Hire a Bankruptcy Attorney If Assistance Needed
Video Transcribed: Bankruptcy Attorney Edward Kelley here from 888 Debtline. Casual again in my Red Sox hat and healthy so far. I hope all of you are as well. Today, I’m going to continue on my little emergency series on why now may be the best time to file a Chapter 7 in particular.
Last time, we talked about how if you’re on the line between a 13 and a 7, now is probably the time the trustees are trying to help out as much as they can with the crisis and are being quite forgiving.
And of course, this is legitimate. Your income’s going to be up in the air. So also, let’s talk about how that affects a covid-19 Chapter 13, why this may be the best time for that. Remember that when you file a 13, you calculate your disposable income and that’s what you pay for 36 to 60 months, usually 60 if you’re trying to catch up on a home mortgage. Normally, you could do a Chapter 7 or a car payment, then you might choose to do a 13 anyway.
In any case, that disposable income is going to be affected just as it would in a 7. So if a month ago, your pay was much higher than it is now, now you’re going to have a month of zeroed or diminished income to throw into the equation, meaning that your payment going forward for that entire 36 to 60 months is going to be lower. So if you save $100 a month on your payment, now that 6,000 over the course of the plan and on up.
Also, if you’re projecting that your income is going to be, or continue to be lower for the foreseeable future, you may be able to put that into the equation. And again, the trustees are being pretty forgiving about that. So not just a 7, but a 13, this may be the best time. Because once this crisis passes, you’ll be locked into that payment.
And if you have a significant increase in the future, you’re supposed to deal with that with the court. We can talk about that in a later series. But as far as locking yourself in now, you may get a lower payment. And although in this crisis you may not want to be thinking about it, this may be the time to do it.
As I said before, you may qualify for a 7. This may be the only time you do in the foreseeable future, and this may be the lowest payment you’ll ever get on your 13. If you’re not trying to catch up on mortgage or a rearage, your payment is solely based, again, not on what you owe, but on that disposable income, which is going to go down and probably be accepted by the forgiving trustees at this time. Of course, it does need to be legitimate, but projections are being accepted.
So again, this may be the best time. It may not feel like something you want to mess with, with what’s going on. But bear in mind, again, this is all e-file right now, 341 creditor meetings. The one appearance you have to make in these bankruptcies generally are being done telephonically.
So you can do all this without leaving your home, assuming you’ve got a scanner and an ability to at least mail out original signatures. So again, you can always contact me at 888Debtline Edward@wirthlawoffice.com. Or on Facebook at our a Facebook group, Oklahomans for Debt Relief. Hope everyone stays healthy