Archive for the ‘Bankruptcy Means Test’ Category
Can same-sex couples filing a
joint bankruptcy? The U.S. Department of Justice announced on
July 6, 2011 that it will no longer oppose joint bankruptcies filed by same-sex
couples legally married in their state. This news comes close on the tails of
the recent court decision in Los Angeles where 20
of 24 judges signed an opinion allowing a same-sex couple to file a joint
petition for bankruptcy. That opinion declared that the federal Defense of Marriage Act (DOMA) was
unconstitutional. The U.S. Trustee in Bankruptcy has agrees that DOMA will not be
raised to protest joint filings by married same-sex couples. One would assume that this rule would only be
applied in states where the marriages are recognized. However, it has been noted that joint filings
are the rule in North Carolina so long as the couple is actually married.
When it comes to creditworthiness, it’s hard to top the consumers of Wisconsin.
Four Wisconsin cities – including Wausau at No. 1 – are among the 10 communities in the nation with the highest average credit scores, a new survey shows.
Wausau residents posted an average credit score of 789 in the survey conducted by the credit-rating agency Experian. Madison was third, at 785; Green Bay sixth, at 780; and La Crosse 10th, at 777.
Milwaukee, with a score of 765, was 33rd of 143 cities included in the survey.
“Wisconsin residents remain among the nation’s most fiscally responsible,” Experian stated Tuesday in announcing the survey results.
Higher credit scores generally give consumers the ability to borrow money at lower interest rates.
Credit scores are based on a consumer’s payment history, debt balances and several other factors. Among those factors are how much of a person’s available credit is used, how long a person has had credit and whether late payments have occurred recently.
Wausau unseated Minneapolis, with the Minnesota city slipping to second in the annual survey with a 787 average credit score.
Rose Oswald Poels, chief executive of the Wisconsin Bankers Association, wasn’t surprised by the survey’s findings.
“The consumers in this state are generally very conservative with their money and smart about credit decisions, and that’s true of the financial institutions that serve those citizens,” Oswald Poels said. “I think it’s just the combination of the types of values and people we have in this state, coupled with the type of financial institutions that we have. We both share similar values in being fiscally conservative, hardworking and smart about credit.”
An executive with Wausau-based Peoples State Bank said he’s noticed before that many of the bank’s customers bring credit scores higher than 700.
“I think people here were raised in a conservative fashion, and they live the way their parents do,” said John Proulx, senior vice president for Peoples State Bank. “I think that probably is a big reason as to why we have the good scores.”
Overall, the survey found that Midwesterners have the highest credit scores while Southerners have more financial struggles.
Experian said that while no one factor determines a consumer’s credit score, the weak economy continues to cause major setbacks, such as foreclosures and unemployment. Those troubles were drivers in the rankings and trends for different regions of the country, the firm said.
Of the cities with top 10 credit scores, only San Francisco had a jobless rate higher than the national rate. Texas had four cities in the bottom 10.
The credit scores in the report were based on the VantageScore scoring system, which has a range from 501 to 990, in designated market areas from January through June of 2011, Experian said. The analysis was based on a statistically relevant sampling of Experian’s consumer credit database, the firm said.
“We have our issues just like any other city does. We have some foreclosures and things like that, but probably not as much as some of the other areas do,” Proulx said. “So some of that doom and gloom has hit Wausau, but it’s maybe not as prevalent in this area.”
Wausau Mayor James Tipple was proud of the ranking for his city, which has a population of 41,800.
“I think the quality of life and the people we attract to the region, and not only the region but the city of Wausau, speaks volumes for the score,” Tipple said.
If you are having problems making your second mortgage payment or home equity line of credit you may want to meet with one of our lawyers to see if we can get rid of that secondary mortgage. When you file a chapter 13 bankruptcy a bankruptcy Judge may get rid of a second mortgage or home equity loan if that mortgage is wholly unsecured. Those secondary mortgages are wholly unsecured if your home is valued at an amount equal to or less than the amount you owe on your first mortgage. As an example. You have a home worth $150,000.00 with a 1st mortgage of $155,000.00 and a 2nd mortgage of $30,000.00. In this case the 2nd mortgage company would get nothing in the event your home sold for $150,000.00 or less. For that reason a Chapter 13 judge would order the 2nd mortgage void since it is entirely or wholly unsecured.
This issue can sometimes be very confusing. For that reason we always suggest you set up a free consultation with one of our lawyers a Miller & Miller. There is never a charge for an initial consultation and we are happy to meet with you to discuss all of your options.
James Miller
jmiller@millermillerlaw.com
414-277-7742
The last blog post chronicled how foreclosure were up in the Milwaukee area last month. Well, on the bright side, according to this article on www.Biztimes.com, it seems that home sales were up as well.
If you need help getting caught up on your mortgage, we can help! Also, if you are in the market to buy a home, call us! Our credit repair and credit rebuilding services will help you raise your credit score and get the best interest rate on your new mortgage.
The Basics of Chapter 13 Bankruptcy
Chapter 13 is very effective at helping filers get a fresh financial start while being able to keep valuable assets like homes and cars Federal bankruptcy laws exist to give debtors an escape from overwhelming debt when they find themselves in an unworkable financial situation. The protections offered by a bankruptcy filing have only rarely been more important than they are in our country’s current economic situation. Stock market woes, the burst housing bubble and chronically high unemployment rates have left record numbers of Americans in financial trouble and looking for more information about debt relief options like credit counseling, loan modification, debt consolidation and bankruptcy.
Types of Bankruptcy
There are several different types of bankruptcy filings that a debtor might consider. Eligibility for these programs are based upon an analysis of the debtor’s unique financial condition and whether the filer is an individual, a business entity, a farming enterprise, a fishery, a railroad or a municipality.
- Businesses — depending upon the industry — might be able to file under Chapters 11, 12 or 15 of the U.S. Bankruptcy Code.
- Municipalities like cities, towns, villages and school districts can seek the protections offered by Chapter 9.
- Individual debtors, however, have two choices: Chapter 7 or Chapter 13.
What Is Chapter 7?
Consumer bankruptcy is the blanket legal term for a bankruptcy filed by a single individual (or by a married couple) instead of a by a business or other entity. Consumer bankruptcies are covered by Chapters 7 and 13 of the Bankruptcy Code.
Chapter 7 is better known as “liquidation bankruptcy.” It involves the literal liquidation (selling) of the debtor’s assets in order to raise money that will be used to pay debts. Secured creditors — those whose debts involve a tangible collateral like a house, car or appliance — are given priority, so they are paid first. Any debts not payable through the proceeds of a liquidation are discharged at the end of the proceeding, except for certain debts (student loans, taxes, child support and alimony) that are non-dischargeable. Chapter 7 does include myriad exemptions that will protect various types of property from being liquidated, however, so filers do get to keep the majority of their essential assets.
Because it is more inclusive and involves the discharge of all or most debts, it is more difficult to qualify for Chapter 7 bankruptcy protection than it is for Chapter 13. Potential filers must undergo what is known as a “means test” to determine eligibility. Most people who do not qualify to file under Chapter 7 are able to bring a Chapter 13 filing instead.
What is Chapter 13?
Chapter 13 bankruptcy involves the reorganization / consolidation of all the filers debts into one amount that is repaid over a period of three to five years. People filing under Chapter 13 do not have to pass a means test, but they do have to prove to the bankruptcy court that they have an income with which to make regular payments on their debt. Some debts — the like student loans, taxes, child support and alimony mentioned above — cannot be included in the repayment plan and are not subject to discharge.
Chapter 13 is very effective at helping filers get a fresh financial start while being able to keep valuable assets like homes and cars without seeking exemptions. There is not the immediate discharge of debt like there is in Chapter 7 bankruptcy, but if the debtor fulfills the obligations of the repayment plan, remaining debt is discharged at the end of the agreed-upon time.
Why File a Chapter 13 Bankruptcy?
Most people choose Chapter 13 bankruptcy filings to protect themselves from foreclosure, repossession or wage garnishment. Filing for bankruptcy protection activates something called an “automatic stay.” That means that while the filing is pending, creditors cannot pursue lawsuits, garnishments, repossessions or foreclosures. In fact, they cannot even contact the debtor while the automatic stay is in place — all harassing phone calls and threatening letters must stop once the filing process has begun. Past due amounts on mortgage or car payments can be rolled into the consolidated debt and paid back over the life of the repayment plan, so as long as the debtor remains current.
In addition to the protections offered by the automatic stay, Chapter 13 is also a relatively inexpensive way to get a fresh financial start. Yes, filers have to commit to making payments on their debts for a period of time, and the bankruptcy will have a long-lasting impact on their credit rating, but they can also start to rebuild credit not long after filing. Furthermore, the negative impact of a bankruptcy filing is still less significant than that resulting from a foreclosure, repossession or garnishment.
If you want to learn more about filing for Chapter 13 consumer bankruptcy, contact an experienced bankruptcy attorney in your area.
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