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

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

“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

“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?

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?

“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?

 

 

“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?

“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.