Personal Bankruptcy Tips #2

 

Listing Credit Card Debts in Your Bankruptcy Filing 

Most credit cards are considered to be completely unsecured debts. The credit card bank can chase you for the owed funds but doesn’t have any specific claim on any of your other assets or possessions. These unsecured debts should be listed on Schedule F. 

Unfortunately some department store consider themselves to have a claim of some sort in all the goods purchased with their card. That makes these debts more secured than bank credit card debt and so should be listed instead on Schedule D.
 

Several Different Income Figures 

The chapter 13 paperwork ends up stating several different income figures. On Form 22C you’ll list your average gross income over the past six months. But on Schedule I you’ll list your anticipated net monthly income over the months ahead.  

When it comes to determining how much money you’ll have available for repayment under your chapter 13 plan, some courts use the Schedule I amount while others will use the more accurate Form 22C figure. 

Be sure to ask your lawyer about which number will be used in your case. It could make some difference.

Often Overlooked Creditors

Bankruptcy filers often forget to include the following on their list of creditors: 

Include any holder of either a loan contract or promissory note that you cosigned to help someone else. If they default, you will suffer a financial loss. 

Include any debt that has been sold or transferred to any kind of collection service or lawyer could come back to haunt you later. Be very careful about old forgotten debts. 

Are you aware of anyone who could possibly sue you in the near future? Such a law suit could result in a new unanticipated debt that could derail a chapter 13 payment plan. 

Include any debts you may in the future have to pay an ex-spouse. Did your divorce decree include any possible payments? Could you be liable for any join debts? 

These kinds of debts and obligations are easily forgotten. When you’re in the process of getting your bankruptcy paperwork together you should rack your brain and be sure you anticipate any and all possible financial obligations. 

Discharging Student Loans in Chapter 13

In most cases student loans cannot be discharged unless you can convince a bankruptcy judge that repaying your student loan would cause “undue hardship.”

This is the usual rule but you should know that in some more recent cases chapter 13 payment plans have included only partial payment for student loans without any need for proving hardship.

This is possible so be sure to ask your lawyer and tell them that it’s not impossible as there’s a precedent.