Texans who are considering filing for Chapter 13 bankruptcy might be interested in a case that was decided in Kansas earlier. In the case, a bankruptcy court ruled that an elderly, retired couple could file for a fee-only Chapter 13 bankruptcy through which they would pay their attorney's fees, bankruptcy costs and a small monthly amount to their creditors.
Texas residents may be interested in a Louisiana ruling that may impact their ability to collect an auto accident settlement after declaring bankruptcy. The judge in Louisiana ruled that a settlement stemming from an auto accident claim three years after a Chapter 13 plan had been confirmed was part of the bankruptcy estate. As such, the man was not entitled to collect the money until his creditors had been paid.
When Texans file for Chapter 13 bankruptcy, they will enter into repayment plans that will last from between 3 and 5 years. If a person does not successfully complete the repayment plan, the bankruptcy court may either convert the bankruptcy to a Chapter 7 case or dismiss it completely. A person who does complete the plan will receive a discharge of any leftover unsecured debts at the plan's conclusion.
Texas fans of rapper 50 Cent may have heard that the entertainer filed for bankruptcy. He had faced a lawsuit from a woman involving a sex tape and had been ordered to pay her $7 million. With this debt on top of some losses in business, 50 Cent turned to bankruptcy.
Texas residents may know that student loans and back taxes are not usually discharged by a Chapter 7 or Chapter 13 personal bankruptcy, but they might not be aware that alimony and maintenance payments required by divorce settlements could also be nondischargeable. A Virginia woman tested the scope of this exemption by filing a lawsuit claiming that a property division agreement she had entered into with her ex-husband amounted to alimony, support or maintenance, but her arguments failed to sway a bankruptcy court judge.
Texas residents who would like to keep their income tax refund while in a Chapter 13 bankruptcy may be interested in knowing more about petitioning the court to that effect. Because it is considered disposable income, the Chapter 13 bankruptcy trustee is most likely to demand that the full tax refund be turned over for disbursement among the debtor's creditors. Dependent upon the set of circumstances surrounding the debtor's situation, however, it may be possible for that individual to petition the court to excuse one or all future tax refunds.
Texas residents who file a Chapter 13 bankruptcy sometimes wonder what would happen if they run into financial difficulties and are unable to make one of their required monthly payments on time. These payments are generally sent to a designated bankruptcy trustee who then passes the money along to the debtor's creditors, and, in these situations, payments that arrive a few days late will rarely cause many problems. However, it may be wise for debtors to find out when the bankruptcy trustee sends these payments out each month.
Texans considering bankruptcy should understand that there are different chapters under which a case may be filed. Each chapter has different effects and requirements, however, and not everyone is eligible.
Many people in Texas who file for Chapter 13 bankruptcy do so because they would like to be able to keep their home. Because Chapter 13 is a debt repayment plan, it is critical that the homeowner and the bankruptcy trustee be kept up-to-date on any changes in payments to creditors. This is because the majority of the homeowner's income is going toward paying off old debt. Changes can significantly disrupt the homeowner's budget and repayment schedule.
The U.S. Court of Appeals for the 9th Circuit has ruled that creditors may now be required to pay the legal fees of debtors who have sued for damages in connection with a violation of an automatic stay. Previously, debtors were only permitted to do so in connection with curing the stay, and the decision actually overturned the court's previous ruling on the topic.