- Debtor owns property that is worth significantly more than what is owed on it and the Debtor wishes to keep such property. In Chapter 7 such property may be sold at the discretion of the Chapter 7 Trustee; and, the proceeds divided among all creditors. Such property can be retained by the Debtor in a Chapter 13.
- Debtor is behind on house payments and he wants to keep the house. Creditors have the right to take the house in a Chapter 7. In Chapter 13, missed payments can be paid back over a period of time. Chapter 13 Bankruptcy cannot lower a home mortgage monthly payment; but, it can almost always lower car payments and other debt payments to free up money to pay a home mortgage monthly payment; and, catch-up on the home mortgage. When a person files Chapter 13 Bankruptcy, he stops paying his creditors directly. Instead, he pays the Chapter 13 Trustee who divides the money among all of his creditors.
- Debtor is behind on a debt where the creditor has a lien on an item of personal property such as a car. Creditors have the right to take such property in a Chapter 7. In Chapter 13, debts such as these can be re-negotiated and paid off over time.
- Debtor owes money on something he wants to keep, such as a car, but the payments are too high to afford. In Chapter 13 the loan can, in many cases, be re-negotiated so that the payments are lower.
- Debtor has missed payments on child support and is about to be thrown in jail for it. Missed payments on child support cannot be eliminated in a Chapter 7. Such missed payments can be repaid over time in a Chapter 13 without going to jail.
- Debtor owes recent income taxes that cannot be eliminated in Chapter 7. In Chapter 13, back taxes can be repaid over time. The penalties on back taxes stop upon the filing of the Chapter 13 bankruptcy; if no tax lien has been filed, the interest stops too; and, the balance owed can be paid over time.
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"Debt Relief David" Holmes 102-A Public Square • Gallatin, TN 37066 615-206-9900 • Fax: 615-451-0084 E-Mail: davidholmes@attorneyholmes.com Board Certified Bankruptcy Specialist David Holmes is Board Certified as
a Consumer Bankruptcy Specialist by the Tennessee Commission on Continuing
Legal Education and Specialization. The service offered is bankruptcy
relief under the United States Bankruptcy Code (Title 11, USC). Federal Bankruptcy laws require that lawyers such as me, who represent parties before the bankruptcy courts, call themselves debt relief agencies. We are
a debt relief agency. We help people file for Bankruptcy relief
under the Bankruptcy Code. Practice Areas The Law Office of David Holmes accepts
Consumer Bankruptcy cases exclusively; Chapter 7 and Chapter 13 exclusively;
and, represents Debtors and not Creditors. Overview of Chapters 7 & 13 When a person (hereinafter "Debtor")
gets to a point in life where he cannot afford to pay back all of his
debts, something must be done in order to put the past behind and move
forward in a positive manner with some much needed piece of mind. Chapter 7 Bankruptcy: In Chapter 7, the Debtor can eliminate his debts; other than debts that he chooses to keep paying and those debts that are non-dischargable under the law. The most common non-dischargable debts include child support, student loans, and recent income taxes. Debts that a Debtor might choose to keep paying include debts owed on a house, vehicle or other property. In most cases, the monthly payments must be current in order to keep a debt (and thereby keep the house, vehicle or other property). The Debtor is allowed to keep some (and often all) of his property in Chapter 7. The amount of property he is allowed to keep is dependent upon the amount of equity he has in such property. If he has equity in property that is more than a prescribed amount, such property may be sold at the discretion of the Chapter 7 Trustee; and, the proceeds divided among all creditors. Chapter 13 Bankruptcy: There are certain circumstances where a Debtor might prefer to file Chapter 13 Bankruptcy rather than Chapter 7. These circumstances include the following: In general, a Chapter 13 bankruptcy must last a minimum of 3 years. It may not exceed 5 years. The Debtor pays the portion of his income which exceeds basic living expenses, such as food, clothing and utilities to the Chapter 13 Trustee who disburses it among the Debtor's creditors. In most cases, ALL creditors must take their payments from the Chapter 13 Trustee rather than from the Debtor directly. If income to fund the plan is low, the Debtor may be required to give up certain property rather than pay it off in Chapter 13. If giving up such property is unacceptable, then income to fund the plan must increase; either by obtaining new sources of income or reducing living expenses. In summary, the Debtor in Chapter 13 is relieved of the obligation to pay his creditors directly and instead, pays the Chapter 13 Trustee for three to five years. Except for a few exceptions, upon the completion of all payments to the Chapter 13 Trustee, the Debtor's debts are treated as if they had been paid in full. This is so even though some of the creditors may not have gotten all that they would have been entitled to had the Debtor not filed bankruptcy. The most common debts that must be paid after the completion of all Chapter 13 payments include the remaining balance owed on long-term house notes, child support payments still coming due and debts owed to creditors who were never notified that the Debtor filed bankruptcy. Disclaimer The information contained on this web site is an over simplification of a very complex area of the law. The information contained in this web site is not intended as legal advice. No attorney-client relationship is created due to the dissemination of this information. Neither the law office of David Holmes nor David Holmes individually shall be liable for any special, direct, indirect, incidental, or consequential damages which may result from the use of this information. Attorney/Staff Profile David Holmes Education: LL.M. in TAXATION - 1987 Practice Experience: Practicing Bankruptcy Law Since 1999 Member: Sumner County Bar Association Mattie Bhela
Education: Practice Experience: Practicing Bankruptcy Law Since 2005 April DeLisle
Education: Two year American Bar Assn. accredited
Paralegal Program - 2005 Practice Experience: April has worked in 2 different law firms representing both debtors and creditors. She works closely with the office of the Chapter 13 Trustee, the office of the United States Trustee and the office of the United States Bankruptcy Court Clerk. She has the experience and knowledge to provide excellent service to our clients in a wide variety of areas. Locations/Directions 102-A Public Square, Gallatin, TN 37066 (map)
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