Bankruptcy Questions

A joint mortgage (a mortgage signed for by two or more parties) can be included in an individual’s personal bankruptcy filing. But an individual filing of Bankruptcy does not discharge the mortgage debt for all parties.

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A Chapter 13 bankruptcy case allows one who is behind on secured debts to “catch up” on these debts through the chapter 13 plan and repayment process.

Using disposable income (the debtor’s income in excess of allowed expenses), the debtor pays the Bankruptcy Trustee a monthly amount that will pay the past due amounts in full over time.

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If the creditor is listed on the Bankruptcy filing’s petition schedules, the court will provide notice to that creditor to immediately cease the garnishing of wages.

However, it certainly would not be inappropriate for the debtor to contact the entity garnishing his or her wages and inform them in writing of the bankruptcy filing and providing the bankruptcy case number to the creditor. In doing so, the creditor is made aware of the filings through a second means, and has no excuse for failing to stop the garnishment of wages.

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A debtor cannot always be sure that a debt has not been sold or assigned to a collection agency or other third party debt collector source. Nor can a debtor be 100% sure that the creditor might not reactivate a past due account for collection at a later date.

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There are no bankruptcy rules or laws that would prevent or prohibit a person from purchasing a new home or receiving a mortgage after a discharge is entered for their case.

However, a bankruptcy filing often negatively affects a debtor\’s credit score or rating significantly.

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A filing of a bankruptcy petition potentially discharges all debts incurred prior to the filing date of the petition itself (i.e. as of the date that the case is filed with the court).

However, certain debts are non-dischargeable and other debts can be challenged directly. For example, debts incurred with the deliberate intention of being discharged in bankruptcy can be challenged.

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Short answer, yes: the Trustee administering a bankruptcy case is permitted to take a tax refund that is paid to the debtor from the IRS (as well as any State tax refund).

The theory is that such refund is an asset of the debtor that can be used to pay creditors.

But there is one consideration, however.

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Standard Legal recommends that a person with a large number of debtors who is filing Bankruptcy create separate continuation sheets for each type of debt, using the stock continuation sheet provided.

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