In short, like many areas of the law, it depends. You are responsible for repaying these overpayments. However, if you file bankruptcy and include that debt on the bankruptcy and the government does not object to the discharge of the debt then it may be wiped out. As with any other unsecured creditor they will of course have a set amount of time to object to the discharge, but after that time is up then that debt will go away just like the others. Of course, if the bankruptcy Trustee looks deeper into your case and finds you received these overpayments fraudulently, then there is a possibility those overpayments will not be discharged.
Overpayment can happen because of something like you were out of work and receiving disability payments from the Social Security Administration (SSA) and go back to work sooner than expected and try and inform the SSA but they do not respond and keep paying you. Technically when they discover this, they are supposed to collect back from you the amount you were overpaid. But if you were to file bankruptcy and they did not object to the discharge, then they cannot collect that money from you.
https://www.duncanlawonline.com/wp-content/uploads/2015/01/duncanlawlogo.png00Damon Duncanhttps://www.duncanlawonline.com/wp-content/uploads/2015/01/duncanlawlogo.pngDamon Duncan2012-03-20 09:00:072012-03-20 09:00:07Can Social Security Overpayments Be Wiped Out in Bankruptcy?
You sure can! It may be a bit more difficult to find a place that will rent to you than it otherwise would be, but be patient. Depending on the rental agency, you may be required to pay a higher security deposit or even be required to have a co-signer. It really depends on the rental agency.
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https://www.duncanlawonline.com/wp-content/uploads/2015/01/duncanlawlogo.png00Damon Duncanhttps://www.duncanlawonline.com/wp-content/uploads/2015/01/duncanlawlogo.pngDamon Duncan2012-02-28 09:00:352017-08-14 21:38:13What is a Preference in Bankruptcy?
With the ever improving online banking that is available through most banks, it is possible to pay almost all of your bills without ever stepping foot outside of your home. There is no doubt filing bankruptcy can impact every situation of everyday life, but what about paying your bills? What happens if you have everything automatically drafted out of your account each month? Will that continue?
It depends. If your home mortgage or car payment is automatically drafted prior to your bankruptcy filing, then during the duration of the bankruptcy the mortgage company or vehicle creditor will likely stop automatic drafts and require you to manually pay your bill, or will only accept a mailed-in payment. When you file bankruptcy there is an “automatic stay” that goes into effect which states that your creditors cannot contact you for a payment. Many lien holders (such as your mortgage company or vehicle creditor) would rather play it “safe than sorry” and will code your account as being in active bankruptcy and will not automatically draft payments. In some cases, the creditor will not even send monthly statements. If you wish to continue receiving monthly statements, contact the creditor to let them know. They may require you to send in written permission from your bankruptcy attorney, which is common practice with creditors.
If you have your utilities automatically drafted from your bank account, then they will likely continue. If your automatic drafts are for credit cards and other debts, once you file the bankruptcy they should automatically stop since the debt is included in the bankruptcy. Those creditors should not be receiving payments at all – whether automatic draft or otherwise – due to the automatic stay.
Therefore, after you sign your petition and your bankruptcy is filed, it is imperative to make your monthly payments on your secured debts. If your payment is normally automatically drafted, do not think something is wrong in the transaction and sit and wait for it to happen. Go ahead and contact your creditor to find out the best way to make the payment (whether they will accept the payment over the phone or if you will have to mail in your payment). Discuss any confusion you may have with your attorney. Your bankruptcy is one step towards obtaining your financial freedom; you do not want to file bankruptcy and then become behind on your vehicle or mortgage due to the fact that they no longer just took their payment like they were before your bankruptcy filing.
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With the decline in the housing market many people find they are “upside down” or “under water” on their home. In other words, do you owe more for the house than what it is worth? If that is your situation and you have two or more mortgages, you may find that Chapter 13 bankruptcy is an option you have never considered.
Let’s look at an example where Chapter 13 bankruptcy may help you:
You have a home with a fair market value of $150,000. Three years ago the house was worth $200,000.
You have a first mortgage on the home for $160,000 and a second mortgage or HELOC for $40,000. In other words, you owe more on the first mortgage than the house is worth.
You can easily make the first mortgage but the second mortgage is more than you can afford.
You know it will be several years before the house is valued at $200,000 again.
As a result, you are stuck making two or more mortgage payments on the home and it isn’t worth it.
You are contemplating a short-sale which leaves you without a home and a “ding” on your credit or you are considering walking away from the home and letting the mortgage company foreclose.
If this is your situation, you should consider a Chapter 13 bankruptcy. With the Chapter 13 bankruptcy, you may be able to “strip” or eliminate the second lien/mortgage. Within the bankruptcy, you are able to eliminate the lien on the house as long as you complete the Chapter 13 bankruptcy within the three to five years required by the bankruptcy laws. The number of years you must be in the bankruptcy will depend on your specific situation. Let’s use the example above to see how it might work for you.
Your first mortgage is $1,100 per month.
You have $10,000 in credit card debt, a $2,000 personal loan and $750 in medical bills.
You owe $40,000 on the second mortgage that may be eliminated in your Chapter 13 bankruptcy.
You meet with the bankruptcy attorney and determine that you qualify for a Chapter 13 bankruptcy and it appears you are eligible to strip the second lien in the bankruptcy.
Your Chapter 13 plan payments are estimated at $1,300 – $1,500 including your first mortgage and other debts including the second mortgage.
Once the bankruptcy is filed, your attorney will file a lawsuit or adversary proceeding against the mortgage company or they may be able to simply file a motion to strip the lien. Each bankruptcy court has their own requirements, so you should speak with your bankruptcy attorney to determine what must be completed in your case.
Once this process (either adversary proceeding or motion) is completed, the bankruptcy court will issue a judgment or order that voids the second lien on the house as long as you complete and receive a discharge in your Chapter 13 bankruptcy.
Once the bankruptcy is discharged and completed, three to five years after you file, you will resume payments on your first mortgage but the second mortgage and the other debts listed in your bankruptcy are eliminated and you will not be responsible for making payments on these debts in the future.
As a result, if you decide to sell your house in the future, you will only be required to pay off the first mortgage. The second mortgage is no longer a factor.
This is obviously a simplified approach, so you should seek the advice of a bankruptcy attorney to see if stripping your second or third mortgage or HELOC is an option for you. You are thinking this must be too good to be true otherwise someone would have mentioned this to you before! It really is fairly simple. This is just one way a Chapter 13 bankruptcy may assist you in keeping your home when you are upside down or under water.
https://www.duncanlawonline.com/wp-content/uploads/2015/01/duncanlawlogo.png00Damon Duncanhttps://www.duncanlawonline.com/wp-content/uploads/2015/01/duncanlawlogo.pngDamon Duncan2012-02-09 09:00:262015-04-13 00:02:27Upside Down or Under Water on Your Home? Bankruptcy May Help!
If you are filing bankruptcy then a portion of your bankruptcy petition called the Statement of Financial Affairs asks if you have made any transfers.
Section 10 of the Statement of Financial Affairs requires you to, “list all other property, other than property transferred in the ordinary course of the business or financial affairs of the debtor, transferred either absolutely or as security within 2 years immediately preceding the commencement of this case. (Married debtors filing under Chapter 12 or Chapter 13 bankruptcy must include transfers by either or both spouses whether or not a joint petition is filed, unless the spouses are separated and a joint petition is not filed.)”
So what exactly does that mean? It means if you have sold a major tangible asset such as a house, car, Jet Ski, boat, ATV, basically anything that is titled, tagged or taxed, needs to be listed in this area. Also, if you have transferred ownership, this information will be included in this area as well. So for example, you buy a car for your 16 year old, and after they graduated, you transferred the title to their name, then that transaction would need to be included in this area as well. Any property sold or transferred within the last 2 years must be listed in your bankruptcy. We encourage our clients to tell us about any property that has been transferred in the last five years.
Beware though; the bankruptcy Trustee will want to see what you received for this transaction. Did you sell a house that was worth a million dollars, owned free and clear, for $5 bucks? This is his way of catching Debtor’s trying to “beat” the system. In such a case, the Trustee would reverse the transfer, sell the property and use that money to pay off your debts. Anything remaining would go to him. If you have sold or transferred a property within the past 5 years it is critical to discuss that transfer with your attorney so he or she may advise you correctly.
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If you have filed or will be filing a workers’ compensation or personal injury claim, be sure to tell your bankruptcy attorney so your potential settlement can be listed and protected in the bankruptcy. If it is not listed and protected in your bankruptcy, you could lose the money received in the settlement.
If you have lived in North Carolina for at least two consecutive years, North Carolina General Statutes allow the settlement, regardless of the dollar amount received, to be protected in bankruptcy. If you are required to use exemptions from another state or federal exemptions because you have not met the residency requirement as outlined in the bankruptcy code, you may not be able to fully protect the settlement in bankruptcy. The exemptions vary by state, therefore, it is very important to discuss the potential settlement with your bankruptcy attorney before filing bankruptcy.
If you are in a Chapter 13 bankruptcy, it is necessary for you to work with your bankruptcy attorney to obtain the bankruptcy court’s permission to settle your workers’ compensation or personal injury case. This is necessary even when you listed the potential settlement on your original bankruptcy filing. By filing the motion and obtaining an order from the bankruptcy court to settle the claim, the total settlement is protected from the bankruptcy Trustee and your creditors assuming you are able to use North Carolina exemptions. Therefore, the settlement is yours to assist you and your family with living expenses or to cover future medical expenses you may incur due to your injury.
If you file a Chapter 7 bankruptcy, you may or may not be required to file a motion to settle the injury claim. If the settlement is offered while you are in an active Chapter 7, you should contact your bankruptcy attorney to determine if it will be necessary to file a motion with the court. If the settlement occurs after your Chapter 7 bankruptcy is discharged and final decree is issued, it is not necessary to obtain the bankruptcy court’s permission to settle the claim.
As previously mentioned, it is extremely important to speak with your bankruptcy attorney about your potential workers’ compensation or personal injury settlement prior to filing your bankruptcy. If the settlement is not protected correctly in the bankruptcy, you could lose your settlement.
https://www.duncanlawonline.com/wp-content/uploads/2015/01/duncanlawlogo.png00Damon Duncanhttps://www.duncanlawonline.com/wp-content/uploads/2015/01/duncanlawlogo.pngDamon Duncan2012-01-18 09:00:142015-04-13 00:03:25Must I Get the Court’s Permission To Settle A Workers’ Comp or Personal Injury Claim While In Bankruptcy?
If before filing for bankruptcy you had automatic drafts from your bank accounts to pay other bills then this may stop when you file the bankruptcy. It’s obviously important to know that these automatic drafts may stop because we want to make sure you do not get behind on things like house payments, car payments and other important bills you have.
Creditors may stop the automatic draft(s) because they want to make sure they don’t violate the automatic stay enacted by filing the bankruptcy. They don’t want to accidentally charge you money that has been wiped out in the bankruptcy. However, even if you don’t include a debt in your bankruptcy they may still stop the automatic draft(s) for precautionary measures.
However, you may not be able to get automatic drafts set up right away after filing the bankruptcy. Be aware of this and be sure to plan accordingly.
https://www.duncanlawonline.com/wp-content/uploads/2015/01/duncanlawlogo.png00Damon Duncanhttps://www.duncanlawonline.com/wp-content/uploads/2015/01/duncanlawlogo.pngDamon Duncan2011-11-11 09:00:252011-11-11 09:00:25Why Won't They Draft Payments From My Bank Account After Filing Bankruptcy?
Whether or not someone who files bankruptcy also needs to do a quitclaim deed or deed in lieu of foreclosure is a question that many bankruptcy attorneys and clients are asking themselves these days. A few years ago, most banks and mortgage companies (we will call them banks for this blog) foreclosed on a property – house or land – within three to four months of the bankruptcy filing. At the foreclosure sale, the bank would pay the property taxes on the house as well as any homeowner association liens on the property. For many people, that is now considered the “good ole’ days”.
https://www.duncanlawonline.com/wp-content/uploads/2015/01/duncanlawlogo.png00Damon Duncanhttps://www.duncanlawonline.com/wp-content/uploads/2015/01/duncanlawlogo.pngDamon Duncan2011-11-09 09:00:292015-06-19 23:53:19Why You Might Need To Do A Quitclaim Deed Or Deed in Lieu of Foreclosure Even After Filing Bankruptcy
When you have filed your bankruptcy petition and receive a case number, an automatic stay is enacted to protect you under the bankruptcy code from creditor contact, lawsuits, repossessions, foreclosures, etc. In turn, this limits the contact a creditor may have with you.
If a creditor violates the automatic stay then they can be sanctioned by the federal court system. In order to avoid this, many creditors choose to stop sending anything that can be viewed as a collection attempt.
After your bankruptcy is filed and the creditors are notified, they are no longer allowed to send you bills trying to collect on a debt. Typically, the automatic stay is a good thing because it means the harassing phone calls and collection attempts will stop. However, many creditors will stop all forms of communication, even if you have agreed to keep paying on the debt, due to fear of violating the automatic stay. Therefore, it is important that you remember to continue to make your payments (on debts not being wiped out in the bankruptcy and regular utilities) even if you do not receive a statement each month.
If you want to continue to receive statements then there are a couple of things that you can do to try to help restart this process.
First, you can contact the creditor and explain that you filed bankruptcy and, despite that, you would like to still receive monthly statements from that creditor. Some creditors will agree to then send you monthly statements.
Second, if the first option doesn’t work then you can get the assistance of your bankruptcy lawyer. Once your bankruptcy is filed, request a letter from your bankruptcy lawyer that will give a creditor permission to send you statements or allow for other payment arrangements. You will need to do this usually for a mortgage company where a car finance company will be sending a reaffirmation agreement, so making payments and receiving statements should not be difficult. Other secured creditors, such as furniture companies, jewelry stores, or electronic stores, may require a letter from your lawyer as well.
The bottom line is, you may stop receiving statements or bills after filing the bankruptcy because the creditors don’t want to violate the automatic stay. Despite this, it is critical that you still make your payments on things like house, cars and monthly utility payments.
https://www.duncanlawonline.com/wp-content/uploads/2015/01/duncanlawlogo.png00Damon Duncanhttps://www.duncanlawonline.com/wp-content/uploads/2015/01/duncanlawlogo.pngDamon Duncan2011-11-07 09:00:182011-11-07 09:00:18Why Have I Stopped Getting Statements or Bills After Filing Bankruptcy?
In short, like many areas of the law, it depends. You are responsible for repaying these overpayments. However, if you file bankruptcy and include that debt on the bankruptcy and the government does not object to the discharge of the debt then it may be wiped out. As with any other unsecured creditor they will of course have a set amount of time to object to the discharge, but after that time is up then that debt will go away just like the others. Of course, if the bankruptcy Trustee looks deeper into your case and finds you received these overpayments fraudulently, then there is a possibility those overpayments will not be discharged.
