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Changes In Circumstances In a 13

When filing a Chapter 13 Bankruptcy, many individuals are very concerned about what will happen if there is a change in their income. A Chapter 13 is a repayment plan that is largely based upon a debtor’s income and expenses. In some cases the payment is based on tax debt or mortgage arrears. The payments vary considerable on a case to case basis.

If a person files a Chapter 13 and there is a significant change in circumstances, it is possible in most cases to go back to the court and ask for a reduction in the payments. It is also possible in some cases to ask that the case be changed from a Chapter 13 into a Chapter 7 liquidation which does not involve repaying the creditors.

When a person enters into a Chapter 13, it is important that they stay in contact with the attorney who represents him or her.  Oftentimes problems can be addressed in the Chapter 13, if the attorney is informed.

Written by Hoglund Law

The attorneys of Hoglund law are licensed in Minnesota, Wisconsin and Ohio. Hoglund, Chwialkowski & Mrozik, PLLC is based in Roseville, Minnesota. In addition to handling cases involving bankruptcy & social security, Hoglund, Chwialkowski & Mrozik, PLLC handles faulty drugs and toxic exposure.

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Is student loan dischargeable in a Chapter 13?

Student loans are typically non-dischargeable in either a Chapter 13 Bankruptcy or in a Chapter 7 Bankruptcy. (In some instances, an individual can have his/her student loans discharged in a bankruptcy if the individual can show the student loans present an undue hardship. The standard for this is very high and very few individuals are able to successfully show this.)

A Chapter 13 is essentially a repayment plan where the individuals pay back their creditors based upon their income. Some people will pay the creditors 1% of what is owed to them and some will pay back 100%. The amount paid back will depend on a person’s individual circumstances. If a person owes student loans in a Chapter 13, the student loans will survive the bankruptcy and essentially be waiting for the debtor at the completion of the Chapter 13.

While the individual is in a bankruptcy, the student loan company will be treated like any other unsecured creditor if it is put into the plan. The student will only get a portion of the Chapter 13 payment if they get anything at all. The debtor will still owe the student loan company whatever has not been paid upon the completion of the bankruptcy.

If a student loan is considered long-term debt, meaning that the individual will be paying on the student loan for longer than the duration of the Chapter 13 plan even if the individual were making full payment to the student loan company, then it is permissible to allow the debtor to continue to pay the student loan company directly while the person is in the Chapter 13. In many cases, this will be a benefit to the debtor because the student loan company will be paid more during the Chapter 13 plan and the debtor will therefore owe them less when the Chapter 13 plan is completed.

Student loans are typically non-dischargeable in either a Chapter 13 Bankruptcy or in a Chapter 7 Bankruptcy. (In some instances, an individual can have his/her student loans discharged in a bankruptcy if the individual can show the student loans present an undue hardship. The standard for this is very high and very few individuals are able to successfully show this.)

A Chapter 13 is essentially a repayment plan where the individuals pay back their creditors based upon their income. Some people will pay the creditors 1% of what is owed to them and some will pay back 100%. The amount paid back will depend on a person’s individual circumstances. If a person owes student loans in a Chapter 13, the student loans will survive the bankruptcy and essentially be waiting for the debtor at the completion of the Chapter 13.

While the individual is in a bankruptcy, the student loan company will be treated like any other unsecured creditor if it is put into the plan. The student will only get a portion of the Chapter 13 payment if they get anything at all. The debtor will still owe the student loan company whatever has not been paid upon the completion of the bankruptcy.

If a student loan is considered long-term debt, meaning that the individual will be paying on the student loan for longer than the duration of the Chapter 13 plan even if the individual were making full payment to the student loan company, then it is permissible to allow the debtor to continue to pay the student loan company directly while the person is in the Chapter 13. In many cases, this will be a benefit to the debtor because the student loan company will be paid more during the Chapter 13 plan and the debtor will therefore owe them less when the Chapter 13 plan is completed.

Written by Hoglund Law

The attorneys of Hoglund law are licensed in Minnesota, Wisconsin and Ohio. Hoglund, Chwialkowski & Mrozik, PLLC is based in Roseville, Minnesota. In addition to handling cases involving bankruptcy & social security, Hoglund, Chwialkowski & Mrozik, PLLC handles faulty drugs and toxic exposure.

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Younger Generations Worse Off Than Older Generations

Over the history of the United States there has been a general trend of increased wealth with each passing generation.  However, analysis by the Pew Research Center points to the exact opposite.  The older generations have been able to amass more wealth over time relative to the younger generations.  Despite the obvious ability to collect more wealth by living longer, households in 1984 headed by people 35 years and younger had a median net worth of $7,859 greater than households headed by people 35 years and younger in 2009.  Today, the wealth gap between households headed by people age 65 and older and households headed by people age 35 and younger has never been wider.  In 1984 the 65 year old age group had a median net worth 10 times greater than the 35 year old age group. Today the 65 year old age group holds a median net worth 47 times greater than the 35 year old age group.

Besides a weak economy, there are several other likely culprits to this increasing net worth gap.  For instance, today’s individuals are starting their independent lives later and putting home ownership off longer.  The increased cost of attending college also has aided in this change; younger generations are attending college in greater numbers compared to the older generations.

The Pew Research Center attributes the largest factor in the increased wealth gap to the housing market.  The report said, “While rising home equity helped drive wealth gains for the older generation over the long-term, younger people had less time to ride out the housing market’s volatility — especially its most recent boom and bust.”  Whatever the reason for the increased net worth gap, one thing is certain, the younger generation is not better off financially than their parents and grandparents.

 

Source:

Annalyn Censky, Older Americans are 47 times richer than young, https://money.cnn.com/2011/11/07/news/economy/wealth_gap_age/index.htm?iid=HP_River (accessed November 8, 2011)

Written by Hoglund Law

The attorneys of Hoglund law are licensed in Minnesota, Wisconsin and Ohio. Hoglund, Chwialkowski & Mrozik, PLLC is based in Roseville, Minnesota. In addition to handling cases involving bankruptcy & social security, Hoglund, Chwialkowski & Mrozik, PLLC handles faulty drugs and toxic exposure.

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Payday Loans Dangerous For Borrowers

Payday loans are short-term loans offered by lenders as an advance on the borrower’s paycheck. Payday loan lenders are located in stores and online. Generally, it is a good idea to take out a payday loan only if it can be paid back immediately. Payday loans are one of the most expensive types of credit. The loans carry high interest rates, and interest adds up quickly if payment is not made on time. It is not uncommon for borrowers of payday loans to pay 700 or 800% interest. Payday loans are usually easy to get. The money usually is transferred in a few hours, and borrowers only need a paystub to prove they are employed. In most circumstances, payday loans are dischargeable in bankruptcy.

Payday loans often are targeted to people who cannot afford them. Additionally, most lenders do not sufficiently disclose the interest rates and other costs. Borrowers who apply for online payday loans have to be careful to avoid enrolling in additional programs. Online applications often include opportunities to sign up for unrelated programs, such as travel, phone, or Internet plans. A borrower can easily become enrolled in these programs and will be charged every month. Regulation of payday loans varies from state to state. The predatory behavior by lenders has caused many to question the existence of payday loans.

 

 

Source:

Sheryl Nance-Nash, How Online Payday Loans Can Get You in Trouble, https://www.dailyfinance.com/2011/08/10/how-online-payday-loans-can-get-you-in-trouble/ (accessed August 14, 2011).

Written by Hoglund Law

The attorneys of Hoglund law are licensed in Minnesota, Wisconsin and Ohio. Hoglund, Chwialkowski & Mrozik, PLLC is based in Roseville, Minnesota. In addition to handling cases involving bankruptcy & social security, Hoglund, Chwialkowski & Mrozik, PLLC handles faulty drugs and toxic exposure.

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