Friday, October 9th, 2009
bankruptcy
Jon Arnold asked:


In the same manner that certain assets are typically not included as part of a consumer’s chapter 7 or chapter 13 bankruptcy filing, there are also certain types of debt and financial obligations which cannot be discharged via bankruptcy. These types of debts are exempt from bankruptcy law, and you still need to pay them, whether or not you file for bankruptcy protection.

For example, one type of financial obligation that cannot be discharged via bankruptcy is child support. If you have gone through a divorce or some type of divorce or separation settlement and you are required to pay child support or child maintenance by court order, the act of filing bankruptcy will not discharge this responsibility for you to continue paying it. Child support payments are exempt from any type of bankruptcy filing that the consumer might do, whether chapter 7 or chapter 13.

Another type of financial obligation that is exempt from being discharged by bankruptcy is an IRS lien. What happens with an IRS lien is that you owe income tax payments from one or multiple years. At a certain amount of money owed, the IRS will put a lien on your house or some other type of asset that you own, or in lieu of that possibility, may garnish your wages via your employer. This type of IRS lien, in addition to being exempt from a bankruptcy discharge, is also on your credit report for about 10 years as a huge blemish, which would be in addition to the blemish on your credit report from your bankruptcy filing. These types of red flags on your credit report can make it more difficult (although not impossible) to get approved for new credit in the future.
Another type of debt that is exempt from a bankruptcy discharge is a court order that may have awarded another company or individual a specified amount of money via a lawsuit brought against you. Since judgments such as these cannot be discharged, you should know if you have any of these pending against you that you have not been paying on, because they will not be discharged via bankruptcy.

If you are significantly behind in one or more debts with your existing creditors, chances are good that in time, one or more of those creditors will file a lawsuit against you to collect that outstanding balance that you owe them. This takes time and most creditors are not anxious to go to this extreme to collect money owed to them, but it cannot be ignored since most of them, in time, WILL go to that extent. If such a lawsuit occurs BEFORE you file for bankruptcy, then that will be a court order to pay the specified amount to that creditor, and that will NOT be discharged via your bankruptcy filing, since their lawsuit occurred before you filed. The bottom line here is that you need to take some action, because you could find that filing bankruptcy is not going to do you any good at all if you have multiple creditors with a judgment against you already.

Government loans such as federal student loans are also exempt from bankruptcy discharge.

If you are considering filing bankruptcy and have thoroughly investigated all your options, you should sit down with your debts and determine how many of them would be exempt from being discharged via bankruptcy. With the recent changes in bankruptcy law, this is no longer a do it yourself project. You need to be familiar with bankruptcy law, or if you don’t have time to study up on that, the money you spend on a good bankruptcy lawyer would be money well spent.



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Monday, August 3rd, 2009
bankruptcy
Jon Arnold asked:

When a consumer is considering bankruptcy, the usual way to file it is to use Chapter 7 bankruptcy but in some cases it makes more sense for the consumer to file under Chapter 13 bankruptcy law. All bankruptcies, regardless of which chapter is filed, are done under the jurisdiction and supervision of the federal bankruptcy court.

The consumer who files under Chapter 13 bankruptcy protection is shielded and protected from creditors who might otherwise file a separate lawsuit against the consumer to collect the outstanding debt owed. When a consumer files Chapter 13 bankruptcy, the debt from all creditors is consolidated into one debt, it drastically reduces and sometimes even eliminates interest payments, and in almost all cases, it lowers the total amount of money that the consumer needs to lay out each month.

One of the beautiful parts about this is that after you have notified the creditors that you have filed bankruptcy, Chapter 13 or any other chapter, they can no longer call you or send you threatening letters, which only serves to increase your stress level anyway. You are recommended to keep a notebook near your phone and note which creditors you told about your bankruptcy, noting date, time, creditor and the name of the person you talked with. If they persist in calling after being notified that you have filed bankruptcy, they are in violation of federal law and you may have the option at that point of bringing a countersuit against them for that violation. Believe me, they are well aware of that and do not want to risk it.

Now by looking at this explanation, if you have been doing research into your bankruptcy options, you may have noticed that Chapter 13 bankruptcy sounds very similar to the process of using a debt consolidation service. You are right, but there are some very distinct advantages and disadvantages of each. For example, a debt consolidation service charges a small fee for their services, where the total amount of that fee would probably be a bit more than you would pay for your Chapter 13 bankruptcy filings and legal fees. But then again, with a debt consolidation service, your credit score is maintained and the fact that you are using a debt consolidation service is frequently not even visible on your credit reports, whereas a bankruptcy filing is a huge neon sign on your credit reports for the next 7 to 10 years. Although everyone’s situation is different, it would seem that a debt consolidation service, even though costing a bit more, would have much fewer long term negatives. You should really compare both options with a good bankruptcy lawyer so you can make an informed decision about what is best for your circumstances.

So the bottom line is that a chapter 13 bankruptcy gives the consumer the opportunity to pay off their financial obligations in a timely manner. The amount that the consumer will pay each month is determined by the bankruptcy court and will be an amount determined by a close examination of the consumer’s sources of income. A trustee is appointed by the court and the consumer’s check each month is given to that trustee. In most cases, this must be a certified check or cashier’s check, so it is going to be a bit more hassle to get that kind of check each month and get it to the trustee.

If you are considering bankruptcy as a consumer, you can either file Chapter 7 or Chapter 13. But especially with the recent changes in the bankruptcy laws, filing bankruptcy is no longer a “do it yourself” process unless you are willing to get very familiar with the bankruptcy laws. Making a mistake in the complex procedures that have been established could easily end up costing you more than a bankruptcy lawyer’s fees.



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Tuesday, July 28th, 2009
bankruptcy
Legal Helpers asked:


In bankruptcy, the attorney assigned to the case is responsible for making sure all information provided by their client is accurate. They usually do this before filing any and all paperwork. However, they often miss something and simply take their client’s word for the truth. Once the case is filed, a bankruptcy trustee will go over all information supplied by the client, looking for inaccuracies or reasons to believe fraud may be involved.

The role of the trustee in bankruptcy is to protect creditors are treated fairly and to be sure all non-exempt assets are sold for the highest price. The money raised is then distributed to the creditors in accordance with their claims and the trustee in bankruptcy helps make this happen. They go to creditor meetings and can discharge debt if fraud is found on the creditor’s end.
With a Chapter 13 bankruptcy filing things are different. The trustee’s job is more administrative. This is because there are no assets to liquidate. They make sure the court approves the new payment plan. The trustee will often accept payments from the client. They then distribute them to the creditors, according to the court approved payment plan.

Many people use bankruptcy because they need to be relieved from the financial burdens that they are unable to take care of now or in the future. Unfortunately, too many people may have taken advantage of the bankruptcy system, and in May of 2004, the Bankruptcy Legislation Amendment Bill was passed. This bill was designed to stop those that were using the bankruptcy system as a quick way out of paying their taxes, although they were financially able to pay them. There may have been very few people that were taking advantage of the ability to not pay their taxes; however, the ones that are taking advantage have had debts that were a considerable amount of money. Since the bill was unfair to those that were in actual financial debt, there was an amendment in December of 2005.

This amendment allowed for those that truly needed to be relieved of their burdens to conduct a means test, which would evaluate them to see if they were in true need of filing bankruptcy. This includes taking a debt counseling course, in which the filer must pay for themselves. If after completing these requirements you were considered unable to file for the Chapter 7 bankruptcy, you still have the option of filing for Chapter 13 bankruptcy. Filing for Chapter 13 is more difficult, but can be a necessity if you are in desperate need of relief. With these new laws in effect, those that need help can still receive it, while those that are using it for avoidance, can no longer do so.

Filing for bankruptcy can be quite frightening. When filing for bankruptcy there are many rules you must follow exactly in order. If you don’t, you won’t correctly file your bankruptcy. In addition, you should completely understand each of the separate types of bankruptcy you can file, before your file. If you’ve had no experience with bankruptcy you may find yourself overwhelmed with the tasks of filling out the right paperwork. If your bankruptcy papers are not filed in the proper manner, you can end up with a bigger problem than you started with.

If you want to ensure you are doing everything the right way, you may want to consult with a bankruptcy attorney. The easiest way to contact a good bankruptcy attorney is to get in touch with a bankruptcy firm. A bankruptcy firm is actually a group that employs lawyers who specialize in the process of bankruptcy.

When you’re dealing with something as sensitive as filing bankruptcy, you want to be sure you’re doing it right. A bankruptcy firm can help you know what type of bankruptcy you qualify for and the proper steps you need to take to complete the process. In addition, the attorney can help prepare you if you need to go to court and can often help you protect some of your most precious assets (like your home and car). Overall, it is a prime idea to contact a bankruptcy firm before filing for bankruptcy.



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