New Bankruptcy developments
CARES Act -The CARES Act gives some borrowers temporary protection from foreclosure. The mortgages that are protected are government backed mortgages, which would include Fannie Mae, Freddie Mac, VA, FHA and USDA loans. You can request a forebearance from your lender if you have one of these loans. A forebearance under this act can be requested even if you are not current. The forebearance can be obtained for an initial six month period, and then extended for an initial six month period. This act provides that no fees, interest, or penalties would be charged to the borrower during the forebearance period. The credit reporting will be the same as the borrower previous reporting prior to the forebearance. The payment of the forebearance amount will depend on the guidance given to your mortgage servicer by the respective federal agency.
Small Business Reorganization Act (SBRA)-This act that became effective on February 19, 2020. This act in a nutshell allows small business to reorganize under subchapter V of Chapter 11 of the U.S. Bankruptcy Code. This revision allows a more economical path for a small business to file under Chapter 11. The threshold of the original act as passed was $2,725,625. The Cares Act increased the amount to $7,500,000 for one year from its enactment.
Chapter 13 confirmed plans prior to enactment of the CARES act-The Cares Act provides that a Chapter 13 plan confirmed prior to the passage of the CARES act can be extended out to seven years if Debtor has experienced payments issues because of COVID 19.
Creditors Meetings (341 meetings)-The U.S. Trustee has issued guidelines that these meetings be conducted by telephonic hearing for cases filed thru July 10, 2020.
Stimulus payments-These payments are not to be counted in regards to the means test.
Frequently Asked Questions
Can I Own Anything after a Bankruptcy?
Yes, you can keep your exempt property, and your home and vehicles if the debts are reaffirmed,
and you own no equity above your state's limits in the secured items. If you receive an inheritance, divorce property settlement, or life insurance benefit 180 days after your bankruptcy filing, that money or property has to be turned over to your creditors.
Will Bankruptcy Wipe Out My Debts?
Yes, with some exceptions. Those exemptions are specifically listed under the Bankruptcy Code but include alimony, child support, certain taxes, fines, and student loans. Lenders can also claim that a debt is nondischargeable under Section 523 of the Bankruptcy Code.
How Will Bankruptcy Affect My Credit?
The fact that you are considering bankruptcy is already a clear message your credit has been affected. A bankruptcy will stay in your credit report for 10 years, but the filing of a bankruptcy will cause those creditors on your credit report that have been discharged to show a zero balance owed after your discharge. This should help you improve your credit score.
Can I Avoid Listing a Creditor or Credit Card?
You are required after the Bankruptcy Code to disclose all assets and all debts. You cannot pick and choose who you list. You have to list all your bills and debts you owe.
Can I Rebuild My Credit After Bankruptcy?
Yes, in the past, it was difficult to rebuild your credit, but after a bankruptcy, if you watch how you use your credit and pay your bills on time, you can rebuild your credit. The filing of bankruptcy does not prevent you from getting credit in the future.
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