It is rare for someone who is represented by a bankruptcy attorney to lose their property (home, personal possessions, retirement plans, etc.) as a result of a bankruptcy filed in Rhode Island. The Rhode Island statute dealing with what you are allowed to keep or “exempt” in spite of a bankruptcy filing has some particularly generous provisions. You can often keep or “exempt” the following items (up to set dollar limits) from being taken from you as a result of a bankruptcy filing in Rhode Island:
• the home where you live
• one or more vehicles
• furniture, home electronics, and other household items
• office equipment
• 401ks, IRAs and various other types of retirement accounts
• Cash, bank account balances, and cash equivalent assets
If you are considering filing bankruptcy and own real estate or other significant assets, you owe it to yourself to speak to an attorney who specializes in bankruptcy law before assuming that all of your assets will be exempt. I offer free initial consultations and often can determine during this first meeting if there is a risk of assets being lost as a result of a bankruptcy filing. Please feel free to give me a call to schedule an appointment to discuss your particular situation.
A Rhode Island bankruptcy filing can be used to get rid of many types of debt. Filing under Chapter 7 may allow many types of debts to be wiped out completely:
- credit card debt
- electric, gas, water, and other utility bills
- medical, dental, and vision bills
- personal and unsecured bank loans
- automobile loan obligations remaining on a repossessed vehicle
- mortgage loan obligations remaining on a foreclosed home
Any child support obligations, recent taxes, and student loans are generally not eligible for discharge. But in some cases, even student loans can be eliminated in a bankruptcy if it can be shown that these debts create an unreasonable hardship for you.
Posted in chapter 13, chapter 7, debt settlement, income taxes past due, new bankruptcy law, Rhode Island, RI Bankruptcy Court, Stop Home Foreclosure
Tagged first mortgage, mortgage modification, second mortgage, underwater real estate
According to a recent study, the typical Rhode Island house lost 25% of its value last year. For many homeowners, the only alternative to losing a home to foreclosure may be to modify their mortgage. Fortunately, current bankruptcy laws allow for many Rhode Island homeowners to dramatically reduce their monthly mortgage payments.
If your house is valued at less than you own on your first mortgage, you may be able to eliminate most of yoursecond mortgage with a bankruptcy (for owners of rental properties or investment real estate, it’s even better: you can often use a RI bankruptcy filing to modify both the first and second mortgage). This can be done by filing for a Chapter 13 bankruptcy: you eliminate your second mortgage obligation and instead make a series of monthly payments for a limited period of time (between 36 and 60 months, depending on your income).
Given the magnitude of most second mortgages, this approach can result in significant savings. For example, if you have a $40,000 second mortgage, you could potentially eliminate all but $7,200 of your debt in a Chapter 13 bankruptcy.
Yes, in many cases you can. In Rhode Island, you can keep vehicles you own outright up to $12,000 under the state’s “motor vehicle” exemption. Even if your vehicle is worth more, you could potentially hold on to a vehicle valued up to $17,000 by also claiming the state’s $5,000 “wildcard” exemption.
If a creditor has a secured loan on your vehicle, you can often keep your vehicle through a bankruptcy as well. Debtors can choose to reaffirm an auto loan, and if the car payments continue to be made, the secured creditor would have no reason to repossess the vehicle.
Yes — in many cases filing a Chapter 13 bankruptcy can stop a home foreclosure sale from proceeding. Over the years, many Rhode Island homeowners have used this type of bankruptcy filing to prevent foreclosure and allow themselves to get caught up on their mortgage payments and keep their house.
People sometimes find it necessary to file bankruptcy again. The good news is you can file again; the bad news is you may want to wait a while. Under the new bankruptcy law, you can file a Chapter 7 bankruptcy eight years after you initially filed for Chapter 7 . You must wait four years to file for Chapter 13 bankruptcy again.
You can actually file for Chapter 13 even before the 4 year limit, but in this case you’ll have to pay back 100% of your debt over time. While this might not sound like an appealing option, it may be a useful approach for people attempting to save their home from foreclosure.
With a Chapter 7 Bankruptcy, many types of debt can be eliminated completely. However, not everyone is eligible to file for Chapter 7 bankruptcy. Multiple factors (such as your income level, family size, medical bills, etc.) determine whether you are eligible for Chapter 7. A Rhode Island attorney experienced with bankruptcy should be able to determine if you’re eligible.
For some people a Chapter 13 Bankruptcy is the best option. People often file for Chapter 13 bankruptcy protection in order to stop foreclosure on their homes. This form of bankruptcy often involves partial repayment of debts over a three- to five-year period.
Since the passage of the new bankruptcy law (the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005), more middle class individuals have been filing for Chapter 13 bankruptcy protection.
After the new bankruptcy law was passed in 2005, the number of bankruptcy filings in Rhode Island declined significantly.
Now the number of bankruptcy filings is rising. In the first quarter of this year 583 Rhode Islanders filed for bankruptcy, according to court records, which is nearly double last year’s filings.