The short answer is, no. Federal law prohibits an employer to discriminate against you for your declaring bankruptcy. According to 11 U.S.C § 525 (a) and (b), no governmental unit or private employer may “…terminate the employment of, or discriminate with the respect of employment someone who is or has been a debtor under this title…” In other words, you can’t be fired from your job simply because you have filed for bankruptcy.
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If you are like many people, your home is not worth what it was a few years ago. With the downturn of the economy, the value of your house has decreased. Suddenly, you are “upside down” on your home and the sales price is not enough to pay off the first, second and sometimes third mortgage on your home.
When the real estate market was strong, many people capitalized on the fact that their home was worth more than their first mortgage and obtained second and even third mortgage loans against their home. Often this money was used to pay off credit cards or medical bills, and in some cases it was used to update or upgrade the home. Regardless, the house is not worth what you owe on it today, and there is no way for you to sell the home without a short-sale or possible deficiency balance.
If the value of your home is less than what you owe on your first mortgage, you may be able to file Chapter 13 bankruptcy in a North Carolina bankruptcy court and “strip” the lien of the second mortgage. In other words, if you file Chapter 13 bankruptcy you may be able to either file a lawsuit (adversary proceeding) or file a Motion to Value Realty and eliminate a great deal, if not all, of the amount owed on the second and/or third mortgage. Obviously, the mortgage company has the right to argue the value placed on the property. However, if you have obtained a market assessment by a licensed real estate agent or an appraisal by a licensed appraiser, it will be more difficult for the mortgage company to argue the value.
The adversary proceeding or Motion to Value Realty must be filed in addition to your Chapter 13 bankruptcy case. For the lien of the second and/or third mortgage to be “stripped” or voided, you must have a bankruptcy court order canceling the lien on the second and/or third mortgage and you must receive a discharge in your Chapter 13 bankruptcy.
If you have questions on how you may be able to “strip” a lien on your home by filing Chapter 13 bankruptcy, please do not hesitate to contact us.
Generally speaking, yes. It is not mandatory to stop using your credit cards before filing for bankruptcy but you should use them wisely and, ideally, you should stop using them. If charges to your credit cards have been made to purchase luxury items within 180 days prior to you filing the bankruptcy you would need to wait to file.
Whether you are filing a Chapter 7 bankruptcy or a Chapter 13 bankruptcy, you will be required to attend a creditor’s meeting (also known as a 341 Meeting of Creditors). The Court schedules the date and time of your creditors meeting after your bankruptcy has been filed and a bankruptcy Trustee has been assigned to your case.
Generally speaking, no. However, there are always exceptions.
Most retirement plans are ERISA qualified, which stands for Employee Retirement Income Security Act of 1974. This law was enacted to protect your retirement accounts from risky investments by your employer or plan administrator. If the plan is ERISA qualified, then your bankruptcy Trustee cannot seize your retirement money to pay your creditors.
Situations often arise where a potential bankruptcy client is hospitalized, out of town or out of the country, or otherwise unable to sign the necessary paperwork or appear at the necessary court dates for a bankruptcy filing. Often, these potential bankruptcy clients have a valid Power of Attorney document allowing a loved one to sign important papers on their behalf. The question is, can a loved one use a Power of Attorney to file a bankruptcy on behalf of another person?
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Generally, most Power of Attorney documents are drafted using standard language that includes real property transactions, banking transactions, insurance transactions, etc. Most Power of Attorney documents do NOT, however, include “bankruptcy transactions.” In North Carolina, and in many other courts, the Bankruptcy Court will only accept a Power of Attorney if the Power of Attorney document specifically names “bankruptcy” as an included transaction. In other words, if the document does not say the word “bankruptcy filings and related matters” or similar language, then the Bankruptcy Court will not accept the Power of Attorney and the bankruptcy will be dismissed.
An example of this would be the following case: An elderly couple has fallen behind on their mortgage payment. They have lived in their house for almost fifty years and have refinanced a few years ago. Due to circumstances involving hospital stays and nursing home stays, the couple has been unable to make their mortgage payment and the house is in foreclosure. In order to save their home they are considering filing for a Chapter 13 bankruptcy. The couple’s daughter is the Power of Attorney for both the mother and the father. The mother’s Power of Attorney document specifically includes the words “bankruptcy filings” but the father’s Power of Attorney does not. The daughter, as the Power of Attorney for both her mother and father, files a joint bankruptcy petition on their behalf in order to save the home. It is likely in this case that the father would be dismissed from the bankruptcy because the language in his Power of Attorney document did not include the word “bankruptcy.”
If you or a loved one is considering bankruptcy and/or considering having a Power of Attorney document created, it is important to include bankruptcy in the Power of Attorney document. You will need to speak with the lawyer preparing the Power of Attorney document to ensure that the necessary language is included.
If the Power of Attorney document has already been created and does not include the proper language, there are a couple of options. First, a new Power of Attorney document could be created that includes the proper language. Second, you could speak with a bankruptcy lawyer about how the bankruptcy could be filed without a Power of Attorney. This option would require the presence and competence of the actual debtor.
A trustee is an individual appointed by the federal government in charge of overseeing bankruptcy proceedings. Chapter 7 bankruptcy and Chapter 13 bankruptcy trustees are usually bankruptcy attorneys or accountants.
How often you can file a bankruptcy depends on a few things: what type of bankruptcy you filed in the past, when you filed your previous bankruptcy, and were you discharged or dismissed from your previous bankruptcy.
Knowing the difference between these two debts can be extremely useful in determining which type of bankruptcy will work best for you. In order to file a Chapter 7 bankruptcy, you must be current on all house and car payments in order to keep them. A Chapter 7 bankruptcy will wipe out any unsecured debt. A Chapter 13 bankruptcy, on the other hand, is what’s known as a repayment plan.
