Financial Hardship

Massachusetts Bankruptcy Lawyers Anthony Bucacci and Robert Simonian (508)673-9500


Chapter 13 Bankruptcy: Hardship Discharge

If you run into permanent financial trouble while in Chapter 13 bankruptcy, you may be able to get your debts discharged early.

When you file for Chapter 13 bankruptcy, you don’t usually receive a discharge until you complete your repayment plan. But a Chapter 13 plan typically lasts three to five years, so it’s not uncommon to experience a significant change in financial circumstances. If you can’t continue to make your payments, you can ask the court for a hardship discharge. Read on to learn more.

What Is a Chapter 13 Hardship Discharge?

A hardship discharge is a discharge the court grants you before you complete all of the required payments under your Chapter 13 repayment plan. To receive a hardship discharge, you must file a motion with the bankruptcy court and satisfy all three of the following conditions:

  • You failed to complete your payments because of circumstances beyond your control.
  • Your unsecured creditors already received as much money as they would have received under Chapter 7 bankruptcy.
  • Modification of your repayment plan is not feasible.

Circumstances That Might Justify a Hardship Discharge

To qualify for a hardship discharge, the change in your circumstances must not be your fault. Also, you must typically show that a serious and permanent reason or condition prevents you from completing your plan, such as a life-changing medical condition that arose after filing your case. Temporarily losing your job or experiencing a decrease in income is not sufficient. In that situation, you might want to consider converting your case to Chapter 7.

Distribution to Unsecured Creditors

Before you can receive a hardship discharge, you must show the court that your Chapter 13 plan has already paid your unsecured creditors—those debts that aren’t secured by collateral—as much money as they would have received in Chapter 7 bankruptcy.

The amount of money your unsecured creditors would have received in Chapter 7 bankruptcy depends on the amount of nonexempt property you own. Nonexempt property gets sold in Chapter 7. By contrast, you pay your creditors for nonexempt property as part of your Chapter 13 repayment plan—which is why you get to keep it.

If you’re paying for a significant amount of nonexempt property in your plan and your Chapter 13 plan was recently confirmed (approved), you might not have paid your unsecured creditors enough to qualify for a hardship discharge.

When Is a Chapter 13 Plan Modification Not Feasible?

If your circumstances change after filing for Chapter 13 bankruptcy, bankruptcy laws allow you to modify your plan accordingly. For example, if your income goes down during bankruptcy, you might be able to modify your plan to reduce your payment amount. A judge can reduce the amount you’re paying toward nonpriority, unsecured debt, such as credit card balances, medical bills, and personal loans.

Ultimately, you must show the court that modifying your plan is not feasible or practical—that your circumstances are so dire that even a modification would not help you complete your plan.

What Debts Will a Hardship Discharge Eliminate?

A Chapter 13 hardship discharge is similar to a Chapter 7 bankruptcy discharge, and some debts survive Chapter 7 because it wipes out only dischargeable nonpriority unsecured debts. A Chapter 13 hardship discharge won’t eliminate the following types of debts:

  • priority debt
  • student loans, and
  • other debts that are nondischargeable in Chapter 7 bankruptcy.

Also, many people file for Chapter 13 to help keep a home, and you’ll lose that benefit if you receive a Chapter 13 hardship. Once you’re no longer making Chapter 13 repayment plan payments, you won’t be able to catch up on missed mortgage or car loan payments or other past-due secured debt (obligations secured by collateral) and you could lose your house or vehicle. Consider contacting the lender about available options.

Also, because a Chapter 13 hardship discharge is so similar to a Chapter 7 discharge, you might find it helpful to learn about the differences between Chapter 7 and 13 bankruptcy.

Consult With a Bankruptcy Lawyer

It’s not uncommon for a debtor to have an income change during a Chapter 13 case. If you can’t pay your current payment, you’ll want to see if it can be adjusted before you drop out of your plan altogether. Your bankruptcy lawyer will review your matter and advise you of the best course of action.

Source : alllaw.com


The Facts About Filing Bankruptcy

Based on CBP data, we find that people are living longer in the financial stress sweatbox before filing bankruptcy than they have in the past.

Two-thirds of people who file bankruptcy reported struggling with their debts for two or more years before filing for bankruptcy.

One-third of people reported struggling for more than five years, double the frequency from the CBP’s survey of people who filed bankruptcy in 2007.

For those people who struggle for more than two years before filing — the “long strugglers” — we find that their time in the sweatbox is marked by persistent debt collection calls, the loss of homes and other property, and going without healthcare, food, and utilities just to make minimum payments on only some of their bills.

There is no need to live like this. The longer you wait means the longer your road to recovery. Although long strugglers do not file bankruptcy until long after the benefits outweigh the costs, they still report being ashamed of needing to file.

It is often much better to end the stress and anxiety and not delay repairing your life. The longer you wait the longer your relationships with others suffer and the more unhealthy stress and anxiety builds up.

Bankruptcy is for the most part a confidential process and your friends, family and neighbors will not know unless you tell them that you filed for bankruptcy. You should not feel ashamed to file for bankruptcy and it is not a sign of failure or defeat.

Most people need a fresh start in life at least once in their life. From start to finish, no one you encounter in the bankruptcy process will make you feel guilty or ashamed.

At Bucacci and Simonian we are not judgmental of your situation. We are here to help you.

Every year we have to meet with and file bankruptcies for our friends, family members of friends, colleagues, business associates and people we have know for many years. The best way to look at your situation is that it is no different than going to the doctor when you are too sick to recover on your own and you need professional help.

Call us today for a free confidential bankruptcy consultation.

We are Massachusetts bankruptcy attorneys who have been helping people with their financial problems for well over 25 years. Call Bucacci & Simonian at 508-673-9500 for a free and confidential consultation today.

Car Title Loans & Bankruptcy

A car title loan is when you borrow money and offer your car as collateral, and if you default, the lender can repossess your car. Exactly how much you may borrow and how quickly you need to repay the loan depends on your loan contract and the value and equity in your car. The lender may be able to take your car and sell it, keeping the difference between what you owed on the loan and the sale price. If the vehicle sells for less than what is owed you can still be in debt to the lender. If that were to happen you could discharge the debt in bankruptcy whether it is chapter 7 bankruptcy or chapter 13 bankruptcy. What the lender is permitted to do is dependent on state law and some states don’t allow vehicle title loans at all.

Note that you will most likely need to pay back a lot more than what you borrow. Hi interest rates and the cost of borrowing the money, means these are usually very expensive loans. The Federal Trade Commission says lenders often charge a title loan APR of 300%. Some states cap APRs for vehicle title loans, but the Consumer Financial Protection Bureau extended its deadline for putting new protections into place for borrowers who take on vehicle title and other high-cost installment loans. It has proposed rolling back requirements for lenders to determine upfront if borrowers could afford to repay the loans. Often people in desperate situations will try to obtain such a loan before filing bankruptcy.

What is a car title? A car title is an official, state-issued document that says who owns the vehicle. It will list the owner’s name and the car’s year, make, model and the vehicle identification number or “VIN Number.” Every time the car has a new owner and every time the owner moves to a new state, the title will change. Vehicle title loan lenders will often require a “clear” title, meaning you own your car outright and free and clear of other liens or loans against the vehicle.

What if you don’t own your car outright? It may be harder to get a vehicle title loan or you may not be able to borrow as much money as you may need, or you may not be able to get a car title loan at all if you already have a loan on your car, depending on your state’s laws. You technically don’t own the car, the lender does. Depending on your state’s law, you may not even have a title in-hand, the lender may have it. If you do have the title and still owe on your car, it will say there is a lien on your car. This makes in more difficult to obtain such a loan.

The Benefits of a Car Title Loan

Car title loans are loans of last resort. It’s possible that a bank or credit union will offer car title loans at lower rates than storefront lenders.

Easier to Qualify

Because the lender knows it has something of value to take (your car) if you don’t pay it back, it is likely to have more relaxed credit score and income requirements than those for other types of loans. However, your state might impose certain income or other requirements. Again, a title loan should be a last resort for an emergency situation. If you are considering such a loan you should consult with a bankruptcy attorney first to explore other options.

Greater Loan Amount

Depending on how much your car is worth, you may be able to borrow a greater amount than a payday loan, which is another type of installment loan that uses your paycheck as collateral instead of a car title. Most auto title loans are for 25% to 50% of the car’s value, usually between $100.00 and $5,500.00 though some lenders may offer as much as $10,000 or more.

• How do you know how much your car is worth? Lenders will use industry standards like NADA or Kelly Blue Book to look up how much your car is worth. Do not expect that they will use the high retail value but rather the wholesale or trade in value. They will usually offer you less than this amount so that if you don’t pay back the loan and they take your car, they can then sell it for a profit. You can use the same online industry guide for free to get an idea of the amount you could borrow.

The Drawbacks of a Car Title Loan

We can’t emphasize this enough that vehicle title loans are expensive, more expensive than nearly any other type of credit and potentially risky. If you live in Massachusetts and are considering such a loan it may be best to schedule a free consultation with a debt lawyer or bankruptcy attorney before you make a mistake.

A Cycle of Debt

Lenders for car title loans make more money if borrowers stay in debt. In addition to high APRs, title lenders often charge fees or costs. If you cannot repay the loan, a “rollover” loan would fold all of those costs into a new loan. What sounds like a plus really isn’t because the new loan would add more fees and interest, making it even more difficult to get out of debt. CFPB data suggest that’s exactly what happens as a significant number of vehicle title loan borrowers enter multiple rollover loans and the cycle of debt begins.

You Could Lose Your Car

Default on your car title loan and the lender could repossess and sell your car. To add insult to injury, you may even be charged a repossession fee and auction fees. Some lenders require borrowers to furnish them an extra set of keys or install a device that could impair your ability to start the engine if you do not make payments. These devices may be used for repossession or as a way to remind borrowers to pay their loans on time. When the CFPB studied vehicle title loan borrowers between 2010 and 2013, 1 in 5 or 20% had their vehicle seized or repossessed.

If you find yourself in a situation where you are in debt and desperate for money to keep up with your bills it may benefit you to speak with us. We are Massachusetts bankruptcy attorneys serving all of Bristol County Massachusetts and Plymouth County Massachusetts. Attorneys Anthony Bucacci and Robert Simonian are Massachusetts bankruptcy lawyers helping people file bankruptcy in all of Massachusetts and particularly Southeastern Massachusetts including Fall River, Seekonk, Swansea, Freetown, Westport, Somerset, New Bedford, Dartmouth, Assonet, Fairhaven, Assonet, Mattapoisett, Middleboro, Lakeville, Raynham, Attleboro. Call us today or visit our website today to schedule a free consultation.

Income Tax Debt & Bankruptcy

When you file for bankruptcy, you may be able to wipe out and discharge income tax debts 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 for 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.

All Debts Discharged

Are all of the debts discharged?

Bankruptcy: not all debts discharged. The debts discharged vary under each chapter of the Bankruptcy Code. Section 523(a) of the Code specifically excepts various categories of debts from the discharge granted to individual debtors. Therefore, the debtor must still repay those debts after bankruptcy. Congress has determined that these types of debts are not dischargeable.  Public policy reasons do not allow the discharge of certain debts.  Debts incurred for drunk driving injuries to another is one example.

Chapters 7, 11, 12,  lists 19 categories of debt excepted from discharge. A more limited list of exceptions applies to cases under chapter 13.

Generally speaking, the exceptions to discharge apply automatically if the language prescribed by section 523(a) applies. The most common types of nondischargeable debts are certain types of tax claims, debts not set forth by the debtor on the lists and schedules the debtor must file with the court, debts for spousal or child support or alimony, debts for willful and malicious injuries to person or property, debts to governmental units for fines and penalties, debts for most government funded or guaranteed educational loans or benefit overpayments, debts for personal injury caused by the debtor’s operation of a motor vehicle while intoxicated, debts owed to certain tax-advantaged retirement plans, and debts for certain condominium or cooperative housing fees.

The types of debts described in sections 523(a)(2), (4), and (6).  Obligations obtained by fraud or maliciousness not automatically excepted from discharge. Creditors must ask the court to determine that these debts excepted from discharge. Discharge can apply to the debts listed in sections 523(a)(2), (4), and (6).  Only with the absence of an affirmative request by the creditor and the granting of the request by the court.

A slightly broader discharge of debts is available to a debtor in a chapter 13 case than in a chapter 7 case. Debts dischargeable in a chapter 13, but not in chapter 7.  This includes debts for willful and malicious injury to property, debts incurred to pay non-dischargeable tax obligations.  Also debts arising from property settlements in divorce or separation proceedings. Although a chapter 13 debtor generally receives a discharge only after completing all payments required by the court.  There are some limited circumstances under which the debtor may request the court to grant a “hardship discharge.”  Even though the debtor has failed to complete plan payments.

Such a discharge is available only to a certain debtors.  Failure to complete plan payments is due to circumstances beyond the debtor’s control. The scope of a chapter 13 “hardship discharge” is similar to that in a chapter 7 case. With regards to the types of debts that are excepted from the discharge. A hardship discharge also is available in chapter 12.  Failure to complete plan payments.  If due to “circumstances for which the debtor should not justly be held accountable.”

If you have specific questions please call Bucacci And Simonian at 508-673-9500 or visit our website.

Medical Bills Can Stack Up Quickly – Is Bankruptcy the Answer

Medical Bills Can Stack Up Quickly - Is Bankruptcy the AnswerWith everything that is going on, many people are concerned about their health and on going prescriptions. One’s medical bills can cause great concern and keeping up with them can be a real challenge and finical concern. The question many have is “what can I do?”

Filing Bankruptcy is one possible option and many people are not sure what will happen to their assets and property if they decide to choose that course of action. If you decide to pursue the options, both pro and con, of filing Bankruptcy you may be surprised.

Will I be able to keep my house if I file Bankruptcy because of overdue Medical Bills ?

Will I be able to keep my car if I file Bankruptcy because of overdue Medical Bills ?

How will this impact my credit score?

People have many questions about Bankruptcy and really have no solid clue about the process and options on doing so. We are here to go over all the options you have regarding filing your Bankruptcy.

When filing Bankruptcy it is best to work with someone that can explain what option you have and what may be best in your particular situation. This is what we do when preparing to file your claim.

Medical bills are, sadly, often unforeseen and can add up quickly and filing Bankruptcy may just be the answer.

Speaking with a Bankruptcy Attorney and going over your situation to find out what options you may have is always a good idea. After all, you will what to know what options you have to eliminate the stress and concern you have regarding any outstanding debt you may have.

Meeting with a Bankruptcy Lawyer is not an admission of guilt or fault. After all, we are hear to help in every way we can to get you back on track with a fresh start.

The process of filing Bankruptcy is not the same for every person, each situation is unique.

If you find yourself in an uncomfortable position and are over whelmed with outstanding medical bills? You should seek professional advise.

We are here to help and get you back on track, give us a call today.

Considering Bankruptcy Undecided or Unsure What To Do ?

Talk To Us About Your Options When Considering Bankruptcy :

Are You Considering Bankruptcy Undecided or Unsure What To Do ? 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 for expert bankruptcy advice and 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. The law firm Bucacci & Simonian is well known for their hard work, diligence, creativity and problem solving abilities. The law firm Bucacci & Simonian 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. Many are embarrassed about their financial problems and the situation regarding  bankruptcy. This is simply not true and many famous people have had to file for bankruptcy to get a fresh start.

Why Call Bucacci & Simonian When Considering Bankruptcy Filing :

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 important cases involved saving a client’s multi-family home.

What to Avoid When Filing Bankruptcy :

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:

Considering Bankruptcy Undecided or Unsure What To Do ? 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 suggests that seeking the advice of a qualified bankruptcy attorney is strongly recommended.

Famous people who filed for bankruptcy

There are many famous people who filed for bankruptcy.  Bankruptcy can happen to anyone at any time and it is usually a result of unfortunate life events or you get caught in the trap of paycheck being used to pay debts and credit cards used to buy necessities. Many famous people who filed for bankruptcy only to become successful afterwards. Your situation does not have to be any different. United States Presidents have had financial trouble.  For inspiration, here are some famous people who filed personal bankruptcy or business bankruptcy and are now in a much, much better place.

If you are experiencing financial difficulties that are bringing you down emotionally and physically, contact bankruptcy attorney Robert Simonian and Anthony Bucacci for a free consultation. It is the first step towards getting a fresh start as the famous people below did.

Movie & television stars: Dino DeLaurentis, Larry King and Ed McMahon.

Authors and Writers: Mark Twain, Oscar Wilde, Robert Kiyosaki and Thomas Paine.

Muscians: Ted Nugent, Jerry Lee Lewis, Tom Petty, Merle Haggard, Cyndi Lauper, Tammy Wynette, M.C. Hammer, Johnny Paycheck, Marvin Gaye, Elton John, Vince Neil, Toni Braxton and David Cross.

Business owners: Henry Ford, H.J. Heinz, P.T. Barnum of Barnum and Charles Goodyear.

Actors and Actresses: Sherman Hemsley, Don Johnson, Kim Basinger, Lynn Redgrave, Mickey Rooney, Randy Quaid, Margot Kidder, Lorenzo Lamas, , Zsa Zsa Gabor, Isaac Hayes, Lorraine Bracco and Redd Foxx.

Athletes: boxers Joe Louis and Leon Spinks, Mike Tyson, Johnny Unitas, Bjorn Borg.

Presidents Abraham Lincoln and Ulysses Grant.

Bankruptcy is more and more common. There are many famous people who filed for bankruptcy.  The current uncertain economic times and unemployment, lack of increased income to keep pace with inflation, all give rise to intense economic pressure. Bankruptcy is a very good tool to get a fresh start and get back on track.

 

Bankruptcy Lawyers, Trust, Wills and Divorces

BANKRUPTCY COURT OPEN & WE ARE OPEN. FREE IN PERSON OFFICE CONSULTATION, TELEPHONE OR VIDEO CONSULTATION. Most People Are Afraid Of Bankruptcy. Hearing different information from friends and the internet? Considering “Debt Consolidation?” Call Us First For Real Answers To Your Financial Problems 508-673-9500