Income Tax Debt Bankruptcy
When you file for bankruptcy, you may be able to wipe out and discharge income tax debt depending on how old the tax debt is. Bankruptcy law has specific rules for how old an income tax debt must be in order for it to be discharged along with a few additional requirements.
Timing: Tax Return Was Due At Least Three Years Ago
The federal income tax debt that you are seeking to discharge must have become due, including all extensions, at least three years before the day you file bankruptcy.
Example: You owe taxes on your 2015 and 2016 tax returns. Your 2015 tax return was due on April 15, 2016. To meet the three-year requirement for your 2015 taxes you must file for bankruptcy on or after April 15, 2019. Your 2016 tax return was due on April 15, 2017, but you requested an extension that expired on October 15, 2017. To meet the three year requirement for your 2016 taxes you must file for bankruptcy on or after October 15, 2020. Generally speaking it is always 3 years from when the tax became DUE not 3 years from the tax year filed.
Timing: Tax Return Was Filed At Least Two Years Ago
In order to discharge your federal income tax debt, you must have actually filed the tax return in which the debt was related to at least two years prior to the filing of bankruptcy. Tax debts related to unfiled tax returns are not dischargeable. You must file the return and although it satisfies the 3 year rule it has to have been filed for at least 2 years.
Timing: Tax Assessment Occurred At Least 240 Days Ago
The IRS must have recorded your liability and assessed it to you for the tax debt at least 240 days prior to the filing of your bankruptcy. This is known as a “tax assessment.” Often, the date you file your tax return is when your related tax debt is assessed. However, on occasion, the IRS can assess additional taxes later based on an audit. When this happens, you must wait 240 days from the assessment to discharge the additional taxes in bankruptcy. It is very important to know when the tax was actually assessed to you by the IRS and wait at least 240 days to file for bankruptcy.
No Fraud or Willful Evasion Requirement
If you committed fraud when filing your income tax returns you can not discharge the debt in bankruptcy. If you willfully evaded paying taxes, your tax debt will not be eligible for discharge in bankruptcy. You would have options to repayment in a chapter 13 bankruptcy.
Penalties, Interest and Tax Liens
If an income tax debt meets the rules and requirements discussed above, interest charges and penalties on that underlying tax debt will be discharged as well. If the IRS has recorded a tax lien against your property before you file for bankruptcy, the bankruptcy court cannot set aside your tax lien. After the bankruptcy, if the tax lien has not been paid off, the IRS lien will remain. Chapter 13 bankruptcy does offer you options with tax liens. You should consult a qualified and experienced bankruptcy attorney for legal advice.
Chapter 13 and Non-Dischargeable Income Tax Debt
If your tax debt is not dischargeable in bankruptcy, filing a Chapter 13 bankruptcy may still help you as it can make the process of paying back your debt easier. In a Chapter 13 plan you will need to pay your non-dischargeable tax debt over a 3 to 5 year period. The plan might offer better terms than an IRS installment plan and is usually an amount that is more comfortable than what the IRS proposes. It is important to remember that the automatic stay imposed by the bankruptcy court will prevent collection activity while you are in bankruptcy and provide you a lot of relief.
BANKRUPTCY – UNDECIDED OR UNSURE WHAT TO DO?
Talk To Us About Your Options:
We always tell potential clients to talk to us first to see if bankruptcy is in their best interest. The consultation is always free. Talk with Attorney Robert Simonian or Attorney Anthony Bucacci in private and in total confidentiality to see if filing bankruptcy in Massachusetts is right for you.
We can almost always come up with a solution to your financial problem. We have filed over 10,000 cases in the past 26 years and there are very few scenarios that we have not seen. We are known for our hard work, diligence, creativity and problem solving abilities. Often we are the bankruptcy attorneys other attorneys come to with difficult cases. Call today to see what we can do for you and what options are available. Often people believe they are the only ones with financial problems and are embarrassed of their situation. This is simply not true and many famous people have had to file for bankruptcy to get a fresh start.
Why Call Bucacci & Simonian:
We are known as one of the best bankruptcy attorneys in Southeastern Massachusetts serving the Bristol County and Plymouth County areas. Please inquire with anyone as to our reputation. Reputation is everything and we are very proud of ours. We have received numerous awards from various agencies and courts including the Bankruptcy Court in Boston, Massachusetts.
Using our knowledge and skill we have had several clients complete their five year Chapter 13 bankruptcy plans where they own their home FREE & CLEAR OF MORTGAGES. We understand how important it is to save clients’ homes from foreclosure, keep their cars from being repossessed and stop creditors from suing them and attaching their wages or attempting to seize their assets. This can be stopped almost instantly and we make every effort to be very available to your clients and can accommodate emergency situations. One of our most famous cases involved saving a clients’s multi-family home. https://www.courtlistener.com/opinion/1863802/in-re-brizida/
What to Avoid:
Do not attempt to file for bankruptcy on your own. You can make your situation much, much worse. If the bankruptcy petition is not correct you could lose your home, your car or possessions or you could be asked to file a different kind of bankruptcy where you have to make monthly payments when it could have been avoided. If you are not properly represented a bankruptcy trustee may foreclose on your house, allow your car to be repossessed, seize a tax refund or other assets. You could file under the wrong chapter, apply the wrong exemptions, fail to file all of the necessary forms or not understand the significance of important forms.
Protect Yourself:
Call us today for a free and complete bankruptcy consultation. We can protect you from your creditors and protect your home, cars, jewelry and other assets. Creditors and collection lawyers have a job to do and it may seem that they are heartless and will take anything they can from you. They are represented and you should be too. Call us today. The Federal Bankruptcy Court indicated that seeking the advice of a qualified attorney is strongly recommended. https://www.uscourts.gov/services-forms/bankruptcy/filing-without-attorney
Wage Garnishment
Wage Garnishment
Massachusetts Bankruptcy Lawyers Anthony Bucacci and Robert Simonian (508)673-9500
Using Chapter 7 Bankruptcy to Stop Wage Garnishment
Filing for Chapter 7 bankruptcy will stop most wage garnishments, but there are a few exceptions.
If your wages are being garnished, or you fear they soon will be, filing for Chapter 7 bankruptcy will stop the garnishment (also called wage attachment) in most cases. This happens because bankruptcy’s automatic stay prohibits most creditors from continuing with collection actions during your bankruptcy case.
Read on to learn about wage garnishment and how the Chapter 7 automatic stay will put a temporary stop to wage garnishment.
What Is Wage Garnishment?
Most creditors cannot garnish your wages without first suing you in court and getting a money judgment. There are a few exceptions, for example, for student loans, taxes, and child support. But in most cases, including credit card balances, the creditor must file a lawsuit and win.
Once the creditor has a money judgment, it can get an order to garnish your wages from the court. The sheriff or marshall forwards the order to your employer, who then holds back a portion of your wages each pay period and sends that amount to the creditor.
There are limits to how much the employer can garnish from your paycheck each month. And you might be able to protect even more using exemptions. You can learn more by reading about wage garnishment laws.
Chapter 7 Bankruptcy and the Automatic Stay
When you file for Chapter 7 bankruptcy, the law immediately begins protecting you from creditors by imposing an automatic stay. The stay prohibits creditors from taking any collection activity against you during your bankruptcy case.
Because wage garnishment is a collection action, wage garnishments must stop once you file for bankruptcy. There are a few exceptions to this prohibition—most notably, child support collections will not be stopped by the automatic stay.
A creditor can ask the bankruptcy court to lift the automatic stay. However, the court is unlikely to lift the stay unless:
- the creditor has a debt secured by collateral, such as a house or car, and
- the creditor will lose money if forced to wait until the case ends.
- Learn more about when the court might lift the automatic stay.
How Will Your Employer Know to Stop the Garnishment?
When you file for bankruptcy, you must provide the court with a list of your creditors and their addresses. The court will notify each creditor that you have filed for bankruptcy. The creditor must then take steps to suspend the wage garnishment.
If you want to speed things along, however, you or your attorney can send a copy of your bankruptcy filing to the creditor. This is a good way to go if you’re filing shortly before the garnishment is scheduled to take place.
Short or No Automatic Stay for Repeat Bankruptcy Filings
If you have a recent bankruptcy in your past, the automatic stay will end after a short period. If that happens, the wage garnishment can continue. Here are the rules:
If you filed for bankruptcy previously and it was dismissed within one year of your current filing, the stay will last for 30 days. You can ask the court (by formal motion) to extend this time. You’ll have to prove that you made your second filing in good faith.
If you previously filed for bankruptcy twice in the past year, the automatic stay won’t kick in at all when you file the third case. But again, you can ask the court to impose the stay.
Essentially, you cannot use serial bankruptcy filings to avoid wage garnishment indefinitely.
What Happens to the Garnishment When Your Bankruptcy Case Ends?
The automatic stay ends when your bankruptcy case ends. However, if your bankruptcy discharges the debt that was the subject of the wage garnishment (which will happen in most situations), then the creditor cannot continue the wage garnishment.
Of course, if your bankruptcy case is dismissed before you receive a discharge, or the particular debt that was the subject of the wage garnishment was not wiped out, then the creditor can continue to garnish your wages.
Talk to a local lawyer to discuss your options to stop wage garnishment with or without bankruptcy.
Tax Liens
Tax Liens
Massachusetts Bankruptcy Lawyers Anthony Bucacci and Robert Simonian (508)673-9500
Tax Liens in Chapter 7 Bankruptcy
Find out if your tax lien will remain after Chapter 7 bankruptcy.
The primary reason people file Chapter 7 bankruptcy is to discharge, or eliminate, their debts and get a fresh start with their finances. Tax liens, however, are not discharged simply by filing bankruptcy. Tax liens continue in effect after a Chapter 7 filing until they are paid off or otherwise released.
This article will focus on federal tax liens. Similar principles apply to state tax liens. Laws vary from state to state, however, on specific issues such as how state tax liens are created and what property they cover.
What Is a Tax Lien?
A lien is a security interest, or claim, against specific property. A home mortgage, for example, is a lien against a residence. If you don’t pay the debt, the creditor can sell the property that is subject to the lien to get reimbursed.
A federal tax lien is like a mortgage, except that it secures your obligation to the IRS instead of a lender. A tax lien can be imposed if you fail to pay taxes on a timely basis. However, just because you owe taxes does not mean that you are subject to a tax lien.
How state tax liens are imposed. Laws vary between states as to what is required to impose a state tax lien.
How federal tax liens are imposed. The IRS file a notice in order to get a federal tax lien against your property. The notice must be filed in the county where you live or where the property is located. Once the IRS files its notice, it has a lien against all property — real or personal — that you own. The lien attaches to all property that you own from and after the date that the IRS files its lien. Federal tax liens continue in effect for up to 10 years after the IRS assesses the taxes that you owe.
What Happens to Tax Liens When You File Chapter 7 Bankruptcy
What happens to tax liens when you file for bankruptcy depends on whether or not the tax lien was in place before you filed for bankruptcy.
Tax Liens Imposed After Your Bankruptcy Filing
Filing Chapter 7 triggers a statutory protection known as the automatic stay. The automatic stay bars creditors, including the IRS, from taking action to collect most types of debt except through the bankruptcy process.
Among other things, the automatic stay bars the IRS from filing a tax lien postbankruptcy. This means that the IRS cannot impose a tax lien during your Chapter 7 case unless it previously filed a notice.
Tax Lien Notices Filed Before Your Bankruptcy Filing
A tax lien filed before your bankruptcy, however, continues in effect. The bankruptcy court cannot set aside a tax lien as long as it was filed properly before your Chapter 7 case.
Paying Off Tax Liens Through Bankruptcy
Tax liens may be paid, in whole or part, through the bankruptcy process. A bankruptcy trustee is appointed after you file Chapter 7 to administer and liquidate assets in your bankruptcy estate to raise money to pay your debts. In some Chapter 7 cases, debtors have assets that the trustee can sell to pay creditors, including the IRS. The IRS is entitled to any money raised through the sale of assets covered by a federal tax lien except to the extent there are prior mortgages or security interests.
Example. Say your house is worth $350,000 and is subject to a $100,000 mortgage and a $75,000 federal tax lien. Let’s assume that you are entitled to a homestead exemption of $100,000. If the bankruptcy trustee sells your home, the trustee would pay $100,000 to your mortgage lender and $75,000 to the IRS. The trustee would also pay you $100,000 for your homestead exemption. The balance of $75,000 would go to pay costs of sale and other creditors in your bankruptcy case.
When Tax Liens Are Not Paid Through Bankruptcy
Unfortunately, tax liens usually are not paid in Chapter 7 cases. Most Chapter 7 cases are “no asset” cases. In a no asset case, creditors receive nothing because there is no property that the trustee can sell for the benefit of the bankruptcy estate after taking into account secured claims (like mortgages and tax liens) and exemptions. Ordinarily, trustees will not attempt to sell property if all of the proceeds would have to be paid to secured creditors or the debtor.
Example. Let’s take the example of a house worth $200,000, with a $150,000 mortgage, a $25,000 federal tax lien, and a $100,000 homestead exemption. In most cases, the trustee would not try to sell the house, because there would be no proceeds available to pay other creditors after taking into account the mortgage, tax lien, and homestead exemption.
In this situation, the tax lien would still remain on your property after your Chapter 7 case is over. In order to get rid of the lien, you could sell the property and pay the IRS from the proceeds. Or, you could attempt to work out a payment plan with the IRS to pay the balance due and have the tax lien released. Simply filing Chapter 7, however, would not make the lien disappear.
Tax Liens on Personal Property
Tax liens also attach to personal property, such as cars and household furniture. In most Chapter 7 cases, trustees do not try to sell personal property, because it is either worth too little, encumbered by liens (like auto loans), or subject to exemptions. You have to continue to deal with tax liens that cover personal property you are able to retain after a Chapter 7 filing.
Dealing With Tax Liens After Bankruptcy
Generally, your options to deal with a federal tax lien that remains in effect after bankruptcy are as follows:
- pay the tax lien and obtain a release
- negotiate a payment plan or compromise to release the tax lien
- redeem a specific item by paying its value, as determined by the bankruptcy court, to the IRS
- pay the tax lien over time by filing for Chapter 13 bankruptcy after your Chapter 7 (this is often referred to as a “Chapter 20” bankruptcy), or
- do nothing and gamble that the IRS will not take action to collect on its tax lien.
Taking no action can make sense when the value of property subject to a tax lien is relatively nominal and your personal liability for the tax obligation was discharged through your Chapter 7 filing. (Learn more about when tax debts can be discharged in bankruptcy.)
Student Loan Debt
Student Loan Debt
Massachusetts Bankruptcy Lawyers Anthony Bucacci and Robert Simonian (508)673-9500
In some cases, you can have your federal student loan discharged after declaring bankruptcy.
However, discharge in bankruptcy is not an automatic process.
What circumstances do I need to prove to have my loan discharged in bankruptcy?
You must declare Chapter 7 or Chapter 13 bankruptcy and demonstrate that repayment would impose undue hardship on you and your dependents. This must be decided in an adversary proceeding in bankruptcy court. Your creditors may be present to challenge the request.
How do bankruptcy courts determine undue hardship?
The bankruptcy courts do not use a single test to determine undue hardship but may look at the following factors to determine whether requiring you to repay your loans would cause an undue hardship:
- If you are forced to repay the loan, you would not be able to maintain a minimal standard of living.
- There is evidence that this hardship will continue for a significant portion of the loan repayment period.
- You made good faith efforts to repay the loan before filing bankruptcy.
What happens to my loan if the bankruptcy court determines repayment would cause undue hardship?
It depends on the terms of the bankruptcy court’s determination. The terms may include the following:
- Your loan may be fully discharged, and you will not have to repay any portion of your loan. All collection activity will stop.
- Your loan may be partially discharged, and you will still be required to repay some portion of your loan.
- You may be required to repay your loan, but with different terms, such as a lower interest rate.
What can I do if the bankruptcy court doesn’t discharge my loans but I can’t afford the payments?
Many different repayment plans exist, and switching to a plan that’s a better fit is usually a possibility. Contact your loan servicer if you would like to discuss repayment plan options or change your repayment plan. You can get information about all of the federal student loans you have received and find the loan servicer for your loans by logging in to “My Federal Student Aid.”
Sheriff Sale
Sheriff Sale
Massachusetts Bankruptcy Lawyers Anthony Bucacci and Robert Simonian (508)673-9500
What Is a Sheriff’s Sale?
In a sheriff’s sale, law enforcement sells off properties that are in the end stage of foreclosure.
If you default on your mortgage loan, the lending bank can go through a specific legal process called “foreclosure” to sell your home to repay the outstanding debt. Depending on state law and the circumstances, the bank will either:
- file a lawsuit in court to foreclose (a judicial foreclosure), or
- follow specific out-of-court procedures, which are set out in state law, to complete a nonjudicial foreclosure.
After the bank fulfills all of the legal requirements for foreclosure, the home is sold to a new owner at a public sale. With judicial foreclosures, a sheriff’s sale is customarily used as this last step in the foreclosure process. The successful bidder at the sale becomes the new owner of the property.
How Does a Sheriff’s Sale Work?
A sheriff’s sale is usually an auction, which local law enforcement conducts. The sale is open to the public. The sale typically either takes place in the sheriff’s office or at the county courthouse, frequently on the front steps. Some auctions are held online. Once completed, a sheriff’s deed is issued, giving the home’s title to the high bidder, and the deed is recorded in the county records.
Property Tax Sales
Property tax sales and foreclosure sales are separate processes, but depending on state law and local procedures, either might involve a sheriff’s sale. This article focuses on sheriff’s sales for properties in foreclosure due to unpaid mortgage payments.
Notice of a Sheriff’s Sale
Homeowners generally get notice of a sheriff’s sale in the foreclosure paperwork or through a mailed notice of sale. Also, advertisements of foreclosure sales are normally published in newspapers of general circulation, typically four to six weeks before the sale. Many county sheriffs also maintain a list in their office or on a website of the properties going to auction.
The Foreclosing Bank Is Usually the High Bidder
The foreclosing bank submits the first bid at the auction, which is a credit bid. With a credit bid, the bank gets a credit in the amount of the borrower’s debt. The bank can bid the full amount of the debt, including foreclosure fees and costs, or it might bid less. Most of the time, the bank is the winning bidder at the sale because no one else tries to buy the property. If the bank buys the property at the sale and gets title to the home, the property is considered “Real Estate Owned” (REO).
You Might Be Liable for a Deficiency Judgment
When the winning bid at the sheriff’s sale is less than the borrower’s total debt, the bank might be able to seek a deficiency judgment against the foreclosed homeowner. Whether or not the bank can get a deficiency judgment depends on state law.
Other Parties Can Also Bid
After the bank makes its credit bid, another person or entity can submit a higher bid and win the auction. Unlike the bank, a third party will likely need to put down a money order or certified check for a percentage of the property price at the time of the sale. This requirement varies from place to place. Some places require the winning bidder to pay a specified amount, say $10,000, immediately after the sale, with the balance due shortly after that. If the winning bidder doesn’t pay the balance within a set time frame, the deposit might become non-refundable, and the property could be re-listed. Or the purchaser might have to pay the full amount of the winning bid at the time of the sale. The buyer then gets the property in “as is” condition.
Again, the Bank Might Be Able to Get a Deficiency Judgment
If a third party is the high bidder at the auction, the proceeds are used to repay the borrower’s debt. But if the sale amount isn’t sufficient to pay off the full amount of the debt, the bank might be able to (again, if state law allows it) get a deficiency judgment against the foreclosed homeowner.
What Is a Trustee’s Sale?
A trustee’s sale is effectively the same as a sheriff’s sale. It is the last step in a nonjudicial foreclosure. The main difference is that a trustee, the party that handles the nonjudicial foreclosure process in some states, holds the auction.
What Homeowners Can Do to Stop a Sheriff’s Sale
As a homeowner, you can take action to try to prevent a sheriff’s sale from happening and keep your home. You could potentially, depending on your circumstances, as well as state and federal law:
- challenge the foreclosure in court (check the foreclosure papers you received or consult with an attorney to find out the deadline to respond to the foreclosure action)
- apply for a loan modification or other loss mitigation option (be sure to apply before any deadline under state law or federal law expires)
- reinstate the loan (again, don’t miss the deadline set by state law or your mortgage contract)
- file for bankruptcy, or
- pay off the full amount of the mortgage debt.
What Happens After the Sheriff’s Sale
You might, depending on state law, also have options for a brief period after the auction. If state law provides a post-sale redemption period, you can repurchase the home and keep it. Or state law might give you the right to live in the home during the redemption period, even if you don’t exercise your right to redeem. But if you don’t move out when your legal right to occupy the home ends, you’ll most likely get evicted.
Under limited circumstances, you might be able to challenge the sheriff’s sale by filing a motion to set aside (nullify) the sale. A court might set aside the sale if you can show that there was fraud, mistake, or irregularity in the conduct of the sale. For instance, if the bank failed to send you appropriate notice or the auction wasn’t properly advertised in the newspaper as required, these failings can be grounds for an objection to the sale.
Getting Help From a Foreclosure Attorney
As with any legal situation, the law has many nuances and complexities that vary from state to state. If you’re going through a foreclosure and have further questions about the process, consider talking to a local foreclosure lawyer. If you want to learn about different alternatives to a foreclosure, like a modification or short sale, a HUD-approved housing counselor is an excellent resource that will help you at no cost.
How To Handle Bankruptcy And Divorce At The Same Time
Bankruptcy and divorce at the same time are among the most stressful and emotionally fraught experiences anyone can go through, and dealing with both at the same time can seem overwhelming. Often bankruptcy and divorce at the same time is something to consider.
If you’re facing that prospect, it may be hard to take comfort in assurances about new beginnings (however true they are), but maybe it will help to know others have made it through the ordeal, and to learn some proven strategies for making the processes go as smoothly as possible.
Is It Wise to File for Bankruptcy Before Getting Divorced?
Before putting divorce and bankruptcy into motion, you should understand that it’s unlikely the two proceedings can truly take place simultaneously. You can file legal motions at the same time, but in most jurisdictions one case will take precedence over the other. If both cases are pending simultaneously, bankruptcy is typically suspended until the divorce court apportions marital debts and assets to each party.
Juggling the two legal actions will only complicate your situation, so for simplicity’s sake, you may want to consider filing for divorce before tackling bankruptcy. Certain circumstances, however, can make it more desirable to file bankruptcy first, and then address divorce. Sometimes bankruptcy and divorce at the same time is necessary.
Deciding the best order in which to handle divorce and bankruptcy will depend on your financial situation and the laws that apply in the jurisdiction where you live. You should consult legal counsel before starting either process to determine which makes the most sense for you. In a nutshell, here are the advantages to handling divorce before bankruptcy, and vice-versa.
When Does It Make Sense to File for Bankruptcy Before Divorce?
A main advantage to filing bankruptcy before divorce is the potential for cancelling joint marital debts that would otherwise have to be divided up as part of divorce proceedings, and then tackled separately in each spouse’s bankruptcy. A joint bankruptcy filing requires cooperation between the spouses, but it can significantly streamline the divorce process, reducing legal fees and time commitment for both parties.
In many states, a couple filing for bankruptcy can keep a larger portion of their assets than they would when filing for bankruptcy individually, after a divorce.
When Does It Make Sense to File for Divorce Before Bankruptcy?
The main case for filing for divorce before bankruptcy has to do with meeting the qualifications in your state for Chapter 7 bankruptcy. In contrast with Chapter 13 bankruptcy, which cancels certain types of debt but requires negotiating with creditors to structure a yearslong repayment plan, Chapter 7 cancels qualifying debts altogether. To meet the qualifications for Chapter 7, your income must fall below than that of the median for your state. In households where one spouse earns most or all of the income, completing a divorce before filing for bankruptcy can enable both parties to qualify for individual Chapter 7 bankruptcies.
What Happens to Your Credit After Divorce?
Whether you pursue divorce or bankruptcy first, it’s important to know going in that it may not be possible for either process to completely disentangle your finances from your soon-to-be ex-spouse’s.
For example, Chapter 13 plans on marital debt may leave both parties legally responsible for repayments. There are also categories of debt that bankruptcy cannot discharge (student loans, for example), and if you or your spouse cosigned on such a loan, you may be equally responsible for seeing to it that those debts are paid, even after divorce and bankruptcy.
Bankruptcy has severe, long-lasting negative consequences for individuals’ credit scores and eligibility for loans or credit cards. While divorce doesn’t directly affect individuals’ credit, the aftermath of divorce can lead to circumstances that bring down credit scores as well. Those situations—and the long road to recovery from the credit impact of bankruptcy—will only be complicated if either party withholds payments or otherwise uses joint debt to spite the other party.
Getting through bankruptcy and divorce is never easy, but with a sound strategy and some good faith on the part of both spouses, it’s possible to move on from them and start regaining a solid financial footing within a few years.
BANKRUPTCY – UNDECIDED OR UNSURE WHAT TO DO?
Talk To Us About Your Options:
We always tell potential clients to talk to us first to see if bankruptcy is in their best interest. The consultation is always free. Talk with Attorney Robert Simonian or Attorney Anthony Bucacci in private and in total confidentiality to see if filing bankruptcy in Massachusetts is right for you.
We can almost always come up with a solution to your financial problem. We have filed over 10,000 cases in the past 26 years and there are very few scenarios that we have not seen. We are known for our hard work, diligence, creativity and problem solving abilities. Often we are the bankruptcy attorneys other attorneys come to with difficult cases. Call today to see what we can do for you and what options are available. Often people believe they are the only ones with financial problems and are embarrassed of their situation. This is simply not true and many famous people have had to file for bankruptcy to get a fresh start.
Why Call Bucacci & Simonian:
We are known as one of the best bankruptcy attorneys in Southeastern Massachusetts serving the Bristol County and Plymouth County areas. Please inquire with anyone as to our reputation. Reputation is everything and we are very proud of ours. We have received numerous awards from various agencies and courts including the Bankruptcy Court in Boston, Massachusetts.
Using our knowledge and skill we have had several clients complete their five year Chapter 13 bankruptcy plans where they own their home FREE & CLEAR OF MORTGAGES. We understand how important it is to save clients’ homes from foreclosure, keep their cars from being repossessed and stop creditors from suing them and attaching their wages or attempting to seize their assets. This can be stopped almost instantly and we make every effort to be very available to your clients and can accommodate emergency situations. One of our most famous cases involved saving a clients’s multi-family home. https://www.courtlistener.com/opinion/1863802/in-re-brizida/
What to Avoid:
Do not attempt to file for bankruptcy on your own. You can make your situation much, much worse. If the bankruptcy petition is not correct you could lose your home, your car or possessions or you could be asked to file a different kind of bankruptcy where you have to make monthly payments when it could have been avoided. If you are not properly represented a bankruptcy trustee may foreclose on your house, allow your car to be repossessed, seize a tax refund or other assets. You could file under the wrong chapter, apply the wrong exemptions, fail to file all of the necessary forms or not understand the significance of important forms.
Protect Yourself:
Call us today for a free and complete bankruptcy consultation. We can protect you from your creditors and protect your home, cars, jewelry and other assets. Creditors and collection lawyers have a job to do and it may seem that they are heartless and will take anything they can from you. They are represented and you should be too. Call us today. The Federal Bankruptcy Court indicated that seeking the advice of a qualified attorney is strongly recommended. https://www.uscourts.gov/services-forms/bankruptcy/filing-without-attorney
ForeClosure Mortgage Relief
There will be a great need for mortgage relief and foreclosure prevention in Massachusetts and the entire country. The CFPB stated today “we are at really an unusual point in history”. Nobody has ever before seen this many mortgages in forbearance at one time that are expected to exit forbearance all at one time.”
This may be the calm before the storm. If mortgage companies don’t get it right when all these forbearance periods end.
With stimulus money and no federal student loan payments, people have been able to firm up their finances. People are paying off car loans, clearing off credit card debts or other old debt. Many are actually establishing a savings account for the first time in a long while.
What Mortgage Relief and Foreclosure Prevention is Expected
The CFPB hopes to have a plan to prevent a sharp rise in foreclosures this fall. The present proposal would:
- Establish a pre-foreclosure review period once forbearance ends
- Delay the start of any Covid-related foreclosure to 2022
- Provide mortgage servicers with streamlined loan modification options
- Revise mortgage servicer communication rules to keep borrowers better informed.
Here is what to know.
The deadline for borrowers affected by Covid-19 to request or extend a forbearance plan is June 30. This is also the end of a foreclosure moratorium on federally backed mortgages. For borrowers who are behind in mortgage payments now, it’s imperative to act before June 30 to ask for a 180 day forbearance, and if needed, a second 180 day forbearance. This will get you a year. If that isn’t done, then the new CFPB rules would at least block servicers from filing a foreclosure lawsuit until after December 31, 2021.
The new rules if they are approved, will apply to all mortgages, not just those that are federally backed.
Certain fees such as late fees and stop payment fees would be waived. If a loan modification were to include any catch up payments, servicers will not be allowed to charge extra fees or interest on those payments. The new rules would be in effect until August 31, 2022 but may not apply to smaller lenders with less than 5,000 loans.
If you have the threat of a foreclosure, you can call us anytime or visit our website for more information.
BANKRUPTCY – UNDECIDED OR UNSURE WHAT TO DO?
Talk To Us About Your Options:
We always tell potential clients to talk to us first to see if bankruptcy is in their best interest. The consultation is always free. Talk with Attorney Robert Simonian or Attorney Anthony Bucacci in private and in total confidentiality to see if filing bankruptcy in Massachusetts is right for you.
We can almost always come up with a solution to your financial problem. We have filed over 10,000 cases in the past 26 years and there are very few scenarios that we have not seen. We are known for our hard work, diligence, creativity and problem solving abilities. Often we are the bankruptcy attorneys other attorneys come to with difficult cases. Call today to see what we can do for you and what options are available. Often people believe they are the only ones with financial problems and are embarrassed of their situation. This is simply not true and many famous people have had to file for bankruptcy to get a fresh start.
Why Call Bucacci & Simonian:
We are known as one of the best bankruptcy attorneys in Southeastern Massachusetts serving the Bristol County and Plymouth County areas. We can help you with mortgage foreclosure relief. Please inquire with anyone as to our reputation. Reputation is everything and we are very proud of ours. We have received numerous awards from various agencies and courts including the Bankruptcy Court in Boston, Massachusetts.
Using our knowledge and skill we have had several clients complete their five year Chapter 13 bankruptcy plans where they own their home FREE & CLEAR OF MORTGAGES. We understand how important it is to save clients’ homes from foreclosure, keep their cars from being repossessed and stop creditors from suing them and attaching their wages or attempting to seize their assets. This can be stopped almost instantly and we make every effort to be very available to your clients and can accommodate emergency situations. One of our most famous cases involved saving a clients’s multi-family home. https://www.courtlistener.com/opinion/1863802/in-re-brizida/
What to Avoid:
Do not attempt to file for bankruptcy on your own if you are seeking mortgage foreclosure relief. You can make your situation much, much worse. If the bankruptcy petition is not correct you could lose your home, your car or possessions or you could be asked to file a different kind of bankruptcy where you have to make monthly payments when it could have been avoided. If you are not properly represented a bankruptcy trustee may foreclose on your house, allow your car to be repossessed, seize a tax refund or other assets. You could file under the wrong chapter, apply the wrong exemptions, fail to file all of the necessary forms or not understand the significance of important forms.
Protect Yourself:
Call us today for a free and complete bankruptcy consultation. We can protect you from your creditors and protect your home, cars, jewelry and other assets. Creditors and collection lawyers have a job to do and it may seem that they are heartless and will take anything they can from you. They are represented and you should be too. Call us today. The Federal Bankruptcy Court indicated that seeking the advice of a qualified attorney is strongly recommended. https://www.uscourts.gov/services-forms/bankruptcy/filing-without-attorney
Fall River Massachusetts
Bucacci and Simonian the local and trusted name for bankruptcy visit www.massbklaw.com
Are you overwhelmed with debt and under the threat of bankruptcy from your creditors?
Are you afraid you’ll lose your home and everything you own?
The threat of bankruptcy requires experienced legal assistance.
With the right professional advice things don’t have to be as bad as you might think.
An experienced bankruptcy attorney can work with you to determine the best solution for your personal situation.
Are you frustrated with aggressive debt settlement companies that make promises too good to be true.
Ask about our low attorneys fees and payment plans.
Most people keep their house, cars, all their property and assets and get the fresh start they deserve.
We may even be able to negotiate with your creditors to avoid bankruptcy altogether.
Stop living in fear and get sound professional advice before it’s too late.
Come and talk to us in complete confidence we’ll be with you every step of the way.
Contact us today Bucacci and Simonian the local and trusted name for bankruptcy.
Call 508-673-9500 and visit www www.massvklaw.com
Servicing Fall River Massachusetts and the surrounding areas.
Repossession
Repossession
Massachusetts Bankruptcy Lawyers Anthony Bucacci and Robert Simonian (508)673-9500
Car Repossession and Chapter 13 Bankruptcy
Find out if a car loan lender can repossess your car during bankruptcy, and whether you can get it back if the repossession happened before you filed.
The Automatic Stay Stops Car Repossession
When you file for Chapter 13 bankruptcy, the court puts an order called the “automatic stay” in place that prohibits debt collection attempts. The stay applies to most, but not all, creditors and debt types.
For instance, the stay will stop collections for credit card debt and other loans, as well as a foreclosure sale. It will also prevent a lender from repossessing your car.
However, the stay won’t stop criminal actions, child custody, or visitation proceedings, and, depending on your state law, certain eviction proceedings. (Learn more in How Bankruptcy Stops Your Creditors: The Automatic Stay.)
Chapter 13 Bankruptcy Helps You Keep Your Car
Here’s how the automatic stay protects you in two different repossession situations.
You Still Have the Car When You File for Bankruptcy
If the lender hasn’t repossessed your car when you file for bankruptcy, the automatic stay will prevent the lender from repossessing it until the bankruptcy judge approves your Chapter 13 repayment plan. If your repayment plan repays any missed car loan payments (the arrearage), the lender can’t repossess your car during your bankruptcy or after it concludes (assuming you stay current on your payments).
Even so, you must make “adequate protection” payments from the time you file for bankruptcy until your plan is approved. These payments cover the depreciation of your car during this period. Usually, adequate protection payments are equal to the amount of your car payment. So you should plan to keep making your car payments until the court confirms your plan.
When the Stay Might Not Protect You
The stay lifts by operation of law (which is another way to say “automatically”) and will go away if you:
- file a Chapter 13 bankruptcy shortly after the court dismisses a previously-filed Chapter 13 case (the stay will last for 30 days only unless you file and win a motion requesting additional time), or
reject a personal property lease, such as for a car or equipment (the automatic stay will lift on the rejection date). - Also, a creditor can ask the court to “lift” or remove the automatic stay to continue collection proceedings during a bankruptcy case. A lender who can show that it stands to lose money—for instance, you stop making your car payments during your case—will have a good chance of winning such a motion.
The Lender Repossessed the Car Before You Filed for Bankruptcy
In some cases, if the lender repossesses your car shortly before you file for Chapter 13 bankruptcy, you might be able to get the car back. In your repayment plan, you’ll need to provide for the payment of the arrearage and be able to continue making your monthly payments. If your car has been repossessed and you plan to file for Chapter 13 bankruptcy, contact an attorney immediately. (To learn more, see My lender repossessed my car right before bankruptcy. Can I get it back?)
Other Chapter 13 Benefits: Reducing a Car Payment
f you’re worried about your car getting repossessed, it’s likely that you can’t afford the payment. If you owe more than what the vehicle is worth, Chapter 13 bankruptcy can help.
You can reduce the loan balance on the car (or boat, storage building, furniture, jewelry, vacation home, and similar property) to the value of the property if the loan meets certain conditions (more below). You can also lower a high-interest rate to a more affordable amount. Any remaining amount gets treated as unsecured and will only get paid if you have room in your budget.
The ability to alter loan terms is called a cramdown, and it’s available for just about any type of loan secured by the property except for the mortgage on your principal home or a recently purchased item (more limitations below).
Example. Jean owes $10,000 on a Prius she bought three years ago, but it’s only worth $8,000. In Chapter 13 bankruptcy, a cramdown will allow Jean to reduce the amount she must pay for the car loan to $8,000.
The bankruptcy code also allows you to reduce a high-interest rate. The creditor is entitled to receive the prime interest rate plus 1 or 2 points. (Most courts accept the prime rate published by the Wall Street Journal.) For instance, if the current rate is 4%, most bankruptcy courts would approve a cramdown to around 6% (this will change as rates rise).
Limitations on Car Cramdowns
The cramdown option isn’t limitless. It doesn’t apply to new car loans (and other types of property), and it doesn’t survive a Chapter 13 case that is dismissed rather than discharged.
- No cramdown for a recent property purchase. Cramdown isn’t available on a loan used to buy a vehicle during the 910 days before filing the bankruptcy case. You can cramdown car title loans that weren’t used to purchase the vehicle even if that title loan was taken out within the 910 days (for instance, you used the car as collateral for another financed purchase).
- No cramdown in a dismissed Chapter 13 case. You’ll get the benefit of the reduced balance and interest rate only if you complete your Chapter 13 plan. If the case gets dismissed, the loan will revert to its original terms and the creditor will have the right to collect the total amount owed at the higher interest rate.