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Court rejects bankruptcy payment plan funded by parents

On Behalf of | Mar 21, 2017 | Chapter 13 Bankruptcy |

When someone in Ohio files for bankruptcy protection, the court will consider many factors before allowing the case to move forward. A dismissed case that involved a convicted felon and income provided by his parents illustrates the scrutiny that a court will apply to a debtor’s income.

Authorities incarcerated the man after a conviction for aggravated DUI stemming from a car accident he caused that killed two passengers in his vehicle. Although the families of those victims had not shown any indication of suing the convicted driver, he was a defendant in a wrongful death suit that arose from an accusation of selling drugs. Before a judgment was handed down for that case, the incarcerated man filed for bankruptcy under chapter 13. This approach allows a person to keep his or her property by setting up a repayment plan with creditors.

The debtor based his payment plan proposal on the $14 a month he made from the department of corrections and a pledge of $25 a month from his parents. The court rejected the plan because the money donated by the parents did not qualify as regular income.

Anyone who is considering filing for chapter 13 bankruptcy might wish to consult an attorney about whether it is the right option. A lawyer could evaluate the person’s debts and income and help him or her understand the advantages and disadvantages involved with filing for bankruptcy. An experienced attorney could also prepare the application for the court and communicate with creditors, informing them that they need to cooperate with the court during the process. This effort could end harassment from bill collectors. As the court reviews the case, a lawyer could explain the needs of his or her client and negotiate a new payment plan.


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