Bankruptcy Questions Answered

JCLawGroup asked:


JC Law Group specializes in helping individuals and families in the Bay Area with filing for Bankruptcy and debt relief. Their areas of practice focus on Chapter 7 and Chapter 13 bankruptcy. If you are burdened by debt and want to explore filing bankruptcy as an option for relief, they can help you very well.

Filing for bankruptcy is not a reflection on you as a person. Perhaps you owe more on your home than what it is worth and you are struggling to make the payments, you are going through a life changing experience such as a serious illness, loss of employment, divorce or death in the family. You do not have to go on living with the constant calls from the creditors or mounting debts. Bankruptcy laws allow people who are overwhelmed by debt to get a fresh start easily.

According to the American Bankruptcy Institute “household debt is at a record high relative to disposable income.” The Administrative Office of the U.S. Courts reported that the number of filings for the year ended March 31, 2003 “exceeded 1.6 million for the first time in any 12 month period,” a 15.1 percent increase from the previous year.
There are two types of personal bankruptcy: Chapter 7 and Chapter 13. Chapter 7 Bankruptcy and Chapter 13 are legal proceedings that are available to a person to cope with the financial crisis. Personal bankruptcy must be filed in a federal bankruptcy court. You will have to pay about $160.00 in court fees. Attorney fees will be additional.

Chapter 7 of bankruptcy involves the liquidation of all your assets that are not exempt from the bankruptcy settlement. Exempt property can include automobiles, some household furnishings, and property needed for work-related use; for example if you were a mechanic the tools you use to perform your work would be exempt from the bankruptcy settlement. Exemption amounts vary from state to state.

A Chapter 13 bankruptcy allows you to keep property, like a mortgaged house or car, as long as you have a steady income. Chapter 13 bankruptcy is a court-ordered and approved repayment plan to your creditors. This allows you to use your future income to pay back your debts over a 3-to-5 year period without surrendering any property. Once you complete the payments under the plan, your debts are discharged by the court.

Both types of bankruptcy may get rid of unsecured debts and stop foreclosures, repossessions, utility shut-offs, and debt collection activities. Both provide exemptions that allow people to keep certain assets, although exemption amounts vary.

The sweeping changes to the laws in 2005 made filing bankruptcy more complex, and often inaccessible to most people, particularly those with low incomes. Attorney’s fees increased due to the added complexity of bankruptcy cases; court fees have gone up; there are new credit counseling and debtor education requirements that cost money.

However, consider this when contemplating bankruptcy. If you have $40,000 in unsecured debt at about 20 percent interest, the cost of the interest alone is $8,000 per year. Divided by 12 that is about $667 per month. For less than the cost of 4 months of interest payments, you can pay for a Chapter 7 bankruptcy and be done with it once and for all.

For more information on Bankruptcy San Francisco Call us at 415.963.4004 to schedule a free consultation with a San Francisco bankruptcy lawyer.



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Legal Helpers asked:


There are two broad forms of bankruptcy, no matter your definition - Liquidation and reorganization. Liquidation is provided for in the United States under Chapter 7 of the Bankruptcy Code while Reorganization is covered under chapters11, 12 and 13.

CHAPTER 7

Chapter 7 bankruptcy is the chapter of the Bankruptcy Code that provides for the sale of the debtor’s non-exempt assets for the distribution of the proceeds to creditors (liquidation). Usually, a trustee collects the debtor’s assets, which forms the bankruptcy estate, under court supervision and “converts” it to cash for onward distribution to creditors. This is subject to the rights of the debtor to keep certain assets, which are exempt (for example personal clothing). Also, distribution of the liquidated assets is subject to the rights of secured creditors. As may be expected, most Chapter 7 bankruptcy cases are “no assets” cases, as the debtor literally has no assets that can be liquidated.

An individual or business filing for a Chapter 7 bankruptcy case is required to begin by filing a petition with the relevant bankruptcy court serving his area or the area where the business is registered or operated with its main assets.

The petition stage can be described as the declaration stage. The debtor will also need to provide other documents to the court in addition to their petition. This may include but not limited to;

§ A schedule of assets and liabilities

§ A schedule of current income and expenditures

§ A schedule of executory contracts and unexpired leases

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

Basically, the additional documents would capture all your assets, debts and financial affairs. On the average, the process may take up to six months and may cost the debtor in terms of filing, and administrative fees. Unfortunately, you cannot file a Chapter 7 bankruptcy if you have a bankruptcy discharge in the last six to eight years and also if your current financial affairs can permit a Chapter 13 bankruptcy. Debts like priority taxes, support, student loans, liens and any debts that were reaffirmed are not discharged under Chapter 7 Bankruptcy.

CHAPTER 11

Knowing the different types of bankruptcy is very importance especially if you are into business. Always remember that businesses sometimes hit a bad spell so you have to be prepared for any eventualities. If you are a business owner, you need to know about Chapter 11 Bankruptcy also known as Re-organization Bankruptcy. Since with type of bankruptcy involves Partnerships and Corporations, it is imperative you should know about this type of bankruptcy.

Under Chapter 11 Bankruptcy, businesses are allowed to propose payment plan to their creditors. The payment plan shall include the length of time needed for the business to recover and settle its financial obligations. Although there are some provisions under Chapter 11 Bankruptcy that are similar to Chapter 13 Bankruptcy, the two are quite different in the sense that Chapter 13 bankruptcy is more concerned with individuals. The fees that apply to partnerships and corporations are also different to those fees imposed on individuals who file for bankruptcy.

What Fees Apply Under Chapter 11 Bankruptcy?

A mandatory filing fee of $1,000 and additional $39 miscellaneous administrative fees apply under Chapter 11 Bankruptcy. In cases of joint petitions, only one filing fee is imposed. Since these fees are considered as mandatory, the failure of the debtor to pay these fees may cause the dismissal of the petition. Once the case is already in progress, the business or the petitioner may be required to pay the court trustee every quarter. The amount of the fees differs depending on the amount involved. In most cases, the fees would range from $250 up to $10,000.



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Jon Arnold asked:


There are several different types of bankruptcy. The one people most commonly think of is chapter 7 bankruptcy. It can be confusing to know which of the types of bankruptcy is appropriate in your situation. Here is some information on chapter 7 bankruptcy and whether it is right for you.

Chapter 7 bankruptcy is also referred to as liquidation bankruptcy. It will rid you of your outstanding debts, but the court may force you to liquidate some of your assets in order to satisfy your creditors. Chapter 7 bankruptcy will cost you about $299 between filing fees and paperwork, and will take between four and six months to be completed.

Chapter 7 bankruptcy typically only requires one visit to the courts. Most of the time you will be ordered to take a credit counseling course that is endorsed by the United States Trustee. Be aware that the laws concerning bankruptcy and the various types vary from state to state, so make sure you and your bankruptcy attorney are very familiar with the way bankruptcy law works in your state.

Not everyone is able to file for chapter 7 bankruptcy. If you have had a bankruptcy discharged in the last six to eight years, you may not be eligible to file a chapter 7 bankruptcy. The courts will also review whether you might be eligible to file a chapter 13 instead. This is a repayment plan instead of completely canceling the debt. This is based on things like your income, debt load, and expenses.

New rules dictate exactly what guidelines should be used when determining whether someone has enough income to repay their debts or not. If you are a disabled veteran and your debts were racked up during active duty or your financial burdens were due to a business loss, you are more likely to be able to file a chapter 7 bankruptcy.

Chapter 13 bankruptcy differs from chapter 7 bankruptcy quite a bit. Chapter 13 is a reorganization plan for people who want to pay off their debts over a period of three to five years. Usually the people who choose this option are ones who have assets that are not exempt under chapter 7 bankruptcy rules. People who choose chapter 13 must have enough income to cover their living expenses and enough left over to pay on their debts.

Chapter 11 bankruptcy is used primarily by large businesses to reorganize their debts and pay their creditors. The debtor must come up with a plan and get it approved by the creditors. If they cannot get it approved, they can try to force it through the courts anyway. However, the success rate of this type of bankruptcy can be as low as 10%. This is not a bankruptcy option for consumers.

Chapter 7 bankruptcy is most appropriate for those individuals who have overwhelming amounts of debt and do not have sufficient income to repay those debts. You can keep some assets, but some possessions may need to be sold to help pay back your debt. Once you file the papers, the courts will decide whether you are eligible for a chapter 7 bankruptcy or if a chapter 13 is feasible. It is a fairly quick process and will help end collections harassments.



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Reethi Rai asked:


Bankruptcy is the last resort for any debtor wherein he/she legally declares the inability to pay back the debt owed. In most cases bankruptcy is initiated by the debtor or the organization. However creditors can also request bankruptcy in an effort to get back what they are owed. After filing bankruptcy you can choose the life you want to live – you can either re-build your finances or plummet deeper into the abyss.

Follow The Checklist below and You’re Going to Emerge Unscathed Even after Bankruptcy

• Restrict or if possible STOP using credit cards

• If required get a secured bankruptcy credit card an pay your dues regularly

• Wait for two years before availing mortgage or even bankruptcy car loan to get the best interest rates

• Get copies off your credit reports and ensure that your accounts are listed as discharged

Bankruptcy Loan – Getting a Loan after Bankruptcy

Availing small and easily repayable bankruptcy loan – be it bankruptcy home loan or even bankruptcy car loan, will help you not just deal with your financial obligations but it will also help you rebuild your credit rating. A small bankruptcy personal loan is the ideal solution to repair your credit status. However there are some facts about bankruptcy loans that you must be aware of.

Firstly, bankruptcy loans are recommended only for people who have declared themselves bankrupt and only after their case has been discharged, their creditors have been paid. You have to wait for at least 2 years for your bankruptcy home loan or bankruptcy car loan application to be approved without unnecessary delay. Generally lenders perceive bankrupts as threats and don’t particularly want to risk lending to a recently discharged bankrupt. If you have chosen Chapter 7 Bankruptcy you must wait for 2 years to apply for a loan and in case of Chapter 13 Bankruptcy you need to first pay the full amount to your creditors before applying for a loan.

Can You Get A Credit Card After Bankruptcy?

You owned a home and hardly ever defaulted on your monthly payments. Your credit report sparkled. But unfortunate health circumstances forced you out of your job and you had to file for bankruptcy…Today you are looking for bankruptcy credit card without being charged outrageous interest rates. So what are you’re choices? You can choose between secured credit card for bankruptcy and unsecured credit card after bankruptcy.

Secured bankruptcy credit card is secured by a savings account you establish with your creditor. This savings account works as collateral for your credit limit. If you default on your payment your creditor will take money from the savings account. If you’re looking for a risk free credit card after bankruptcy – unsecured bankruptcy credit card is the option for you as it does not require any collateral.

Many people think about filing bankruptcy but the fear of life after bankruptcy hold them back. The information offered in this article aims to enlighten you on what you can expect when you have filed for bankruptcy.

For more information and help log onto Bankruptcy



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Muna wa Wanjiru asked:


Going bankrupt is something that is hard to imagine happening to you. When bankruptcy does occur though, you have some options that you can try. For these bankruptcy options to work you will need to consider bankruptcy filing. The options will include chapter 11, 13, and 7.

Each of these types of bankruptcy filing allows you a breathing space while you try to sort out your financial mess. The most well used bankruptcy claims are chapters 13 and 7. In these two options you will be able to talk with your lawyer and find the best method for paying off your payments.

In general chapter 7 and chapter 13 bankruptcy claims ensures that you can’t be forced to pay further debts once you have placed a bankruptcy filing. For your creditors to stop contacting you it is essential that you file a bankruptcy claim.

Once the bankruptcy filing has been accomplished your payments will commence. These payments will be made depending on the type of bankruptcy that you have filed for. As both of these bankruptcy filings are very different it is best if you understand what happens when you file bankruptcy claims.

In the chapter 7 bankruptcy filing you agree to liquidate all of your disposable and non-exempt assets. These assets, money, and property are turned over to a court appointed bankruptcy trustee. This individual will start the process of turning your disposable assets into cash. Once the amount of money that you owe has been found, the trustee will distribute them amongst your creditors.

You should make sure that when you are preparing for bankruptcy filing that you have given your lawyer a list of all of your creditors so that the proper payments can be finalized.

This step in bankruptcy filing will wipeout all of your debts, excepting for certain non-dischargeable debts. You will however need to discuss with your lawyer the best ways to go about bankruptcy filing for chapter 7 and in some cases chapter 13.

The chapter 13 bankruptcy filing will allow you to make arrangements with your lawyer to pay off these payments as best as you can. The lawyer will examine your bankruptcy case history before you can begin the bankruptcy filing process. Once the filing has been finalized you have a period of 5 years to pay off your debt.

Bankruptcy filing is the best way to make sure that your bankruptcy claim is following in the proper path. Your lawyer should be able to advise you on the best route of bankruptcy to file for.



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