While many people are familiar with chapters, 7, 11, and 13 another chapter that is available is chapter 12.  A chapter 12 is agricultural and is for “family farmers" or "family fishermen." with "regular annual income."   The chapter 12 allows for farmers and fishermen to reorganize their debts in a reorganization plan to pay all or some of their debt.  The chapter 12 plan is an installment plan over three to five years.  Generally, the plan is for three years unless the court approves longer “for cause." If the plan proposes to pay 100% of child support or alimony if any exist, it must be for five years and must include all of the debtor’s disposable income.  A case may not exceed 5 years.

 In order to file for chapter 12 the debtor must meet four criteria when they file the case:

  1. The debtor(s) must be engaged in a farming operation or a commercial fishing operation.
  2. The total debts must not exceed $4,031,575 for a farming operation or $1,868,200 for a fishing operation.
  3. If a family farmer, at least 50%, and if family fisherman at least 80%, of the total debts must be related to the farming or fishing operation.
  4. More than 50% of the gross income of the individual or the husband and wife for the preceding tax year must have come from the farming or commercial fishing operation.
 
Chapter 12 is less complicated, and less expensive than chapter 11, but allows for more debt than a chapter 13 because Chapter 13 is designed for wage earners who have smaller debts than those facing farmers. In chapter 12, Congress sought to combine the features of the Bankruptcy Code which can provide a framework for successful family farmer and fisherman reorganizations.
The only a family farmer or fisherman with "regular annual income" may file chapter 12, but the chapter 12 makes allowance farmers and fishermen whose income is seasonal. 
 
If you have any questions about bankruptcy, contact the attorneys at Fears Nachawati today. Call 1.866.705.7584 or send an email to fears@fnlawfirm.com for a free consultation.
 

When a debtor files for bankruptcy the court charges a filing fee to file the case.  For a chapter 7 case the courts charge a $245 case filing fee, a $75 miscellaneous administrative fee, and a $15 trustee surcharge.  These fees are paid to the clerk when the case is filed. Although with a chapter 7 case a debtor can request to pay the filing fee in installments or have the fee waived. 

If the Debtor is asks the court to pay the fee in installments the number of installments is limited to four, and the final payment must be made no later than 120 days after the case is filed.  For cause shown, the court may extend the deadline, but the last payment then must be paid not later than 180 days after the case is filed.  Failure to pay these fees may result in the case being dismissed. 
 
If the debtor’s is unable to pay in installments and the income is less than 150% of the poverty level, the court may waive the filing fee. 
 
For a chapter 13 case the courts charge a $235 case filing fee and a $75 miscellaneous administrative fee.  The debtor may also request to pay these fees in installments or for the fee to be waived, however the Debtor must also make a chapter 13 plan payments so the Debtor must have sufficient income to pay the plan to remain in the case. 
 
If you have any questions about  Bankruptcy or filing fees, contact the attorneys at Fears Nachawati today. Call 1.866.705.7584 or send an email to fears@fnlawfirm.com for a free consultation.

In the event you brought significant debt into your marriage which you incurred before you were married, certain states will consider that your separate debt, including Texas.  If your spouse is not liable for your debt, such as it was incurred before the wedding, or they did not co-sign for the debt, an individual bankruptcy may be an option.  Married debtors are able to file both Chapter 7 and Chapter 13 Bankruptcy individually.  However, your spouse’s income may still influence which Chapter of Bankruptcy you ultimately file.  Keep in mind that all household income, which includes your spouse, is used to determine your eligibility for bankruptcy.  In the event you do file bankruptcy individually, your filing will not affect your spouse’s individual credit rating.  This is a common concern for debtors seeking to file individually.  However, joint debts will still include a bankruptcy indication on your spouse’s credit report.

 
If you have any questions about Chapter 7 or Chapter 13 Bankruptcy, contact the attorneys at Fears Nachawati today. Call 1.866.705.7584 or send an email to fears@fnlawfirm.com for a free consultation. 
 
According to the American Psychological Association, about 40 to 50 percent of married couples in the United States get divorced.    While getting divorced may not be the easiest process, if you happen to be involved in an active Bankruptcy case, it can add additional step to complete your divorce proceeding.  The good news for those going through a divorce is that you can still complete the process if you or your spouse are involved in a bankruptcy.
 
As part of your divorce proceeding, the Judge will divide the family assets between the spouses.  If you are in a Bankruptcy, this division of assets is prohibited unless approved by the Bankruptcy Court.  After the Bankruptcy is filed, all of your assets become property of the Bankruptcy estate.  The automatic stay, which provides protection from your creditors, prevents distribution or liquidation of the bankruptcy estate without permission from the Court.  In order to proceed with the divorce in State Court, your Bankruptcy Attorney will need to petition the Bankruptcy Court for permission to proceed with the State Court Divorce proceeding.  This is generally accomplished by filing a Motion for Relief From Automatic Stay in the Bankruptcy Court.  Once the Automatic Stay is lifted for the purpose of filing divorce, you will be able to proceed in the State Court.
 
If you are involved in an active Bankruptcy case, you should discuss your situation with your Bankruptcy Attorney to make sure you are properly following the rules of the Bankruptcy Court. If you are considering filing for bankruptcy please call the experienced attorneys at Fears | Nachawati Law Firm to set up a free consultation. Call 1.866.705.7584 or send an email to fears@fnlawfirm.com.
 

 Multiple Bankruptcy Filings

A debtor cannot re-file for bankruptcy for 180 days after their previous case was dismissed if  the  prior case was dismissed due to the debtor’s willful failure to appear before the court or comply with orders of the court.  Additionally a debtor cannot re-file for bankruptcy for 180 days after their previous case was dismissed voluntarily after a secured creditor obtained an order for relief from stay.  11 U.S.C. §  362.  In other words if a creditor such as the mortgage or car creditor lifted the stay in the previous case, the Debtor is barred from filing a new case for 180s days if they then chose to dismiss the case themselves.  If a case was dismissed for other reason, such as missed plan payments the same restrictions do not usually apply.

 Even if a Debtor is able to file a second bankruptcy, if the bankruptcy is filed in the same year as a previous bankruptcy the automatic stay is only valid for 30 days.  A motion to extend the stay can be filed, that will extend the stay for the duration of the case, but this must be filed early and will usually need to be expedited to avoid the stay lifting.  If there are more the one case with in the last year there is no stay in place, and a motion to impose stay must be filed.  Either of these motions will require that the debtor show by a preponderance of the evidence that the new case is filed in good faith and there is a likelihood of success. 

Once upon a time, a college degree ensured a bright future. In fact, an entire previous generation taught their children to work hard, go to college, and stay away from trouble. That seemed to be a recipe for success.

 
Maybe is still is, but it has become harder to find the right ingredients to make that recipe a success – especially when choosing the “right” college and degree program.
 
Forbes estimates that the national student loan debt is $1.2 trillion – with $1 trillion of that federal student loan debt. US News estimates that the average student loan debt for 2013 graduates is $30,000. Many students graduate with six figure debts hanging over their heads as they enter the workforce. Bankruptcy is largely not an option to discharge this debt. Consequently, now, more than ever it is important to make wise decisions regarding college choice and degree program.
 
Fortunately, the US government has stepped in with a tool that provides information on graduation rates, what former students of each school earn, how much debt they leave with, and, perhaps most importantly, what percentage can repay their federal student loans.
 
The College Scorecard, put together by the US Department of Education, allows prospective students to sort and compare information on schools by either state or geographic region. 
 
“Everyone should be able to find clear, reliable, open data on college affordability and value,” President Barack Obama stated. “Many existing college rankings reward schools for spending more money and rejecting more students — at a time when America needs our colleges to focus on affordability and supporting all students who enroll.”
 
Critics of college rankings by media publications complain that the results may be influenced by advertising or other financial sponsorship by the institution. Sometimes this becomes outright comical when small for-profit schools are ranked on the same level as the nation’s best public universities. The College Scorecard seeks to provide objective information that allows the consumer to research and make a sound decision in his or her education.
 
If you are considering filing for bankruptcy please call the experienced attorneys at Fears | Nachawati Law Firm to set up a free consultation. Call 1.866.705.7584 or send an email to fears@fnlawfirm.com.
 
There are minimum ages that are milestones as you go through life. Typically, age 16 means a driver’s license; age 18 means you can vote; age 21 means you can purchase alcohol; age 35 means you can be elected President of the United States (like your kindergarten teacher predicted for you); and age 65 means you receive Social Security retirement benefits (or age 62, or 66, or 67, or never if the government runs out of money).
 
While the government places age restrictions on many activities, there is no minimum age requirement for an individual to qualify as a debtor in a federal bankruptcy proceeding.
 
This “loophole” was used in 1998 to stop a foreclosure. In that case, 10 year old Shawn Powell filed for Chapter 13 bankruptcy protection in a Maryland bankruptcy court. The facts of the case are actually very sad: Shawn, his brother and his sister were orphaned in 1998 after his father died of liver disease; almost exactly a year after their mother died in a car accident. Shawn and his brother lived in his parent’s home with his uncle, who was not able to keep up the mortgage. Faced with foreclosure, Shawn filed for bankruptcy protection.
 
According to a Washington Post story at that time, the purpose of Shawn’s bankruptcy was to buy time for “the children to collect $100,000 from their father’s life insurance policy, which would allow them to pay what they owe and stay in the well-kept home.” Shawn’s bankruptcy filing lists his personal property: toys and clothes valued at $200. Shawn’s income, needed for funding a Chapter 13 repayment plan, was disclosed at $327 a month in Social Security survivor benefits.
 
Ultimately, Shawn’s bankruptcy was dismissed in March, 1999 – by Shawn. After filing, Shawn became the subject of media interest. He was interviewed by newspaper and television reporters including Barbara Walters and Montel Williams. Shawn and his family received donations in excess of $34,000. Even the mortgage company found a heart and agreed to stop the foreclosure proceeding while the insurance issue was being resolved.
 
Bankruptcy can be a lifeline, a second chance, and even provide additional time to restructure personal finances. Bankruptcy is protection for everyone, regardless of age.
 
If you are considering filing for bankruptcy please call the experienced attorneys at Fears | Nachawati Law Firm to set up a free consultation. Call 1.866.705.7584 or send an email to fears@fnlawfirm.com.

In April of 2015, Green Tree Servicing agreed to pay a $63 million fine from the Consumer Financial Protection Bureau and the Federal Trade Commission for “mistreating borrowers” after failing to honor modifications for loans transferred from other servicers, demanding payments before providing loss mitigation options, delaying decisions on short sales, and harassing and threatening overdue borrowers. Green Tree agreed to pay $48 million in restitution to victims, and a $15 million civil money penalty to the CFPB’s Civil Penalty Fund for its illegal actions.

 
So what’s a shady mortgage servicing company with a sullied reputation to do?

Change its name, silly.
 
Green Tree’s parent company, Walter Investment Management Corp. (WAC), decided to merge Green Tree with another of Walter Investment’s subsidiaries, Ditech Mortgage Corp, to form a new company, Ditech Financial LLC. According to its corporate website, the new company will operate as ditech, a Walter company.
 
Readers may remember ditech commercials during the housing boom and subsequent bust of the early 2000’s. The company’s ubiquitous commercials were even parodied by Saturday Night Live, which featured a nefarious loan officer, played by actor Ron Michaelson, repeating the catchphrase “Lost another loan to Ditech!”
 
Green Tree’s website announces that the merger will be complete and effective on August 31. “Whether you’re purchasing a new home or looking to refinance your current mortgage, ditech can help you find the right solution for your needs,” the website states. “We look forward to serving you as a ditech customer.”
 
But this leopard may not be able to change its spots.
 
“Green Tree failed consumers who were struggling by prioritizing collecting payments over helping homeowners,” CFPB Director Richard Cordray said last April. “When homeowners in distress had their mortgages transferred to Green Tree, their previous foreclosure relief plans were not maintained. We are holding Green Tree accountable for its unlawful conduct.”
 
Time will tell if the new ditech will be more responsible or law-abiding in its loans or its servicing than its former incarnations.
 
If you are considering filing for bankruptcy please call the experienced attorneys at Fears | Nachawati Law Firm to set up a free consultation. Call 1.866.705.7584 or send an email to fears@fnlawfirm.com.

 

In a strange case of irony, the Wall Street Journal recently reported that the federal bankruptcy courts around the country are sitting on money that belongs to others. The Wall Street Journal reports that 

 
Each bankruptcy court holds onto unclaimed money for several years before turning it over to the U.S. Treasury. The exact amount of homeless money is unclear. For all of the U.S. Judiciary, the U.S. Treasury held $280.8 million in unclaimed money as of June 30.
 
Apparently, the amount of money in court accounts is large enough to compel some action. Bankruptcy courts around the country are adopting a new financial program initially developed by the U.S. Bankruptcy Court for the Eastern District of Virginia. The Judiciary Financial System is a court financial system which includes an Unclaimed Funds Locator service that a court can make available to the general public for unclaimed funds searches. Through the Unclaimed Funds Locator, creditors can search for leftover money. Currently, 39 of the country’s 94 court websites permit access to the Unclaimed Funds Locator.
 
Usually, “leftover” funds result at the end of the case when a creditor doesn’t cash the bankruptcy court’s check, but can also happen when the court loses contact with the creditor, or the creditor dies and heirs are not aware of the funds. A simple search of the Unclaimed Funds Locator for the Northern District of Texas turned up 24 creditors owed more than $10,000 each, and three owed more than $60,000. Many of these creditors are owed money from cases filed more than 20 years ago.
 
The procedures for collecting these leftover funds varies from court to court. Most bankruptcy courts have local rules for establishing the procedures and practices, and many include an application to the bankruptcy court and service to the US Attorney. For an example of this, see the Application for Payment of Unclaimed Funds for the bankruptcy court for the Northern District of Texas.
 
If you are considering filing for bankruptcy please call the experienced attorneys at Fears | Nachawati Law Firm to set up a free consultation. Call 1.866.705.7584 or send an email to fears@fnlawfirm.com.
During the recent Republican debate in Cleveland, Donald Trump stated that he has never filed a personal bankruptcy. However, his companies have filed for Chapter 11 bankruptcy protection four times in 18 years. How is this different from rapper Curtis Jackson, better known as “50 Cent,” who filed personal Chapter 11 bankruptcy earlier this summer?
 
Jackson’s Chapter 11 bankruptcy is a personal reorganization bankruptcy. The Bankruptcy Code allows an individual may file for financial reorganization under either Chapter 11 or Chapter 13. Both Chapter 11 and 13 stop collection activities while the individual formulates a repayment plan. In some cases the bankruptcy court may approve a plan to restructure or change personal debts. For instance, liens on secured property may be stripped off, interest rates changed, repayment times lengthened, and some debts may be paid “pennies on the dollar” or discharged without payment.
 
Most individuals seeking a repayment plan and reorganization of personal finances choose Chapter 13 rather than Chapter 11. Chapter 11 is a more complex bankruptcy process and is used primarily by businesses to reorganize (a company cannot file under Chapter 13). An individual, such as Mr. Jackson, is ineligible to file under Chapter 13 if the person owes more than $383,175 in unsecured debts (such as a personal judgment, credit cards, and medical bills), or more than $1,149,525 in secured debts (such as mortgages and car payments).  Mr. Jackson reportedly owes in excess of $28 million.
 
On the other hand, Donald Trump avoided personal bankruptcy by incorporating his business activities.  His first business bankruptcy, a 1991 case involving the Trump Taj Mahal in Atlantic City, left his business more than $3 billion in debt. Unfortunately, Mr. Trump himself was not completely insulated from this financial collapse. In exchange for a lower interest rate and more time to make loan payments, Mr. Trump gave up half his ownership and equity in the Trump Taj Mahal, and sold off personal assets.
 
During that time, Trump told The Washington Post that he passed a beggar in New York and said to his now ex-wife, model Marla Maples, “You see that man? Right now he’s worth $900 million more than me.”
 
If you are struggling financially, speak with an experienced bankruptcy attorney and discuss your financial strategies. The federal law can be a useful tool to reorganize business or personal liabilities and provide for a more successful future.
 
If you are considering filing for bankruptcy please call the experienced attorneys at Fears | Nachawati Law Firm to set up a free consultation. Call 1.866.705.7584 or send an email to fears@fnlawfirm.com.