Archive for July, 2009
Thursday, July 30th, 2009
Cornie Herring asked: Bankruptcy has become a chosen route for more than 1.8 millions Americans to get a debt relief from their overwhelming debt problem, according to the reports found. However, filing for bankruptcy should be avoided seeing it drawbacks that may cause bad impact on your credit history. You should not choose to file a bankruptcy just get a debt relief before you explore other alternative options. There might be a solution to your debt problem other than bankruptcy filing.
Drawbacks of BankruptcyWhy do you need to avoid bankruptcy? If you have read some of debt relief guides, you will find that most of these guides don’t offer bankruptcy as the solution for debt relief. This is because its drawbacks follow you for years. A bankruptcy filing will be remarked in your credit report for 10 years. During this time, you may find hard to obtain loans, mortgages, and credit cards. If you really need a credit during the 10-year period, you may need to go for secured loans which may be more expensive to acquire. Even you are offered with an unsecured loan, you need to pay much higher interest rate than those offered to people with clean credit history; this is to compensate the risk faced by the lenders.
Obtaining attractive low interest-rate unsecured credit card may be impossible because most credit card companies reject applicants who have filed a bankruptcy. You may only be able to get secured credit card which the credit limit depends on the amount you deposited to secure the card. Moreover, secured credit card normally has higher annual fee and the issuer may charge an application fee.
In filing a bankruptcy, all your assets may need to be liquidized for debt payment. However, under the Federal law, some of your assets needed to support you and your dependents can be exempted. Such exemptions may include a portion of your IRA account and other retirement accounts which are subjected in case by case basis. Basically, you will lose most of your asset if you choose bankruptcy as your debt relief solution.
Alternatives to BankruptcySince bankruptcy should be avoided, then what are the alternative options to resolve your debt problem? There are a few options to go for in getting a solution to resolve your debt problem. If you are out of your mind and do not know what can be done other than bankruptcy filing, then try to approach a credit counseling agency and get them to propose to you a few potential debt relief options that tailors to your financial situation.
Alternatively, you can also try to negotiate a payment plan with your creditors. Besides that, you can also get helps from professional debt-negotiation company to perform the negotiation on behalf of you. Most creditors would prefer to get some of the money you owe them rather than get nothing if you file a bankruptcy to erase the entire debt. So, your creditors may accept what you may offer to them through the negotiation process.
SummaryBankruptcy filing is an extreme option that may seriously impact your future credit worthiness. You should avoid this option by exploring other alternatives for a better debt relief solution.
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Wednesday, July 29th, 2009
Peter Gitundu asked: Bankruptcy is a situation in which an individual who is unable to pay his debts goes to court and files a petition. Depending on the financial position of the debtor, the court can decide on the best chapter for the individual to file the case. There are mainly two chapters under which individuals can file a petition; the liquidation chapter and the wage-earner chapter.
There are several things that the debtor should expect once the bankruptcy court has accepted the petition. The debtor must be willing to share with the court officials and his lawyers how he got himself in this situation. This means, recounting every detail of the debtors current financial position. The debtor should as such be ready for questions from these people and be ready with appropriate answers.
The debtor should also expect to lose all their credit cards unless they have fully paid for them. It also becomes hard for the debtor to find loans to pay for mortgages and other loans to acquire essentials such as automobiles. In case they get lenders willing to lend them some money, they will have to pay huge amounts in interest rates which could also escalate with time. During the bankruptcy period, the debtor is expected to continue making other monthly payments such as students loans and alimony.
Financial distress is a stressing period for an individual. It is wise for one to look at other possible ways of coming out of it before taking it as the only option that they have. Consult financial experts on other options that could be available and then weigh them to see what is best for you.
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Tuesday, July 28th, 2009
Roilee Mandeville asked: There are many consumers who are aware of their legal option to use bankruptcy as a means of eliminating their debts. However, majority of them are uncertain of the costs involved on how to declare bankruptcy. This is because there is confusion about the different ways to do it. To many, they thought there is only one way of doing it. In this article, I will answer some of the most frequently asked questions about filing consumer bankruptcy.
Q: What is the easiest method to file bankruptcy?
A: Hiring a bankruptcy lawyer is the most convenient way to file bankruptcy. The lawyer will handle all the intricacies and complexities of the bankruptcy procedure. Whether you are planning to file Chapter 7 or Chapter 13, a good lawyer can guide you to the proper course of action. Unfortunately, this method is also the most expensive. You need to be able to screen legal professionals to your advantage if you want to get the best deal. Most attorneys these days offer a free initial consultation that you can take advantage of.
Q: I’m short on money, is there a fixed cost solution?
A: If you are planning to file Chapter 7 then you are in luck! Bankruptcy preparation services will be happy to take your case. What they will do is to ask you to complete an ‘intake form.’ They will evaluate and prepare the bankruptcy petition for you. Some of the service providers have full-time lawyers to evaluate your case while others don’t have any legal professionals at all. After getting the paperwork done, you are the one to represent yourself in the bankruptcy court. This makes half of the solution a do-it-yourself. Always consult your local bankruptcy court to confirm that your state allows for such services to prepare your documents.
Q: I can’t afford a lawyer, is there a cheaper solution?
A: The new bankruptcy law doesn’t require you to hire a lawyer. You can file bankruptcy yourself as long as you can show ‘due diligence’ to the court. This method of personal bankruptcy filing is called ‘pro se’ or self-help method. There’s a great deal of learning curve in educating yourself with the latest procedures in bankruptcy laws. You can make this difficult task easier by buying an up-to-date bankruptcy book. You can also use a bankruptcy kit with completed samples as your guide. It’s important to make sure that you are using the latest version of any bankruptcy software that you are planning to buy. From time to time the Federal Bankruptcy Court updates the official forms.
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Tuesday, July 28th, 2009
Legal Helpers asked: In bankruptcy, the attorney assigned to the case is responsible for making sure all information provided by their client is accurate. They usually do this before filing any and all paperwork. However, they often miss something and simply take their client’s word for the truth. Once the case is filed, a bankruptcy trustee will go over all information supplied by the client, looking for inaccuracies or reasons to believe fraud may be involved.
The role of the trustee in bankruptcy is to protect creditors are treated fairly and to be sure all non-exempt assets are sold for the highest price. The money raised is then distributed to the creditors in accordance with their claims and the trustee in bankruptcy helps make this happen. They go to creditor meetings and can discharge debt if fraud is found on the creditor’s end.
With a Chapter 13 bankruptcy filing things are different. The trustee’s job is more administrative. This is because there are no assets to liquidate. They make sure the court approves the new payment plan. The trustee will often accept payments from the client. They then distribute them to the creditors, according to the court approved payment plan.
Many people use bankruptcy because they need to be relieved from the financial burdens that they are unable to take care of now or in the future. Unfortunately, too many people may have taken advantage of the bankruptcy system, and in May of 2004, the Bankruptcy Legislation Amendment Bill was passed. This bill was designed to stop those that were using the bankruptcy system as a quick way out of paying their taxes, although they were financially able to pay them. There may have been very few people that were taking advantage of the ability to not pay their taxes; however, the ones that are taking advantage have had debts that were a considerable amount of money. Since the bill was unfair to those that were in actual financial debt, there was an amendment in December of 2005.
This amendment allowed for those that truly needed to be relieved of their burdens to conduct a means test, which would evaluate them to see if they were in true need of filing bankruptcy. This includes taking a debt counseling course, in which the filer must pay for themselves. If after completing these requirements you were considered unable to file for the Chapter 7 bankruptcy, you still have the option of filing for Chapter 13 bankruptcy. Filing for Chapter 13 is more difficult, but can be a necessity if you are in desperate need of relief. With these new laws in effect, those that need help can still receive it, while those that are using it for avoidance, can no longer do so.
Filing for bankruptcy can be quite frightening. When filing for bankruptcy there are many rules you must follow exactly in order. If you don’t, you won’t correctly file your bankruptcy. In addition, you should completely understand each of the separate types of bankruptcy you can file, before your file. If you’ve had no experience with bankruptcy you may find yourself overwhelmed with the tasks of filling out the right paperwork. If your bankruptcy papers are not filed in the proper manner, you can end up with a bigger problem than you started with.
If you want to ensure you are doing everything the right way, you may want to consult with a bankruptcy attorney. The easiest way to contact a good bankruptcy attorney is to get in touch with a bankruptcy firm. A bankruptcy firm is actually a group that employs lawyers who specialize in the process of bankruptcy.
When you’re dealing with something as sensitive as filing bankruptcy, you want to be sure you’re doing it right. A bankruptcy firm can help you know what type of bankruptcy you qualify for and the proper steps you need to take to complete the process. In addition, the attorney can help prepare you if you need to go to court and can often help you protect some of your most precious assets (like your home and car). Overall, it is a prime idea to contact a bankruptcy firm before filing for bankruptcy.
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Monday, July 27th, 2009
Jon Arnold asked: Bankruptcy is not something that you do on the spur of the moment, but rather it should be a well thought out plan that you only implement when you have exhausted all other possibilities. While bankruptcy may provide a way out of your current financial situation, you need to consider and be aware that the ramifications of filing bankruptcy are going to haunt you for the next 7 to 10 years. Many people who file bankruptcy are doing so to make things better “now” but they are not looking years down the road, and when they do and wish they had considered other options, it is then too late.
If you are on the very edge of filing bankruptcy and need a way out, there are multiple other options that may be available to you. If you feel like you’re hopelessly buried in debt and you have very few assets, filing for bankruptcy may not be the answer to ending your financial problems. Though it sounds like an easy and attractive solution for one’s financial problems, bankruptcy should be the last option any individual should resort to.
Throughout the process of filing for bankruptcy, it is a good idea to have a lawyer represent you through all formal bankruptcy proceedings. Unless you yourself are very familiar with bankruptcy law, especially the variations of the law within your state, it is more than just a good idea to have a bankruptcy lawyer represent you; it is almost a necessity so that you don’t accidentally get yourself into worse trouble than you are right now. From start to finish, the process of filing for bankruptcy is much different than it has been in decades past, and a good bankruptcy attorney knows those pitfalls and can navigate around them.
Before taking the big step and filing for bankruptcy, you will need to do some reading, especially so that you can explain to your bankruptcy attorney the reason for considering bankruptcy. You may need to consider filing bankruptcy if your expenses are increasing because of divorce, job loss, or medical bills, while your income is decreasing because of the same reason. There are various good reasons for filing bankruptcy, but there are also many BAD reasons for filing bankruptcy, based on the ease with which one could do that in years past, but most of those loopholes have been closed, and it is not nearly as easy today to file a non-painful bankruptcy case.
If you have decided there is no alternative to filing bankruptcy, you may be asking yourself, “how do I find a good bankruptcy lawyer? If you have exhausted all other resources and still feel bankruptcy is your only viable option you can learn more about filing bankruptcy or buy do it yourself bankruptcy forms. If you’re unemployed, on public assistance, have little or no money in a bank account, don’t own an automobile, or rent or live with others, filing for bankruptcy may do little to improve your financial situation. The bankruptcy judge is going to want to see a plan of how you plan to change your current situation so that you are not back in the same position in another few years, so be sure that you discuss a financial plan with your bankruptcy lawyer.
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Sunday, July 26th, 2009
David Siegel asked: Have you seen the price of gas lately? Have you gone to your local grocery store and checked out the prices for basic food items? Have you been out to eat in the past six months? If you are paying any attention at all, you will have noticed a significant increase.
The primary indicator that most folks notice is that of gas prices. The price of gas has nearly doubled in the last five years with a sharp increase during the most recent twelve months. Since gas prices are rising, that means the cost of all kinds of shipping has increased. This will lead to higher prices in all products that are shipped. Even service businesses will need to raise fees to cover the additional transportation expenses. What this all leads to is increased bankruptcy filings.
When cash money is tight, folks rely on their credit cards to finance normal living expenses. When the credit line becomes exhausted and minimum payments cannot be paid, the balances skyrocket. This is due to late fees, over limit fees and excessive interest rate adjustments. The inability to catch-up eventually leads to collector calls, future lawsuits, judgments and garnishments. When this eventually occurs, many will be force to turn to bankruptcy relief.
Chapter 7 bankruptcy is the most common form of bankruptcy relief. It basically provides relief for an honest debtor who has mostly unsecured debt and does not have significant assets. Often times, the person will choose to maintain a house or car while declaring bankruptcy. To do so, the person will have to continue to make timely payments on those items.
There are several debts that are not eliminated in a Chapter 7 bankruptcy case. Those include, but are not limited to student loans, parking tickets, recent taxes, child support, spousal support and debts incurred through fraud. However, in most cases, the majority of the debt is eliminated. Importantly, the credit card debt is eliminated. An exception would be if the debtor utilized the credit cards too close to the bankruptcy filing and in contemplation of bankruptcy filing. In those cases, the creditor can file an adversarial complaint, seeking to hold the debtor liable for the recent credit card charges.
When prices for normal living expenses become excessive, the natural result will be an increase in bankruptcy filings. People need to be very aware of how much they are spending each month. It may take a reduction in spending just to maintain the status quo under the current economic conditions.
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Friday, July 24th, 2009
Legal Helpers asked: In the United States, federal bankruptcy was designed by congress as a relief measure to persons or organizations who are financially distressed. In other words, in the face of insolvency, an individual or organization can find relief against their debt obligations in federal bankruptcy.
Chapter 7 of the federal bankruptcy code provides for the appointment of a trustee for the liquidation of assets of the debtor for orderly distribution to the creditors. When a debtor’s assets are being liquidated, federal bankruptcy code requires that this should be subject to certain exemptions.
Federal bankruptcy exemptions determine how much property a debtor can keep when they file for Chapter 7 bankruptcy and also the category of items. One of the schedules in a debtor’s petition under the federal bankruptcy code is the schedule of exempt property. In essence, Federal bankruptcy law provides that creditors cannot claim certain properties of a debtor.
In the same manner, the debtor cannot be discharged of some debts. In some states, state exemptions are different from federal exemptions (in the United States). Although each state is permitted by law to adopt its own exemption law, certain states allow Federal bankruptcy exemptions and so a debtor may choose to abide by the federal list of exemptions or by that of their home state. But overall, the state decides which exemption is upheld in a bankruptcy court within that jurisdiction. This underscores congress goal to offer protection to financially distressed individuals or organizations. Married couples may double all exemptions under federal bankruptcy code.
Bankruptcy is something that could happen to anyone. Even big organizations do lose their shirts. Since bankruptcy is something that could actually happen to anybody, our laws provide safety nets for people, municipalities and business entities that have financial difficulties. Chapter 12 Bankruptcy deals with family farmer or fisher folks, Chapter 11 Bankruptcy deals with business reorganization, Chapter 9 talks about municipalities while Chapter 15 focus on ancillary and cross-border cases. Although there are many types of bankruptcy, only two of these types of bankruptcies actually concerns individuals like you. Chapter 7 and Chapter 13 Bankruptcy tell you how you van dissolve you piles of debts.
According to a study in 2007, on the rate of federal bankruptcy and state bankruptcy, businesses are embracing proceedings under state laws rather than federal bankruptcy laws because proceedings under the former is faster, less expensive and more private.
In view of this, the debtor should endeavor to compare Federal bankruptcy exemptions with their states exemptions using the guidance of a solicitor when filling their bankruptcy forms.
Filing Fees For Bankruptcy
Filing for bankruptcy entails some expenses. Just because you are broke that does not mean that you are exempt from court filing fees. However, the good news is that filing fees for individuals are very much lower compared to those filing fees imposed on businesses. For instance, where businesses filing under Chapter 11 Bankruptcy are required to filing fee in the amount of $ 1,039, individuals who are filing bankruptcy under Chapter are only required to pay $299 while those who are filing under Chapter 13 gets to pay $274. Family farmers and fisher folks also get to pay lower fees compared to big companies. Under Chapter 12 Bankruptcy these people are only required to pay $239. Sounds complicated? Not really. If you have experts to guide you through bankruptcy filing and the proceedings that will follow thereafter, you will get through the whole thing without a snag.
No matter the route you choose, guidance and information is very essential. Bear in mind that bankruptcy is not a panacea to financial indiscretion but an opportunity to start afresh and making use of the lessons learnt pre-bankruptcy.
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Thursday, July 23rd, 2009
Cornie Herring asked: Are you in this situation? You are facing a serious and overwhelming debt issues and you are considering of filing a bankruptcy to get an instant release from the stressful debt problem. While the process of making up your decision, you keep asking yourself to look for other option that you can go for besides the bankruptcy filing. Is there an alternative to bankruptcy?
Have you explored all your options? In fact, there are many factors to consider in deciding whether bankruptcy is an appropriate option. You might need to consult an attorney before you decide to go for this option. The rule of thumb, bankruptcy must always be your last option when you really can’t find other better option to get you out of debt.
You may trapped into your overwhelming debt issues and the depressed situation makes you unaware of other potential debt solutions and thinking that bankruptcy filing is only way to get rid of debt. Sometimes a few advices are all you need to get your finance in order, or putting a proper debt management plan can save you from your debt problem. Hence, get help from a professional such as consumer credit counseling service might help you to avoid the need to go for the bankruptcy option.
Consumer credit counseling is non-profit service that is designed to help people who have money problems. It offers free service about how to get out of debt and how you use your credit wisely. Based on your financial situation, a counselor that assigned to handle your case will help you to explore all your available options that may help you to resolve your debt issues. In most case, you may be proposed to sign up a debt management plan, in which a small monthly contribution is needed.
Although enrolling into a debt management plan is optional in consumer credit counseling service, sometimes you find it a helpful to follow the plan and recover your financial to a better situation so that you won’t drag into the last option of bankruptcy filing.
If you decide to take up a debt management plan, you normally will go through a full assessment of your financial situation. You need to let the counselor know in details your regular income, expenditure, how much you owe, who are your creditors and other relevant information about your personal circumstances. And based on information you provided, a debt management plan will be proposed to you by the counselor. Under the debt management plan, you will consolidate all your debt payment into one payment that pay to your debt management account, it will then be distributed pro data to your creditors. Your plan will be reviewed at a regular basis it meets your circumstances.
By go through a consumer credit counseling process, you get to know what other options available for you to resolve your debt issue instead of bankruptcy filing. The consequences of bankruptcy follow you for 7 to 10, any other option that may help to resolve your debt issue would be a better option than bankruptcy filing. Hence, you must go through a consume credit counseling before you comes to the conclusion that bankruptcy is an appropriate option.
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Thursday, July 23rd, 2009
Anderslhage asked:
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Tuesday, July 21st, 2009
Jared Myers asked: Chapter 11 bankruptcy has also been termed “Re-organization bankruptcy”. It’s the most familiar type of insolvency in the United States. It is typically used in large organizations or businesses dealing with financial crisis. But it is also utilized by partnerships, individuals and corporations.
Advantages
Remember, Chapter 11 Bankruptcy is reorganization, not liquidation. In some situations, filing for Chapter 11 bankruptcy allows a business to go on operating throughout bankruptcy proceedings. What this means is that under hard circumstances, you now have time to reorganize under the bankruptcy court’s supervision. This chapter has no limits on the amount of debt, where as Chapter 13 does.
How it works
Chapter 11 bankruptcy is commonly used by businesses as a way to restructure their debt without forfeiting their bussiness. To do this, the debtor files a petition which includes a list of assets and liabilities, and a detailed statement of financial affairs. And several of the bussiness’s assets are sold off to remunerate past due creditors. The debtor must then come up with a course of action and get it sanctioned by the creditors.
Notice: If the enterprise walks into the courthouse unprepared, then the results may be that the judge deeds over the business to the biggest people you owe.
Limitations & Drawbacks
Chapter 11 bankruptcy is easily the most high-priced corporate option in terms of legal costs and attorneys fees. Just to file a Chapter 11 Bankruptcy you must surrender a filing fee of $830.00–plus a quarterly administrative fee to the Court. It is not commonly used by individual consumers because it can be far more complicated and high-priced to pursue.
Chapter 11 Bankruptcy is almost certainly the most flexible of all the chapters, and at the same time the most difficult to generalize. Chapter 11 bankruptcy is a time consuming and expensive chapter, therefore it is only appropriate for individuals whose circumstances make Chapter 7 or Chapter 13 inapplicable or inappropriate. Fewer than one percent of all bankruptcy filings are Chapter 11s.
Comparison with Chapters 13 & 7
Chapter 11 bankruptcy is a viable option when a business has sufficient prospects to continue operating. Businesses are commonly allowed to continue to operate while in Chapter 11 bankruptcy, though they must do so under the supervision of the bankruptcy court.
Chapter 11 Bankruptcy is unique, because the debtor will commonly operate as his or her own trustee. This concept is called a “debtor in possession”. Businesses that file Chapter 11 bankruptcy are commonly are allowed to operate under the supervision of the bankruptcy court. In Chapter 7 bankruptcy a business sells off all its assets and eventually ceases operation.
Other Options
Chapter 11 Bankruptcy is not the only option available to a business - reorganization is permitted under Chapter 13, too. Often times, a sole proprietor may file for personal bankruptcy, which grants reorganization of the business without the cost of pursuing a Chapter 11.
Want more chapter 11 bankruptcy information? Visit our website.
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Tuesday, July 21st, 2009
John Chase asked: Avoid Bankruptcy
Bankruptcy is a legal procedure that individuals put into force when trapped in an impending financial crisis caused by a huge debt. Filing for bankruptcy gives the individual the opportunity to start afresh financially. The person filing the bankruptcy is referred to as the debtor, and the person whom he/she owes the money to is called the creditor.
The decision to file for bankruptcy is an important one, and the consequences of it must be understood before it is taken. It is an extremely difficult decision to take and better left to the discernment of lawyers who have the expertise, and are aware with the nuances such cases.
How Do I Know When I Should File For Bankruptcy?Your lawyer will of course be the best guide for you on that. But even better would be for you to use the evaluation tool on this website which answers this pertinent question for you. The evaluation tool scrutinizes individual cases in order to provide a customized solution. All you have to do is to fill a form that asks for details pertaining to the type of pending debts, any and all information about your assets, your income and a few personal details. At the end of this process, a reliable assessment of your case will be made which will help you answer this extremely difficult question.
How To File For Personal Bankruptcy?The word ‘filing’ might suggest a straightforward process, but filing for bankruptcy is far from that. The lengthy process of bankruptcy is usually best left to work out by lawyers. Reason might advice otherwise – after all it is an added expense! Yet, one must be warned that carrying out the process of filing for bankruptcy on your own requires a lot of patience and groundwork. To start with, keeping records in order is the key to filing bankruptcy properly, without making any errors. A lot of information will have to be furnished as part of the process of filing and this must be utmost care. Suffice to say, go for a lawyer!
When choosing a lawyer you must be watchful of the credibility and the background of the person you are deal with. When dealing with independent lawyers in particularly, there have been plenty of instances where lawyers don’t cater to your needs adequately because they have their hands full with many other cases. Seek the help of employee assistance programs or of course people you know and trust. A filing fee must be paid to the court; there is the possibility of paying this fee in installments. The fees of the lawyer are different although there are some public-funded legal services programs that don’t charge attorney fees when handling personal bankruptcy cases.
To learn more about bankruptcy and bankruptcy alternatives, please visit Total Debt Relief.
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Tuesday, July 21st, 2009
As a Board Certified Consumer Bankruptcy Attorney, I see people considering filing for bankruptcy each and every day from Sarasota, Port Charlotte, Fort Myers, Cape Coral, Lehigh Acres and Naples. One of the most common asked questions about bankruptcy is: Can I File Bankruptcy Right Away? The answer is yes and no. Yes, because you can. No, because you cannot just file bankruptcy without a detailed analysis of your complete financial situation.
The decision to file for bankruptcy protection, whether it be a Chapter 7 or Chapter 13 is not an easy decision anymore and should not be taken by the consumer very lightly. A great deal of thought and work goes into each and every petition that is filed with the United States Bankruptcy Court.
Also, please do not assume that anything is relevant to your situation, unless you have received the appropriate time, attention and legal advice from your attorney. Of course, there is a lot of "street talk" all over the internet about the ins and outs of bankruptcy. Unfortunately, there are many inaccuracies on the internet. This less than truthful information can hurt you, and it may cost you quite a bit of money.
Since the internet is not a confidential place, I strongly suggest that you consult with a Board Certified Consumer Bankruptcy Attorney personally to determine whether the issues that apply to your specific case are problems or not before you make any final decisions regarding filing for bankruptcy.
The reason many people want to file right away is because of the opportunity to take advantage of the Automatic Stay. One of my colleagues at the Bankruptcy Law Network, Cathy Moran, explains what the automatic stay is better than anyone. Yes, a reprieve from your creditors can be a powerful tool, and it can provide you with some time to catch a breath and gather your thoughts. However, if used improperly, it could also work against you.
If you are in the Fort Myers, Naples, Cape Coral, Port Charlotte or Sarasota area, feel free to give my office a call and speak to my secretary or paralegal to make an appointment.
This post was submitted by Carmen Dellutri, Esq., founder of The Dellutri Law Group, P.A. Currently, the firm has offices in Port Charlotte, Fort Myers, Naples and Sarasota. Mr. Dellutri also sits on the Board of American Board of Certification. Mr. Dellutri is also one of the founders of the Bankruptcy Law Network, Debt Law Network, Credit Law Network, and Mortgage Law Network. Mr. Dellutri also writes for the firm's personal injury litigation blog and the firm's mortgage modification blog.
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Tuesday, July 21st, 2009
Steve asked: In the past years, people who were in some deep financial difficulties could aid their problems with the use of a credit card. Now however, it is more difficult to do that. With the rise of job losses being reported almost every day in the news and with the credit card tightened and shrunk, we can see why bankruptcy filing today has risen tremendously.
The financial crisis in the United States can be the main cause of this problem and the future of the economy still unstable and even harder to predict, it may be such a wise thing to start bankruptcy filing today.
People that go to credit counseling agencies to seek help are in worse shape than ever financially. Not even the credit counseling agencies could do anything to help them. So as early as today, if you are experiencing some difficulties financially and cannot find the means to pay your debt, try to consider filing bankruptcy before you really find yourself in a really bad shape.
You can start bankruptcy filing today through the internet. There are many sites on the net that you can choose from but you have to keep in mind that no information on any sites is intended to replace legal advice of a professional bankruptcy lawyer. You can save some money by filing bankruptcy online.
There are two types of bankruptcy that you can either file. The most common is the chapter 7 type of bankruptcy which can be done without a bankruptcy lawyer for simple cases that can save you some money. The other second type of bankruptcy is chapter 13, which is a repayment plan or reorganization.
Chapter 7 is a straight or liquidation type of bankruptcy which means that the properties of a debtor are liquidated to cover his debts. This type of bankruptcy is a simple type that can discharge the debts of the debtor. Chapter 13, on the other hand, provides a legally agreed repayment plan that a debtor has to qualify. The debts are not completely discharged and the debtor is obliged to pay his debt, although the time period will be longer but still reasonable for the creditors.
If you already have decided to file bankruptcy by yourself, you will need to file a petition to the bankruptcy court. There are ways that you can file bankruptcy depending on the way you want things done. The easy way is to hire a bankruptcy lawyer and pay him to do all the work for you. The job of the bankruptcy lawyer is to guide you through the process, represent you in credit meetings and provide advice for your financial problems. This can sound so easy but the fee for hiring a bankruptcy lawyer can be very expensive. The cheapest process is to do it all by yourself. That can save you a lot of money which you can really use later. This way can be a little difficult if you cannot understand the basic of the bankruptcy law and how the system works.
My advice to most people who want to file bankruptcy is to do it both ways. Hire a petition preparer or a bankruptcy lawyer to prepare your papers. This can save you a lot of trouble, and the flat fee you pay them is usually worth the taking. After all your papers are done, you can do all the rest by yourself. This is the most affordable and efficient way you can ever file bankruptcy today. For more information on how to file bankruptcy affordably, visit the link below.
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Monday, July 20th, 2009
bankruptcyattorney asked:
Attorney Jamie Ryke of the Bankruptcy Law Firm Second Start in Southfield Michigan can help you save your home. In this video he explains how he can help you save your home by filing Chapter 13 bankruptcy. … bankruptcy file chapter13 lawyer michigan attorney save home
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Monday, July 20th, 2009
Legal Helpers asked: Filing for bankruptcy is a scary and challenging thing. There are many laws that you must follow exactly in order to correctly file your bankruptcy, not to mention understanding each of the separate types of bankruptcy you can file. For someone that does not have any experience with filing legal documents it can be daunting to file these types of paper work. If these bankruptcy papers are not filed correctly, it can end up being a bigger problem then the one that led to the need for a bankruptcy to begin with.
If time is of the essence it maybe better for you to find an attorney that specializes in bankruptcy. A bankruptcy firm could be the easiest place to start; because they are all lawyers that have specialized in bankruptcy law and all work in the same building together. The simplest explanation of this is a law firm where all of the lawyers have specialized in bankruptcy law.
Hiring a good bankruptcy firm means that there are several lawyers within that firm that can assist you with your case. For instance if you are in a situation like foreclosure that is time sensitive but your lawyer does not have a day available to deal with this situation a lawyer in the firm can step up and assist you to prevent a worse situation then the one your already in. If you are with a solo bankruptcy attorney you could end up having a bigger problem. Hiring a bankruptcy firm could be one of the best choices during a bad situation.
When you are dealing with bankruptcy, you know that there are many questions that you would like answered. One of these questions is always going to be what happens with bankruptcy property. Property usually falls into two different categories - the property which is items that you own, and the actual property that is land or buildings. These two types of property have different rules and regulations when it comes to bankruptcy.
The rules regarding bankruptcy property are confusing because property falls into different categories. This means that when you are starting the process of filing for bankruptcy, one of the most important things that you do is take a careful inventory of your property and have your bankruptcy firm help you decide which parts of your property are parts that will be included in the bankruptcy filing, and which are not going to be included.
After you have divided up your property, you should know that when it comes to bankruptcy property, some of it is going to be counted against you, and some of it will be counted for you. The bigger pieces of property can be sold to the bank and these will help you get rid of some of your debt. The smaller pieces can be kept, and this will help you go on with your life as you usually would, even as you are filing for bankruptcy. No matter what types of property you are dealing with, you should know that bankruptcy property is always going to be confusing, so the best thing to do is to make sure that you talk to your bankruptcy advisor.
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Sunday, July 19th, 2009
Sadhana Dhanyal asked: The word bankruptcy gives rise to an image of utter helplessness. This is primarily due to the fact the there are many mis-conceptions associated with it. Often, people resort to it without even understanding its full meaning. The decision to file for bankruptcy must be based in facts. This is possible only when a person seeks expert advice.
People with multiple debt problems juggling with payments often consider bankruptcy. They feel it can offer some respite from the debt problems. If a bad credit score is attached with multiple debts, the situation can get worse. Such borrowers can make use of bankruptcy bad credit mortgage loan. Accessing these loans is not that difficult. Bankruptcy mortgage loan experts can guide any person to get a suitable loan.
One can use the loan for either buying a new house, refinancing, home improvement purpose, payoff credit cards, etc. There are many lenders in the loan market who offer such loans. One can choose from the most competitive programs. A borrower can easily get rid of credit cards, missed payments, mortgage lates and high interest mortgages.
A bankruptcy information lawyer can guide a person considering bankruptcy make a right decision. As is said earlier, the decision to file for bankruptcy must be base on facts, one should consider other alternatives if available on way to bankruptcy.
One can easily resolve debt problems by seeking their service. Following some simple steps will ensure one gets rid of all the debt problems in a short period of time. There are many debt elimination services that one can make use of. One can hop back to normalcy without filing for bankruptcy, IVA or borrowing more money that will have a person drowned in debt.
A bankruptcy lawyer can let you know the pros and cons of filing for bankruptcy. The prime purpose of Bankruptcy Law is to give a person, who is hopelessly burdened with debt, a fresh start by wiping out his or her debts. A person considering filing for bankruptcy can benefit form the service of these lawyers.
What does Chapter 7 Bankruptcy say?
A Chapter 7 bankruptcy wipes out a borrower’s debts usually within four months. The debtor has no assets that he or she would lose as a consequence of filing for bankruptcy. Chapter 7 bankruptcy gives a person a relatively quick “fresh start”. One can begin life afresh.
Chapter 13 bankruptcy
Chapter 13 bankruptcy, on the other hand is meant for people who want to pay off part of their debts over a period of three to five years. Visit our FAQ’s, which give information on most of your questions. Also visit our Audio Clips, which provide information on many of the most common concerns about debt. If your questions are still not answered we have an “Ask our Bankruptcy Lawyers” feature so you can ask one of our bankruptcy lawyers in your area a question. Filing Chapter 13 Bankruptcy can prove to be helpful if a debtor has a regular income, and thus can afford to request for such adjustments or reductions.
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Saturday, July 18th, 2009
Martin Rogers asked: By Martin Rogers
Here, at Personal Bankruptcy Avoidance, we have been trying to teach people what they should do before making a decision to file for bankruptcy. We have made emphasis numerous times of the harsh consequences that bankruptcy will bring to a person’s financial life.
We have also called bankruptcy a “last-resort method”; meaning, people should always think twice before making such tough decisions; because once you file for bankruptcy, all your financial life will be seriously affected.
The California bankruptcy system offers some legal and financial aids that are for the sole purpose to be used by those who file for bankruptcy.
Today we want to offer a way out for those people that have already made that one last decision and have filed for bankruptcy by explaining a little bit about overdraft agreements, and how they can help someone improve their situation.
One of our clients, Caitlin Stewart, has recently filed for personal bankruptcy, and she just joined our program in order to recover her financial stability and regain her credit capacity.
Martin Rogers, our California bankruptcy expert, will surely help her with any questions she has.
Caitlin Stewart
What are overdraft agreements? And Am I allowed by the California bankruptcy law to use it?
Martin Rogers:
According to the California bankruptcy laws, people who have filed for bankruptcy are allowed to make use of revolving credit accounts that have a direct relation with their bank account. These are called overdraft agreements. These accounts have a limited credit and within that amount you, as the owner of the account, can make withdrawals even if you do not have enough money in the account.
An important point about these accounts is that after the owner has withdrawn money, he or she has to pay the generated capital and interest. People have to be very careful about fulfilling the mandatory payments and above all, always pay the interest charges. Maintaining a healthy financial relationship with this type of account will be vital to recover your credit history.
Caitlin Stewart
Will using this type of account surely help me?
Martin Rogers:
The California bankruptcy laws have created this type of mechanism to help people in certain and specific situations, such as bankruptcy. The most important thing to do after surviving bankruptcy is to recover your credit score by paying on time the capital and interest charges, which credit bureaus will into your account’s behavior; and they will eventually promote the growth of your credit score. The California bankruptcy system is intended to promote the development of these specific bankruptcy cases, where people can show that they can lead a debt free life whilst fulfilling all of their financial responsibilities.
Caitlin Stewart
According to the California bankruptcy system how do I improve my credit capacity beyond that point?
Martin Rogers:
The California bankruptcy system allows people who have a constant growth on their credit reports to equally grow on credit capacity. After the credit picks up over the normal limit by using overdraft agreements, the person can apply for credit cards in order to increase the actual credit score.
Another interesting way of increasing your credit score is requesting a small unsecured loan to make acquisitions or to buy small things. Repaying these kinds of loans will add up more to your credit history, and you will ultimately gain once again the serenity of being out of debt and having a balanced financial life. In time, you will regain your normal financial life, and you will be able to use any bank or credit resource as you could in the past. The main difference is that this time, you will know how to manage it better and avoid debt successfully.
To file for bankruptcy in the California Bankruptcy system, you need the best legal advice possible. Choosing the wrong attorney could cost you your home, vehicles, or other possessions. The decision is too important to trust it to the yellow pages or slick TV commercials.
Choose California bankruptcy well established, well respected and highly skilled attorneys from law firms that deal exclusively with consumer bankruptcy.
By using our free confidential legal evaluation, you can be on your way to achieve the financial solutions you seek. We can help you protect your assets and get the fresh start you deserve.
Check these links to learn more:
http://www.personal-bankruptcy-avoidance.com/Bankruptcy/TX-Texas/Bankruptcy-TX-Texas.shtml
http://www.personal-bankruptcy-avoidance.com/Loans/TX-Texas/Loans-TX-Texas.shtml
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Thursday, July 16th, 2009
Legal Helpers asked: There are two broad forms of bankruptcy, no matter your definition - Liquidation and reorganization. Liquidation is provided for in the United States under Chapter 7 of the Bankruptcy Code while Reorganization is covered under chapters11, 12 and 13.
CHAPTER 7
Chapter 7 bankruptcy is the chapter of the Bankruptcy Code that provides for the sale of the debtor’s non-exempt assets for the distribution of the proceeds to creditors (liquidation). Usually, a trustee collects the debtor’s assets, which forms the bankruptcy estate, under court supervision and “converts” it to cash for onward distribution to creditors. This is subject to the rights of the debtor to keep certain assets, which are exempt (for example personal clothing). Also, distribution of the liquidated assets is subject to the rights of secured creditors. As may be expected, most Chapter 7 bankruptcy cases are “no assets” cases, as the debtor literally has no assets that can be liquidated.
An individual or business filing for a Chapter 7 bankruptcy case is required to begin by filing a petition with the relevant bankruptcy court serving his area or the area where the business is registered or operated with its main assets.
The petition stage can be described as the declaration stage. The debtor will also need to provide other documents to the court in addition to their petition. This may include but not limited to;
§ A schedule of assets and liabilities
§ A schedule of current income and expenditures
§ A schedule of executory contracts and unexpired leases
§ A statement of monthly net income and any anticipated increase in income or expenses after filing.
Basically, the additional documents would capture all your assets, debts and financial affairs. On the average, the process may take up to six months and may cost the debtor in terms of filing, and administrative fees. Unfortunately, you cannot file a Chapter 7 bankruptcy if you have a bankruptcy discharge in the last six to eight years and also if your current financial affairs can permit a Chapter 13 bankruptcy. Debts like priority taxes, support, student loans, liens and any debts that were reaffirmed are not discharged under Chapter 7 Bankruptcy.
CHAPTER 11
Knowing the different types of bankruptcy is very importance especially if you are into business. Always remember that businesses sometimes hit a bad spell so you have to be prepared for any eventualities. If you are a business owner, you need to know about Chapter 11 Bankruptcy also known as Re-organization Bankruptcy. Since with type of bankruptcy involves Partnerships and Corporations, it is imperative you should know about this type of bankruptcy.
Under Chapter 11 Bankruptcy, businesses are allowed to propose payment plan to their creditors. The payment plan shall include the length of time needed for the business to recover and settle its financial obligations. Although there are some provisions under Chapter 11 Bankruptcy that are similar to Chapter 13 Bankruptcy, the two are quite different in the sense that Chapter 13 bankruptcy is more concerned with individuals. The fees that apply to partnerships and corporations are also different to those fees imposed on individuals who file for bankruptcy.
What Fees Apply Under Chapter 11 Bankruptcy?
A mandatory filing fee of $1,000 and additional $39 miscellaneous administrative fees apply under Chapter 11 Bankruptcy. In cases of joint petitions, only one filing fee is imposed. Since these fees are considered as mandatory, the failure of the debtor to pay these fees may cause the dismissal of the petition. Once the case is already in progress, the business or the petitioner may be required to pay the court trustee every quarter. The amount of the fees differs depending on the amount involved. In most cases, the fees would range from $250 up to $10,000.
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Tuesday, July 14th, 2009
Groshan Fabiola asked: It’s a disaster if someone is insolvent and unable to pay their dues. Declaring bankruptcy is a disaster and understandably causes a bout of depression. But if due to circumstances, someone reaches a situation in which they have to declare themselves bankrupt, it must be done with all due care and diligence. The Minnesota Bankruptcy law gives people the facility to declare bankruptcy in two ways: Chapter 7 bankruptcy, and Chapter 13 Bankruptcy. In fact these bankruptcy options are available almost all over America, informs one Minneapolis Bankruptcy Lawyer.
Declaring a chapter 7 bankruptcy is often the fastest and the easiest way to get the deed done and over with. However, according to Minnesota Bankruptcy law, Chapter 7 bankruptcy can be declared only if the income of your household is below the Median income for Minnesota. If you feel you’re having trouble understanding the laws, it’s better to hire a Minneapolis bankruptcy lawyer who can guide you with the bankruptcy process.
In chapter 7 bankruptcy, the bankruptcy court attaches trustees who take control of your assets and negotiate with the creditors. The creditors may also move the court to halt the bankruptcy proceedings, but if everything is in order, then you will be able to proceed easily. Even after you declare bankruptcy Minnesota bankruptcy laws do allow you to keep some assets with yourself. This can include essentials like your home, vehicle, life insurance, etc. There’s an upper cap to every asset that you can keep, and a Minneapolis bankruptcy lawyer can study your assets and tell you how much you’ll be able to keep after filing for bankruptcy.
If the bankruptcy court feels that you’re in a position to pay off your debt, and have a higher income, they can prevent you from filing chapter 7 Minnesota bankruptcy. In this case you may file for chapter 13 bankruptcy. Under this system you’re allowed to pay off your debt over a period of three or five years. So your debts are delayed or re-organised instead of being wiped out. According to the Minneapolis bankruptcy lawyer we consulted, this bankruptcy option is available to all individuals and sole proprietors.
Under chapter 13 bankruptcy, you’re not free of debt, and you will have to pay the creditors after you’ve paid for necessities like food, shelter, etc. The trustee appointed by the court will review your income and prepare a payment plan for you. You’ll then have to stick to the plan, and make sure all payments are made. In case you do not make the payments, your assets may be taken over by your creditors as per the Minnesota bankruptcy law, the Minneapolis bankruptcy lawyer told us.
If you’re able to pay the planned amount as per schedule, the rest of your debts are written off, and you’re free from credit again. So this type of bankruptcy plan can help you hold on to some of your precious assets while you struggle to get your life back on track, or wait out the bad period. Remember to consult a qualified Minneapolis bankruptcy lawyer if you wish to make your Minnesota bankruptcy experience easier. After all, when you have so much trouble already on your, it is wise to leave the bankruptcy hassles to an expert who will give you sound and experienced advice.
For more resources about Minnesota DWI lawyer or even about Minneapolis DWI Lawyer please review this page http://www.thelawway.com
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Tuesday, July 14th, 2009
On June 10, 2009, the sale of substantially all of Chrysler's assets closed, just 42 days after the country's third largest automaker filed for bankruptcy protection. The closing followed a contentious sale hearing before the Bankruptcy Court, an expedited appeal to the Second Circuit Court of Appeals and a brief stay imposed by the United States Supreme Court. The source of the contention: three Indiana state pension funds, arguing that the sale of Chrysler's assets constituted a sub rosa plan of reorganization that upended the priority scheme of the Bankruptcy Code. Rejecting the Indiana pension funds' arguments and approving the sale, a decision upheld on appeal, the Bankruptcy Court avoided mention of the effect of unprecedented the governmental intervention in its analysis, relying on its interpretation of applicable bankruptcy law. As the sale process in the bankruptcy of General Motors nears completion, much has been learned from Chrysler.
The Chrysler Sale Transaction and Indiana Pensioners' Objections
Chrysler LLC and 24 of its domestic direct and indirect affiliates filed for Chapter 11 protection on April 30, 2009 in the United States Bankruptcy Court for the Southern District of New York. Shortly thereafter, Chrysler filed a motion seeking approval of the sale of substantially all of its operating assets to "New Chrysler" in exchange for $2 billion in cash and the assumption of certain liabilities. As part of the transaction, New Chrysler entered into two agreements with the UAW: a new collective bargaining agreement in which the UAW made unprecedented concessions and a settlement agreement relating to a 2008 class action that established a voluntary employees' beneficiary association, or VEBA, to fund legacy retiree health care obligations. Pursuant to the settlement agreement, the VEBA would be funded with a 55% membership interest in New Chrysler and a new $4.587 billion note. The remaining membership interests in New Chrysler would be issued to U.S. and Canadian governmental entities and a subsidiary of Fiat S.p.A. Ultimately, New Chrysler would be funded entirely by the U.S. and Canadian governments, contributing $6 billion in senior secured financing to support New Chrysler's operations after the sale.
The Indiana pension funds which challenged the sale held approximately $42 million (less than 1%) of Chrysler's $6.9 billion first-priority secured debt pursuant to an Amended and Restated First Lien Credit Agreement secured by substantially all of Chrysler's assets. The Indiana pension funds raised multiple objections to the proposed sale, including that it violated the Emergency Economic Stabilization Act of 2008 and the Troubled Asset Relief Program. However, its primary complaint was that the sale transaction constituted a sub rosa plan of reorganization that violated the priority scheme of the Bankruptcy Code because it sold all of the first lien lenders' collateral and essentially distributed the proceeds of the sale to unsecured trade creditors and the UAW.
Lesson One: A Quick Sale is Nothing More Than a Quick Sale
Section 363 of the Bankruptcy Code authorizes a debtor-in-possession, after notice and a hearing, to use, sell or lease property of the estate outside of the ordinary course of its business. However, a sale of assets under section 363 that, in essence, would direct or effectuate the terms of a reorganization plan is considered an impermissible sub rosa plan of reorganization. The rationale for barring such attempts is that they deprive creditors of the comprehensive protections normally afforded to them in the plan confirmation process, including formal disclosure, an opportunity to vote on acceptance and a fully noticed confirmation process. While a section 363 sale requires court approval and gives creditors the right to object, the more stringent and time-consuming plan confirmation requirements are not present. Thus, where a section 363(b) sale would preempt or dictate the terms of a plan, the sale should not be authorized. The Indiana pension funds argued that the Chrysler sale transaction was a sub rosa plan of reorganization in that it would sell their collateral to New Chrysler, which would use it to satisfy over $20 billion in unsecured creditor claims, leaving the first lien lenders with only 29% of the value of its collateral.
In rejecting this argument, the Court noted that the standard in the Second Circuit for determining whether to authorize a section 363 sale prior to and outside of the plan confirmation process is, simply, whether there was a "good business reason" for such a sale. The Court held there was an articulated business justification for the sale and for the necessity of completing it quickly. Moreover, the Court held that the sale was not a sub rosa plan of reorganization because the Debtors were receiving fair value for the assets being sold and all of the proceeds from the sale would be paid to the first lien lenders.
Avoiding Violations of the Priority Scheme
Chapter 11 of the Bankruptcy Code requires, among other things, that a plan be fair and equitable and not discriminate unfairly among similarly situated creditors. The absolute priority rule, a fundamental principle of U.S. bankruptcy law, provides that a plan is fair and equitable if an unsecured creditor or other priority creditor receives full value for its claim or, if it does not receive full value, thatthe holder of any junior claim will not receive any property on account of such junior claim. The words 'fair and equitable' are terms of art meaning senior interests and claims are entitled to full priority over junior ones. The Indiana pension funds argued that allowing Chrysler "to ignore the priority scheme established by the Bankruptcy Code while selling substantially all of their assets, in permanent derogation of the Indiana Pensioners' property rights, would turn the law on its head." Specifically, they argue that the sale violates the priority scheme of the Bankruptcy Code because (i) the first lien lenders will be not be paid in full while U.S. and Canadian governmental entities, junior lienholders under Chrysler's TARP debt, will receive value; and (ii) the first lien lenders' $4.9 billion unsecured deficiency claim will ultimately be treated differently than the general unsecured claims of certain trade creditors and the UAW.
In rejecting these arguments, the Court emphasized three points. First, the membership interests in New Chrysler were not issued to the UAW and the U.S. and Canadian governments on account of their prepetition claims, but rather were issued as consideration for the contribution of new value. The U.S. and Canadian governments are providing New Chrysler with approximately $6 billion in funding, while the UAW is providing New Chrysler with a skilled workforce under a more competitive cost structure and a more restrictive collective bargaining agreement. Second, the membership interests in New Chrysler were issued pursuant to agreements between each party and New Chrysler, and not Chrysler as debtor. The consideration provided by New Chrysler was not value that would otherwise inure to the benefit of Chrysler's estate, so the agreements did not divert value from Chrysler's estate or allocate proceeds from the sale of its assets. Finally, parties to contracts that are assumed in a bankruptcy case are entitled to cure payments and adequate assurance of future performance -- the Bankruptcy Code recognizes that certain creditors may receive more favorable treatment than other creditors, either in their class or a higher priority class, as part of a sale, and that such disparate treatment does not violate the priority rules.
Adequacy of Notice is in the Eye of the Beholder
Rule 2002 of the Bankruptcy Rules requires at least 20 days notice of a section 363 sale, unless otherwise ordered by the Court. While the Chrysler sale hearing began more than 20 days after Chrysler filed its sale motion, the Indiana pension funds, as well as many other parties, objected to the abbreviated and rushed sale process. As the Indiana pension funds stated in their objection, Chrysler "acted as if they were selling a Chrysler LeBaron and not a multinational corporation with billions of dollars in assets." They argued that the sale process effectively precluded anyone but New Chrysler from bidding on Chrysler's assets, was inherently unfair and failed to maximize the sale price.
In holding that the notice provided was adequate, the Court focused on the need for expedited relief to prevent the erosion of the value of Chrysler's assets. The Court found that despite the complexity of the transaction, notice of the sale was adequate where information about Chrysler's troubles were known worldwide prior to the bankruptcy, there had already been an extensive marketing attempt, and the assets were "wasting" away. Adequacy of notice is to be judged on what is adequate under the circumstances of each case.
The Lessons
The Chrysler bankruptcy case demonstrate the flexibility of the Bankruptcy Code, which has permitted Bankruptcy Courts to adapt to and confront the challenges and turmoil of these unprecedented economic times. The Bankruptcy Court's decision to approve the Chrysler sale transaction relied upon the familiar values underlying U.S. bankruptcy law: equity, rehabilitation and the right to a fresh start. Although other Bankruptcy Courts, faced with less dire consequences, may act with more deliberation, the effect of the Chrysler bankruptcy case, and the precedent it has set, is undeniable.
Authored By:
Malani J. Cademartori
(212) 332-3847
mcademartori@sheppardmullin.com
and
Blanka Wolfe
(212) 332-3822
bwolfe@sheppardmullin.com
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Monday, July 13th, 2009
Jon Arnold asked: There are several different types of bankruptcy. The one people most commonly think of is chapter 7 bankruptcy. It can be confusing to know which of the types of bankruptcy is appropriate in your situation. Here is some information on chapter 7 bankruptcy and whether it is right for you.
Chapter 7 bankruptcy is also referred to as liquidation bankruptcy. It will rid you of your outstanding debts, but the court may force you to liquidate some of your assets in order to satisfy your creditors. Chapter 7 bankruptcy will cost you about $299 between filing fees and paperwork, and will take between four and six months to be completed.
Chapter 7 bankruptcy typically only requires one visit to the courts. Most of the time you will be ordered to take a credit counseling course that is endorsed by the United States Trustee. Be aware that the laws concerning bankruptcy and the various types vary from state to state, so make sure you and your bankruptcy attorney are very familiar with the way bankruptcy law works in your state.
Not everyone is able to file for chapter 7 bankruptcy. If you have had a bankruptcy discharged in the last six to eight years, you may not be eligible to file a chapter 7 bankruptcy. The courts will also review whether you might be eligible to file a chapter 13 instead. This is a repayment plan instead of completely canceling the debt. This is based on things like your income, debt load, and expenses.
New rules dictate exactly what guidelines should be used when determining whether someone has enough income to repay their debts or not. If you are a disabled veteran and your debts were racked up during active duty or your financial burdens were due to a business loss, you are more likely to be able to file a chapter 7 bankruptcy.
Chapter 13 bankruptcy differs from chapter 7 bankruptcy quite a bit. Chapter 13 is a reorganization plan for people who want to pay off their debts over a period of three to five years. Usually the people who choose this option are ones who have assets that are not exempt under chapter 7 bankruptcy rules. People who choose chapter 13 must have enough income to cover their living expenses and enough left over to pay on their debts.
Chapter 11 bankruptcy is used primarily by large businesses to reorganize their debts and pay their creditors. The debtor must come up with a plan and get it approved by the creditors. If they cannot get it approved, they can try to force it through the courts anyway. However, the success rate of this type of bankruptcy can be as low as 10%. This is not a bankruptcy option for consumers.
Chapter 7 bankruptcy is most appropriate for those individuals who have overwhelming amounts of debt and do not have sufficient income to repay those debts. You can keep some assets, but some possessions may need to be sold to help pay back your debt. Once you file the papers, the courts will decide whether you are eligible for a chapter 7 bankruptcy or if a chapter 13 is feasible. It is a fairly quick process and will help end collections harassments.
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Saturday, July 11th, 2009
Thomas Heath asked: At first glance, bankruptcy may appear to be an easy way out of debt problems, but is it the only answer? What is the real cost of bankruptcy? Before considering bankruptcy, there are a multitude of factors that must be considered, many of which are best explained by a specialist debt management company.
The process of going bankrupt is actually quite simple:
Complete declaration forms available from your local county court.
Provide details of all assets you own and all debts you owe.
Pay the associated court fee and administration deposit.
Bankruptcy can be a same-day service! But should you consider it at all?
Following the above steps, you will be issued with a Bankruptcy Order. You will then need to meet the Official Receiver in your area. Their role is to review your circumstances and ensure you meet the conditions of the bankruptcy. This will involve discussing your debts. Once the bankruptcy takes effect, you will be unable to acquire any other kind of debt solution, such as debt management, a consolidation loan, or an IVA.
The duration of bankruptcy usually lasts one year. In 2004 this was reduced from three years. Once you are discharged from your bankruptcy you are able to start again debt free.
Sounds easy doesn’t it? Many people think it is an easy option for those in serious debt. However, the negative, long lasting consequences of bankruptcy need to be taken into account as they can have a lasting impact on your life.
You and Your Home
The trustee associated with your bankruptcy has three years to deal with your home or any property you own. During these three years the trustee can:
Put your property up for sale.
Have a charging order issued. This means that any money generated by the property, through rent or sale, will got to the trustee.
Arrange terms for you to buy the trustee’s interest in the property. These terms can be arranged with those with whom you share ownership of the property.
Your bankruptcy terms usually last one year. However you are at risk of further action, in terms of your assets, for a further two years. Many people forget that after the expiration of their bankruptcy order, their home, or their share of it, remains in the hands of the trustee.
At worst this can mean your house is sold regardless of your bankruptcy status. The consequences of this can be devastating for your family. As mentioned above, this can also be the case if you own a share in a property.
Bankruptcy Restriction Order (BRO)
A BRO is an extension of a Bankruptcy Order that can be imposed on the debtor at the end of the bankruptcy terms, which is usually one year. A BRO is issued if the Official Receiver deems that the debtor has been irresponsible during the terms of their bankruptcy.
Examples of irresponsible behaviour could be:
Gaining more debt during their bankruptcy period.
Gaining more debt with the intention of applying for bankruptcy.
Selling assets and giving the money to family members.
Consequences of a BRO
You cannot be a director of a company.
Creditors must be made aware of your bankruptcy status if you apply for credit for more than £500.
If you are trading you have to inform those you trade with about your bankruptcy status and the name you traded under when declared bankrupt.
These restrictions can last between 2 and 15 years.
Bankruptcy can be seen as an easy solution to debt problems, but many problems can result. Whether or not bankruptcy is right for you depends largely on your own unique circumstances. Sure you seek advice from a debt management professional before you go ahead.
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Friday, July 10th, 2009
MIKE SELVON asked: Because of a number of problems that can arise, many people find themselves in a financial situation where their debt load is so heavy, there seems to be no way for them to repay all that they owe. Filing for bankruptcy may be their only hope for rectifying their financial condition and gaining a fresh start.
Certainly, filing a claim form when being broke is a step that is considered to be the last resort and one that is never taken lightly. When people are in a deep mire of debt and they do not have sufficient income to be able to make even the minimum payments, there are other steps that they can take before taking the drastic step. There is credit counseling available when people are overwhelmed with debt and sometimes they even take on an additional job to help make the payments.
Unfortunately, there are many instances in which these approaches are simply not enough and people are left with the last alternative and find themselves in need of legal bankruptcy relief. Even though there are significant negative ramifications when people file bankrupt, at the same time it is a legal step that does indeed provide relief from creditors and provides them with an opportunity to wipe their financial slate clean and new start anew.
One should never decide about filing for bankruptcy until they have had an opportunity to consult with a bankruptcy lawyer, or a credit counseling service at the very least. Many people try to save on the lawyer expense by attempting to do a self bankruptcy, but if anything is overlooked, they can find themselves in a bigger mess than before, since it can be thrown out of court if not properly handled. This is why it is so strongly urged that people should pay for the proper help with being broke, so they can rest assured it will be done correctly.
Filing for legal relief is a matter of Federal law, which governs the entire process and it is the Federal courts where the claim form and all paperwork is filed. Under United States Federal bankruptcy law, there are three types of it that can be filed.
You can file a Chapter 7, a Chapter 11 or a Chapter 13 bankruptcy. Each type of filing has different requirements and this is where it is very helpful to secure professional help with being broke, so that you will be sure you are filing for the right type.
After filing, your creditors must stop making any attempts at collecting on debts that are included in the bankruptcy filing. Also, they cannot pursue any type of legal action or lawsuits against you once they have been notified that you have filed a claim form. When the bankruptcy in complete and has been discharged, the debts have essentially be rendered null and void and your creditors have no power to make collection demands on you.
Filing for bankruptcy will definitely leave telltale negative marks on your credit report for many years to come. Due to this fact, it is advisable to avoid hunting for a job or renting new living quarters once the process has started. Therefore, it is best to have secure employment and housing first, if at all possible.
Once the bankruptcy has been completed and is discharged, then you can start the process of restoring your credit record. Eventually, even though it will remain on your credit report for ten years, you will be able to have a good credit score once again. In many instances, people have better credit scores within a couple years after the bankruptcy than they ever did before, because they became better money managers.
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Wednesday, July 8th, 2009
Mark Cella asked: The New Bankruptcy Laws - Truth about the unconstitutional new BK law changes. On April 20, 2005, George Bush signed the new “Bankruptcy Abuse and Consumer Protection Act” into law.
Bankruptcy Abuse? Do you know anyone personally who has abused the Bankruptcy laws, and are consumers really protected? Or, should this new bankruptcy bill be called the “Abuse the Consumer and Protect the Fraudulent Banks Act”?
We’ll soon see…
In order to understand these unfair new bankruptcy laws, and to help you see that you must avoid bankruptcy, lets cover the original purpose of the BK laws.
According to U.S. Bankruptcy Courts, the primary purpose of the old bankruptcy Chapter 7, bankruptcy Chapter 11 and bankruptcy Chapter 13 laws were: 1) to give an honest debtor a “fresh start” in life by relieving the debtor of most debts, and 2) to repay banks and creditors in an orderly manner to the extent that the debtor has property available for payment.
Apparently the primary purpose of the new credit card bank BK laws is: 1) to repay banks and creditors in an orderly manner to the extent that the debtor has property available for payment.
However, with the new BK laws, giving an honest debtor a “fresh start” in life by relieving the debtor of most debts has been done away with.
The finance companies and credit card banks all blame the necessity of the bankruptcy changes on the .003% of abusers of the old bankruptcy laws.
Sponsors of the bill claim that most bankruptcy personal cases involve irresponsible spenders who have shopped or gambled their money away and now do not wish to pay their creditors so the new BK legislation, will eliminate “filing bankruptcy for convenience”.
There is NOTHING further from the truth then these claims alleged by the credit card banks and finance companies. And, as you dig deeper into these pages, you’ll see who’s really abusing who in America’s credit, finance and banking game.
They claim that bankruptcy costs the credit card banks billions of dollars each year and that those costs are passed on to customers in the form of higher interest rates.
That of course would be true if the credit card banks were actually lending any of their own money, or their customer’s deposited money. For more details, read our page a history of money and banking secrets that banks don’t want published.
And, by making bankruptcy filings harder for those with financial trouble, legislators say that more people will pay their bills, the credit card companies will save billions of dollars, and the resulting savings will be passed on to consumers in the form of lower interest rates.
We’ve never ever heard of a credit card company lowering interest rates voluntarily, and we know they never will.
New Bankruptcy Law Highlights
The key highlights of the credit card banks new bankruptcy laws are:
The new bankruptcy laws apply a means test for people filing bankruptcy. If a debtor has at least $100 per month left over after an IRS determined monthly expense plan, (can you picture that?) the debtor will be forced to file Chapter 13 and pay for five years.
Just imagine life after bankruptcy now.
They will not be able to file Chapter 7 of the Federal bankruptcy code, which would have eliminated all of their unsecured debt.
There are no provisions in the bankruptcy law for debt problems caused by job loss, illness or other traumatic events, despite studies that show that these are the cause of most bankruptcy cases.
Can you say Debt Slave?
With these new, credit card BK laws, attorneys are now responsible for the accuracy of paperwork filed by their clients. So in other words, your attorney must now search your dresser drawers for those hidden family heirlooms.
This will no doubt result in fewer bankruptcy attorneys, with the remaining ones raising their fees in order to cover this additional liability.
With the new bankruptcy laws most consumers are now completely unprotected from losing a job or having medical problems. They can no longer start over by filing for bankruptcy Chapter 7.
They will have less affordable help from capable BK attorneys due to the new bankruptcy law liability stipulation.
Giving an honest debtor a “fresh start” in life by relieving the debtor of most debts has been done away with completely thanks to the new bankruptcy laws.
However an amazing discovery has been made that you cannot miss learning about. Now that you must avoid bk as there is no PROTECTION for consumers provided by the new Bankruptcy Abuse and Consumer Protection Act if filing bankruptcy under the new bankruptcy laws.
Fill This Out For Free Bankruptcy Evaluation!
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Saturday, July 4th, 2009
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