Bankruptcy Questions Answered

Chris Ball asked:


u know that 329 people will be declared bankrupt or insolvent today? And that this number will rise to approximately 429 people per day by the end of 2009?

It is not surprising when you consider that approximately 8 million people in the UK are suffering with excessive debt due to a number of reasons. With 2,915 people becoming redundant every day during the 3 months to end January 2009, it is little wonder that this level of bankruptcies is arising.

So what are the main benefits and drawbacks of going bankrupt? And are there any real alternatives for many people?

What are the main advantages for you of going bankrupt?

* For most people bankruptcy provides immediate peace of mind as the problem is effectively taken out of your hands

* It is possible that you will be automatically discharged after one year (or less in some cases), though you will generally continue to have an attachment to earnings for a further 2 years. * No more letter, harassment or phone calls from your creditors.

What are the main negative implications for you of going bankrupt?

* You will lose control of all of your main assets, such as your house, car, jewellery, etc.

* You will not be able to obtain a loan or credit for over £250 (without the permission of the lender).

* You can no longer act as a company director.

* You cannot take any part in the formation, promotion or management of a limited company without first obtaining the permission of the court.

* You can only trade in a business under another name if you inform all persons concerned of your bankruptcy.

* You may no longer practice as a Lawyer / Charted Accountant.

* Your credit will be affected for many years after you have been discharged.

* You are not permitted to act as a Justice of the peace.

* You are not permitted to become a member of parliament.

* You are not permitted to become a member of the local authority.

* You could be publicly examined in court (though this is not usual).

* If your current home rental contract prohibits bankrupt individuals from renting the house, you could be evicted from your home.

* You will find it difficult to rent a house through any major letting agent.

So there are a number of things to consider when you are thinking that bankruptcy is the best option for you and there are a number of alternatives for many people that would normally have gone bankrupt.

* Debt management

* Independent Voluntary Arrangement

* Debt consolidation

* Legal debt write-off

The biggest issue really for most people is that they do not know which is the best way to go for them and they think that bankruptcy is a quick fix. In some cases bankruptcy is the only option, but for many a multi pronged approach to the problem is far better.

There are a number of option available under the Consumer Credit Act 2006 to enable you to pay as little as £20 per month to a creditor and they must accept if you can show them that you are suffering anxiety and stress from the debts you have. This is all thanks to the unfair relationships section which gives a great deal of power to you.

It could be that some of your creditors do not have the legal right to the money they are demanding. This is where legal debt write-off is useful it can be used to get you debts completely written off.

An Independent Voluntary Arrangement ( IVA) is a very popular method of cutting your debts and getting out of debt within 5 years, but it is not available to everyone and the failure rate can be high with people who do not have a guaranteed stable monthly income throughout the 5 year period.

Debt consolidation does not have a very good success rate as many individuals are then free to take out more debt and actually get targeted by the banks as a prospective good customer.

It is never easy to find a one-size-fits-all approach to personal debt clearance and the best approach is to look for a middle path. It maybe that you can get some of your debts written-off, whilst you may consolidate other and free up cash to pay-off secured loans more quickly.

It is important to realise though that some of your debts need not be paid at all if the bank did not perform their duties to you properly and left you in a disadvantaged position. The correct legal advice on that subject is vital!

Whatever your circumstances, finding out your options and getting advice about all these possibilities is a must before you decide to go bankrupt.

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Law Office Of Goldstein asked:


Individuals who have amassed large debts have many options. However, if an individual finds that non-bankruptcy alternatives are not feasible, a decision then must be then made between filing a Chapter 7 liquidation proceeding or a debt adjustment proceeding under Chapter 13.

A Chapter 7 bankruptcy filing is best described as obtaining a discharge from debts (with some exceptions) while retaining some assets such as a home, household goods and an automobile as long as they do not exceed certain values determined by the U.S. Bankruptcy Code. Chapter 7 is consider a “liquidation” decision however if filed correctly and using the Bankruptcy Code to the best of your ability some assets can be retained while crushing debt is removed.

To be eligible to file a Chapter 7 bankruptcy the filer has to reside or be domiciled in the United States. In addition, they can not have been a debtor in a bankruptcy case in the 180 day period prior to filing the current bankruptcy case; they must receive counseling from an approved nonprofit budget and credit counseling agency prior to the filing and pass the “median family income” test. In order to receive a discharge in a Chapter 7 an individual may not have received a Chapter 7 bankruptcy discharge in the previous eight years or a Chapter 13 discharge in the previous six years.

The element which will fully determine if you can file a Chapter 7, is the “median family income” level. The individual or couple must review income made within the previous six months and average it out. If when the average income is measured against the “median family income” as stated in 11 U.S.C. § 707(b)(7) and it falls below, then a Chapter 7 filing is appropriate. If the household income exceeds the “median family income”, then the individual or couple will be subject to the means testing. The means testing calculation takes the average amount of the income received during the six-month period prior to the bankruptcy filing and subtracts it from the average monthly expenses. This determines the margin of excess income. Using this figure you determine if the excess income exceeds the margin allowed by 11 U.S.C. § 707(2)(A)(i) and if you are eligible to file a Chapter 7 bankruptcy.

If you are unable to file for Chapter 7 due to the “median family income” level being too high and failing the means testing, then your other option is filing a Chapter 13. A Chapter 13 bankruptcy filing allows a person to seek protection of their property and develop a plan of paying creditors by making monthly payments to a Trustee under Court supervision. The plan can be for as little as 24 months or for as long as 60 months.

To be eligible to file a Chapter 13 bankruptcy the filer must reside in the United States, have a regular income, have unsecured debt less hand $336,900 and secured debt less than $1,010,650 and receive counseling from an approved non profit budge and credit counseling agency. In order to obtain a discharge in a Chapter 13 an individual must not have been granted a discharge in a Chapter 7 bankruptcy in the previous 4 years or been granted a Chapter 13 discharge in the last 2 years.

The primary advantage of a Chapter 13 filing over a Chapter 7 filing is that a debtor by paying a portion of his or her pre-bankruptcy debts over the life of the Chapter 13 plan can obtain a discharge of the unpaid balances while retaining all of their asset, avoid foreclosure of a home and more debts are deemed dischargeable in a Chapter 13 verses a Chapter 7.

The disadvantages to a Chapter 13 verses a Chapter 7 is that the filer will have to pay something to unsecured creditors, a reduced amount against entire debt. However in a Chapter 7 filing it could result in a discharge from most or all pre-bankruptcy obligations without any payments. Another disadvantage to a Chapter 13 is that a discharge will not be received until all payments required by the plan are done whereas a Chapter 7 debtor will usually receive a discharge in three to five months from filing.

It is essential that when trying to figure out if bankruptcy is the right option to contract an attorney to discuss the entire matter, review your current financial situation, determine what is most important to keep and let go and decide which is the best plan for their situation.



Bankruptcy Questions

Chris Cooper asked:


The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 went into effect in October of that year. As its name clearly implies, it was designed to make bankruptcy less attractive to filers and curb perceived abuses of the bankruptcy system.

The fight about this law was waged by financial institutions on the one hand and consumer rights advocates on the other. Lenders felt that the bankruptcy courts were being abused and that borrowers who had the means to repay were allowed to walk away from their obligations.

This, in turn, raised the cost of credit for the rest of us, since the losses were spread among those still solvent.

Consumer advocates argued that the majority of filers were in that position because of unexpected bills - generally due to medical conditions - and that it would be a hardship to deprive them of their “fresh start” in order to fatten the profits of the lenders.

On the middle ground where those that felt the changes to the bankruptcy law would make little difference, since most filers fell under the median income of their home state and were so hopelessly in debt that they could never repay their bills.

The lenders won and the law, which is considered the most far reaching reform of the bankruptcy laws in 20 years, passed.

Here are highlights of the major changes likely to affect individual filers:

1. Credit counseling is required and must take place within 6 months before filing. The counselor is supposed to determine if the debtor can file for Chapter 7 & or Chapter 13. He is also supposed to set up the Chapter Thirteen repayment plan, if applicable.

2. Since the main thrust of the act was to make it more difficult for high wage earners to get a Chapter Seven discharge, if their income exceeds their state’s median income, they are forced into a Chapter Thirteen repayment plan.

Once in this plan they are placed on a strict - some say draconian - budget determined by IRS regulations. They are told how much of their money is to go to debt repayment and how much they can spend on things like food and housing.

3. If the debtor ran up bills of $500 or more for “luxury goods” from a single source within 90 days of filing or borrowed $750 or more within 70 days of filing, these debts will be considered non- dischargeable. If he bought a car within 2 and a half years of filing, the lien holder will keep his lien until the entire debt is repaid.

4. Debtors used to shield assets by buying homes in states with big or even unlimited “homestead” exemptions. They would, in effect prevent creditors from being able to collect on their debts, by tying all their money up in a home in one of these states. Now the debtor has to acquire the house about 3 and a quarter years before filing a bankruptcy petition. Otherwise his exemption is limited to $125,000.

5. The debtor must “reaffirm” his secured debt or reveal what his intentions are regarding that debt within 45 days after the first creditors meeting. If he fails, the automatic stay is lifted and the creditor can foreclose, repossess or start a suit to collect his money. A debtor can no longer just pay the debt without reaffirming it.

6. Automatic stays will not be granted if it can be shown that the debtor has had a habit of abusing the bankruptcy system. Many used to file bankruptcy petitions merely to hold off their creditors or to buy themselves time, having no intention of following through on the bankruptcy.

7. A Chapter 13 discharge will not be granted if the debtor obtained a Chapter 7, 11 or 12 discharge within the 4 years prior to the date of filing or if a Chapter 13 case was filed within 2 years of the pending case.

8. More documentation must now be provided by the debtor. In addition to the list of creditors, schedules of assets and liabilities, income and expenses, debtors must also file:

A certificate of credit counseling

Evidence of payment from employers received 60 days before filing

A statement of monthly net income and any anticipated increase in income or expenses after filing

Tax returns for the most recent tax year

Tax returns filed during the case including tax returns for prior years that had not been filed when the cases began

A photo ID.

Failure to provide the documents within 45 days after the petition has been filed will result in automatic dismissal of the case. However the debtor can apply for a 45 day extension.

9. The court will give support obligations first priority over everything but the administrative costs of a trustee.

The automatic stay does not apply to the payment of domestic support or to the enforcement of a wage garnishment. This includes obligations incurred either before or after the bankruptcy filing. Failure to remain current on support claims is grounds for conversion of a Chapter 7 to a Chapter 13 case or complete dismissal of the petition. The debtor must be current on all his obligations in order to confirm a repayment plan and the plan must provide for priority payment of support. 9. The new law curbs the ability of the court to grant discharge of certain debts at the completion of the 5 year plan. Unpaid trust fund taxes, taxes for which returns were never filed or filed late within two years of the petition, taxes for which the debtor filed a false return in order to evade taxes, debts from fraudulent activities, debt unlisted in the petition, theft by a fiduciary, domestic support payments, student loans, damages for injuries caused by drunk driving, criminal restitution, fines, civil restitution or damages awarded for willful or malicious personal actions resulting in personal injury or death are now excepted from Chapter 13 discharge.

10. The automatic stay will not prevent eviction if the debtor fails to pay his rent after the petition is filed.

11. Attorney’s can’t represent themselves as “Debt Relief Agencies”. They cannot advise the debtor to incur more debt before filing and among other things they must enter into a written contract specifying all costs and informing the debtor that a lawyer is not necessary to file bankruptcy.

12. The trustee can void all transfers made to self directed trusts within 10 years of the filing, if he can show that the transfer was made to harm or defraud a creditor.

13. Federally guaranteed student loans were never dischargeable. Now student loans owed to for-profit and nongovernmental entities are also not dischargeable.

14. A Chapter 13 discharge will not be granted until the debtor takes a course in financial management as determined by the trustee.

15. The time between Chapter 7 discharges has been extended to 8 years to discourage “serial” filers.

Before the law took effect, there was a rash of filings, which was expected.

But since then, after taking a brief dip, the number of bankruptcy filings is starting to climb again, which seems to indicate that maybe all has not gone as planned - which is, of course, nothing new where the government is concerned.

This article does not purport to offer legal advice, nor is it a complete summary of all changes made to the bankruptcy laws.



Bankruptcy Questions

Jon Arnold asked:


In recent years, the rate of filed bankruptcies has been closely tracked. From the recent high in 2005 of bankruptcy filing, the year 2006 represented a significant drop in the reported number of filings, but after the end of 2006, the rate of bankruptcy filing has started to increase again.

One of the factors for this may be the new bankruptcy ruling laws that requires consumers to attending financial management and credit counseling sessions before they can file bankruptcy. But since that law was put into effect, numerous studies have shown clearly that such counseling does little good for the consumer. The big problem with this law is that it makes the assumption that the consumer who is filing bankruptcy is doing so out of excessive financial mismanagement or credit abuse. Anyone who has spent any amount of time studying the underlying causes for why someone would file bankruptcy can tell you, almost after a casual glance, that this is not the case at all with the majority of consumers who file bankruptcy.

The studies bear this fact out. In fact, out of more than 400,000 consumers that were counseled via these mandatory classes before filing bankruptcy, more than 95% of them continued their bankruptcy filing after completing the classes. The biggest problem here is that by the time a consumer is in a situation to need to file bankruptcy, they have typically exhausted all other viable options, and it is too late to make any significant difference for almost all of them.

The following can be considered early warning signs of possible future bankruptcy that consumers should be aware of:

No/little savings cushion

Most consumers in the US have little or no savings to rely on in case of an expected huge necessary expense. Most Americans spend more than they earn, and they finance their greater lifestyle on credit cards and borrowing from Peter to pay Paul. Although saving is hard, a shift needs to occur in the minds of most consumers about putting a higher emphasis on savings instead of always “living for today”.

Consistently living paycheck to paycheck

Many people say they do not enjoy it but find themselves living from paycheck to paycheck, such that when something happens to prevent that next paycheck from showing up, like a job layoff, they are already in deep sneakers. Some reports have indicated that more than 60% of Americans are in this situation.

Higher than 20% non-mortgage debt to income ratio

If you are spending more than 20% of your net income to pay your credit cards and financial obligations outside of your mortgage, this is a problem, and a warning sign that financial troubles could be near.

Always making only minimum payments on credit cards

Almost half of all people who have credit cards carry a balance forward from month to month. If you pay only the minimum payment due each month, it will take you three or more times as long to pay off the balance, even if you don’t charge anything more to the card.

Inadequate insurance

Many people consider insurance to be a ripoff – until they need it. Many bankruptcies are due to very high cost of medical treatments or car accidents, where the consumer was inadequately insured to allow the insurance company to carry the burden of the majority of the expense.

If you find yourself in these situations, you should take action to straighten things out so that you do not become the next bankruptcy statistic. In addition, consider your alternatives to bankruptcy such as personal loans or debt consolidation, which offer some financial breathing room without the long-term negative effects of bankruptcy.



Bankruptcy Questions

Jo Ann LeQuang asked:


a great deal of misinformation online about debt and debt solutions. It’s not so much deliberate falsification as a blurring of terminology. This may sound pretty academicafter all, who cares how terms like debt consolidation or debt settlement or debt negotiation are defined if they all get me the desired result?

The fact is that you need to know all about these things in order to choose the right option for your situation. Picking the wrong one can cost you money (the last thing you need right now), hurt your credit, and keep you stuck in debt. Picking the right one can get you out of debt.

Let’s start with the one not on the list: bankruptcy. Believe it or not, Americans have a Constitutional right to go bankrupt.

Bankruptcy is a legal proceeding. You can’t declare bankruptcy in the U.S. without getting a lawyer and judge involved. The proceeding becomes part of public record. Bankruptcy is extremely intrusive in that outsiders will now determine how your money will be divided up to pay off debt and what you must sell.

Bankruptcy offers an advantage many debtors really love. A court has the power to issue “bankruptcy protection.” You may be allowed to write off certain debts. That means some debts just go away; you are no longer obligated to pay them. Furthermore, once you have “bankruptcy protection,” bill collectors can no longer pursue you for those debts.

The problem with bankruptcy is that it all but ruins your credit. It stays on your credit report for seven years, and it has a way of cropping up even after that. It makes it very tough to get new loans or buy a house. The loans you will be able to get will be at very high rates of interest because you’ve suddenly become a high-risk borrower.

Bankruptcy will turn your life upside down. If you have secured loans (like car notes or loans to buy electronic equipment), those things can be repossessed. The court may seize or order you to sell certain assets and take the money to pay off other debts. You will be required to go to classes to learn to manage money better, sort of like financial rehab.

While bankruptcy does have its place, it is definitely the “last resort.”

Debt settlement and debt negotiation mean roughly the same thing: you or somebody representing you sits down and talks to your creditors to work out a solution.

The principle is that you work out (negotiate) a way to end (settle) your debt. You may be able to get the interest rate reduced or the terms of payment changed (such as getting a couple of months off or extending the terms of the loan). Sometimes you negotiate to try to get the balance reduced. As an example, assume you owe $10,000. You would negotiate with your creditor to try to get him to accept less, say $5,000, and mark the debt paid in full.

Why would anyone do that? The main reason a creditor will negotiate a debt is that they suspect you are flirting with bankruptcy and they are fearful that if you go bankrupt, they won’t get anything. From their viewpoint, $5,000 may be better than nothing.

Debt settlement and negotiation plans will almost assuredly make it all but impossible to get future loans at reasonable interest (if at all).

A debt management plan (DMP) is a formal plan where you hand your problem off to a company which then negotiates your debt. You make one monthly payment to the DMP and they handle your problem.

While there are legitimate DMP programs out there, these are very treacherous waters. Do your homework and check with the Better Business Bureau as well as a certified credit counselor (nfcc.org) and maybe your bank or credit union. There are programs out there that are outright frauds and a few that are not dishonest but not exactly advantageous to the customer.

The last approach is something called debt consolidation. Ironically, many debt settlement, debt management plans, and debt negotiation companies will call their programs “debt consolidation.” That is not inaccurate, but it’s a bit misleading.

Debt consolidation simply means lumping all your debts together. In one way, that is what all debt plans do at first, whether it’s bankruptcy, a DMP, or some other program.

But pure debt consolidation involves lumping your debts together and then taking out one big loan to pay them off.

Why would anyone do that?

If you have a lot of high-interest loans, you may be able to take out lower-interest loans to pay them off. For instance, if you owe $10,000 at 22% on a credit card and you can borrow $10,000 at 10% from your bank, you would be smart to borrow $10,000 at 10% and pay off the credit card. You still owe $10,000, but you owe it at less than half the interest rate. If you keep making the same payments, you’ll pay the debt off much sooner.

If you own a house and can refinance it or get a home equity loan or second mortgage, you can use that to consolidate your debt. Let’s say all of your debts together came to $100,000 and you owed them at varying interest rates from 22% down to 10%. If you own a house and take out a second mortgage (or use another refinancing option), you can borrow $100,000 and pay off all of your debt. You can structure this second mortgage as a 30-year loan and probably get it at 7% or even lower. Now your monthly payment is significantly lower and your many loans are paid off.

Debt consolidation offers a lot of advantages. (That’s why so many programs like to call themselves debt consolidation!)

It is the only debt solution that can actually help your credit score (your credit score goes up whenever you pay off loans in full). If you are willing to take the time to learn a few things, you can do it yourself (no fees or other people to pay). It’s not intrusive; in fact, if done properly, no one would ever guess you did it. Even if your bank or a lender figured it outthey would probably think you’re smart to handle your debt that way.

If you can figure out how to do a pure debt consolidation on your own, you don’t need to bother with hiring a company (or a lawyer), entering financial rehab, or paying off agents to “manage” your money.

In the interest of fair disclosure, however, it must be stated that debt consolidation in its pure form will not work for everyone. Some people will not qualify for it. There are others who might indeed qualify for debt consolidation, but will find another plan is more to their advantage. It’s important to learn what you can to find out if debt consolidation is right for you.



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MIKE SELVON asked:


A couple of years ago, the Congress of the United States overhauled the US Federal bankruptcy laws in the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. One of the provisions that was written into the new procedures for filing for bankruptcy, was the requirement that all debtors must attend bankruptcy classes.

The debtor is the person who is going through the chapter bankruptcy filing. The new law mandates that the debtor must take two different types of classes during the course of the proceeding. The first class is for pre-filing counseling. The second required class is for pre-discharge education purposes.

During the first of the set of mandated classes, the debtor must attend a class that provides information and counseling from approved professionals before declaring for brokeness. The purpose of the pre-filing counseling class is to help the debtor gain a full understanding of the process of a new bankrupt filing, to understand the consequences that it leads to with regard to their credit score and long-term ramifications, and to investigate available alternatives to the drastic decision to file.

One of the purposes of pre-filing bankruptcy classes is to take the debtor through the process of thoroughly examining their financial situation with the pre-filing counselor. This includes looking at their earnings, all of the household expenses, all of the debts they have incurred and their monthly obligations. The next step is to do a budget analysis based on this information and to look at any alternatives that may be available, instead of filing for bankruptcy.

As part of the counseling, instruction will be given on the differences between filing Chapter 7 and filing Chapter 13. As well, an overview of both the advantages of declaring for brokeness and the disadvantages will be discussed.

After the debtor goes through the classes for pre-filing counseling, they will be issued a certificate of completion. They must have this certificate of completion in order to proceed to the next step of filing for bankruptcy.

The second of the required classes that a debtor must take is the pre-discharge education class. The debtor is to take this class between the time that they complete the claim form for brokeness and file it with the court and when it is discharged. A bankruptcy is not considered complete, and the debts are not eliminated, until it is discharged by the court. The discharge of it is the final step in the process.

Typically the pre-discharge classes are two hours in length. During that class the consumers learn about budgeting and more effective money management skills. They also learn about the proper uses of credit, how to re-build a positive credit record, how to recognize predatory lending practices and how to avoid such practices, and how to take steps to protect against identity theft.

Under the new laws, it can not be discharged until the debtor shows proof that they have completed both the pre-filing and the pre-discharge classes. Just at with the pre-filing counseling class, the debtor will receive a certificate of completion at the conclusion of the pre-discharge education. They must file this certificate with the court in order for their bankruptcy to be discharged.

The bankruptcy classes have to be taken from an institution that is on an approved list and which is authorized to issue the class completion certifications. The cost of the classes will vary depending on the organization that is offering them and depending on the format of the class.

Some companies offer the classes online, while others provide classes over the phone and still others offer the traditional classroom environment. In most parts of the country, the cost ranges from $50 to $150 per class.



Bankruptcy Questions

Mike Freemen asked:


While no one likes to think about the subject of bankruptcy, the fact is that more and more people these days are finding themselves contemplating filing bankruptcy. It is not hard to understand why bankruptcy filings are on the rise. The levels of debt are rising faster than are incomes, and more and more people are finding themselves at a loss and wondering what to do.

While bankruptcy can seem like the best way to get off to a clean start, it is important to thoroughly consider all other options before taking the serious step of filing bankruptcy. For one thing, a bankruptcy filing will follow you for years, and it may be difficult for those who have filed bankruptcy to obtain loans, lines of credit or mortgages until the bankruptcy is off their record.

Another reason to seriously consider alternatives to bankruptcy is the fact that the bankruptcy laws have recently changed. The bankruptcy filing system, and the rules associated with filing bankruptcy, have recently undergone a total overhaul, and this means that many debtors will be required to pay back a larger percentage of what they owe when filing bankruptcy.

The rules associated with bankruptcy are largely determined by the annual income of the bankruptcy filer. Those debtors whose incomes are higher than the average for their state may find themselves required to pay back more of the money they owe in a bankruptcy filing, so it is important for those in such a situation to consult with a qualified bankruptcy attorney before making a move.

Of course for many people filing bankruptcy is unavoidable, and for many people this last resort is truly a fresh start and a new lease on life. The key is to thoroughly research the bankruptcy laws for your state, and to thoroughly understand the rules that may apply to your situation. The bankruptcy laws vary quite a bit from state to state. In some states bankruptcy filers can keep a great deal of personal property and real estate, while in other states they are entitled to keep next to nothing. It is important to know where you stand before filing bankruptcy.

The purpose of these new bankruptcy laws, of course, is to cut down on past abuses of the system, and there is no doubt that these abuses have occurred from time to time. For honest people in debt, however, these laws may have some serious impacts. It is important for every consumer to become educated in just what these law changes will ultimately mean.



Bankruptcy Questions

ebet sanders asked:


The myth of bankruptcy and redemption simply that the bankruptcy stopping ransom. Closer examination shows that it may not be quite true. Bankruptcy is a serious action taken to a tent redemption, which will have long-term consequences.

In particular, chapter 13 bankruptcy allows the person filing for work-one of the repayment plan, which extends over 36 to 60 months. The sum payments based on income from the “Claimant”, and he can essentially eliminate some debt. But this duty, not only exemption from matters that are not entirely collateral, such as cars or homes.

What happens is the applicant petition the court to recognize its Chapter 13 filing. It should not be taken, but if it is accepted, the court shall appoint a guardian, who determine the timetable for repayment. The petition should not be accepted if the applicant has filed more recently, or if its assets are not. If accepted, the Governor of starting its work in determining how the money from the landlord would be distributed to its creditors. Once the filing was made, the petitioner (homeowners) already has been unable to sell any of its assets without the permission of a guardian. If you want to stop your redemption by filing bankruptcy, you will temporarily lose their ability to sell their homes without the approval of Trustees.

If you find a buyer, the sale will enable the trustee, but only if he could be convinced, the price at fair market value (FMV). He needs to be assessed, because homeowners can sell their assets below market value prior to their registration. He is a trustee of the responsibility to make sure that does not happen, checking bank statements and the state archives back six months, and sometimes longer. If such a sale has taken place, the trustee may have to deal cancelled and selling reversed. That would be very inconvenient and expensive for new housing and the applicant.

Creditors know that many homeowners will file bankruptcy, as lawyers’ advertising so much, and homeowners do not understand the legal process. Where creditor receives notification that the bankruptcy was filed by the homeowners, they immediately instruct their lawyer to apply to the courts for his release from the bankruptcy filing. A special hearing will be scheduled, so there may be several a day in your delay without leaving his home. however, when the court hears petitions for the release of creditor homes, the court will approve it. landlord has now face bankruptcy, and his house will be on track to be sold.

The more the result of the release of the home is that the housing will have on its bankruptcy credit report for ten years instead of seven years for redemption. In fact, bankruptcy is a public registry for 20 years and will remain on each credit report, in accordance with the “Public Records” for up to 20 years. Before bankruptcy is a very short-term fix with long-term consequences. Consult a lawyer as soon as you think, bankruptcy may be an option for more information.

If you are looking for more information on personal bankruptcy, bankruptcybest.info or any other issue on bankruptcy please visit this links.



Bankruptcy Questions

Cornie Herring asked:


Many bankruptcy filers are wondering whether they are entitled to keep one or several credit cards for emergencies backup. In general, you may not because your credit cards will be cancelled regardless, since you file the bankruptcy. The credit card issuers tend to punish their card holders for filling any kind of bankruptcy; in most cases, the credit cards of bankruptcy filers will be terminated once they file for a bankruptcy. But there are some exemptions where terms and conditions will be applied to enable the bankruptcy filers to continue holding their credit cards.

There are some exceptions applicable only to chapter 7 bankruptcy filers. Some credit card’s issuers will allow you to keep your credit card but with a sized down credit limit, and in return you need to repay them for some of your debts. In fact, some companies will automatically send you or your attorney a proposed reaffirmation agreement, a contract between you and your creditor that you will pay all or a portion of the money owed, despite the bankruptcy filing, in exchange for a minimal amount of new credit.

Beside the sized down credit limit, a chapter 7 bankruptcy filers may allow to keep their credit cards by some of their card issuers but the interest rate will be revised to a higher than the normal interest rate. But, if you can always pay your credit balance in full each month, you will never incur a finance charge, and the high interest rate won’t hurt you.

Other than chapter 7 bankruptcy filers, all credit cards must be given up at the filling of bankruptcy. However, there are credit card holders who have maintained their credit cards at zero balance for a long period of time do not report their credit cards during the filing. This action can be considered illegal since in effect your preference on one creditor (your credit card issuer) over other creditors, because repayment ordination is a trustee job.

If you are not eligible to file under chapter 7 or even you are filling under chapter 7 but you didn’t manage to get approval from your credit card issuers to keep your credit cards, the best thing is report all your credit cards and give them up. In most cases, your need to wait until the bankruptcy filing has cleared and then work with a debt management consultant to rebuilt your credit step by step. Of course, in the months and years after the bankruptcy filling, you may not be eligible for top-tier or even middle-tier credit cards.

But with some efforts and fiscal strategy such pay your monthly credit balance in full and on schedule will help you to rebuilt your good credit record and you can begin to erase the stigma of the bankruptcy; and eventually put you back in the realm of good to high credit score.

In Summary

In most cases, bankruptcy filers need to give up their credit cards. But, there are exceptions for bankruptcy filers in chapter 7, the debtors who file their bankruptcy under chapter 7 may allow to keep their credit cards with some terms and conditions.

Cornie Herring is the Author from http://www.studykiosk.com/CreditBasics. “StudyKiosk-Credit Basics” is an informational website on credit basics, debt consolidation and bankruptcy. To see recommended bankruptcy attorneys, visit: Recommended Bankruptcy Attorneys



Bankruptcy Questions

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

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

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

Legal Helpers asked:


When a client and their attorney file for bankruptcy it is not automatically presumed that everything listed on the petition is the exact truth. Attorneys generally will not file any claims knowing they are not accurate, but then again, the attorney is relying on the client’s honesty to insure all the appropriate information is available.

In the majority of bankruptcy cases the attorney filing the petition has already gone through the paperwork to determine if any claims being made are inaccurate. Once the case is filed, the 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 to insure all creditors are treated fairly and that any non-exempt assets are sold for the most money, which is then distributed to the creditors in accordance with their claims.

The United States Trustee who is an officer of the Department of Justice appoints trustees. There are no state agencies involved in a bankruptcy proceeding as all matters are handled through the federal bankruptcy courts.

They will also participate in creditor meetings and has the power to discharge of debt if evidence of fraud or ineligibility is found with the creditor. Additionally, any actions required by new bankruptcy laws concerning money management and budget planning will also be reviewed by the trustee to insure the client is meeting all requirements. Typically, bankruptcy attorneys work with the same trustees on numerous cases and know how the paperwork needs to be filed to meet specific trustees’ concerns. Any concerns with how the trustee handles a case should be left up to the attorney to get answered.

The trustee’s role in bankruptcy differs with the type of bankruptcy filed. Whether Chapter 7, Chapter 13 or a Chapter 11 for businesses, his roles to determine the true value of any assets claimed and to protect the creditors from fraudulent claims, insuring they get a fair value of any assets. While a Chapter 13 trustee’s role is more of an overseer, they stay close to the case, representing clients to insure payments are received and distributed according to the court’s plan.

Trustees for Chapter 7 filings generally serve a one-year term while those working with Chapter 13 filings may be standing trustees serving a geographic area or a court region. Some clients may have confusion over the role of a bankruptcy trustee and believe they are more interested in helping creditors than insuring the client receives a fair chance. The In most Chapter 7 bankruptcies there are few assets involved, however if there are it is the trustee’s responsibilities include liquidating the assets and distributing the money.

With a Chapter 13 bankruptcy filing, the trustee’s job is more administrative as there will be no assets to liquidate. They will make sure the balances claimed to be owed by the client are true and have approval power over the repayment plan. Most attorneys will not file for Chapter 13 fir a client if they do not have the means of meeting the payment obligations.

The trustee will accept payments from the client and distribute them to the creditors according to the plan approved by the court.



Bankruptcy Questions

MIKE SELVON asked:


Filing for bankruptcy is a drastic measure that overwhelms most people because of the detailed paperwork that must be done. In addition, for most people it is an emotionally draining experience to go through. Because of the complexity of the matter, and the fact that emotions can cloud judgment, it is a good idea to get bankruptcy help to be sure that a chapter bankruptcy filing is done correctly.

One of the first places to go for help is to one of the credit counseling agencies. They are sometimes able to help people avoid going into that final step of filing for bankruptcy. Often, they can suggest ways to help debts collections situations or they can negotiate with the creditors and try to make arrangements, either reducing the monthly payments or reducing or even eliminating the interest charges and late fees. In some instances, they can get both the interest rate on a loan reduced and make arrangements for easier payments.

The reason that this kind of bankruptcy help is often effective, is because creditors know that if a person is in a financially bankrupt position, then the chances of ever collecting on any of the debt owed to them is nil. It makes sense for companies to cooperate when a debtor is having trouble making their payments and to work with them to make a new financial plan.

The credit counseling services offering help usually start by digging into the person’s or couple’s financial situation and then will help to determine if filing for it is going to be necessary in their case. Many times, when a person is in a panic mode because they have had numerous bill collectors constantly calling them, they move toward a chapter bankruptcy filing as a knee-jerk reaction before they have found out if they have other options.

Even though the credit counselors will sometimes determine that the best way to help debts incurred is to file for one, at least the consumers who receive the counseling feel more assured before taking such drastic measures. However, it should be noted that some of the credit counseling services do charge a substantial fee for their services.

Another avenue of help, or better said, another route which might help one to avoid declaring broke altogether, is by using a debt consolidation service. Sometimes, credit counseling services can arrange for debt consolidation as well.

The purpose of consolidating your debts is to give you one single payment to make per month and to secure financing with a lower interest rate. This can help make the current debts more manageable and bring the monthly payment down so that it can be worked into the family budget.

If credit counseling or debt consolidation are not enough and it is evident that filing for it will be necessary, then you should seek out a qualified lawyer for the legal help that you will need. Making sure that you get an experienced lawyer who specializes in the different chapter bankruptcy filing types, will help to assure that your case is handled professionally and that the required paperwork is properly filed in a timely manner.

This is not an area where one should attempt self bankruptcy or try to save a few dollars. Not properly filing the paperwork and adhering to the court timeline can result in your court record being thrown out, which will leave you vulnerable to the tactics of the creditors and collectors again.

If you find yourself in the situation of struggling to meet your monthly obligations or if you have experienced a life-changing event, then getting bankruptcy help to assist you on how to best proceed is probably a good idea. The worst thing you can do is to ignore a growing financial problem, as the condition will only get worse if positive action is not taken. Even though bankruptcy is a momentous decision, it is provided for through Federal law to allow people to have a new start financially when the situation arises.



Bankruptcy Questions

Jon Arnold asked:


Like almost anything else, there is a right way and a wrong way to file bankruptcy, just as there is a good reason and a bad reason to file bankruptcy. Your success with your filing will depend heavily on what caused you to get into the position of thinking you need to file for bankruptcy, as well as the status of your personal assets.

The most common reasons for filing for bankruptcy are unemployment, huge unexpected medical expenses, marital problems, or largely overextended credit card bills. But filing for bankruptcy may not be the easy way out that many people think it is, and as it actually may have been a few short years ago when the bankruptcy laws were easier and more sympathetic to a person’s circumstances. But the laws today are tougher, and it is very difficult to successfully file bankruptcy without a good case and good reasons to back it up. Also, many people do not consider bankruptcy alternatives, where you need to realize that bankruptcy should be your LAST consideration, not your first one.

First you need to consider your current situation. If you are unemployed, living on welfare or some sort of public assistance program, you have little or no money in any bank accounts, you do not own a car or truck, and/or you rent your home or are living with others, there is very little that bankruptcy can do to resolve or improve your financial situation.

If however you feel that filing bankruptcy is your only option, and I hope you have thoroughly explored all of your options and alternatives before reaching that conclusion, you should definitely discuss this with a good bankruptcy lawyer or bankruptcy attorney. In many cases, your first consultation will be at minimal or even no charge, and the lawyer can advise you as to what course to pursue, or if bankruptcy declaration is going to help, or perhaps make matters very much worse overall. There is a form at my web site which is free and can put you in touch with a local bankruptcy attorney who can look at your unique situation and would be aware and well versed in how bankruptcies are handled in your state and your particular part of the country.

A bankruptcy lawyer can help you determine factors like if it can be proven or demonstrated that you have abused your credit privileges, then you may even be disqualified from filing for bankruptcy. This is known as a “means test”. Of course, there are always unique factors which got you to this situation, such as divorce, medical bills, unexpected and unavoidable large expenses, etc, all of which can play a factor as to whether you can file bankruptcy, and if you can, if it will help you at all.

For most people, the biggest disadvantage to filing personal bankruptcy is the fact that the bankruptcy will appear on your credit report for six years or more after you are discharged from bankruptcy. This is a huge red flag on your credit report, and obtaining new credit after filing for bankruptcy is going to be difficult if not impossible from most traditional lenders and credit card issuers.

With bankruptcy, like anything else, going about it the right way and knowing what you are getting into is the best way to approach it so that you do not end up doing more damage than the situation you are already in.



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ebet sanders asked:


Today more and more people to file a duty of protection and assistance under bankruptcy laws. With the current trend to increased bankruptcy filings, it is important to have a common understanding of some general facts related to the decision to file for bankruptcy.

First, for filing bankruptcy does not mean the end of the financial world for the individual.

Bankruptcy is a means for the debtor to suspend collection activities and tactics pursued in respect of the debtor. Once you have formally filed for bankruptcy, the court will grant automatic suspension order against debt collectors and their agents.

The stay order ending the various agencies to recover debts from further attempts to collect money from the debtor, while the case before the court, and until the court had not defined the terms of bankruptcy. Creditors, however, may petition the court for relief from the stay order. If such assistance is granted to the lenders will allow them to collect on any secured debt that the individual has written over them. Thus, the lenders will be able to get any money or property of the debtor.

Because of these types of complexity, the debtor must work in close contact with his lawyer regarding the details of payment of the arrears for the entire bankruptcy procedure.

Just know such petty facts as bankruptcy, said that you should be careful about appointing your property as collateral for the loan companies in the debt itself. Another point to remember bankruptcy is that one has the right to withdraw from bankruptcy, and. In other words, once you are satisfied with the terms of your bankruptcy and paid what was required of you, you will be discharged from further payments.

Once you have been discharged from bankruptcy by former creditors will no longer have any debt claims against you. This does not mean that any future debt incurred after discharge can be performed by creditors.

In many cases, if you file for bankruptcy protection, the court will ask that any assets not important to be turned into cash and be handed over to the bankruptcy trustee. The court then appointed a separate check that you fulfilling your part of the bankruptcy agreement, outlined in court and pay your assigned duties.

Once your disposable assets were liquidated (appealed to the cash), they will be distributed among creditors. There are of course a whole set of facts and bankruptcy laws that may be in effect during any type of scenario. That is why those considering filing for bankruptcy should do so only after consulting with a lawyer and bankruptcy receipt of all relevant facts.

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Bankruptcy Questions

Legal Helpers asked:


Under pressure from retailers and other companies claiming losses from increased bankruptcy filings, congress took steps a few years ago to make it more difficult for individuals to file for bankruptcy. Initially, bankruptcy laws were designed to help people, whose financial debt got out of control and were meant to be a method of giving them a new start.

However, over the years many were taking advantage of the bankruptcy laws to continually file bankruptcy as often as allowed by law to get out of paying their financial obligations. This overuse of the system led to more stringent rules to protect creditors often the loser in cases with people who worked the system to their advantage. New laws were designed to prevent those from simply getting out of their obligations.

For those who fall into out-of-control debt, the bankruptcy laws exist to help them make a fresh start. Providing the need for financial and debt management as part of the bankruptcy process will provide the needed help while sifting out those individuals who use the bankruptcy laws to simply create debt and have it wiped out by the court periodically.

In most instances the laws still allow for discharging all legally dischargeable debt for those whose only way out is through bankruptcy. However, it also makes it tougher to meet the demands of the new laws. This may prevent some people from filing for bankruptcy, either Chapter 7 or Chapter 13 from seeking the help offered through bankruptcy, only making their financial life more miserable.

In 2005, the U.S. government seemed to agree with lobbyists for credit companies and determined that too many debtors were allowed to get out from under their self-created debt by filing for bankruptcy. Many were pointing to a few cases in which people with the means to make good on their obligations were simply filing for Chapter 7 bankruptcy and leaving the creditor holding the balance.

The new law, which was supposed to provide additional help to consumers in handling their credit load, also added many requirements, including the need to go through credit counseling services before filing bankruptcy. The counseling is also to provide alternatives to bankruptcy, attempting to move more people from Chapter 7 bankruptcy into a plan that will provide the creditors receiving payments through Chapter 13 filings.

The new bankruptcy laws added extra burdens for the debtor as well as the attorneys, which not only increased the amount of information collected for bankruptcy filings, but also included many new financial requirements that are beginning to resemble the current income tax code. In order to understand the new rules and regulations as well as the reporting requirements, many attorneys will need to specialize in bankruptcy.

There are also penalties in the new law for both attorneys and clients who willfully attempt to use inaccurate information in a bankruptcy petition. If a violation is found by the court, the attorney fees and client costs can be claimed by the court trustee, giving the trustees more incentive to more carefully review all filings in the court.



Bankruptcy Questions

Legal Helpers asked:


Since federal law governs bankruptcy, it does not matter where someone lives, the procedures will all be the same. If a person live for example in Illinois bankruptcy proceedings will be the same as those living in California. An attorney is always recommended for those contemplating going through the process, as they can make sure the petitioner qualifies for the type of bankruptcy for which they file.

Even as the changes in the bankruptcy code affected filings across the nation, for those filing for bankruptcy relief in the Windy City the timed release from debt is sometimes a bitter pill. Seeing many Chapter 7 applications switched over to a Chapter 13 debt adjustment instead, there is some question as to whether filing for Chapter 13 Chicago debtors seek timed release or are simply doing the best they can with what is offered to them.

The fresh start that used to be the hallmark of a bankruptcy filing is not open to such debtors, yet at the same time they do not stand to lose their homes and assets either. Even if they are behind in mortgage payments, they will still have the option of curing that deficit and thus holding on to the family home, offering stability to their families rather than the fire sale of the primary residence that will result in having to move into a potentially less desirable neighborhood and home.

The biggest selling point Chapter 13 Chicagoans realize is the fact that debts may be restructured to suit the needs of the payer, not the payee. In addition to the foregoing, remember that a Chapter 13 filing - although negative on the credit report - will not be as bad on paper as a Chapter 7 filing. Sure, you are stuck making payments, but all in all you can point to the good faith effort you have made at meeting your financial obligations. Additionally, the extra time that you buy by filing for this bankruptcy protection is often enough to ensure that your family is not forced to involuntarily relocate to a neighborhood or home that does not fit your needs.

There are two types of personal bankruptcy, Chapter 7 and Chapter 13 that offer debtors protection from unruly creditors or collectors. There may some key points about the person’s state of residence that is pertinent to filing bankruptcy, even though it is a federal court procedure. There are exemption limits to some personal possessions, meaning that the petitioner can protect certain assets from liquidation. Depending on length of residency in Illinois bankruptcy attorneys can help determine if they should use state exemptions or federal exemptions.

When contemplating bankruptcy an experienced attorney can help debtors sift through the paperwork quickly and easily and make sure that everything the petitioners puts into their petition is true and accurate. Today’s bankruptcy judges will hold attorneys responsible for false statements made by the petitioner they represent to make sure that the debtor and creditor are both treated fairly under the new laws.

Additionally, persons petitioning the courts for protection under federal bankruptcy laws will have to attend counseling sessions from firms approved by the court to help keep them financially healthy in the future. By preventing repeated bankruptcy not only are the credit companies made more healthy, but the debtor learns to be more responsible with their credit.



Bankruptcy Questions

Jared Myers asked:


Chapter 13 bankruptcy is referred to as the Wage Earner’s Reorganization. It allows the wage earner to use his income to repay his creditors over a specified time period. To accomplish this, the court creates a payment schedule, whereby the wage earner makes scheduled payments to the creditors over a three to five year payment period.

Some courts might not permit a filing of chapter thirteen. Filings depend on whether or not an individual’s income is adequate to repay part or all of the debt. Courts must establish certify that the income is stable and not too low. Thus, chapter 13 is not suited for everyone.

Other Limitations & Requirements

There are limits to the total debt a person carries to qualify for filing a chapter thirteen. Total secured debt can’t rise above $922,975. Total unsecured debt can’t rise above $307,675. Secured debt is backed up by collateral like a home or a car. Unsecured debt consists of signature loans, medical bills, balances on credit cards etc.

Before proceeding with a chapter 13 filing, all inquirers are required to take a class on personal financial management. This credit counseling course has to be sanctioned by the court trustee. And there is a fee associated with this course. (This fee might be waved in some cases.)

The court determines how much of your debt you must repay. You, then, start making those payments within 30 days after filing. These payments are ordinarily made to the bankruptcy trustee. And the trustee forwards your payments on to your creditors. The court might require these monthly payments be automatically deducted from your pay check and mailed to the trustee. 3%-10% of each monthly payment is paid to the trustee as their commission. It is necessary that these monthly payments be paid on time.

Under chapter thirteen, there are some debts that should be paid in full. This include child support, some tax obligations and alimony. These debts are non-dischargeable and must be paid one-hundred percent.

Bankruptcy law is a federal law; but, there are state laws connected to bankruptcy, so some rules governing bankruptcy depend on the state of residence and filing.

The idea of chapter 13 is to give a person an opportunity for a clean financial start. It protects them from creditors by placing a hold on their assets and debt collections, and provides the court time to work out a legal judgment that is acceptable to all parties.

However, there are consequences of bankruptcy in the form of poor credit and higher interest rates, because bankruptcy shows up on the credit report. Thus, bankruptcy filing should be thought out seriously, and advice should be sought through an attorney.

There are alternatives to chapter 13 bankruptcy. It’s important to consider all your options before making a final decision on whether to file for bankruptcy.

Want more Chapter 13 Bankruptcy information? Visit our website.



Bankruptcy Questions

Dean Shainin asked:


A law that provides for the development of a plan that allows a debtor, who is unable to pay his creditors, to resolve his debts through the division of his assets among his creditors is called Bankruptcy. Certain bankruptcy proceedings allow a debtor to stay in business and use revenue generated to resolve his or her debts.

The new bankruptcy law is now in effect, the landscape has changed for those who are considering bankruptcy. All debtors will have to get credit counseling before they can file a bankruptcy case and additional counseling on budgeting and debt management before their debts can be wiped out.

What is Chapter 7 of the Bankruptcy Law?

The most frequently used bankruptcy law is the Chapter 7, often called the Liquidation Bankruptcy. It involves the complete liquidation of a debtor’s property, with the proceeds used to pay off the debts. Someone who considers bankruptcy is unaware of the nuances of bankruptcy or certain creditors’ rights in bankruptcy. Be familiar with all the applications for filing.

6 Basic Procedures Involved in Filing for a Chapter 7 Bankruptcy

1. The clerk of court will give notice of the bankruptcy to your creditors.

2. Meeting of creditors will be held to question you about your debts and ability to pay. Other creditors and the trustee may question you.

3. A creditor of the trustee assigned to your case may object to your listed exemptions within 30 days after the meeting of creditors.

4. After the first date is set for the meeting of creditors, a creditor must file a proof of claim within 90 days.

5. A creditor may object to the discharge ability of a particular debt at any time if the debt if it is not listed in the schedules so that a creditor could file a proof of claim.

6. The best thing to do is to consult bankruptcy experts such as bankruptcy attorneys and lawyers to guide you properly. Filing for bankruptcy involves a lot of procedures. Be sure to do the proper procedures to make your bankruptcy filing go smoothly.

4 Tips in Looking for an Effective Bankruptcy Lawyer

1. A bankruptcy lawyer should be specialized, well-trained and experienced in bankruptcy or does a large part of his or her practice in the field. Look for a certified specialist or a lawyer with significant experience in bankruptcy.

2. A bankruptcy lawyer will be committed to getting you debt relief and providing you with valuable information, services and advice to get you a better financial future. They may also give you advices on where it is better to file a bankruptcy.

3. Your lawyer can also stop your creditors from harassing you, immediately once you retain a lawyer to file your bankruptcy, they will start taking your creditor’s calls or in any conversation that they may need to intervene in on your behalf.

4. You should also take advantages on your lawyer’s expertise. Read carefully the representation agreement, the draft schedules, the court notices and communications from your lawyer.

Take responsibility for your case. Your lawyer can file a bankruptcy with you, but not for you.



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Nathan Dawson asked:


Upon first recognition that you need to take drastic measures against your mounting pile of bad credit, it can be overwhelming. So many different avenues to take, do you want to file chapter 13 bankruptcy or do you qualify for chapter 7? And how exactly is chapter 11 bankruptcy any different? You’ve made the tough decision to file bankruptcy, now you just don’t know where to start. Here are some tips on what to do first when facing a financial crisis.

Bankruptcy Rule 1: Stop using your credit cards. Using credit cards with intent to file for bankruptcy will give creditors the opportunity to challenge your discharge of the debt. If you’ve accumulated the debt knowing you could not repay it creditors have the option to nullify your debt discharge- usually done through a lawsuit or adversary proceeding. Lesson one, no more charging. Period.

Bankruptcy Rule 2: See to it that there are no other options for you to utilize. Between debt management, credit counseling, and all the untrustworthy organizations promising a quick fix, there is no doubt that it will require some homework. But do your research and make sure that there isn’t a more gentle method of cleaning up your credit before you resort to the big “B”.

Bankruptcy Rule 3: Once you’ve narrowed down your options and filing bankruptcy is the only one that seems like it will work for you and your situation, find a good lawyer. Many people try to go through this process on their own and end up losing big in the end. Proper legal council will guide you through the process, offer advice on which chapter of bankruptcy is best for you, and will be a huge asset if it comes down to negotiating for better terms with your creditors.

Bankruptcy Rule 4: Figure your costs. Bankruptcy filing fees vary widely from state to state and naturally different lawyers will have different fee schedules, some charging a flat fee, others charging based on how deeply you are in debt. Still other require you to pay up front before they even start the process, but once you have started working with a lawyer, refer all creditors to this office.

Bankruptcy Rule 5: Depending on whether you’re filing for chapter 7 or chapter 13 bankruptcy, prepare to give up some of your belongings. Exempt items such as tools of your trade and low value heirlooms are considered exempt items. All others fall in the non-exempt category and are likely to be sold so that payments can be made to your creditors. Payment amounts differ between chapters; in chapter 7 bankruptcy you may never have to pay a creditor and had all of your debt written off. However if filing for chapter 13 bankruptcy you will be put on a three to five year payment plan at the end of which any outstanding debt will be written off. Again a good lawyer will be able to tell you which one would help more for your specific situation.

If you file chapter 7 bankruptcy, on the 60th day after meeting with your creditors to negotiate the terms of your bankruptcy declaration, your creditors forfeit the right to challenge any and all of your discharge and you will receive a notice of discharge. This notice will come within 30 - 60 days after your final payment under a chapter 13 bankruptcy filing Best of luck in all your endeavors and may your financial recuperation be speedy.



Bankruptcy Questions

Legal Helpers asked:


A New Beginning With Bankruptcy - Chapter 7 Bankruptcy

No one ever expects it to happen but everything get out of control and you are in debt far over your income. No one wants to think about filing bankruptcy but sometimes you just don’t have a choice. Chapter 7 bankruptcy allows you to emerge from a difficult experience and start all over. Chapter 7 bankruptcy is when a debtor’s assets are sold and the money is distributed to his creditors. If a debtor has no assets, his fresh start is achieved that much quicker.

Chapter 7 is the most common style of bankruptcy. This type of filing is most common, claiming about 65% of all bankruptcy filings. As long as the creditors have no objections, the debtor can be free of debt within a few months.

A debtor will not lose their house or car if they agree to continue to pay for these items. Many people are unfamiliar with this information and won’t even check into Chapter 7 bankruptcy. The only drawback to Chapter 7 is that you are unable to file bankruptcy within six years after a previous bankruptcy discharge.

How do you file a Chapter 7 bankruptcy claim? The easiest answer to this is to contact a bankruptcy attorney. There are forms to be completed and filed with the court system. An attorney will lead you through this procedure. It is very important to answer all questions truthfully.

No one ever thinks they could possibly have to file bankruptcy. It is comforting to know that if things get bad enough you do have an option. It is also reassuring to know that you don’t have to lose your house or car when trying to make a new beginning.

A Way To Ease The Pain - Chapter 13 Bankruptcy

The debts have been mounting up and you are getting farther and farther behind in paying them. You want to pay them but you are not sure exactly how to get that done. Chapter 13 of the bankruptcy code allows you to do exactly that. You can pay your bills back at a lower interest rate or no interest rate at all. A Chapter 13 bankruptcy allows you to keep your assets. This type of bankruptcy is for those who have a regular income and can afford request an adjustment. Chapter 13 bankruptcy gives you five years to repay your debts. During these five years, an attorney will oversee the process for both you and the courts.

A Chapter 13 bankruptcy allows the debtor to keep their property. The courts will set them up on an interest free plan of repayment. There will be a written plan drawn up to protect both the debtor and those that he owes. Once this plan has been written and approved the repayment process must begin in thirty to four-five days. The repayment plan does not have to involve a trustee, but could if desired. The creditors are bound by law to adhere to this plan and are unable to collect any other claims from the debtor. You will work with your attorney to set up a reasonable repayment plan for you.

Chapter 13 bankruptcy has a full discharge option when the debtor has completed all the required payments. This type of bankruptcy plan also allows for a repayment plan even if the creditors disagree with it. They do have the option to file an objection, but if it has been approved by the court these circumstances don’t allow them a lot of options. If you want to repay your debts but at a slower rate this is probably the way you want to go. You get out of debt and get to keep all your property.



Bankruptcy Questions

Jon Arnold asked:


Is there a bright side to bankruptcy? Yes there is, although bankruptcy should still be considered your option of last resort, and the bankruptcy option only employed after you have thoroughly investigated all other options and alternatives. There are many downsides to filing bankruptcy, not the least of which is that this will become a huge red flag on your credit report for the next seven to ten years.

But sometimes bankruptcy is the best option in a given situation and if that is the case, you need to understand that there are bright sides to bankruptcy. Keep in mind that, especially with the new bankruptcy laws, one cannot file for bankruptcy on a whim, nor can it be done if you have already declared bankruptcy in recent years. The bankruptcy court needs to APPROVE your bankruptcy before things can move forward, and that approval is not nearly as automatic as it once was. Yes, after looking in your particular financial situation in a great amount of detail, the court may actually decide that you are not eligible to file bankruptcy, and you have to seek another option out of your financial difficulties.

One of the bright sides of bankruptcy, if you are approved to be able to file, is that the harassing phone calls from your creditors come to a screeching halt. But here is where it gets tricky because you also have some responsibilities here. After you have filed your bankruptcy petition and it is approved by the bankruptcy court, knowledge of this fact is not known to your creditors automatically. So the next time they call after your bankruptcy has been approved, keep track of the information. Write down the date and time of the call, which creditor it is, the name of the collections agency, and the name of the individual calling. Let them know that you have filed bankruptcy. By federal law, that stops calls from that creditor.

The reason for keeping a notebook handy where you record this information is so that if a creditor calls again who has already been told that you have filed bankruptcy, again write down the name, phone number, name of the person and name of the creditor as well as date and time of the call. With that information in hand, you can inform the creditor that they are now in violation of federal law. The ball is now in your court. There have been cases where a creditor continued to call after being informed that you had declared bankruptcy, and as a result, the consumer filed a countersuit against that creditor for their continued calls, and the debt from that creditor was wiped clean!

Another bright side to bankruptcy is your potential ability to start over with a clean slate and no financial obligations. Getting new credit is going to be difficult and you will have to spend time getting things like a personal loan, car loan, or even a mortgage, but it can be done. But since your credit report will show your bankruptcy filing clearly, be aware that it will be a longer row to hoe than it previously was.

If you file bankruptcy under the Chapter 7 regulations, you will need to demonstrate and prove that you are unable to pay even a portion of your outstanding debts. If this can be proven to the court’s satisfaction, your slate will be wiped clean.

The decision to file bankruptcy is not an easy one to make, and again, you are encouraged to examine all your options and alternatives. But if bankruptcy is your most viable option, make sure you understand the bankruptcy laws and have a bankruptcy attorney who understands them, because you don’t want to risk making a bad situation worse.



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