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AUTOMOBILE REPOSSESSION PART 2

In Part 1, I described some repossession scenarios that often occur when you fall behind on a car payment. The lender may let you slide on the payment for a month or two, but does not have to under most contracts. If repossession is imminent, a Chapter 13 or Chapter 7 will stop it, however the Chapter 13 affords a repayment plan to make up the missing payments , often significantly reduces the interest rate and may reduce the overall amount owed depending on how long ago the car was purchased. If the car is repossessed prior to filing, a Chapter 13 can compel return of the car provided you have a full coverage insurance policy. That is often a requirement to show before return relief is ordered. Repossession fees , etc., can be put into the Chapter 13 plan. When the car is released back to the initial purchaser, it is often at a impound lot located somewhere in Mississippi. You may have to go to that location if instate to pick up the car. If it has been moved out of state for auction, the creditor can be compelled to return the car. The longer you wait the more difficult it may become. There are requirements at law that must be followed prior to the auction. A Chapter 13 will stop this entire process. Of course you must have income to fund a Chapter 13 plan. This income could be from employment, retirement, social security, provided its regular and enough to fund the Chapter 13 plan. CONTACT T.K. BYRNE AT 601-925-9482 FOR MORE INFORMATION OR TO SET UP AN APPOINTMENT ON THIS ISSUE. TIME IS OF THE ESSENCE

Automobile Repossession Part 1

Suppose you receive a notice from your car company or their agent concerning a late payment or missed payment. By talking with you about the payment they are verifying information that may help them to find, locate and pickup you car , leaving you without transportation to work, pick up children or by groceries. It can lead to job loss if transportation is a job requirement. Can you do anything before this happens? Of course you could pay the note up to date if you have the funds including contractual late fees. If you are unable to pay you could also voluntarily turn over the car. Or you could garage the car . A repossession company can and will snatch your vehicle from work, home or anywhere provided they do not breach the peace. If they have a replevin order, they may appear with a deputy to assist them in their efforts. However, most do not have a replevin order signed by a judge. So they will try and pick up your car while you sleep, are at work or shopping. If your car is in your private garage they cannot break the law (lift up garage door , break lock, and hook up a to tow the car. That may be a residential burglary. If they get the car and you need or want it back, a Chapter 13 will be a method to recover the automobile. If you are not interested in getting the car back a Chapter 7 may help you wipe out the remaining debt on the vehicle. CALL T. K. BYRNE AT 601-925-9482 TO LEARN MORE ABOUT CHAPTER 7 AND CHAPTER 13

Retirement accounts become colateral

All to often individuals withdraw from an IRA, 401K, or SEP to pay medical bills or to stave off a foreclosure of their home. While this is a matter of personal choice, it is often a bad choice. First off, it creates a taxable event. You pay tax on the amount withdrawn at a higher rate than banks, or sometimes loan companies interest rate., Second you are reducing your retirement account at present day value of money and losing out on any potential income gains from your retirement account investment gains. Lastly its a bad way to pay bills or stay on budget. A Chapter 7 bankruptcy will accomplish the elimination of medical bills without the need for borrowing against individual retirement plans. A Chapter 13 will accomplish this also but differently than a Chapter 7. The Chapter 13 Bankruptcy will permit you to pay the arrearage on a mortgage stopping foreclosure or automobile repossession and make the monthly car and/or mortgage payment through a bankruptcy plan. It is necessary that you have regular income sufficient to fund the bankruptcy Chapter 13 plan often on a monthly basis, unless you want to abandon this property and no longer be responsible for its payment. All Chapter 13 plans are individual and unique. Social security disability can be used to fund a Chapter 13 plan.

CRUSHING MEDICAL BILLS AND CREDIT CARD DEBT

There come a time in most of our family lives when injury, sickness, or accident afflicts a breadwinner, or child in our family. This is often followed by inability to work regular hours, possible job loss, loss of income and lack of co-pay money even if their is a medical insurance policy for medical expenses. Many people place these expenses on their credit cards or draw down on retirement plans to make the medical expense payments. While this effort is noble it often is the precursor for creating a catastrophic debt load coupled with loss of retirement income that will be necessary at a later date . Also the drawdown on retirement income is a taxable event that the IRS will collect first. Your $10,000 draw down or loan on a 401K may come with a $2,800.00 or more tax hit at the front end. A Chapter 7 or Chapter 13 bankruptcy mat discharge these debts without the necessity of running up credit card debt or retirement plan drawdown and a taxable event. It is important to evaluate your specific needs before blindly paying with a means that will create a bigger issue. Certain Medical providers may be partially reimbursed with Federal tax credit programs or money for unpaid medical expenses. It may be wise to plan out how you intend to pay your medical expenses before borrowing against your retirement plan or home.

TAKE ACTION

Whenever a client calls or visits my office with a legal issue or problem one underlying and consistently obvious issue is that they have waited too long to take any remedial and/or corrective action to properly address their problem or issue. In the overwhelming majority of cases and problems I am retained to handle and resolve an inability to commit to the problem at hand is the clients biggest issue. If a creditor is garnishing their wages, they let it happen. If their house is in foreclosure, they make no effort to remedy the problem, If they or a family member gets arrested, they wait till the day before court to contact an attorney. If they seek a divorce they wait until the last minute to address and emotional and possibly preventable outcome. Most of us were taught that avoiding a problem doers not make it go away. Often it only lets the problem grow and become overwhelming. Finding good counsel may be difficult and costly at the front end. Nevertheless, it saves time, money and give peace of mind once obtained. Many pending problems once addressed properly either go away or are mitigated once addressed. For example Chapter 7 and Chapter 13 bankruptcy filing stops garnishments, repossession of automobile, foreclosure of your home or real property. Answering a divorce complaint puts forth you side of the issues. Negotiating the matter allows for your input and may save thousands of dollars. If arrested bond may be obtained if denied , the facts the police are alleging get disclosed and either a plea bargain or trial posture is adopted. Never hesitate to contact an attorney to assist or handle your legal issues and problems. However, do take action early on .

Car Repossession and discharge of debt obligation

Should your automobile be repossessed or you voluntarily surrender the vehicle back to the creditor. There still remains an underlying obligation to repay the debt owed from the automobile purchase. This is often referred to as a deficiency balance. It is the amount the automobile sold for at auction which is subtracted from the outstanding amount originally owed the creditor. It is often a significant amount. However, this is an unsecured debt which may be discharged in a Chapter 7 or Chapter 13 bankruptcy filing. The filing prevents a potential Court Judgment that will be reported to the credit bureaus and/or  effect a possible a wage or bank garnishment, The wage garnishment is stopped or prevented by the bankruptcy filing . The account garnishment is also stopped. However, it is important to disclose these facts to your attorney so the bankruptcy notices are properly directed to the human resources department or banking institution.

Behind on Mortgage

Should a homeowner find themself behind on their home mortgage a Chapter 13 consolidation plan through the United States Bankruptcy Code often provides rapid relief. While in the majority of cases, it does not lower your monthly mortgage payment, if does provide a mechanism to pay back your arrearage payments and stop home foreclosure. The key to this plan of action depends on the filer having regular income or a method to make the monthly plan payments. Many filers while in a Chapter 13 are able to work out a mortgage payment modification scheme with their mortgage holder/lender. However, the Chapter 13 itself does not accomplish that modification. When the filer completes the Chapter 13 plan payments the mortgage arrearage is cured and any ongoing monthly mortgage payments will continued to be made by the filer. Prior to the plan becoming discharged the Chapter 13 Trustee files a document noticing the mortgage holder that the arrearage debt is paid out. This ensures the creditor cannot come back on the filer.

DEBTOR ISSUES IN CHAPTER 13

Over my 22 years representing debtors in Chapter 13 bankruptcy filings one particular theme that arises over the course of the plan period is; My plan should be paid off !, and When am I going to be finished? At the time of filing the debtor signs off on a plan payment that clearly outlines the repayment period and the amount to be paid. For no particular reason after 12 months many debtors either think they are paid out or no longer want to pay. That choice can prevent them from resolving the harassment from their creditors or also risk losing the collateral (house or car or both) During pre bankruptcy discussions the plan period is explained to be 36 months, 48 months or 60 months. Due to most debtor financial situations debtors opt for 60 months. Their are goods reasons for this choice and every situation is different. Nevertheless, once the debtor has determined and chosen their plan, it is important they complete it. Recognizing situations and circumstances change over time, cars break, people or family members get sick, jobs loss can be reasons the Chapter 13 plan will fail. The debtor needs to be proactive in informing their attorney of these changes. They maybe resolvable or not. Holiday periods bring along stress and a squeeze for cash . While gift giving is important, it can wreck a Chapter 13 if expenses get away from the chapter 13 debtor. Importantly, the debtor must resolve to commit to the Chapter 13 plan for it to succeed.

Chapter 7 and Chapter 13 documents most required.

After phoning or communication with a bankruptcy attorney, you may desire an office visit. This is recommended always. The following is a list of items to bring with you for your consultation.
1. Six months of your pay history ( pay stubbs )
2. three months of your bank account history
( checking and savings).
3. current and past years federal and state income tax returns.
4. Credit report or list of everybody you owe money too, whether your going to pay them or not.

This is the minimum requirement at best. The documents contain the basis for the information that will be disclosed in a Chapter 7 or Chapter 13 bankruptcy. Bankruptcy is about disclosure and it must be complete through and accurate to be legally sufficient. If you omit , forget, or fail to disclose certain financial information that is going to perhaps catch the scrutiny of the Chapter Trustee or the United States Trustee. While schedules and information may be amended and supplemented, it is preferable to be correct, right out of the gate. The consultation should be a thorough discussion of assets and liabilities to provide a clear bankruptcy picture. Work dome correct and well limits your time in Court and depositions.

How bankruptcy gives a Fresh Start or Restart

I have been practicing Chapter 7 and Chapter 13 Bankruptcy law on behalf of debtors for over 22 years mostly in Central Mississippi with occasional trips into the North Mississippi and Hattiesburg areas. I have found the work enjoyable and have met very friendly and gracious clients and government employees( Clerks, Trustees,) I discuss the effects of bankruptcy and how it affects the individual. It is important to listen and learn from the client just what their goal is post bankruptcy. Many want to buy a home. While Chapter 7 and Chapter 13 bankruptcy filing may present a challenge to this process, it is not an exclusion. Many businesses reorganize under Chapter 11 of the bankruptcy code. A Chapter 7 is a liquidation process that helps a debtor shed off unsecured and secured debts. However, Secured debts can be kept if sufficient and legal arrangements are made Court approved and met. Unsecured debts such as medical bills, check cashing loans, credit card debt, in special circumstances IRS taxes owed reported , Judgment debts and garnishments , personal loans are discharged and t the obligation to payback ceases. This may be true with secured debts on a case by case analysis, but often the security pledged for the debts must be addressed. An automobile debt may be reaffirmed, whereby the creditor agrees the debtor can still make payments on the auto, keep the car and receive good title after the obligation to pay is satisfied. A home mortgage can also be treated this way. Most creditors insist that the debtors become current and stay current with the secured obligation prior to agreeing on Debt Reaffirmation Agreements. While Chapter 7 and Chapter 13 are reported to the credit bureaus, Trans Union, Equifax and Experian many times the debtors credit score will improve after the bankruptcy filing. This is provided the client now given the opportunity  for a fresh start or restart can make the most of the chance and not fall back onto the ways that may have brought them to this point. There are times that  hard events circumstances revisit of lives such as medical problems, loss of employment, injury, divorce or family emergency.  All in all the fresh start or restart that a chapter 7 can provide may help.