Bankruptcy Questions Answered

The248Lawyers asked:

Bankruptcy does not have to be intimidating. There are a lot of misconceptions about the new Michigan Bankruptcy laws. Did you know that, in most cases, you can keep your car, home, and other assets? Its not easy however. You’ll need a successful and proven lawyer. Get the best trial lawyers in Michigan. Put our 90% win record to work for you. More info on bankruptcy at 248 Lawyers can be found at: 248lawyers.com

TA Honey asked:


Knee deep in debt and looking for a way out? Well, you will easily find people willing to help you but the catch is “debt consolidation services” come for a fee! There are many dealers in market without requisite skill sets or qualification who may take advantage of a tight situation. You would find here some handy information on dealing with debt.

For addressing immediate insolvency concerns in UK refer to 1986 Insolvency Act. Bankruptcy can be an option when dealing with overwhelming debt you can not possibly meet under any circumstances. Bankruptcy is a way of making a fresh start, the assets are shared fairly among the creditors.
An individual can be declared bankrupt by usually three sources. An individual can voluntarily declare insolvency. A creditor who had extended an amount of more than 750 pounds can declare the individual bankrupt, given the circumstance. Bound by IVA too an individual can be declared bankrupt. Refusing to acknowledge the proceedings or the bankruptcy petition can also lead to declaration of bankruptcy.

The consequences of bankruptcy can be that you lose ownership of all your assets. Whatever assets you own will be divided fairly amongst the creditors. Moreover one declared insolvent will have to seek permission of the creditor. There will be certain restrictions on a person declared insolvent, such person is barred from the responsibility of Justice of Peace, member of parliament, as Chartered Accountant or Lawyer and cannot act as a director of a company. you may be publicly examined by the court. Also such a person can not indulge in trade under any other name without informing the creditors.

Bankruptcy does indeed bring you peace of mind if nothing else. It will also ensure creditors that full investigation of debtor’s affairs has been carried out, that nothing including the debt consolidation loan have failed. Though it leaves a mark on the credit history it does release you to make a fresh start.



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Benjamin Brook asked:


When it comes to the word bankruptcy it normally leaves a bad taste in anyone’s mouth. For those that do no know what bankruptcy is it is the only way out financially if you are stuck in loads of debt and have no way to pay creditors.

There are three ways a person can go into bankruptcy which are:

1) Voluntary assignment. This is were insolvent persons make an assignment of all their assets for the general benefit of creditors.

2) Involuntary assignment which is when a creditor files a petition in a provincial court for a receiving order against the debtor’s assets.

3) Deemed bankruptcy which is when a proposal in bankruptcy under the Bankruptcy Insolvency Act has failed

Relief from Bankruptcy

Bankruptcy is definitely a serious thing and can cause an array of problems, but bankruptcy debt relief is possible. One of the first steps to bankruptcy debt relief is to understand what happens to your life after bankruptcy. Specifically in terms to how long bankruptcy lasts, if a person has been declared bankrupt before, within the past fifteen years, then they will not be automatically discharged.

If it is the first time for being declared bankrupt however, then discharge may be automatic, what this means it that there will be a release of the bankrupt from most of your debts owed at the date of the bankruptcy. There are a few exceptions to this though including debts coming from fraud and fines.

Also on the topic of bankruptcy debt relief is the issue of assets that were obtained before discharge. This is important because this will largely determine how much money is going to be available after bankruptcy. When discharged there may still be assets that were owned either when the bankruptcy began or which were acquired before discharge. This may include property of insurance for example.

Think About the Future

Bankruptcy debt relief is a very important topic to discuss, but more than anything it is important that people are aware of how to stay out of debt in the future. After all, many people go to incredibly hard work to get out of debt but then just fall back into the same hole again in the future. This is not only going to be frustrating and devastating to a credit report, but also it is much harder to get out of debt the second time around.

Debt does not bring anything positive, and can really be repressing on a person’s life, because it means that they may not be able to do many of the things that they would like to.



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Pnreddy asked:


Bankruptcy is one option to consider in order giving yourself a “fresh start,” when you have more debts than you have assets. There are in fact many types of bankruptcy provided under the law but the most common is Chapter 7 bankruptcy, which is also known as liquidation.

When filing under Chapter 7 bankruptcy, all your assets, excluding those that are exempt under the law of your state, are dissolved and liquidated. Generally, the person tasked to do this is the court-appointed official, called a trustee.

All in all, the vital task of the trustee is selling your properties and using the proceeds to pay your creditors. After doing such, the court will then cancel many of your remaining debts, thus affording you a “fresh start” to life.

Here is a step-by-step guide to filing a bankruptcy under Chapter 7 bankruptcy:

Step 1: Decide whether you should file bankruptcy or not.

Filing bankruptcy is a personal decision, influenced by many factors, such as the amount of serious debts and your ability to meet the original payments or pay the full amount. For starters, when you are broke, it is never a nice experience getting harassed by creditors for debts incurred. For another, your decision to file should not be made for the sole purpose of putting a stop to your demanding creditors.

This is a significant point as secured creditors may apply for “relief from stay,” thus allowing them to continue their efforts to repossess or foreclose even though you already filed for bankruptcy.

Step 2: Get an attorney

While the law on Chapter 7 bankruptcy does not need individual consumers to hire an attorney who would represent them in court, it is still advisable to ask for legal help, particularly concerning critical decisions involved in bankruptcy.

Step 3: Comply with the legal requirements.

File your petition with the bankruptcy court serving in your area. If you are a business debtor, then file with the bankruptcy court in the place where the business was organized or has its principal place of business or principal assets. Your attorney should be able to advise you on how to deal with these required legal forms.

Step 4: Pay the necessary fees.

As with any other court cases, there are certain fees required, such as:

• Case filing fee

• Miscellaneous administrative fee

• Trustee surcharge

Upon filing, you are usually asked to pay these fees to the clerk of court.

Note that the number of installments is limited only to four. Additionally to that, you are also required to make the final installment no later than 120 days after filing the petition.

Step 5: Notice to the creditors and meeting.

After filing your petition for bankruptcy under Chapter 7, paying the necessary fees, and complying with the legal requirements, an “automatic stay” is granted to you by operation of law. This stay will efficiently stop most collection actions against you and your properties. This means that as long as the stay is in effect, creditors cannot initiate or continue lawsuits, wage garnishments, or even telephone calls demanding payments.

After the bankruptcy case has been filed, the bankruptcy clerk will give notice to all creditors whose names and addresses you provided. Then, the case trustee will hold a meeting of creditors between 20 and 40 days after you filed your petition.

Step 6: Cooperate with the trustee.

The case trustee has a vital role in a bankruptcy case. His primary responsibility is to liquidate your nonexempt assets in a manner that maximizes the return to your unsecured creditors. He does this by selling your property, if it is free and clear of liens and as long as it is not exempt, or if it worth more than any security interest or lien attached to the property and any exemption that the debtor holds in the property.

In view of the broadness of a trustee’s power, it is significant therefore that you cooperate with the trustee. Provide any financial records or documents that the trustee requests and answer questions, which the trustee is necessary to ask at the meeting of creditors under the Bankruptcy Code.

Step 7: After the discharge…

If all goes well with your Chapter 7 bankruptcy case – that is, no one files a complaint objecting to the discharge or a motion to extend the time to object – the bankruptcy court will issue a discharge order relatively early in the case, about 60 to 90 days after the date first set for the meeting of creditors

A discharge order is an order issued by the bankruptcy court, releasing you from personal liability for most debts and preventing your creditors from taking any collection actions against you. As a rule, excluding cases that are dismissed or converted, individual debtors receive a discharge in more than 99 percent of Chapter 7 bankruptcy cases.

For someone filing under Chapter 7 bankruptcy, a discharge of almost all of your debts is the ultimate goal. With the release of all your debts and creditors stopped from pursuing any further collection actions against you, the opportunity for a fresh start is apparent.



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John Chase asked:


Bankruptcy Questions

Filing for bankruptcy after those endless debt issues may seem as the last resort. However, it might be more of a fearful act. Bankruptcy is a hard-nosed procedure with almost permanent impact. The menacing after effects of bankruptcy, which often are not properly assessed before filing for bankruptcy tend to confuse during the process, thus impelling many to cancel the proceedings.

Debt issues are difficult to deal with and even more strenuous are the problems which typically complement the financial agonies; however, Filing for bankruptcy is not the very perfect answer to curb miseries. Instead, Filing for bankruptcy might just aggravate the issue, leading to even greater, unmanageable troubles. Therefore, before beginning with the official bankruptcy Filing act, read on to find all about bankruptcy and thus refrain from the insidious obligations.

Bankruptcy - The Concept

In the most positive terms, bankruptcy is a legal proceeding that allows individuals and companies to start over again without managing their debt obligations. When large corporations opt for bankruptcy, the leading media representatives talk about it, while when average earning people apply for one, they are an addition to the statistical reports. In the UK, both the stated bankruptcy filing announcements are a norm, thus making bankruptcy sound as a very tempting debt solution route. To further entice the sufferers of the debt, bankruptcy promises to cease all financial stress, and suggest a way out with less to pay, thus eliminate all debt issues.

Bankruptcy has a Host of Harmful Consequences

If you are just thinking about filing for bankruptcy, then consider the matter deeply, because there is much more to it than the benefits stated above, Bankruptcy also has a host of disadvantageous consequences. Once an entity begins filing for bankruptcy and thus declares the bankrupt is devoid of assets of value such as a house or other equity. Businesses could be sold, including machinery to repay creditors. Those declared bankrupts may have accommodation issues, with landlords not too delighted to accept them as tenants. Remember, bankruptcy, is a legal procedure, and therefore is recorded by bankruptcy law. Bankruptcy stays in files for years (see enterprise act for updates) and therefore negatively impacts financial transactions until the same time. The image is not very helpful in envisaged career moves as well. Employers too are apprehensive of those with bankruptcy records in their credit files. Of course, seeking and obtaining competitive credit terms can be just a dream after filing for bankruptcy.

Bank current accounts suddenly seem unobtainable. And after all this mess, there are certain debts which even bankruptcy cannot deal with and there are secured creditors, who have every right to their share, even after the bankruptcy has been declared.

Bankruptcy offers a chance to start again, but there may not be many resources to start again. For more useful information on bankruptcy questions, please visit Debt Relief Adviser.



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Miodrag Trajkovic asked:


It is better to realize as early as possible that going through a bankruptcy claim is not easy. People generally opt for it as their first remedy. You must know the bankruptcy laws well in order to decide.

The bankruptcy law has been crafted in a way to promote provisions that are a part of filling bankruptcy claims. It contains systematized laws that help the debtor to rid himself of any financial obligations that he has to undergo. The Chapter 7 bankruptcy law is in other words called straight bankruptcy. This law deals with the liquidation process. According to this, the one who is filing for bankruptcy has to surrender all his assets except those that are unaccredited or exempted to the lawyer or the trustee in bankruptcy.

The court must appoint a trustee in bankruptcy and he will be given charge of selling the assets or converting them into cash. Once the assets have been converted to cash the creditors are paid with these funds. Under the Chapter 7 bankruptcy law you are discharged from any obligation after a period of four months.

When can you apply the Chapter 7 bankruptcy law? It is applied when the debtor is left with no property to give up or lose. This is one of the most common bankruptcies that are filed in the United States by either individuals or business corporations. You could personally file bankruptcy by abiding with the Chapter 7 bankruptcy law or the court may impose it.

The Chapter 7 bankruptcy law will prompt a business man to sell all his assets and pay what he owes the creditors and finally close down his business. The procedures are very similar for individuals who have been forced to file under the Chapter 7 bankruptcy law, the only difference here is the individual will have no business to close down.

The advantages of filing a claim under the Chapter 7 bankruptcy law first and foremost are that any amount of debt may be cleared and as soon as you get out of the trouble you are in, you get a clean chit. The other advantage is that there is no particular amount of debt to qualify you for filing under the Chapter 7 bankruptcy law. As there is a protection that is granted by this law, the creditors cannot exert any authority over you. It is processed very quickly and you can be discharged from any debts in a short period, say in about four to six months.

The disadvantage of the Chapter 7 bankruptcy law is that you have to give up your whole property. Debts like taxes, child support, housing mortgages, students’ loans and car loans are not discharged under the Chapter 7 bankruptcy law. Along with you the co-signers will also be pulled in and asked to pay for your home loan. This law may be only availed once in every six years.

It becomes difficult to avail other loans because your credit rating gets damaged. Once you have filed for the Chapter 7 bankruptcy law, it cannot be withdrawn.

Tread cautiously if you are considering filing under the provisions that are based on the Chapter 7 bankruptcy law. All you need is to be protected and not end up with added problems.



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some1virtual asked:


I know that its debts and assets will be sold to other banks. The question is when? Will the sale of its mortgages have to wait until the bankruptcy proceedings are over and it is decided what goes to what bank?
If so, what would happen with delinquent mortgages during this time which is sometimes more than a year ?
Another example would be New Century Financial which has already started bankruptcy last year in April. What happened with some of their mortgages that became delinquent while the bankruptcy was going on?

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Jon Arnold asked:


For some people, filing personal bankruptcy is the only way they can find their way out of overwhelming debt. Whether your debt is the result of not being able to pay your bills because you were laid off work or the result of poor financial decisions, there are a variety of things to consider before actually filing personal bankruptcy. When you first consider to file bankruptcy, you will need to decide if Chapter 7 or Chapter 13 bankruptcy will fit your needs better. As well, there are a variety of debts that cannot be included in your bankruptcy settlement.

Chapter 7 bankruptcy requires that a bankruptcy trustee sell off your nonexempt assets so that your debt can then be repaid. With Chapter 7 bankruptcy, there is the risk of losing your home, along with a majority of your other personal items. Therefore, before filing Chapter 7 bankruptcy, it is important you have a full understanding how Chapter 7 works. When it is all said and done, if you file Chapter 7 bankruptcy, you will no longer have your overwhelming debt.

Chapter 13 bankruptcy varies quite a bit from Chapter 7 bankruptcy. Chapter 13 bankruptcy requires that a portion or all of your unsecured debt is repaid. A repayment plan is established through the bankruptcy court. Payments can be made over a period of 36 months to 60 months, depending on the amount of the debt. The repayment amount is equal to or greater than the amount would be should you have chosen to go with Chapter 7 bankruptcy and liquidated your assets.

Although personal bankruptcy may seem like a great way to break free of your overwhelming debt, there are some types of debt that cannot be included when filing bankruptcy. Debt that occurs from student loans, taxes, child support, spousal support, criminal fees and charges made on a credit card 40 days before filing bankruptcy cannot be included in personal bankruptcy.

It is important that you realize filing personal bankruptcy will have a negative effect on your credit rating. This effect will last for approximately seven to ten years, depending on what type of bankruptcy you file. Although your credit score will be affected, you can still obtain credit after you have filed bankruptcy. However, the credit that you will be able to obtain will carry a higher interest rate than it would if you didn’t have a bankruptcy on your credit.

Filing bankruptcy can also have other negative effects. For instance, if you would need to obtain life insurance you may have a harder time obtaining a policy. Many car insurance companies are now charging a higher premium if you have a bad credit score. Many employees are now running credit checks. Therefore, if you have a bankruptcy on your credit, it may be harder to obtain a job. You may also experience psychological effects, such as depression.

For many, debt is a way of life. However, there are instances when the debt becomes more than you can handle. Personal bankruptcy is a way to help you deal with debt that you can no longer pay. If you are looking to file bankruptcy, it is important that you have a full understanding of the way it works, as well as the lasting effects bankruptcy can have.



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cory asked:


I am thinking of filing for bankruptcy. Can creditors touch the equity I have in my home? What assets can they cease?

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