St. Louis Bankruptcy Attorney-What Debt Classification Means

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By: St. Louis Bankruptcy Attorney- Frank Ledbetter

I've been a St. Louis bankruptcy lawyer since 2003. If you're filing for bankruptcy, you'll come across terms like secured debts, priority debts, and unsecured debts. It is crucial that you understand exactly what each debt classification means.
 
Secured debts are those which allow the lender to repossess personal property or foreclose upon real property if the borrower does not timely make debt repayments to the lender.  Mortgage loans against real property are secured debts if the property was not already foreclosed upon or deeded back to the lender.  Purchase money vehicle loans, furniture loans, electronics equipment loans, and jewelry loans for which the purchased personal property was agreed in writing to be collateral for the loan are also secured debts.  "Title-loans" are also secured debts although they are taken out after the collateral was purchased.
 
Unsecured, priority debts, more commonly referred to simply as "priority" debts include income taxes more than three years old, some newer income taxes in certain instances, child support and other domestic support obligations, and some other types of debts.    Student loans though non-dischargeable are NOT classified as priority debts.
 
Unsecured, non-priority debts are usually referred to as "unsecured" debts.  Common types of unsecured debts in bankruptcy cases are most credit card debts, medical bills, mortgage debts which have been foreclosed upon, vehicle loan debts where the vehicle was repossessed and sold, and students loans.  Student loans, as previously mentioned, are a non-dischargeable unsecured debt.
 
If you live in Missouri like Jefferson County, Franklin County, St. Charles County, or anywhere near St. Louis and are considering filing for Chapter 7 or Chapter 13 bankruptcy, I want you to have my FREE SPECIAL REPORT at no charge. It reveals tips and strategies good people who've suffered through tough times can use to turn things around. Just visit StLouisBankruptcyAttorneyHelp.com to get your own copy sent to you right away. As an additional bonus, I would be glad to meet with you for a no cost, no commitment consultation to help you explore your options so that you may determine which debt relief option is best for you.
 
 
Aditional Information:
 
 
 
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St. Louis Bankruptcy Lawyer: Problems with Pro Se Filing

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By: St. Louis Bankruptcy Attorney Frank Ledbetter

Hi, I'm St. Louis bankruptcy attorney Frank Ledbetter. I've been a St. Louis bankruptcy lawyer for over a decade. When applying for bankruptcy, you might want to do it yourself to try to save a dollar.  This is called Pro Se bankruptcy filing.  "Pro Se" is Latin for "for oneself."  There are many problems with this method.

Bankruptcy cases may seem simple at times, but even the easiest case is complicated enough to require an attorney. Bankruptcy documents are filed under penalty of perjury.  If a Pro Se client does not comprehend all the legal jargon involved with the bankruptcy documents, the Pro Se client will not be able to complete the bankruptcy schedules and statements honestly, which is a serious offense.  Pro Se bankruptcy filers often misunderstand the limits of what property is exempt, which may mean a loss of assets in a Chapter 7 bankruptcy case, which would have been evaded if a bankruptcy attorney had been utilized.

St. Louis Bankruptcy Lawyer: Bankruptcy & Your Credit Score

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By: St. Louis Bankruptcy Attorney Frank Ledbetter. 

I've been a St. Louis bankruptcy lawyer for ten years, during which time I've filed thousands of bankruptcy cases for customers and stopped numerous Missouri foreclosure sales for clients in St. Louis City, St. Louis County, Jefferson County, St. Charles County, Franklin County, St. Francois County, and many other Metro counties.

Sometimes homeowners facing a Missouri foreclosure sale hesitate filing a Chapter 13 bankruptcy case because of a feared negative consequence on their credit score and misconceptions about Missouri foreclosure laws.  When facing a foreclosure sale in Missouri, filing for protection under Chapter 13 will not only stop the foreclosure sale, but over time if the client continues on in the Chapter 13 bankruptcy, it will result in an increased credit score, which in turn helps to reduce the interest rate for future debts, and which in turn will result in substantial future savings for financed goods.

 

St. Louis Bankruptcy Lawyer Thoughts: Refinancing & Chapter 13

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I've been a St. Louis bankruptcy attorney for 10 years. During this time I've helped hundreds of homeowners stop the Missouri foreclosure process and given them a second chance at keeping their home. 

Many people don't know that homeowners who are in an active Chapter 13 case for one year may be able to refinance their home mortgage with a new lender after filing their Chapter 13 cases. This applies even for homeowners who filed their Chapter 13 bankruptcy case in order to stop a Missouri foreclosure sale. 

Of course, refinancing with a new lender will make the remaining mortgage arrearage go away. Therefore, clients who refinance their mortgage loans while in Chapter 13 will be able to reduce the amount of their Chapter 13 plan payments and therefore reduce their overall monthly expenses.

Chapter 13 bankruptcy clients who wish to refinance while their Chapter 13 case is active must make their monthly mortgage payments which come due each month after their case is filed, on time, and make their Chapter 13 plan payments on time in order to be able to refinance with a new mortgage lender.

 

 
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St. Louis Bankruptcy Lawyer Thoughts: Pre-Bankruptcy Counseling Course

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SinI've been a St. Louis bankruptcy lawyer since 2003. If you're considering filing for bankruptcy, you are probably wondering what steps you need to take beforehand.


Prior to the filing of any type of bankruptcy case by an individual, the bankruptcy client must complete a specially designed pre-bankruptcy counseling course (sometimes referred to as "credit counseling") and submit the certificate of completion for the course to the client's bankruptcy lawyer. The pre-bankruptcy counseling is required prior to the case filing even when the client has an emergency such as an immediate need to stop foreclosure of the client's real property.

The bankruptcy client has the option of completing the pre-bankruptcy counseling course with any counseling agency approved by the United States Trustee's Office for the district in which the client will be filing the case. In-person counseling is available in some locales. Most bankruptcy clients, however, opt to complete the pre-bankruptcy counseling over the telephone or online.

The bankruptcy client should give the counseling agency the fax number or e-mail address for the client's bankruptcy attorney and request the counseling agency send the certificate of completion to the bankruptcy lawyer. The pre-bankruptcy counseling must be completed within 180 days prior to the filing of Debtor's case. If a client completes the counseling course and waits 181 days or more to file the case, the counseling must be repeated before the bankruptcy attorney may file the client's case. 

The counseling agencies typically charges $25.00-$50.00 for the pre-bankruptcy counseling depending on the agency and sometimes depending on whether the counseling is completed via the internet or telephone. 

If you live in Missouri… like Jefferson County, Franklin County, St. Charles County, or anywhere near St. Louis and are considering filing for Chapter 7 or Chapter 13 bankruptcy, I want you to have my FREE SPECIAL REPORT at no charge. It reveals tips and strategies good people who've suffered through tough times can use to turn things around. Just visit StLouisBankruptcyAttorneyHelp.com to get your own copy sent to you right away. 
 

 
 
For additional resources visit:
 

St. Louis Bankruptcy Lawyer Thoughts: Chapter 13 Stops Foreclosure

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Since 2003, I have been a St. Louis bankruptcy attorney.   In the last ten years, I've represented a myriad of bankruptcy clients, helping clients dispose of tens of millions in debts and stopping thousands of foreclosure sales.  Let me discuss why Chapter 13 bankruptcy in most cases stops the foreclosure process in Missouri. 
 
If the client has not had more than one bankruptcy cases dismissed within the previous 12 months, filing Chapter 13 bankruptcy puts in place what is known as an automatic stay. An automatic stay is an automatic injunction, which ends actions by creditors, including foreclosure sales.   If a homeowner has not had a bankruptcy dismissed within the past year, the filing of a Chapter 13 bankruptcy case will put in place this automatic injunction without further legal action.
 
Stalling the foreclosure sale then gives the Chapter 13 client another chance to keep the client's home and affords up to 48 months to repay the past due mortgage amount in a repayment plan approved by a federal court.
 
If you have a foreclosure sale pending, let me talk with you about how Chapter 13 bankruptcy may stop your foreclosure and give you a second chance to keep your house.
 
See the video-http://youtu.be/ZMEOpvfsWoc
 
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St. Louis Bankruptcy Lawyer Thoughts: Chapter 13 Filing Location

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I've been a St. Louis bankruptcy attorney for many years now.  I help clients who are going up against a dispossession bargain yet are new to Missouri abandonment laws.

The dispossession law in Missouri states that a bank must tell a criminal borrower by guaranteed mail 20 days before the dispossession bargain.  If the property holder does not cure the default or record a Chapter 13 bankruptcy case, the borrower may foreclose on the schedule date

Clients who own area in a state other than Missouri or who have recently moved to Missouri need to know where they are to record their Chapter 13 cases.  The answer in a couple of events is that the client may have an elective as to where to record the case.  According to the Bankruptcy Code, the right location for the case to be recorded may be either where the client has existed most of the past 180 days, where the client has had the client's focal place of business for the dominant part of the past 180 days, or where the client has dwelled for a huge partition of the past 180 days.

A client who has abided in Illinois the past three months yet claims a house in Missouri which is rented to a substitute individual, may file the liquidation case in Missouri to stop the Missouri surrender approach, assuming that house is the focal ownership for the client.  A client who moved to Missouri more than 90 days back and who has a dispossession plan would by and large need to record a Chapter 13 commitment case in Missouri if the client's principal assets are in Missouri.

Provided that you are going up against a dispossession deal and have moved to Missouri inside the last three months, you have to meet with an expert promptly to verify where the case should be filed.

See the video http://youtu.be/2ZoCyyi2fPE

For additional resources visit:

 

St. Louis Bankruptcy Lawyer: Chapter 13 St. Louis MO.

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Filing for relief in a Chapter 13 Bankruptcy scenario gives most homeowners the possibility to stop a foreclosure sale. Under federal law, the Missouri foreclosure process must end when the Chapter 13 bankruptcy case is filed in most cases. The only exception could be if the person had more than one bankruptcy case dismissed in the past year.

The Chapter 13 bankruptcy client will need to continue making monthly home loan payments to the mortgage company and pay the past due mortgage quantity in equal monthly installments in the client’s Chapter 13 plan. Nevertheless, many homeowners aren’t aware that Chapter 13 bankruptcy in addition to ending the foreclosure process in Missouri, also provides homeowners an opportunity to eliminate a second mortgage in a Chapter 13 bankruptcy situation in the event the homeowner owes more on the primary home loan, even only a penny more, when compared with the residence is worth at the moment the case is filed.

The Chapter 13 individual will have to obtain a value determination for the client’s house and pay an extra filing charge for an action within the bankruptcy case to shed the second mortgage loan. No extra lawyer expenses would apply for the action to lose the second home loan.  Additionally, the client will need to complete the Chapter 13 bankruptcy case to prevent the second mortgage lender’s lien returning and make the debt go away forever.

St. Louis Bankruptcy Lawyer: Chapter 9, Chapter 11, 12, & 15

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By Frank Ledbetter
A St. Louis Bankruptcy Lawyer
Right now there are several types of bankruptcy such as Chapter 9, Chapter 11, Chapter 12, and Chapter 15. How could they be different? Well a Chapter 9 bankruptcy is a form of bankruptcy designed for villages and cities. That is precisely what it is intended for.
A Chapter 11 bankruptcy can be a complicated form of bankruptcy which is seldom filed by individuals. It is normally filed by corporations or limited liability companies, which reorganize and embark on company operations underneath the Bankruptcy Court’s guidance. The U. S. Supreme Court has ruled that Chapter 11 bankruptcy can even be filed by people including husbands and wives completing jointly. However Chapter 11 is hardly ever the best bankruptcy option for a non-business.
Chapter 12 bankruptcy is a type of bankruptcy only accessible to family farmers and commercial fishermen. In this sort of bankruptcy, the client continues the business operations under the Bankruptcy Court’s guidance, and obtains a discharge of certain debts just after completion of a Chapter 12 settlement plan.
Chapter 15 bankruptcy is a type of bankruptcy for companies which have debts in foreign countries as well as the United States.
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St. Louis Bankruptcy Lawyer Thoughts: Creditor Myths

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I never cease to be amazed at the falsehoods about bankruptcy and its results which I hear from individuals who don’t really know much about bankruptcy. It shouldn’t be surprising that the creditors, whose interests are the opposite of yours, might try to discourage you from filing bankruptcy.
 
If they are accurate in their statements about bankruptcy, I’m all for them expressing their thoughts. Sometimes, however, I have heard of creditors and their agents telling lies about bankruptcy and its
effects in an obvious attempt to keep those who owe them funds in financial debt.
 
Individuals generally assume that if they file bankruptcy they will be struggling to obtain any credit for 10 years. This is completely incorrect.
 
I've had numerous clients who have been qualified to obtain loans on new cars right after a Chapter 7 bankruptcy discharge. I have had several clients who were able to get car loans while in Chapter 13
bankruptcy too.
 
Clients generally inform me they're inundated with charge card offers even prior to obtaining a Chapter 7 discharge. Even obtaining a new home loan may be possible two years after completing Chapter 7 bankruptcy and one year after filing a Chapter 13 bankruptcy.
 
I often hear reporters carelessly throwing around the word “bankrupt” just as if it means that an individual is virtually without assets. This is often incorrect.
 
I’ve had many clients get debt relief under Chapter 7 bankruptcy and Chapter 13 bankruptcy who kept homes worth in excess of a quarter million dollars.
 
The fact is that a client who files Chapter 7 bankruptcy is able to keep the their residence if the client stays current on the mortgage repayment and does not have more than $15,000.00 in equity in the house. The identical principle pertains to being able to keep a vehicle, except the allowable maximum equity is $3,000 for any automobile in Chapter 7 bankruptcy or $6,000 if the bankruptcy is filed jointly by spouses and both spouses’ names are on the automobile title.
 
 
My advice to those who're battling with financial obligations they can’t afford to repay on time is to investigate the truth regarding bankruptcy instead of listening to the lender hype and media hype about bankruptcy.
 

St. Louis Bankruptcy Lawyer Thoughts: Payday Loans

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I’ve noticed a growing number of people who are trying to pay their bills and turning to payday loans to do it. The payday loan is a well known, but risky sort of unsecured, short-term loan for those who are in need of funds and are unable to obtain them from other methods.

As a last resort, some people think this is a good idea.  I think there are better options.
 
At first,  I was stunned once I started looking at the interest charges for payday loans.  Several of have been in excess of 600% annually.
 
Payday loan providers often require the deposit of a post-dated check when the financial loan is taken out.  The loan provider may choose to cash it if the customer doesn’t pay back the loan when they are supposed to.
 
Sadly, in spite of the best of intentions, payday loan borrowers might be unable to pay off the loan promptly and become subjected to criminal charges for inadequate funds when the lender tries to cash their post-dated checks.
 
If you are considering the idea of  taking out payday loans, then you owe it to yourself to consult a bankruptcy attorney first.
 
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St. Louis Bankruptcy Lawyer Concerns: Credit Card Debt

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By Frank Ledbetter

St. Louis Bankruptcy Attorney – St. Louis, MO

 

Whenever individuals can't pay their minimum monthly credit card payments on time, they may try to  use one credit card to help make payments on another.  This is a terrible idea. Unfortunately, paying credit cards using additional credit cards may result in very quickly escalating financial debt. 
 
Creditors often give individuals more credit than they can manage. Frequently when people “max out” their credit cards they will have gotten themselves into an unsustainable debt situation where even making the minimum monthly requirements leaves nothing left for essentials. At these times, bankruptcy could be the best option. 
 
Credit card debt will hardly ever go away on its own. Even when a credit card issuer writes off an account, they will probably sell it to a different company that will then have the right to collect on the balance.
 
For additional information, be sure to check out:
 

YouTube Channel:

http://www.youtube.com/user/bankruptcylawstl

Blog:

http://www.stlouisbankruptcylawyerhelp.com

Website:

http://www.stlouisbankruptcyattorneyhelp.com

St. Louis Bankruptcy Attorney Tip: Debt Relief Transfers

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By Frank Ledbetter

St. Louis Bankruptcy Attorney – St. Louis, MO

If you’re having trouble paying your bills, you want to be very cautious before selling or giving away your stuff before consulting with a bankruptcy lawyer, especially if you transfer it for less than fair market value.

If you file for bankruptcy protection using Chapter 7 or Chapter 13 then, you may need to reveal on your bankruptcy documents, any items you owned which you got rid of during the 24 months prior to the filing of your case.

Furthermore, in the state of Missouri, if you sold or gave away an asset within the last 48 months, then the bankruptcy trustee may void the transfer if it looks like it was done to protect the asset from creditors. If someone files bankruptcy in Missouri within four years of selling or giving away an asset, that asset may be subject to being recovered by the bankruptcy trustee and sold with the proceeds to be paid to the client’s creditors.

Sometimes, people get the notion that they may transfer an asset which might have more equity than the client would be allowed to have in the asset.  For example, they may think they may transfer a car with over $3,000 in equity to a friend or relative and that way prevent the trustee’s liquidation of the asset.

However, such a transfer would likely not allow the protection of the asset if done within the four years prior to the filing of bankruptcy.

Selling assets for fair market value may be permissible shortly before filing a bankruptcy in order to obtain money to pay living expenses, but it is always advisable to consult with a bankruptcy attorney before selling or giving away assets if  the person might need to file bankruptcy.

For additional information, be sure to check out:

YouTube Channel:

http://www.youtube.com/user/bankruptcylawstl

Blog:

http://www.stlouisbankruptcylawyerhelp.com

Website:

http://www.stlouisbankruptcyattorneyhelp.com

St. Louis Bankruptcy Lawyer: Debt Discharge Denials

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 St. Louis Bankruptcy Lawyer: Discharge Denials

One important thing to be aware of if you’re struggling with debts is that if you incur debt after you first plan to file bankruptcy, that debt may not be dischargeable if you later file bankruptcy.   Bankruptcy was designed to give financial relief to those who incurred debt which they had planned to repay but due to illness, job layoffs, work hour reductions, other pay cuts, debt escalation due to accrued interest and other factors are no longer able to repay creditors on time. 
 
Someone thinking about filing Chapter 7 bankruptcy or Chapter 13 bankruptcy should not borrow money or use credit cards once they have made the decision to file bankruptcy unless it is a secured loan such as a car loan or a mortgage loan which the person plans to repay.  If you incur debt shortly before you file your  Chapter 7 bankruptcy or Chapter 13 bankruptcy case, particularly if the balance is several thousands of dollars of debt, the creditor may file a proceeding to deny discharge of that specific debt. 
 
An issue can exist if a creditor pursues denial of discharge of the debt .  Success depends on when the person first consulted with a bankruptcy attorney or bankruptcy lawyer about filing bankruptcy.  
 
Once a person decides to file bankruptcy he or she should stop using credit cards and not otherwise incur debt unless it is a car loan or mortgage loan which the person plans to repay and will be able to repay. 

St. Louis Bankruptcy Attorney: Bankruptcy a Last Resort

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Sometimes people have the notion that filing bankruptcy is their last resort.  Unfortunately, this type of thinking can lead people to take out payday loans, take 401(k) distributions, and pay one credit card with other credit card, all of which may lead to very undesirable results.  Also, people sometimes get many months behind on credit card payments before considering bankruptcy because they believe bankruptcy must be their last resort.
 
What many people don’t realize is that getting several months behind on multiple credit cards may devastating effects on their credit score.  By comparison, clients may actually see an increase in their credit score within one year of filing bankruptcy.
  
Sometimes people have the notion that they must be behind on credit card payments to file bankruptcy.  Bankrputcy lawyers know that this idea is quite untrue. 
 
The reality is that with decreased income or increased debt, people often get to the point where they just can’t repay all their creditors on time.  People who hit that financial wall, owe it to themselves to learn more about Chapter 7 bankruptcy and Chapter 13 bankruptcy and to learn if bankruptcy is the best debt relief option under their circumstances. St. Louis. 
 

 

St. Louis Bankruptcy Attorney Viewpoint: Insider Repayment

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Frequently, people who are struggling with their finances and getting behind on their debts, repay a family member, a friend, or a business associate they owe money to.  This may create a significant problem if the individuals file bankruptcy shortly after making that repayment. 

The U.S. Bankruptcy Code was created and enacted by Congress with the intention of prohibiting people who file bankruptcy from paying back individuals they have a close relationship with such as a relative, friend, or business associate at the expense of other creditors who are owed money.
 
If such insider repayment is made within 365 days prior to the filing of the bankruptcy, then the bankruptcy trustee has the legal authority and duty to the creditors to recover funds from the friend, relative, or business associate who has received the debt repayment within the twelve months prior to the filing of the client’s bankruptcy.
 
In a Chapter 13 bankruptcy case, the client must either repay over the life of the Chapter 13 Plan to unsecured creditors the amount equal to what was repaid to the family member, friend or business associate or subject the relative, friend or business associate to being forced to pay to the Trustee  the sum paid by the client within the 1 year prior to case filing.
 
In a Chapter 7 bankruptcy case, the insider paid back by the client within the 1 year before filing, may need to immediately return to the Chapter 7 Trustee, the amount of money paid by the client within the year prior to bankruptcy filing or subject the “insider creditor” to being sued by The Trustee to recover those funds.
 
For example, let us imagine that a client who is deciding to file bankruptcy with a bankruptcy attorney repays a friend, relative, or business partner $10,000.00 owed to that person on May 1, 2012. The client would then be required to wait until May 1, 2013 to file a Chapter 7 bankruptcy in which the insider creditor would not have to give back the $10,000 for distribution to creditors.
 
If you're suffering financially, before you give money to pay back a friend, relative or business associate, then you may want to consider filing for bankruptcy relief and schedule a consultation with a bankruptcy lawyer.

Debt Settlement vs. Chapter 13 vs. Chapter 7 Bankruptcy

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Based on what I have witnessed recently, I would strongly encourage anyone thinking about entering into a debt settlement program to think about filing for bankruptcy first.

Bankruptcy won't be the ideal choice for some individuals, however, for many individuals dealing with a debt problem, bankruptcy may bery well be the best option.

Why? Because with many debt settlement programs, particularly those that don’t offer debt settlement overseen by an attorney, the debt settlement company may take thousands of dollars of fees before any funds paid by the client would be set aside for a settlement with the creditors. 

Even at that point it may take years to settle some debts in a non-attorney backed debt settlement program.  I’ve seen clients before they come to see me pay thousands of dollars to non-attorney backed debt settlement programs without having any of their debts paid.  

Now, there is one thing that lots of people don't realize.  Not everybody will qualify for relief under Chapter 7 bankruptcy.  On top of that, high income Chapter 13 bankruptcy clients might have to pay back 100% of credit card debts in their Chapter 13 bankruptcy.  

Attorney-backed debt settlement for a single person with no dependents with  a six figure income and $10,000 in credit card debt would likely  be preferable to bankruptcy, whereas a single person with no dependents, $35,000 per year in income and $10,000 in credit card debt would likely be better off filing bankruptcy.

I do offer debt settlement services as alternative to bankruptcy for those for whom it is appropriate.  But I am careful not to recommend debt settlement for those who are better off filing for bankruptcy relief and vice versa.   

If you had a medical condition, you would probably want to explore the different types of treatment available for your condition and obtain the advice of a medical professional before choosing your treatment.  The same principles apply if you are dealing with a debt problem; you owe it to yourself to explore the different debt relief options so that you may choose the option which is best for you.

Debt Settlement, Chapter 13 or Chapter 7 Bankruptcy

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Based on what I have witnessed recently, I would strongly encourage anyone thinking about entering into a debt settlement program to think about filing for bankruptcy first.

Bankruptcy won't be the ideal choice for some individuals, however, for many individuals dealing with a debt problem, bankruptcy may bery well be the best option.

Why? Because with many debt settlement programs, particularly those that don’t offer debt settlement overseen by an attorney, the debt settlement company may take thousands of dollars of fees before any funds paid by the client would be set aside for a settlement with the creditors. 

Even at that point it may take years to settle some debts in a non-attorney backed debt settlement program.  I’ve seen clients before they come to see me pay thousands of dollars to non-attorney backed debt settlement programs without having any of their debts paid.  

Now, there is one thing that lots of people don't realize.  Not everybody will qualify for relief under Chapter 7 bankruptcy.  On top of that, high income Chapter 13 bankruptcy clients might have to pay back 100% of credit card debts in their Chapter 13 bankruptcy.  

Attorney-backed debt settlement for one individual without dependents with a six figure income and $10,000 in credit card debt would likely be better suited for bankruptcy.  However, a single person without dependents, $35,000 per year in income and $10,000 in credit card debt may be  better off filing bankruptcy.

I do offer debt settlement services as alternative to bankruptcy for those for whom it is appropriate.  But I am careful not to recommend debt settlement for those who are better off filing for bankruptcy relief and vice versa.   

If you had a medical condition, you would probably want to explore the different types of treatment available for your condition and obtain the advice of a medical professional before choosing your treatment.  The same principles apply if you are dealing with a debt problem; you owe it to yourself to explore the different debt relief options so that you may choose the option which is best for you.

St. Louis Bankruptcy Attorney Advice: Debt Relief and School Loans

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Plenty of U.S. residents and citizens are realizing how much college tuition rates have exploded in recent years.  Tuition rates continue to increase to a degree far in excess of the inflation rate.  

A professional degree such as a law degree, medical degree, or dental degree is often still an excellent investment.  Other degrees, however, are sometimes not a good investment.  The job markets are flooded with college graduates and some high paying jobs such as sales jobs may require no college degree.
 
Additionally, lots of small business people succeed very well without a college degree.  My advice for those contemplating incurring student loan debt is to carefully evaluate the expected return on investment before signing for student loan debt.
 
Why? Since October 17, 2005 no student loan debt may be discharged in bankruptcy unless the client shows he or she would suffer “undue hardship” if not granted a discharge of the student loan debt. The bankruptcy client would need to file a separate proceeding within the bankruptcy case to have any chance at discharging the debt. 
 
The courts have generally determined that the Undue Hardship Test is not met unless the person has developed a disability after the student loan debt was incurred which completely prevents the client from practicing the trade or profession the client took out the student loans to prepare for or the client is of advanced age, that is beyond the normal retirement age, and owes a substantial amount of student loan debt.
 
A Chapter 7 client of mine a few years ago was able to discharge over $100,000 in student loan debt taken out for a professional degree program she had entered after she had retired from her first career while in her mid-50s.  This client was able to meet the undue hardship test although she wasn’t disabled and to obtain a discharge of her student loan debt, but she was over 65 years old, owed over $100,000 in student loan debt, and had been unable to obtain professional licensure related to the educational program she had taken out the student loan debt for.
 
I see lots of individuals who took out student loan debt, which I would not have encouraged them to take acquire, who won't be able to discharge these debts in bankruptcy even though they can’t reasonably afford to repay them.  Education is fantastic, however there are often less expensive alternatives than the most highly ranked program available. 
 
As a St. Louis bankruptcy lawyer who has had clients saddled with enormous student loan debts, I would advise you to choose an economical option for obtaining necessary education, and be very careful about signing for student loan debt because it’s very unlikely you would be able to discharge any student loan debts in bankruptcy. 

St. Louis Bankruptcy Attorney Tips: Second Mortgages

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Several years after the explosion of the real estate bubble, numerous Americans now find themselves owing more on their first mortgage than their house is even worth. Many homeowners also are burdened with a second and sometimes third mortgage in addition to their primary mortgage.

Lots of people fail to it, but it 's possible to remove the lien of a second mortgage holder in a Chapter 13 bankruptcy under the following circumstances:  the client owes at least one penny more on the first mortgage than the real estate is worth at the time the case is filed.
 
The individual must get a certified appraisal for the real estate in order to file the proceeding within the bankruptcy case to strip the lien of the junior mortgage lender.
 
The process to avoid a junior mortgage lien also is available for a third mortgage.  If a client has three mortgages on the client’s property and the client owes more on the first mortgage than what the property is worth, then both the second and third mortgages may be avoided.
 
Now, if the client has three mortgages and the client’s property is worth more than the balance on the first mortgage but less than the sums of the balances on the first and second mortgages, then the third mortgage still may be avoided but not the second mortgage.  
 
Once the lien of the junior mortgage holder is avoided, the debt becomes classified as unsecured debt, which means for most clients the junior mortgage debt will not need to be repaid in the Chapter 13 bankruptcy, and this debt will finally be cancelled forever upon completion of the Chapter 13 bankruptcy.

St. Louis Bankruptcy Attorney Tips: Second Mortgages

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Several years after the explosion of the real estate bubble, numerous Americans now find themselves owing more on their first mortgage than their house is even worth. Many homeowners also are burdened with a second and sometimes third mortgage in addition to their primary mortgage.

Lots of people fail to it, but it 's possible to remove the lien of a second mortgage holder in a Chapter 13 bankruptcy under the following circumstances:  the client owes at least one penny more on the first mortgage than the real estate is worth at the time the case is filed.
 
The individual must get a certified appraisal for the real estate in order to file the proceeding within the bankruptcy case to strip the lien of the junior mortgage lender.
 
The process to avoid a junior mortgage lien also is available for a third mortgage.  If a client has three mortgages on the client’s property and the client owes more on the first mortgage than what the property is worth, then both the second and third mortgages may be avoided.
 
Now, if the client has three mortgages and the client’s property is worth more than the balance on the first mortgage but less than the sums of the balances on the first and second mortgages, then the third mortgage still may be avoided but not the second mortgage.  
 
Once the lien of the junior mortgage holder is avoided, the debt becomes classified as unsecured debt, which means for most clients the junior mortgage debt will not need to be repaid in the Chapter 13 bankruptcy, and this debt will finally be cancelled forever upon completion of the Chapter 13 bankruptcy.

Chapter 7 and 13 Bankruptcy: Bankrputcy Attorney Needs?

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What should you bring when you go to see a bankruptcy attorney or bankruptcy lawyer?

When you have your initial consultation with your bankruptcy attorney you should bring copies of your paycheck stubs and, if married, your spouse’s paycheck stubs for the previous six calendar months.  You will also need the last two years’ tax returns, if self-    employed, profit and loss statements for the previous six calendar months, and bank statements for the last three months.  Also review your recent utility bills because the bankruptcy attorney will ask you about various monthly expenses.  It is also helpful to     bring a current mortgage statement if you have a  mortgage.
 

 

 

Chapter 7 and 13 Bankruptcy: What Money Can You Keep?

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Filing for Bankruptcy: Can You Keep Money Paid During Chapter 7 or Chapter 13 Bankruptcy?

If you have a lawsuit against someone or otherwise have a claim against someone such as a personal injury claim, breach of contract claim, or medical malpractice claim, if you file

Chapter 7 bankruptcy

, the Chapter 7 trustee may be able to keep any compensation you receive in the future for such a claim with the money to be distributed to your creditors.   In a

Chapter 13 bankruptcy

case, if the claim is settled during the bankruptcy, then the monies paid for the claim must be turned over to the Chapter 13 trustee for distribution to the creditors.

 

 

Taxes & Filing for Bankruptcy

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“Does Filing Tax Returns Relate to Filing for Bankruptcy?”

You must have filed all tax returns you were supposed to file for the last 4 years before the filing of the Chapter 7 bankruptcy case.  For a Chapter 13 case, you should file all tax returns which were required to be filed for the past 4 years.  However, in the case of an emergency filing of a Chapter 13 case, such as to halt a foreclosure sale, you may file the bankruptcy first.  Then, quickly file any required tax returns so the bankruptcy case may be confirmed.

 

Listing Creditors When Filing for Bankruptcy

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“Must I List All My Creditors if I File for Bankruptcy?”

When you file for bankruptcy you are required to list all of your creditors on the the bankruptcy schedule.  This includes debts you owe to family members and friends and debts that you wish to repay such as mortgage loans and vehicle loans.  Once ais completed and a discharge order achieved, you may repay a discharged debt bankruptcy if you choose to.

 

Bankruptcy: Do I List Recent Income?

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Must I List All Recent Income if I File for Bankruptcy?

When filing for bankruptcy, you are required to list all household income for the current year in which you file bankruptcy and for the two years before filing.  Plus, you are required to list all household gross income specifically for the six calendar months prior to the case filing.  Social Security income and unemployment compensation must be listed on the bankruptcy paperwork, but they do not count as part of the household income for determining eligibility to file Chapter 7 or for deciding how much if any money must be repaid to unsecured creditors in a Chapter 13 case.
 

Bankruptcy: Disclose All My Accounts?

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“Must I Disclose All My Bank Accounts if I File Bankruptcy?”
 
When you file for bankruptcy, you have to declare all of your assets including any and all bank accounts with your name including bank accounts of minor children and accounts of your parent(s) which your name has been put on as well.  Clients occasionally ask if they must list a bank account if there is a zero balance at the time of filing.  Of course, the answer is yes- any bank account with your name on it must be listed in the bankruptcy filing.
 

Does My Income Qualify for Chapter 7?

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“Is My Income Low Enough to Qualify for Chapter 7?”

The majority of us have income low enough to qualify for Chapter 7 bankruptcy.  If your income is below the median income of the average monthly gross income for the six months prior to case filing, then you would probably have income low enough to qualify for Chapter 7 bankruptcy.  If your income is above the median, means test calculations can be performed to decide if you qualify for Chapter 7 bankruptcy. As of September 2011 the household mean incomes for Missouri range is $3,278 per month gross income for a household of one, $4,260 for a household of two, $4,884 for a household of three, $5,819 for a household of four,  and $6,444 per month gross income for a household of five.  

 

Eliminate Second Mortgage in Chapter 13?

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“Can I Eliminate My Second Mortgage in a Chapter 13?”

If you owe more on your first mortgage than the property is valued at when you file, a proceeding might be filed in a Chapter 13 bankruptcy case to remove the lien of the second mortgage holder.  When the you finish the Chapter 13 bankruptcy, the second mortgage debt would be removed, meaning discharged permanently.

Frank Ledbetter and is a bankruptcy attorney or, if you prefer, a bankruptcy lawyer specializing in Chapter 7, Chapter 13, and debt relief primarily in the St. Louis, MO and surrounding areas. 

He has identified 13 questions all my clients should ask when considering filing for Chapter 7 or Chapter 13 bankruptcy and is sharing his responses in this blog.

 

What Assets Can I Keep in Chapter 7?

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“What Assets Can I Keep in a Chapter 7?”

In Chapter 7 bankruptcy cases, clients can typically keep all of their assets.  However, if you have more equity in an asset than what is allowed*, the Chapter 7 trustee can take the asset and sell it to get funds for distribution to the creditors.  In such cases, you might want to file for Chapter 13 case instead.  This is because in a Chapter 13 bankruptcy case, the trustee cannot take any of your assets.  

*In Chapter 7 a client may have as much as $15,000.00 in equity, or, the value of the house may be as high as $15,000.00 more than the total of mortgage loans owed against the property in order for the client to retain the house.  As to motor vehicles, a client may have up to $3,000.00 in equity in the vehicle. A client may keep up to $3,000.00 in household goods, furnishings, and clothing in a Chapter 7 bankruptcy.  A wedding ring with no more than $1500 in value may be kept and also up to $500 in other jewelry may be kept.  A client may keep up to $3000 in tools which are used in the client’s primary business.  Up to $150,000 in whole life insurance policy may be retained.  Many of these values double if a married couple files jointly.  A mobile home, which is on real estate not owned by the client may be kept if there isn’t more than $10,000 of equity. Typically, a client may keep all the value of a qualified retirement plan such as a 401k regardless of how much is in the retirement plan.

Chapter 7 Bankruptcy: Keep Tax Refund?

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“Will I be Able to Keep My Tax Refund if I File a Chapter 7?”

When filing Chapter 7 bankruptcy, talk with a bankruptcy attorney about keeping your next tax refund.  In some cases, if you don’t discuss with a bankruptcy lawyer about the tax refund issue you may have to give up your next tax refund to the Chapter 7 trustee, who will give the refund amount to the creditors.  Also, you might be able to apply enough exemptions to your tax refund which will allow you to keep it.  Or, the bankruptcy attorney may tell you to wait a few months before you file the bankruptcy case.  Regardless, if you think you will get a tax refund within the next year, you should have a bankruptcy attorney engage in careful pre-bankruptcy planning to stop unnecessary loss of your tax refund.

 

 

Paying Off Debt: Who to Pay Before Filing Bankruptcy

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A big topic with bankruptcy cases is that of preference payments.  An insider preference payment is any payment made within the past year to a family member, friend or business associate.  If this type of payment was made during the past year, the Chapter 7 trustee has to recover the amount paid to the family member, friend or business associate, and share the funds with other creditors.  In a Chapter 13 case,  you have to repay to unsecured creditors at least as much as you paid during the past year to any family members, friends and/or business associates. If you are considering filing bankruptcy, you should not repay family members, friends, or business associates in advance of filing your bankruptcy.

Bankruptcy Case Waiting Period

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If a you received a discharge in a Chapter 7 bankruptcy, you have to wait a minimum of eight years before you can file a new Chapter 7 case.  If you filed a prior Chapter 7 case require debt relief, a Chapter 13 case may be filed instead, and if four years have gone by since the Chapter 7 case filing,  you will not have to entirely repay creditors.  If you got a Chapter 13 discharge in a Chapter 13 bankruptcy case, then you have to wait a minimum of six years before you can file for Chapter 7. 

 

 

 

How to Reduce Car Loan Payment in Chapter 13

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 “How Can I Reduce My Car Loan Payment in a Chapter 13?”

In some instances you may be able to reduce the amount you have to repay on a car loan in a Chapter 13 bankruptcy case.  As long as there is not a non-filing co-debtor on the vehicle loan, the interest rate on the car will be the rate set by the bankruptcy court, which is currently about 6%.   So for clients with high interest rates on their car loans, they will pay less than they would outside of bankruptcy.  If the vehicle loan was taken out more than two and a half years prior to the filing of the Chapter 13 bankruptcy case, only the amount of the loan up to the fair market value will need to be repaid.  If you owe quite a bit more than your car is worth and your car loan is more than two and a half years old you may experience a substantial savings.  

If you are in Jefferson County, Franklin County, St. Charles County, or anywhere near St. Louis and considering filing for Chapter 7 or Chapter 13 bankruptcy, I want you to have my FREE SPECIAL REPORT titled “Why Bankruptcy Laws Are Your Friend- Legal Lessons You Don’t Want to Learn the Hard Way”.  Just visit  www.StLouisBankruptcyAttorneyHelp.com to get your own copy sent to you right away.

 

 

 

 

 

Bankruptcy: File Jointly or Individually?

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“May We File For Bankruptcy Jointly Or Individually?”

Married clients have the option to file the bankruptcy case individually or jointly with each other.  If you file individually and owe a specific debt or debts along with your spouse, he or she would still owe on the debt after you receive a bankruptcy discharge.  There are pluses and minuses for a married person filing for bankruptcy jointly, and deciding to file together or individually should be made only after studying all facets of your case with a bankruptcy lawyer

 

 

 

How Quickly Can I File for Bankruptcy?

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When clients consult with a bankruptcy attorney, they always want to know how quickly the bankruptcy lawyer can file the their case.  In most instances, I can file your bankruptcy case the same week that you come see me.  If a foreclosure sale is pending or if you are awaiting a garnishment it is important to get the case filed right away, and my office is able to work with you to get the case filed in a prompt manner. 

 

 

 

Debt Elimination or Debt Solutions Available?

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Hi, my name is Frank Ledbetter and I am a bankruptcy attorney or, if you prefer, a bankruptcy lawyer specializing in Chapter 7, Chapter 13, and debt relief primarily in the St. Louis, MO and surrounding areas. 

An important question I often get is, “What Debt Elimination or Debt Solutions Are Available?”

People considering obtaining debt relief through filing for bankruptcy are of course interested in knowing what types of debts they may get cancelled, that is, discharged, in the bankruptcy case.  The types of debt which my clients often get discharged in a bankruptcy case are unsecured credit card debts, doctor bills, hospital bills, and deficiencies on vehicle loans.  Income taxes more than three years old may also be dischargeable.  Many types of debts, however, are not dischargeable when filing Chapter 7 or Chapter 13 bankruptcy case.  The types of debts that cannot be discharged are as follows:  1) student loans, 2)  income taxes less than three years old, 3)  other types of taxes, 4)  debts incurred to pay non- dischargeable taxes, 5) fines, 6) court-ordered penalties, 7) court-ordered restitution payments, 8) child support, 9) maintenance, formerly known as alimony, 10) anything ordered in a divorce decree to be repaid, 11) debts owed to compensate for injuries cause while driving while intoxicated, 12) debts not listed in the client’s bankruptcy papers, 13) homeowners’ association fees, 14) condo owners association fees, 15) debts owed to compensate for intentional harm done to others, 16) debts incurred through fraud, 17) debts arising from breach of a fiduciary duty and 18) debts owed to compensate for money stolen from other(s).  

If you are in Jefferson County, Franklin County, St. Charles County, or anywhere near St. Louis and considering filing for Chapter 7 or Chapter 13 bankruptcy, I want you to have my FREE SPECIAL REPORT titled “Why Bankruptcy Laws Are Your Friend- Legal Lessons You Don’t Want to Learn the Hard Way”.  Just visit  www.StLouisBankruptcyAttorneyHelp.com to get your own copy sent to you right away.

 

 

 

 

Will Filing Chapter 7 or 13 Bankruptcy Stop Creditor Calls?

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When people find themselves in need of debt relief, they want to know when creditors will leave them alone!

There are times when debt settlement is a better option and there are times when bankruptcy can be your friend.

 

It is illegal for creditors to call or write in an effort to collect a debt as soon as the creditor receives notice of the bankruptcy filing. The “automatic stay” obtained when a bankruptcy case is filed prohibits creditors from taking action to collect on debts as soon as the creditor is notified of the bankruptcy filing.  Incidentally, the automatic stay also bars creditors from proceeding with collection lawsuits as soon as the creditor learns of the bankruptcy case filing.

 

The bankruptcy laws in the State of Missouri and around the St. Louis area can be different than in other states, but here’s a quick video that should provide some clarification.

 

 

 

 

 

Will Filing a Chapter 7 or 13 Bankruptcy Stop Garnishments?

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When people find themselves in need of debt relief, they frequently want to know if filing for Chapter 7 or Chapter 13 will cause them to lose their car.

There are times when debt settlement is a better option and there are times when bankruptcy can be your friend.

Whether you file a Chapter 7 bankruptcy or a Chapter 13 bankruptcy case, a creditor must immediately stop a garnishment as soon as the creditor receives notice of the bankruptcy filing.  

The bankruptcy laws in the State of Missouri and around the St. Louis area can be different than in other states, but here’s a quick video that should provide some clarification.

 

 

 

 

 

Can I Keep My Car in a Chapter 7 or Chapter 13 Bankruptcy?

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When people find themselves in need of debt relief, they frequently want to know if filing for Chapter 7 or Chapter 13 will cause them to lose their car.

There are times when debt settlement is a better option and there are times when bankruptcy can be your friend.

You have some options when you file for a Chapter 7 or Chapter 13 bankruptcy.  In a Chapter 7 bankruptcy, if you want to keep your car you would continue to make the regular monthly payments to the car lender, whereas in a Chapter 13 bankruptcy the vehicle loan would be restructured, the interest rate in many instances reduced, and the vehicle repayment extended for up to 60 months.  

The bankruptcy laws in the State of Missouri and around the St. Louis area can be different than in other states, but here’s a quick video that should provide some clarification.

 

 

 

 

 

Chapter 7 & Chapter 13 Bankruptcy: Still Able to Get Credit?

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When people find themselves in need of debt relief, they frequently want to know how bankruptcy will impact their ability to obtain credit.

There are times when debt settlement is a better option and there are times when bankruptcy can be your friend.

 

Declaring bankruptcy will often result in improved credit scores as early as one year after discharge, which will often increase your chances of obtaining credit help in the future. With regard to a mortgage loan, you will usually have to wait two years after obtaining a bankruptcy discharge before obtaining a mortgage loan.

If your income is good, you may be able to get a vehicle loan immediately after obtaining the discharge in a bankruptcy case. People have often told me they get credit card offers in the mail even prior to obtaining their bankruptcy discharge.

As a bankruptcy attorney, I caution my clients to be careful about debt they incur after the filing of the bankruptcy case because it will not be dischargeable in a new bankruptcy case for several years.

 

The bankruptcy laws in the State of Missouri and around the St. Louis area can be different than in other states, but here’s a quick video that should provide some clarification.

 

 

 

 

 

The Difference: Chapter 7 and Chapter 13 Bankruptcy

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When people find themselves in need of debt relief, they frequently want to know what the difference is between Chapter 7 bankruptcy and Chapter 13 bankruptcy options.

There are times when debt settlement is a better option and there are times when bankruptcy can be your friend.

A Chapter 7 bankruptcy often takes 3 or 4 months to finish, while a Chapter 13 bankruptcy requires at least a minimal payment to the Chapter 13 Trustee over 3 to 5 years.  A Chapter 13 bankruptcy will usually halt a pending foreclosure sale, but a Chapter 7 bankruptcy will not prevent a foreclosure sale.  In a Chapter 13 bankruptcy assets cannot be taken from you no matter how much equity you have, although in a Chapter 7 bankruptcy, you are limited by how much equity you can have in assets you own and still keep them.  Regardless of how much income you have, you may file a Chapter 13 bankruptcy.  People in the top half in terms of income, however, may have too much income to qualify for debt relief under Chapter 7 bankruptcy.

The bankruptcy laws in the State of Missouri and around the St. Louis area can be different than in other states, but here’s a quick video that should provide some clarification.

 

 

 

 

 

St. Louis Bankruptcy Attorney-Chapter 13 & My Employer?

By St. Louis Bankruptcy Attorney Frank Ledbetter

I have been a St. Louis bankruptcy attorney since 2003.  During that time, I’ve helped hundreds of people stop a pending foreclosure process in Missouri and allowed each person a second opportunity to keep the client’s home.

Homeowners are often worried that if they are facing foreclosure and file a Chapter 13 bankruptcy in an effort to save their homes that their employer will find out.  In almost all Chapter 13 cases, the employer will not be notified that the client has filed a Chapter 13 bankruptcy case.

Some law firms make it mandatory that clients submit to a wage withholding to pay their Chapter 13 plan payments.  My firm doesn’t require this, with the exception of a client who is filing a Chapter 13 bankruptcy case less than a year after a previous bankruptcy case was dismissed.  In a case like that, the bankruptcy court in the Eastern District of Missouri makes it mandatory for the client through the client’s attorney to submit a request that the client’s employer withhold each month the amount of the Chapter 13 plan payment and send it to the Chapter 13 Trustee.

Only where the client let the client’s bankruptcy case dismiss during the past year will the employer get notification that the employee has filed bankruptcy. Chapter 13 bankruptcy gives homeowners the opportunity to stop the foreclosure process in Missouri and to receive  a second chance to save their homes.

See the video-http://www.youtube.com/watch?v=iNY0haE3Ywk

Additional Resources:

Website-http://www.stlouisbankruptcyattorneyhelp.com/

YouTube-http://www.youtube.com/user/BankruptcyLawStL

Facebook-https://www.facebook.com/LedbetterLaw

Twitter-http://www.twitter.com/frankledbetter