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Chapter 13 Archives

Fed chair questions inability to discharge student loan debt

Student loan debt can be some of the most difficult debt for people in Virginia to deal with; while the numbers can be large, this type of debt is also unique in that it is ineligible for discharge in bankruptcy unlike other loans and debts. However, the chair of the Federal Reserve Board, Jerome Powell, questioned the necessity of this policy during testimony before the Senate Banking Committee in March 2018. Powell said that student loan debt stands alone in its inability to be discharged in bankruptcy and that he had no clear answer as to why this is the case.

Tips for keeping or buying a car during bankruptcy

People in Virginia who are considering filing for bankruptcy might be wondering whether or not it will affect their ability to purchase or keep a car. In a Chapter 13 bankruptcy, a person's debts are restructured to allow the person to keep some assets and pay creditors over three to five years. A person's car is usually among the assets kept although there are a few exceptions.

Court rulings may change Chapter 13 bankruptcy rules

When Virginia residents file for Chapter 13 bankruptcy, they may have the ability to modify their mortgages. However, if the lien is a primary lien on a primary residence, the debt is generally fully secured even if the homeowner is underwater on the loan. This is usually not the case if a property is a vacation or investment property. In such a scenario, the property owner could be entitled to a "cram down."

Chapter 13 cram downs could come to some primary residences

Many people in Virginia who are unable to repay a large debt burden but want to preserve their mortgages, car loans and similar agreements make use of the provisions of Chapter 13 bankruptcy. Under a Chapter 13 bankruptcy, people have the ability to modify mortgages on investment properties and second homes, as well as car loans and similar secured loans for personal or real property, in a process known as a "cram down."

What to consider before taking out a 401(k) loan

The average household in America that carries a debt owes a total of $131,431. This includes mortgage debt, and other common obligations include student and auto loans and credit cards The average credit card balance is $15,654 while the average student loan debt is $46,597. Americans have an average auto loan debt of $27,669. One way for Virginia consumers to pay off that debt may be to dip into a 401(k).

Credit card debt: Should consumers be worried?

Consumer debt has hit an all-time high, and much of the credit goes to charge cards used by individuals in Virginia and across the U.S. Some consumers may be looking at Chapter 13 bankruptcy filings for relief from overwhelming debt while others might be able to pay off creditors before diving in for another round. The new records in credit card debt agree with other measures of economic stress, including a lack of savings to ride out any unemployment and the ever-worrisome threat of a new recession.

How a 401k may help with debt relief

Virginia residents or others may find themselves in a financial emergency for any number of reasons. One way to possibly get out of that hardship is to apply for a 401k hardship withdrawal. A person may be eligible for such a withdrawal if he or she faces an emergency expense related to a medical issue or a home repair. It may also possible to qualify if making a payment will help the employee to avoid eviction or provides funds to pay for funeral expenses.

Homeowners pay more credit card interest

For many people, owning a home may be a better financial decision than renting. This is because homeowners can take advantage of tax credits while they build equity. However, it's important for Virginia residents to pay attention to the additional costs of homeownership as they decide whether they should rent or buy.

How to buy a home after bankruptcy

People in Virginia who have filed for bankruptcy or who are considering filing for bankruptcy might wonder if they can still buy a house afterward. It is possible to purchase a home after bankruptcy, although certain conditions must be in place for this to happen.

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Bowen Ten Cardani, PC

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