Chapter 13 Payment Plan Calculator

If you need to file for bankruptcy, but want to retain your assets, Chapter 13 bankruptcy may be a good option for you. Chapter 13 is a good option for people who have a consistent, reliable income. After you file a petition for Chapter 13, you must file a repayment plan within 15 days. Calculating your monthly payments under a Chapter 13 repayment plan can be complicated. First, you need to determine whether you have “priority claims” debts according to the Bankruptcy Code. Priority debts include, but are not limited to, spousal support and child support. These debts must be repaid in full and have payment priority over other types of debt.

Care must be taken when calculating Chapter 13 repayment plans. Each state may use a slightly different calculation for repayments plans, and the median income for each state is different. Chapter 13 repayment plans typically are set up for a three year or five year plan, and your disposable income each month will help to determine how much your payment will be each month, as well as the length of your repayment plan.

There are Chapter 13 repayment calculators available online. While these calculators may be helpful in getting a ballpark idea of your payments, they should not be considered as a substitute for legal advice from a bankruptcy attorney. A bankruptcy attorney in your state is the most reliable source for determining your monthly repayment amount in a Chapter 13 bankruptcy case.
Richard Croce - Rich@rrc-llc.com

Chapter 7 Means Test

The Chapter 7 “means test” determines whether you are eligible to file Chapter 7 Bankruptcy. The means test is a formula that is designed to stop people with high income levels and/or low monthly expenses from filing Chapter 7 bankruptcy.  The test was designed to ensure that Chapter 7 is only used by people who are truly unable to repay their debts.

Before taking the means test, you can determine if your income is less than the median income for your household size in your state. If your income is lower than the median income level, you are eligible for Chapter 7 bankruptcy and do not have to take the means test. If your income is higher than the median income level, you have to take the means test to see if you are eligible to file Chapter 7 bankruptcy.

The basic formula for the means test involves deducting specific monthly expenses from your average income for the six months preceding your bankruptcy. This formula will determine your monthly “disposable” income. If you have a high amount of disposable income, you are unlikely to be eligible for Chapter 7 bankruptcy. Filers with higher income, and who fail the means test, may be eligible for Chapter 13 to repay part f other debts, but are not eligible for Chapter 7 which completely eliminates debt altogether.

You can find online versions of the means test to see if you may be eligible for Chapter 7. These tests may not always be accurate, and should not be substituted for legal advice from a bankruptcy attorney.
Richard Croce - Rich@rrc-llc.com

Keeping my home and my car after a Bankruptcy filing

One of the first questions a person typically asks when considering bankruptcy is “Will I lose my house?” The next question is often “Will I lose my car?” Depending on the Chapter of bankruptcy filed, what state you live in, and many other factors, the answer may vary. If you are considering retaining a bankruptcy attorney, these are questions he or she will be able to help answer.

There are instances where you would not be able to keep your home as well as cases where you would be able to keep your home. Also, there is the possibility that even if you lose your home, or are forced to sell the home, you may not lose the equity. 

Again, there are options that an attorney can help you sort through.

In the case of vehicles, there are also different situations that affect the outcome. If you own antique automobiles that are paid free and clear, and that are worth a lot of money, you will probably not be allowed to keep them. They will likely be liquidated to pay your debts. 

On the other hand, if you have a car that you still owe money on, you will likely be able to keep it if you can continue to make the payments. Likewise, a leased car has no equity and you will need to continue to make the payments on said vehicle.

Your situation is unique and there are often no clear cut answers to these questions. A bankruptcy attorney is qualified to help you find the best solution for your circumstances and can walk you through the best options for your individual bankruptcy case.

Hope this helps!
- Richard Croce -  Rich@rrc-llc.com

Rebuilding Credit through Loans and Retail/Gas Credit Cards

You may be able to apply for loans soon after your bankruptcy proceedings have ended. As with credit cards, you may be able to apply for secured or unsecured loans. The procedures for applying for a secured loan are very similar to applying for a secured credit card. Also, the procedures for applying for an unsecured loan are very similar to applying for an unsecured credit card.

Credit cards from retail stores and gas companies are another option for rebuilding credit. Many department stores, hardware stores, office supply stores, electronics retailers and gas stations now offer their own credit cards. However, these cards have become more difficult to acquire over the past several years. You may have to reestablish your credit through a secured credit card, unsecured credit card, secured loan or unsecured loan before you are eligible for retail store credit cards. 

One main reason why acquiring this type of card has become challenging is that even though numerous retailers offer credit cards, most of their credit card transactions are processed through only a few key lenders. A considerable majority of retail stores use Citibank, GE Money Bank, Chase Bank, HSBC and WFNNB to process their credit transactions. If you are already in the system of one of these major lenders, a new application may red flag a formerly delinquent account, further damaging your credit if you are denied a new credit line. Therefore, retailer credit cards should not be your first avenue for rebuilding your credit score.

It is always advised to speak with an experienced bankruptcy attorney to clarify any doubts about the pros and cons concerning bankruptcy proceedings. 

Useful Information to Help Re-Build Your Credit
Your Rights: Credit Reporting
Credit Cards & Consumer Loans
Credit Reports & Scoring
Free Credit Reports 
Hope this helps!
- Richard Croce -  Rich@rrc-llc.com