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CHAPTER 13 – DON’T TRY THIS AT HOME!

By Bankruptcy Lawyer in Post St Lucie Jon L Martin, the author of “What Everyone ought to Know about Debt Relief Today!” 

Bankruptcy-lawyer-port-st-lucie-Jon-Martin-HeadshotA recent article in the American bankruptcy Journal shows the success rates of chapter 13’s filed by debtors who filed Chapter 13 without the guidance of a bankruptcy attorney. The difference between those who filed with an attorney and those who didn’t are striking. Moreover, when three other considerations are taken into account, the probabilities of success are slim indeed.

The study used a sample of 123,185 chapter 13 cases across the country. The four criteria considered were:

  1. Did the debtor have an attorney?
  2. Was it a joint case including husband-and-wife?
  3. Were the filing fees paid in full at the time of the filing?
  4. Was there a prior filing for either party?

The results for those filing without an attorney showed successful results ranging from .05% (Yes, that’s less than 1%!), to as high as 14.8%. The high number was limited to first-time filers filing without an attorney, where both husband and wife were filing, and filing fees were paid in full at the time of the filing.

Interestingly enough, the study also indicated that even under the best of circumstances, filing with an attorney resulted in a success range of 31.8% to only 52.7%. (A small segment fitting in between the high and low ranges in the study were omitted for space-saving in this article).

More interesting, is that when the entire sample was considered, less than 40% of all chapter 13 cases resulted in a successful outcome. For purposes of the study a successful outcome meant that the debtor had successfully completed the payment plan and ultimately received a discharge.

Clearly, chapter 13 is not all it is purported to be, and in the vast majority of cases provides only temporary relief from overwhelming debt and the accompanying onslaught of creditor harassment that drives people to seek bankruptcy relief in the first place

This is why it almost every case, chapter 7 should be carefully considered with the help of a bankruptcy attorney. Most people are amazed when they learn that chapter 7 does not mean the loss of assets they have spent a lifetime accumulating; nor the end of life as they know it. In fact, if properly done, Chapter 7 provides far better solutions than ill-conceived chapter 13’s.

There are many factors to be considered but without a complete assessment, debtors may be wasting their time and money when filing Chapter 13 without guidance and a complete picture of likely results in both 13 and 7.

If you would like to schedule a FREE consultation with a Bankruptcy Lawyer Port St Lucie, please contact Jon L Martin Bankruptcy Attorney at (772)419-0057 or visit us online http://jonlmartinlaw.com/. With over 40 years of combined legal and business experience, we have helped hundreds of people in and around Martin and St Lucie County to relieve their financial problems. Bankruptcy Lawyer Port St Lucie Florida and a chairman of Martin County Bar Bankruptcy Committee Jon L. Martin helps clients throughout the following cities and surrounding areas: Hobe Sound, Jensen Beach, Palm City, Port Salerno, Port St. Lucie, Stuart, Vero Beach, and the entire Treasure Coast of Florida.

Non-Dischargeable Debts

By Bankruptcy Lawyer in Post St Lucie Jon L Martin, the author of “What Everyone ought to Know about Debt Relief Today!” 

Filing for Chapter 7 Bankruptcy can be a great way to start again with a clean slate. Such procedures will help relieve the burden of debt for those who have gotten in over their heads. However, there are certain kinds of debts that cannot be discharged through bankruptcy. These debts generally (though exceptions do exist) follow you to the grave. When considering a bankruptcy filing, it is important to keep in mind the debts listed in this article cannot be discharged and you will still be responsible for paying them off.

Owed Taxes

In general, taxes cannot be discharged through a Chapter 7 filing. This primarily refers to income taxes less than three years old and all trust-fund taxes. Income taxes that are three years old may be discharged under certain conditions. First you must have filed an income tax return for the year you want discharged and an offer in compromise is not pending or has not been pending within eight months of the filing of bankruptcy.

Do note that any back taxes owed as a result of fraud or tax evasion schemes are never dischargeable.

Money Obtained by Fraud

Naturally, any funds obtained through fraudulent means that have to be paid back are non-dischargeable. This pertains to how the money was originally obtained and does not necessarily apply to wealth or property concealed during the filing (though such concealment can create other negative consequences).

Most important about this classification to most readers pertains to use of credit cards or a cash advance on the eve of bankruptcy. If you run up a massive credit card debt on luxury goods just before filing, this debt is presumed to be fraudulent. The exception is if the cash advance or credit card debt was incurred by an emergency situation (for instance: staving off imminent foreclosure). In general, it is best to avoid making use of credit cards or cash advances for at least 90 days before filing if at all possible. If you are uncertain about how a cash advance or credit card charge may look to the courts, talking to a qualified bankruptcy attorney for advice would be your best course of action.

Alimony and Child Support

If you owe alimony or child support as a result of a divorce or other court settlement, this debt is non-dischargeable. There are certain debts related to divorce that may be dischargeable under federal law (property settlement for instance). If you are looking to discharge debts incurred through divorce, an attorney can guide you through which debts are dischargeable and which are not.

Unlisted Creditors

Part of the bankruptcy process is making sure creditors are made aware of the bankruptcy proceedings so they may file objections if desired. Debts to creditors who are not listed during the bankruptcy filing proceedings nor are aware of your plans to file will not be discharged. This is why being accurate and listing all of your creditors is important.

Student Loans

The most common non-dischargeable debt these days would be student loan debt. This form of debt will follow you until paid unless discharged by special statute. While there are a few exceptions where student loans may be discharged if they create undue hardship, courts have been notoriously stingy with the undue hardship definition. As such, unless you find yourself homeless and destitute, you will be unlikely to receive a student loan discharge.

Whether or not a debt is dischargeable will have a major impact on your bankruptcy proceedings and just how much of the debt is wiped away. This list is by no means exhaustive, but contains some of the more common forms of non-dischargeable debt we come across. If you’re planning to file for bankruptcy, talk to a qualified bankruptcy attorney who will help you determine which debt can be discharged and which cannot.

If you would like to schedule a FREE consultation with a Bankruptcy Lawyer Port St Lucie, please contact Jon L Martin Bankruptcy Attorney at (772)419-0057 or visit us online http://jonlmartinlaw.com/. With over 40 years of combined legal and business experience, we have helped hundreds of people in and around Martin and St Lucie County to relieve their financial problems. Bankruptcy Lawyer Port St Lucie Florida and a chairman of Martin County Bar Bankruptcy Committee Jon L. Martin helps clients throughout the following cities and surrounding areas: Hobe Sound, Jensen Beach, Palm City, Port Salerno, Port St. Lucie, Stuart, Vero Beach, and the entire Treasure Coast of Florida.

Financial Mistakes That Lead You to a Bankruptcy Lawyer in Port St Lucie

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There is no shame in bankruptcy. That is a point we have tried to emphasis throughout this site. Things happen, and you sometimes need help to get through it. While it is better to file for bankruptcy rather than let debts that you can’t afford to repay pile up, it is even better to not place yourself in that position in the first place. In light of that, we plan to highlight some of the most common financial mistakes that people make that cause them to seek advice from a bankruptcy lawyer Port St Lucie.

Not Saving for a Rainy Day

It seems like ever since the turn of the century, the US economy has been struggling in one form or another. From the dot-com bubble bursting at the turn of the century to the real estate crash to recession, the 21st century has been fraught with hardship. Some of us lost cars, homes, retirement funds, and college funds in the turmoil and are still struggling to rebuild. Others, however, appear to have ridden through the storm without a scratch, and not all of those people are individuals we would describe as particularly wealthy.

One of the secrets to surviving hard times is savings. Savings are critical to surviving the bad times, and most financial experts recommend you have enough stored away to live for three months. Not only do the savings allow you to fix those expensive emergencies that crop up, but also serve as a buffer in the event of sudden job loss. You might be thinking that you are living paycheck to paycheck as it is and have no room to save, and while such cases do exist, more often we find that the difficulty making ends meet comes down to…

Not Budgeting Properly

You probably have an idea in your head what your monthly payments are for things like cable, internet, mortgage, car payments, Netflix, and more. All of these expenses should be factored into your budget, but what about the little things? The daily Starbucks runs or the fast-food lunch breaks. These seemingly minor expenditures can easily add up. Even $5 per day in miscellaneous spending can add up to $100 per month.

When planning a budget, factor in these miscellaneous expenses in addition to the monthly payments and the big expenses. Even if it is only a $10/month expense, add it to your budget. When time comes to tighten the belt, you will often find expenditures that you can do without to free up the few extra dollars you need to make ends meet.

Relying on Credit Cards

We are not saying you have to outright destroy your credit cards, but you should not rely on them too heavily. If you find yourself having to use credit cards to make ends meet every month, you are spending more than you are earning, which is one of the biggest mistakes you can make in personal finance. Sometimes you do need those credit cards, and that’s fine, but just remember that a credit card is essentially a loan. That means that whatever you buy on credit is automatically more expensive (due to interest) than something you pay cash for.

Do not depend on credit cards, and if you do use them, repay the balance as quickly as you are financially able. Making only minimum payments simply compounds the debt, causing you to pay as much as double what you thought you had paid for an item.

These are just a few of the tips to help you avoid financial ruin. However, even if you follow this advice and the advice of other financial experts religiously, mistakes happen. If you find yourself simply unable to make ends meet regardless of what you do, and the debt on your shoulders is becoming unmanageable, that is when you need a qualified bankruptcy attorney in Port St Lucie to lend you a hand. While avoiding bankruptcy is ideal, letting your debt get out of hand and refusing to file is worse.

If you have any questions or would like to schedule a FREE consultation with a Port St Lucie Bankruptcy Lawyer, please contact Jon L Martin Bankruptcy Attorney at (772)419-0057 or visit us online http://jonlmartinlaw.com/.

With over 40 years of combined legal and business experience, we have helped hundreds of people in and around Martin and St Lucie County to relieve their financial problems. Bankruptcy Lawyer in Port St Lucie Jon L. Martin helps clients throughout the following cities and surrounding areas: Hobe Sound, Jensen Beach, Palm City, Port Salerno, Port St. Lucie, Stuart, Vero Beach, and the entire area of the Treasure Coast.