Bankruptcy Part 5


There is a myth, a bankruptcy myth, that a
debtor, once they’ve filed bankruptcy, will not be able to obtain good credit
or purchase a home or an automobile. That is absolutely false. We have debtors in a chapter thirteen who have purchased homes. We have had plenty of
debtors in a chapter seven who have subsequently acquired a new home, new
vehicle, and so on. Another myth I would like to address is the thinking that in
a chapter thirteen bankruptcy, all debts are repaid. That is not true. Only a percentage or portion of the general unsecured debt,
which is credit cards, automobile deficiencies from repossessions, broken
leases, and simple promissory notes are discharged. The ability to repay, or the
feasibility of making chapter thirteen bankruptcy payments, is what is critical,
and, therefore, we examine the debtor’s income and fixed monthly living expenses
to determine what is available as disposable income. In a chapter thirteen, that disposable income is turned over to a chapter thirteen trustee for the benefit of
the creditors, and that chapter thirteen trustee distributes those funds pursuant to the
debtor’s plan.

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