Bankruptcy Questions Answered

Bowe Packer asked:


Becoming bankrupt is not something that many people think about. There are occasions when this will happen and these individuals will need to file for bankruptcy. The assorted chapters of bankruptcy like chapter 13, and chapter 11 are taken from the bankruptcy code. This code was established by the US congress.

Believe it or not, much of these laws are in place to protect the individuals who are having financial problems. Below we will outline what the bankruptcy codes are and what they mean to you.

These laws were put in place so that there was a uniform law about bankruptcy that could be found throughout the US. These laws from the bankruptcy code are designed to protect the person who is in debt from further problems.

There are currently four main types of bankruptcy laws that are taken from the bankruptcy code. You will recognize these bankruptcy laws as chapters. Chapter 11 is one of the bankruptcy laws that can be found in the bankruptcy code under the heading chapter 11.

The different chapters inside the bankruptcy code provide info for people who are in debt. The various ways that the law can work to keep you safe from unreasonable hassles can be found inside the pages of the bankruptcy code chapters.

As a citizen you have the right to view and read these laws. The only problem that we see is it is typically to late for most people. Meaning they are already in financial trouble, so reading about the laws to stop the bankruptcy may not work. However, you will still want to understand the rights you have being in a bankrupt state of affairs.
While the US government has provided the framework for these laws of the bankruptcy code each state has the right to pass other laws that will work in accordance with the bankruptcy code. They don’t have the right to change the law, just factors that pertain to their specific state can they add.

The states can only provide other laws that are compatible with their state’s laws. Otherwise the states themselves don’t have the power to govern how the bankruptcy code works.

There are many dissimilar and new laws that you can find when you look through the bankruptcy code. One of the new laws that you will find is the altered state of the debtor-creditor relationship.

While the different states can’t vary the basic rules of the bankruptcy code they do have the right to interpret how these bankruptcy claims are filed and acted on in their respective states.

If there is a major change to the bankruptcy code this change will be passed by congress. One such change that has taken effect alters the rules of bankruptcy for chapter 7. In this part of the bankruptcy code all debtors must prove that they have the right to file for bankruptcy.

The bankruptcy was established and put into place to address those that are in financial trouble and for creditors to get their money back. This of course if a very general definition, but will serve the point. So be responsible and spend less than you make.

They will be allowed to file for bankruptcy only if these people have fulfilled a counseling session. This step has been taken to hold that the bankruptcy code is not being misused by the assorted individuals who want to avoid paying their various debts. As the bankruptcy code has been placed for our shelter it is best if you handle these laws with respect.

Remember, bankruptcy is here to help and if you respect the laws of the code then it can be used as a tool if you are every in the need.



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Larence Hubert asked:


If you are in need of a copy of your bankruptcy records due to loss from an accident such as a flood or fire or personal negligence, you can find relief in record replacement online. You can contact a bankruptcy record site online to send for a copy of your records online through a search by name, state or social security number. You can get this copy free of charge, though numerous sites charge a fee ranging twenty to thirty dollars per search/copy. These copies can be sent by email or through the U.S. mail. This is all a matter of personal preference.

Since section 107 of the bankruptcy code makes any filing in a bankruptcy case public record, this information is now even more accessible due to technology such as the Internet. This can raise concerns for many people who are worried that their personal bankruptcy record information is available for all to see. With identity theft/ identity fraud in full swing it is easy to see that this concern is a valid one. Privacy and protection methods are said to be in place for this specific purpose. Information such as a debtors name, address, attorney, and case number, filing type and file date and location are all located in one easily searchable bankruptcy record document. Assets, liabilities, figures and case status are also included in most bankruptcy records.

If you need a list of previous creditors or a copy of discharge papers to correct your credit report you can find these documents online as well. You can find them through an online search using an online investigative firm. You can find any bankruptcy from the past ten years by name, state or social security number. Though this is helpful for the person who was the previous debtor it can also be hindering as well. Some employers choose to look up bankruptcy filings to base job hire upon. Though this can seem unfair, it is not illegal.
The ability to replace your bankruptcy records is easily available to you. Once you have replaced your records it is best to keep your bankruptcy records on file in a safe place such as a lock box or locking file cabinet for safekeeping. This will better prevent you from making another search for records online saving you time and money.

Anyone who has ever been late on a bill knows creditors are more than happy to give you a call to remind you of your balance. Many times the calls turn a little harsher in demeanor. There are laws to protect consumers on harassment from creditors, however most collection agencies could care less about following these laws and will take them to the limit to try to harass people into paying them.

Most often creditors will threaten to call your employer, threaten to print your name in the paper and threaten to take your car. They are nasty people who are simply out to get the money you owe…no matter what the cost. If you’ve got one creditor calling, chances are they aren’t the only one.

If you file for bankruptcy, you’ll find the calls will stop. It may about a week for the creditors to be notified of the pending action and calls may still be made until they are notified. When the creditors are notified they will be advised to contact the bankruptcy attorney for all information. If they continue to call after being notified of the bankruptcy filing, they can be held legally accountable.

If you’ve ever tried applying for a loan, you know how important your credit report can be. Whether you’re buying a car or a house, your credit can not only determine if you get the loan but also the interest rate you qualify for. Since interest rates ultimately determine how much you pay for something in the long run, it can be important to get low rates on large purchases.

A credit report contains a lot of information about you. Your name, addresses, and other necessary information in included on each report. Credit reporting agencies compile these reports and allow them to be available to potential lenders, with your approval. They keep a cumulative report on you, from your first credit account forward.

The federal law called the Fair Credit Reporting Act regulates credit-reporting agencies. The purpose of this law is to make sure that the credit reporting is fair and accurate. Credit reporting agencies give out the credit information to companies and individual consumers. You can gain access to your credit report at any time.



Bankruptcy Questions

Phillip Allen asked:


People who are considering filing for bankruptcy may have already tried loans, consolidations and other methods of getting out of their debts, but failed. Filing for bankruptcy can have serious consequences for the borrower, as the bankruptcy will be recorded on their credit file for 6 years. The need for bankruptcy comes when people are not able to pay off their minimum balances on the credit cards, car payments and home payments. Debtors who are facing financial crisis and who are considering for filing for bankruptcy should definitely speak to a bankruptcy specialist.

Filing for bankruptcy can be a very complex and time-taking process and can leave and person overwhelmed. Therefore seeking the help of an experienced insolvency practitioner for doing the task has numerous advantages, including peace of mind. There are practitioners who deal only with businesses, while others deal only with individuals; therefore, it is important to choose a practitioner who best suits the individual requirements and situation of the borrowers. If you need bankruptcy explained, a professional practitioner will be able to help the debtors in familiarising them with the legal procedures of the bankruptcy filing process.

An insolvency practitioner also helps in dealing with the creditors and working with the systems of the court for coming up with a better repayment plan. He or she is the one who will deal with all the extensive paper work needed to file for bankruptcy, by filling and filing all the paper work needed for their client. Otherwise, there is such a broad requirement of paper work during the bankruptcy process that can overwhelm any normal person. In addition to that, the practitioner will also help the client in gathering and liquidating the assets so that he or she can become debt free.

Taking help of a professional insolvency practitioner will help the borrower in getting out with the best possible deal. Although in some cases, legal proceedings can be done without an insolvency practitioner,  it is still advisable to have a one so that the borrowers can get the laws of the bankruptcy explained for them, unless the borrowers have extensive knowledge about the legal procedures of bankruptcy.



Bankruptcy Questions

Muna wa Wanjiru asked:


From time to time someone may become bankrupt. As there are different forms of bankruptcy the person will need to decide what type of action to take. For the person who is unsure about the type of bankruptcy filing action to take they need to discuss with their lawyer all of the different courses and options that can help. One type of bankruptcy that is well known is that of the chapter 7 bankruptcy.

This bankruptcy claim deals with consumer bankruptcy. In consumer bankruptcy you don’t have enough money to pay off your creditors. To give you some time to recover from this problem and to help appease your creditors you can file for a chapter 7 bankruptcy claim.

In this claim all of your property that is not exempt from credit payment will need to be turned over to the bankruptcy trustee. This person will proceed to convert this property into cash. Once all of your property has been liquidated into cash it will be distributed among your creditors.

There are certain people who can file for a chapter 7 bankruptcy claim. These people are those who live or have a residence in the US. People who work, own property in the US or a municipality of the US.

You can also file for chapter 7 bankruptcy if you have not filed for a chapter 13 plan or you have not had a chapter 7 bankruptcy filed during the last 6 years. On the other hand if you have had a bankruptcy claim dismissed with a reasonable reason and cause then you will need to wait for 180 days before you can file for chapter 7 bankruptcy.

When you decide to declare that you are bankrupt this fact must be verified by your lawyer. A means test will be used to prove that you are in fact in financial trouble which can only be solved by a chapter 7 bankruptcy declaration.

The means test that you will have to undergo will see if your monthly earnings are more than what is the norm for your state. Your cost of food, rent, mortgages and other living expenses are deducted from your monthly income.

If the IRS finds that your monthly salary is $100 less than your state’s median wages then you have the right to claim chapter 7 bankruptcy.

With chapter 7 bankruptcy almost all of your debts will be erased and you have the chance to start your life and business matters up again. You will however need to rebuild your credit reputation.

As chapter 7 bankruptcy can remain on your public record for more than 10 years you might want to think about using this bankruptcy filing only as a last resort.



Bankruptcy Questions

John Chase asked:


Bankruptcy

The new bankruptcy legislation, which took effect on October 17, 2005, has made the process of filing for bankruptcy a more laborious task, for attorneys and debtors. Of course, that’s one side of the coin and the shift is undoubtedly geared towards benefiting the end customer; the debtor.

The documentation that is required when filing for bankruptcy has increased. For example, the debtor must provide additional information that details all income and expenses. In cases where the expenses exceed the IRS allowance, a special circumstances document must be submitted which reasons the necessity of the extra expense incurred. A statement of accuracy must also be submitted, along with these special circumstance documents.

The attorney’s job is further diversified, and a lot of responsibility for ensuring checks is put on the attorney. A signature of the attorney certifies that the petition has been reasonably inspected, and the proceeding is not an abuse of the bankruptcy process. The attorney also certifies that the proceeding is acceptable under current law or that it is a good faith argument for the extension/modification of current law. In case of a violation, the fees of the attorney and the debtor cost can be assessed and made payable to the trustee. This will possibly work as an incentive for trustees to file more motions, perhaps resulting in the need for additional insurance or an unknown increase in current rates.

In a bid to decrease the number of people filing bankruptcy, the new law requires that debtors receive counseling from an approved credit counseling agency within six months prior to filing the bankruptcy petition. This counseling would orient clients of other options that are available to them. Such a counseling session will ensure that people don’t take an uninformed decision to file for bankruptcy.

Here again, it will be the responsibility of the attorney to ensure that the client has attended a certified counseling program. But this is just as simple as a “have you” or “have you not” verification. In Senate hearings the credit counseling industry has been described as “a network of not-for-profit companies linked to for-profit conglomerates. … plagued with consumer complaints about excessive fees, pressure tactics, nonexistent counseling and education, promised results that never come about, ruined credit ratings, poor service, in many cases being left in worse debt than before they initiated their debt management plan.” The debtors’ job is not getting any easier, with counseling required even in such cases where repayment is impossible, or where a debtor faces an unfair debt.

Furthermore, while in the old law in consultation with attorneys debtors chose the type of bankruptcy that they felt suited them the most, in the new law that is not to be the case. The new law will also reduce the number of people who file for Chapter 7 bankruptcy by allowing only people who fall under the median state income, adjusted for family size and inflation, and people who meet the rigorous standards under the means test to file for it. A series of complex mathematical formulas have been put in place to evaluate the rest of people who don’t make this mark. These formulas won’t be fixed, and will be revised on an annual basis when the new median incomes are released. The new law utilizes income and expense standards devised by the IRS that vary by county. There are numerous exceptions and special circumstances to the standards that must be considered for each client.

Clients who do not qualify for the aforesaid means test will be required to file for Chapter 13 bankruptcy. Also, the new law has extended the term for Chapter 13 bankruptcy from the range of three to five years, to a mandatory five-year term. Chapter 13 Bankruptcy clients will now require supervision and representation for at least five years before they receive their discharge.

The effects of the new law are such that it would require attorneys to specialize in bankruptcy. These are complex rules, and a new level of commitment towards the protection of bankruptcy clients is mandated by it.

Yes, it would seem from here on lawyers would be harder to find, because of the kind of complications that have been introduced under the new law. The commitment of Bankruptcyhome.com is undeterred! After all, the basic tenet of bankruptcy filing remains unchanged. A change in the law does not imply a change in the basic principles that we work on. We specialize in bankruptcy litigation will continue to assist clients, even in the face of new bankruptcy legislation.



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Dina W asked:


industry?
CC

Chapter 11 Bankruptcy does not mean anyone is going out of buisness, it means that they have to restructure their debt.

Sorry, but the reason is that a federal judge would step in and tell the UAW that they are asking for too much.

Did you know that any every big 3 car, people pay an additional $3000 when purchasing a car to pay for retirement benefits…
No company can afford that and stay in the black.

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Legal Helpers asked:


Student Loans Often Remain Following Bankruptcy

One question many former students have when considering filing for bankruptcy is how their student loans will be handled. In a majority of cases, student loans for college are not dischargeable under bankruptcy rules established in 1998.

Too many students had taken out an exorbitant amount of loans for school and between graduation and starting to work would file for bankruptcy, eliminating the need to repay the loans. While bankruptcy probably will not eliminate the need for repayment of college loans it may help ease the new graduate’s debt load, enabling them to make their payments without exhausting their finances.

There are three areas a bankruptcy court will consider if student loans are part of a bankruptcy filing. In order to be relieved of the responsibility, the person will have to show that paying the loan will create an undue hardship on the individual, meaning that if forced to pay they cannot maintain even a minimum standard of living. The second point is that if the time for which the student has to repay the loan will stretch over a significant time. The last point on which the court will consider wiping out a student loan debt is if the student has made a valiant effort to pay off the over an extended period of time, for instance five years, and is still having difficulty making the payments.

Filing for bankruptcy however, may relieve the burden of other qualified debts, allowing money to be used to make payments on student loans.

Filing For Bankruptcy Alone Can Be Costly Mistake

It is true that the law allows individuals to file for bankruptcy on their own. As with most legal proceedings, pro se, or by self in legal terms, is an acceptable means of a person representing themselves in court. It has often been said that a person who serves as their own legal counsel in court has a fool for a client. While filing bankruptcy petitions on their own, can save money, if not done correctly, it can result in the petition being dismissed or denied.

Court procedures are fairly rigid and there will be a ton of paperwork to be filed. The term filing for bankruptcy can mislead many people to believe it is a simple matter of filling out a few forms and handing them to a clerk in the court. As a broad brush idea, this is essentially true, but the reality is that the right forms have to be filled out correctly and in the right order to be accepted by the court.

Choosing the right attorney in bankruptcy is as important as determining to hire an attorney. When the time comes that a lawyer is needed talking to legal aid services or to friends who may know attorneys for a recommendation can help locate the one who can work on the bankruptcy professionally. Some may have a large caseload and not be able to provide the type of service expected.

It will pay dividends in the long run to do some research into bankruptcy attorneys before trusting your financial fate into someone who may not have enough hours in the day to get their work done.



Bankruptcy Questions

MIKE SELVON asked:


Chapter 7 bankruptcy is the type of discharge that most people associate with the idea of bankruptcy. Chapter 7 is also the option that most people commonly choose because it offers a fresh financial start without the obligation to repay the debts that the debtor has incurred.

Although there are several other options that debtors can choose to deal with their financial troubles, Chapter 7 bankruptcy is ideal for people who have no way to repay the huge amount even with a repayment plan. However, according to the law, bankruptcy involves a variety of options and guidelines to help people make an informed financial decision.

Although Chapter 7 bankruptcy provides many people with bankruptcy alternatives and a new beginning concerning their finances, it is not a panacea for their problems. The courts do not just grant a complete discharge for debts without fully investigating the circumstances surrounding the debt. People who file for a discharge are obligated to undergo a “means test,” which is a comparison of the person’s monthly income to that of the state’s median income.

Due to the new law, bankruptcy petitions are subject to greater scrutiny than in previous years and they require the signature of a lawyer. Bankruptcy filings in the past year also affect the status of one’s petition according to the new guidelines. This helps the courts to decide if the person is even eligible for a complete discharge.

The new bankruptcy code guidelines are designed to discourage abuse of the system. If an investigation finds abuse, the court can cancel the bankruptcy or require the debtor to repay their creditors through other means.

Suspected abuse includes multiple bankruptcy filings or trying to get debts discharged immediately after an expensive shopping spree. In the end, the court and its officials make the final decision regarding a Chapter 7 bankruptcy before debtors are granted relief.

Chapter 7 bankruptcy is not the only bankruptcy alternative for a debtor. Other bankruptcy options, such as Chapter 13 bankruptcy, allow the debtor to repay the debts in a 3-5 year repayment plan set up by the bankruptcy courts.

The court’s trustee assesses the debtor’s income and debts and decides on a plan in which the money is taken directly out of the debtor’s income for the purposes of paying the creditors. This option is often settled out of court with the creditors and is often used as a means for debtors to save their home from foreclosure.

Before filing for Chapter 7 bankruptcy, the best thing you can do is to talk to an attorney. Maybe you can avoid bankruptcy. Bankruptcy attorneys are familiar with the entire process and can advise you as to your best options before rushing into such a drastic measure.

If the attorney feels that you should file, they will also tell you which chapter of bankruptcy is the most advantageous to your particular case. Whether you decide to file or not though, focusing your efforts on changing your behavior is best so you do not end up in this situation again.



Bankruptcy Questions

Joseph Kenny asked:


A lot of people are running into financial difficulty these days - especially with a lot of major corporations going through layoffs and buyouts. What this means is that a lot of people find themselves suddenly unemployed and it may take some time to get another good paying job. When financial difficulties come, and they stay around for awhile, the thought of declaring bankruptcy will come into some people’s minds - especially when the debt starts getting out of hand, with no light at the end of the tunnel. Here are some thoughts about bankruptcy that will help you to make that important decision of “Should I, or shouldn’t I?”

What Declaring Bankruptcy Means

Declaring bankruptcy is basically an indication that you are not able to pay the debts that you have legally incurred. For this reason, and the legal examination of your bills and the way you handle your finances, as well as the humiliation involved, makes it a rather stressful process. It means that you will have to seek credit counseling, too.

Because so many people are attempting to get out of their debts, for one reason or another, Congress has passed an Act, which was signed by President Bush in 2005, to place certain limitations on declaring bankruptcy and who can do it. This Act, called the “Bankruptcy Abuse and Consumer Protection Act,” seeks to make it more difficult to declare bankruptcy and to help the creditor to receive a higher degree of compensation. This Act called for higher bankruptcy filing fees, credit counseling, and making it more difficult to file under Chapter 7, making it necessary for more people to file under Chapter 13 bankruptcy. Many other details are also covered in the Act that place further limitations on bankruptcy.

Two Types of Bankruptcy

Filing under a Chapter 13 bankruptcy means that there is a “reorganization” of your finances, and it does mean that you do repay much of your existing debt. You are required to make a plan that enables you to pay back a lot of your existing debt in the next three to five years. This means the sale of some of your properties (or all of them) in order to satisfy the debt. It is the bankruptcy Trustee who will make the decision as to what needs to be sold - not you.

Filing under a Chapter 7 bankruptcy means, once again, that the various assets that you do currently possess will need to be listed, by requiring you to take a “means test,” and then a decision will be made as to what you can keep and what you cannot. Everything will fall under an “exempt” or a “non-exempt clause.” You keep the “exempt” items, and lose the rest. The “non-exempt” items will either be sold, or you will be required to pay them back. Some things that are not exempt are child support and education costs.

The cost for declaring bankruptcy can run up to about $1,500 for personal bankruptcy. This includes the filing charges, and the lawyer’s fees. The fees, however, are dependent upon how much of an income you have, and it will vary from one state to another. The process of obtaining a legal declaration of bankruptcy, assuming everything is in order, can take up to six months.

After The Declaration Of Bankruptcy

Once you have obtained a legal declaration of bankruptcy, all of your creditors know where they stand. For some, the debts are discharged, and others have received what will be paid to them, or they know what will soon be coming to them. However, it also means that your credit rates have been destroyed, and it will take years to fully repair it. The bankruptcy is placed on your credit rating and will remain there for the next ten years.

What Other Options Are There?

If you are now in a position where you need to consider bankruptcy, then there are some other options that may yet be available to you.

1. Get Credit Counseling

By this, it means work through a debt negotiation company who will take your case to the various creditors in an attempt to work out some kind of a deal. This could be a good step in the right direction because creditors know that if you declare bankruptcy, then they may not get anything. Oftentimes, they will work with you.

2. Renegotiate Your Loans

Once again, by talking with your creditors, you may be able to renegotiate for better loan terms. This could give you a greater leeway financially that could provide just enough of an edge to enable you to get through it with having to declare bankruptcy.



Bankruptcy Questions