Every day I receive phone calls from taxi owners requesting information about bankruptcy. There are two most common types of bankruptcy are Chapter 7 and Chapter 13.
Taxi Owner uses chapter 13 to eliminate $600,000 debt by paying $900 per month for 5 years.
He could not stand the pressure of the monthly note payments so he visited us for advice. We determined that he could not file chapter 7 bankruptcy because his house was worth too much. It appraised at $485,000 and he had paid down his mortgage to $63,000. That left $422,000 in equity. His wife owned half the house, so his share was worth $211,000, but he was entitled to a homestead exemption of only $165,000. That left $46,000 of equity that could not be protected. If we filed a chapter 7 case, the bankruptcy trustee would ask him to pay a lump-sum of $46,000, and if he could not pay it, the Trustee would sell the house.
Do you have a basic understanding of estate planning?
As New York readers know, there is significant benefit in having a strong estate plan. You may understand that it is important to plan for the future through certain estate planning tools, but you may not be sure what that means or how you can do this for yourself. Like many others, you may benefit from a basic understanding of what estate planning means and what it entails.
