Question 1: A friend of yours, Vince, is having financial troubles. Vince is married with two children and had a high paying job as a professional athlete but is retired and has not found steady employment in his hometown of Columbus, Ohio. He owns a house worth $200,000.00, he has $100,000.00 in equity in the home and he has fallen behind $20,000.00 on his mortgage payments. He also owns a 2015 Toyota Highlander valued at $20,000.00 in which he has $10,000.00 in equity and is $2,500.00 behind in payments on the vehicle. Vince does not own any other property of value exceeding the bankruptcy exemptions in Ohio. Vince meets with an attorney who tells him that both Chapter 7 and Chapter 13 bankruptcy are options for him going forward. Vince tells you he is confused and asks you to explain his options in greater detail.
According to Chapter 7 of bankruptcy the asset that are owned by a person is sold and the recovered amount is used to repay the debt. This is a classic bankruptcy case. However, in chapter 13, the person is given protection on assets i.e. Court will issue a repayment plan assessing the income level and the person, upon successful payments, get to keep the ownership and possession of the asset.
In this case Vince can go for Chapter 13 if he has a fixed source of income (though paying low). He should duly meet the repayment plan mandated by the court and not lose the ownership and possession of assets.
However, if Vince is not able to find a steady job and has no fixed source of income he should declare bankruptcy as per Chapter 7
Question 1: A friend of yours, Vince, is having financial troubles. Vince is married with two chi...
Paul J. and Judy L. Vance are married and file a joint return. Paul is self- employed as a dentist, and Judy is a college professor. Paul and Judy have two children. The oldest is Vince who lives at home. Vince is a law student at the University of Cincinnati and worked part-time during the year, earning $1,500, which he spent for his own support. Paul and Judy provided $6,000 toward Vince’s support. Jennifer is the youngest and lived in...
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