If you have tried every way imaginable to avoid bankruptcy but find that you have no other way out of the situation, the first step you should take before filing is to consult with a bankruptcy attorney. A bankruptcy attorney can be hired or appointed by the court systems to help you through the court proceedings. If you decide to select your own attorney, make sure to select someone with previous experience in bankruptcy law, preferably someone who works specifically with bankruptcy.
No matter which bankruptcy attorney you select, you should always be prepared to ask the attorney questions regarding your own case. Here is a list of questions you should always ask your attorney to make yourself more aware of your bankruptcy proceedings:
* What type of bankruptcy is right for me?
Keep in mind that the Federal court system in the United States has eight different types of bankruptcy filing available. Of course the two most popular are Chapter 13 and Chapter 7, but there are a variety of different details and rules that apply to each type of filing. A good bankruptcy attorney will be able to sift through your financial difficulties and recommend the best type of bankruptcy for you.
* How do I file for bankruptcy?
Filing for bankruptcy will need to be done in the state where you currently live. If you plan to remain represented by a bankruptcy attorney, their legal staff can help to prepare all of the paperwork that is necessary to present to the court system. If you simply want to use the bankruptcy attorney for a consultation, make sure you don’t leave the attorney’s office without the necessary paperwork to begin the bankruptcy process.
* What type of fees will I owe?
This is important to ask in regards to your bankruptcy attorney as well as the court system. Most bankruptcy attorneys will give a free consultation but any remaining time on the proceeding or in court will cost a fee. Some attorneys charge by the hour while others charge a flat fee for bankruptcy services. As well, the court systems usually charge a court fee connected with filing the case, administrative charges and extra Chapter 7 fees to pay a trustee in charge of the bankrupt account.
* Where do I go to file my bankruptcy claim?
Bankruptcy cases are handled by the federal court systems in every state. This usually means that the bankrupt party will need to give the bankruptcy paperwork to the state courthouse, usually in a state’s capitol city. Your bankruptcy attorney should know the address and rules regarding whether or not paperwork can be sent by mail or if paperwork needs to be given in person.
* What happens after filing for bankruptcy?
Immediately after filing for bankruptcy, the court system will send out notification to creditors of the pending bankruptcy case. From this point on, creditors are considered to have a "restraining order" by the debtor and are not allowed to contact the debtor requesting payment. Depending on the type of bankruptcy, a hearing will be scheduled and deadlines will be set for creditors to file a claim and attend the hearing. Of course, all of the proceedings from here are dependent on the type of bankruptcy filed, so it is important to be in contact with your bankruptcy attorney who can more readily answer these questions.
http://www.articleson.com/Article/Bankruptcy-Attorney--Questions-To-Ask/5272
Saturday, September 29, 2007
Bankruptcy Forms: Having The Right Ones
Filling out bankruptcy forms can be one of the most difficult parts about filing for bankruptcy, although these forms are a necessary evil to complete the legal process. Unfortunately these legalities can add major emotional stress to an already difficult situation. Especially if you have decided to go about filing on your own, without the help of a lawyer or financial service company, you may find yourself overwhelmed with trying to understand which bankruptcy forms are right for which chapter.
If you are an individual who is filing for bankruptcy, most likely you will be filling out bankruptcy forms specifically dealing with either Chapter 7 or Chapter 13. Even as a business you may be filing for Chapter 7 or Chapter 13, although you may be filing for Chapter 11 as well. In any case, there are separate forms that need to be filled out with each particular chapter stating the intention to file bankruptcy under that chapter.
The individual or business may also have other special bankruptcy forms that go along with a particular chapter. For instance, Chapter 13 and Chapter 11 are reorganization chapters and will require a form that discusses how and when creditors will gather to meet and discuss the finances of the individual or business for repayment plans. If the individual is filing for a complete liquidation, Chapter 7, forms for possible exemption of assets will need to be filled out if the debtor plans to keep any of their personal belongings.
In all cases, the debtor will be required to file bankruptcy forms regarding a statement of petition, a list of creditors, personal income, personal property, and Declaration of penalty under perjury. These forms will simple let the courts know of the individual or business’ plan to file, the assets the debtor has available, the current available income, and the debtor’s knowledge that lying about finances will have legal consequences.
With the new age of technology, all bankruptcy forms are available through the United States court system at http://www.uscourts.gov/bkforms/bankruptcy_forms.html. Of course the availability of the forms does not necessarily mean that all individuals or businesses will clearly understand which forms apply to them. If you are confused about which forms to fill out, don’t be afraid to ask the court system for help.
Unfortunately the court system may be overwhelmed with other cases they feel are more important making it difficult to find answers to bankruptcy form questions. In this case, you can always consult with a legal aide, a bankruptcy attorney or even a financial service organization that can help you understand the paperwork better.
Even if you don’t plan on hiring an attorney to handle the case for you, it may be worth the time and energy to consult them regarding the paperwork that goes along with the process. You may also want to consider a bankruptcy service organizations online, which can help answer questions and guide debtors through the process.
Keep in mind that each state court system has secretaries available who can type up the forms for you, although there will be an additional charge for this service. Most law firm or legal aide organizations have similar services that may be beneficial in helping debtors get through the process of filing bankruptcy forms.
http://www.articleson.com/Article/Bankruptcy-Forms--Having-The-Right-Ones/6345
If you are an individual who is filing for bankruptcy, most likely you will be filling out bankruptcy forms specifically dealing with either Chapter 7 or Chapter 13. Even as a business you may be filing for Chapter 7 or Chapter 13, although you may be filing for Chapter 11 as well. In any case, there are separate forms that need to be filled out with each particular chapter stating the intention to file bankruptcy under that chapter.
The individual or business may also have other special bankruptcy forms that go along with a particular chapter. For instance, Chapter 13 and Chapter 11 are reorganization chapters and will require a form that discusses how and when creditors will gather to meet and discuss the finances of the individual or business for repayment plans. If the individual is filing for a complete liquidation, Chapter 7, forms for possible exemption of assets will need to be filled out if the debtor plans to keep any of their personal belongings.
In all cases, the debtor will be required to file bankruptcy forms regarding a statement of petition, a list of creditors, personal income, personal property, and Declaration of penalty under perjury. These forms will simple let the courts know of the individual or business’ plan to file, the assets the debtor has available, the current available income, and the debtor’s knowledge that lying about finances will have legal consequences.
With the new age of technology, all bankruptcy forms are available through the United States court system at http://www.uscourts.gov/bkforms/bankruptcy_forms.html. Of course the availability of the forms does not necessarily mean that all individuals or businesses will clearly understand which forms apply to them. If you are confused about which forms to fill out, don’t be afraid to ask the court system for help.
Unfortunately the court system may be overwhelmed with other cases they feel are more important making it difficult to find answers to bankruptcy form questions. In this case, you can always consult with a legal aide, a bankruptcy attorney or even a financial service organization that can help you understand the paperwork better.
Even if you don’t plan on hiring an attorney to handle the case for you, it may be worth the time and energy to consult them regarding the paperwork that goes along with the process. You may also want to consider a bankruptcy service organizations online, which can help answer questions and guide debtors through the process.
Keep in mind that each state court system has secretaries available who can type up the forms for you, although there will be an additional charge for this service. Most law firm or legal aide organizations have similar services that may be beneficial in helping debtors get through the process of filing bankruptcy forms.
http://www.articleson.com/Article/Bankruptcy-Forms--Having-The-Right-Ones/6345
Bankruptcy Law: Some Important Facts
As applying for loans, credit cards and other forms of credit are easier to come by, so are the bankruptcy rates in the United States. In a ten year period, between 1994 and 2004, bankruptcy rates in the United States nearly doubled. The government’s reaction was to take a closer look at reasons parties were filing for bankruptcy, new laws were instated to ensure that individuals and businesses had valid reasons for applying for bankruptcy.
One of the primary laws regarding bankruptcy that was passed in the United States in 2004 is the Bankruptcy Abuse Prevention and Consumer Protection Act. This law just went into effect in October 2005, but has already caused quite a stir in the financial and bankruptcy law arenas. Besides making it more difficult to qualify for Chapter 7 bankruptcy, or complete bankruptcy, the law imposes stricter rules and budgets on Chapter 13 debtors.
A major change the law makes throughout the United States is the need for debtors to have filed tax returns for four years in a row before qualifying for bankruptcy. As well, dischargeable debts, or those debts where personal liability is taken away by the court system, is more difficult to come by. The Act requires that debtors prove good reason for dischargeable debt and is even requiring more debtors to take responsibility with non-dischargeable debt budgets.
As far as the two major types of bankruptcy laws are concerned, Chapter 13 bankruptcy is that which allows the debtor to keep some assets upon proving only limited debt and a steady income. This bankruptcy is excellent for those debtors who have gotten themselves into major financial difficulty but still have means of paying for some assets. The court will set up a repayment schedule and budget that allows for full repayment of mortgages or cars within three to five years.
If repayment is simply not an option, the bankruptcy law requires that a debtor will file for Chapter 7 bankruptcy. This is often referred to as complete liquidation of assets, except for exempt items. Exempt items in a bankruptcy hearing are determined by the court and are usually items that are a necessity, such as a car or work related items. As well, the courts will distribute debts into two categories: non-dischargeable and dischargeable debt.
Non-dischargeable debts also fall into two categories: non-dischargeable due to wrongful conduct on the debtor and non-dischargeable due to public policy. Wrongful misconduct by the debtor could mean theft or laundering money while public policy could include child support payment or court related judgments.
Keep in mind that in either type of bankruptcy, an individual is almost always required to still pay for taxes, student loans, alimony, child support or court related fees. This is the place where many bankrupt parties are misled in the Chapter 7 bankruptcy, as it is often referred to as "a fresh start". While the court can set up payment plans to help the debtor repay public policy debts, even Chapter 7 debtors will still be required to make payments.
Another major point regarding bankruptcy law is that a bankruptcy will stay on a credit report for approximately ten years. This will make it extremely difficult to become eligible for any type of credit, even a credit card, but especially for a car loan or a house mortgage. While some creditors will still offer limited credit to bankrupt individuals, the interest rates and finance charges are usually through the roof. This makes it even more difficult for debtors to get back on their feet.
Last but not least, keep in mind that bankruptcy law will require any co-signers to be responsible for debt payments. If mom or dad signed for a car loan when you were young and you still owe on that car, they are liable for payments. These friends or family members who were once doing you a favor may be brought into the bankruptcy law court proceedings, which can put a strain on friendships and family relations.
For specific bankruptcy law questions it is best to contact a bankruptcy attorney or legal aide in your county or state. Bankruptcy laws and proceedings may vary slightly from state to state, so be sure to make contacts in the state where you plan to file for bankruptcy.
http://www.articleson.com/Article/Bankruptcy-Law--Some-Important-Facts/8564
One of the primary laws regarding bankruptcy that was passed in the United States in 2004 is the Bankruptcy Abuse Prevention and Consumer Protection Act. This law just went into effect in October 2005, but has already caused quite a stir in the financial and bankruptcy law arenas. Besides making it more difficult to qualify for Chapter 7 bankruptcy, or complete bankruptcy, the law imposes stricter rules and budgets on Chapter 13 debtors.
A major change the law makes throughout the United States is the need for debtors to have filed tax returns for four years in a row before qualifying for bankruptcy. As well, dischargeable debts, or those debts where personal liability is taken away by the court system, is more difficult to come by. The Act requires that debtors prove good reason for dischargeable debt and is even requiring more debtors to take responsibility with non-dischargeable debt budgets.
As far as the two major types of bankruptcy laws are concerned, Chapter 13 bankruptcy is that which allows the debtor to keep some assets upon proving only limited debt and a steady income. This bankruptcy is excellent for those debtors who have gotten themselves into major financial difficulty but still have means of paying for some assets. The court will set up a repayment schedule and budget that allows for full repayment of mortgages or cars within three to five years.
If repayment is simply not an option, the bankruptcy law requires that a debtor will file for Chapter 7 bankruptcy. This is often referred to as complete liquidation of assets, except for exempt items. Exempt items in a bankruptcy hearing are determined by the court and are usually items that are a necessity, such as a car or work related items. As well, the courts will distribute debts into two categories: non-dischargeable and dischargeable debt.
Non-dischargeable debts also fall into two categories: non-dischargeable due to wrongful conduct on the debtor and non-dischargeable due to public policy. Wrongful misconduct by the debtor could mean theft or laundering money while public policy could include child support payment or court related judgments.
Keep in mind that in either type of bankruptcy, an individual is almost always required to still pay for taxes, student loans, alimony, child support or court related fees. This is the place where many bankrupt parties are misled in the Chapter 7 bankruptcy, as it is often referred to as "a fresh start". While the court can set up payment plans to help the debtor repay public policy debts, even Chapter 7 debtors will still be required to make payments.
Another major point regarding bankruptcy law is that a bankruptcy will stay on a credit report for approximately ten years. This will make it extremely difficult to become eligible for any type of credit, even a credit card, but especially for a car loan or a house mortgage. While some creditors will still offer limited credit to bankrupt individuals, the interest rates and finance charges are usually through the roof. This makes it even more difficult for debtors to get back on their feet.
Last but not least, keep in mind that bankruptcy law will require any co-signers to be responsible for debt payments. If mom or dad signed for a car loan when you were young and you still owe on that car, they are liable for payments. These friends or family members who were once doing you a favor may be brought into the bankruptcy law court proceedings, which can put a strain on friendships and family relations.
For specific bankruptcy law questions it is best to contact a bankruptcy attorney or legal aide in your county or state. Bankruptcy laws and proceedings may vary slightly from state to state, so be sure to make contacts in the state where you plan to file for bankruptcy.
http://www.articleson.com/Article/Bankruptcy-Law--Some-Important-Facts/8564
The New Bankruptcy Means Test Explained in Plain English
With the new bankruptcy law in effect since October 17, 2005, there is a lot of confusion with regard to the new "means test" requirement. The means test will be used by the courts to determine eligibility for Chapter 7 or Chapter 13 bankruptcy. The purpose of this article is to explain in plain language how the means test works, so that consumers can get a better idea of how they will be affected under the new rules.
When most people think of bankruptcy, they think in terms of Chapter 7, where unsecured debts are normally discharged in full. Bankruptcy of any variety is a difficult ordeal at best, but at least with Chapter 7, a debtor was able to wipe out their debts in full and get a fresh start. Chapter 13, however, is another story, since the debtor must pay back a significant portion of the debt over a 3-5 year period, with 5 years being the standard under the new law.
Prior to the advent of the "Bankruptcy Abuse Prevention and Consumer Protection Act of 2005," the most common reason for someone to file under Chapter 13 was to avoid the loss of equity in their home or other property. And while equity protection will continue to be a big reason for people to choose Chapter 13 over Chapter 7, the new rules will force many people to file under Chapter 13 even if they have NO equity. That's because the means test will take into account the debtor's income level.
To apply the means test, the courts will look at the debtor's average income for the 6 months prior to filing and compare it to the median income for that state. For example, the median annual income for a single wage-earner in California is $42,012. If the income is below the median, then Chapter 7 remains open as an option. If the income exceeds the median, the remaining parts of the means test will be applied.
This is where it gets a little bit trickier. The next step in the calculation takes income less living expenses (excluding payments on the debts included in the bankruptcy), and multiplies that figure times 60. This represents the amount of income available over a 5-year period for repayment of the debt obligations.
If the income available for debt repayment over that 5-year period is $10,000 or more, then Chapter 13 will be required. In other words, anyone earning above the state median, and with at least $166.67 per month of available income, will automatically be denied Chapter 7. So for example, if the court determines that you have $200 per month income above living expenses, $200 times 60 is $12,000. Since $12,000 is above $10,000, you're stuck with Chapter 13.
What happens if you are above the median income but do NOT have at least $166.67 per month to pay toward your debts? Then the final part of the means test is applied. If the available income is less than $100 per month, then Chapter 7 again becomes an option. If the available income is between $100 and $166.66, then it is measured against the debt as a percentage, with 25% being the benchmark.
In other words, let's say your income is above the median, your debt is $50,000, and you only have $125 of available monthly income. We take $125 times 60 months (5 years), which equals $7,500 total. Since $7,500 is less than 25% of your $50,000 debt, Chapter 7 is still a possible option for you. If your debt was only $25,000, then your $7,500 of available income would exceed 25% of your debt and you would be required to file under Chapter 13.
To sum up, first figure out whether you are above or below the median income for your state - median income figures are available at http://www.new-bankruptcy-law-info.com. Be sure to account for your spouse's income if you are a two-income family. Next, deduct your average monthly living expenses from your monthly income and multiply by 60. If the result is above $10,000, you're stuck with Chapter 13. If the result is below $6,000, you may still be able to file Chapter 7. If the result is between $6,000 and $10,000, compare it to 25% of your debt. Above 25%, you're looking at Chapter 13 for sure.
Now, in these examples, I have ignored a very important aspect of the new bankruptcy law. As stated above, the amount of monthly income available toward debt repayment is determined by subtracting living expenses from income. However, the figures used by the court for living expenses are NOT your actual documented living expenses, but rather the schedules used by the IRS in the collection of taxes.
A big problem here for most consumers is that their household budgets will not reflect the harsh reality of the IRS approved numbers. So even if you think you are "safe," and will be able to file Chapter 7 because you don't have $100 per month to spare, the court may rule otherwise and still force you into Chapter 13. Some of your actual expenses may be disallowed.
What remains to be seen is how the courts will handle cases where the cost of mortgages or home rentals are inflated well above the government schedules. Will debtors be expected to move into cheaper housing to meet the court's required schedule for living expenses? No one has any answers to these questions yet. It will be up to the courts to interpret the new law in practice as cases proceed through the system.
http://www.articleson.com/Article/The-New-Bankruptcy-Means-Test-Explained-in-Plain-English/9157
When most people think of bankruptcy, they think in terms of Chapter 7, where unsecured debts are normally discharged in full. Bankruptcy of any variety is a difficult ordeal at best, but at least with Chapter 7, a debtor was able to wipe out their debts in full and get a fresh start. Chapter 13, however, is another story, since the debtor must pay back a significant portion of the debt over a 3-5 year period, with 5 years being the standard under the new law.
Prior to the advent of the "Bankruptcy Abuse Prevention and Consumer Protection Act of 2005," the most common reason for someone to file under Chapter 13 was to avoid the loss of equity in their home or other property. And while equity protection will continue to be a big reason for people to choose Chapter 13 over Chapter 7, the new rules will force many people to file under Chapter 13 even if they have NO equity. That's because the means test will take into account the debtor's income level.
To apply the means test, the courts will look at the debtor's average income for the 6 months prior to filing and compare it to the median income for that state. For example, the median annual income for a single wage-earner in California is $42,012. If the income is below the median, then Chapter 7 remains open as an option. If the income exceeds the median, the remaining parts of the means test will be applied.
This is where it gets a little bit trickier. The next step in the calculation takes income less living expenses (excluding payments on the debts included in the bankruptcy), and multiplies that figure times 60. This represents the amount of income available over a 5-year period for repayment of the debt obligations.
If the income available for debt repayment over that 5-year period is $10,000 or more, then Chapter 13 will be required. In other words, anyone earning above the state median, and with at least $166.67 per month of available income, will automatically be denied Chapter 7. So for example, if the court determines that you have $200 per month income above living expenses, $200 times 60 is $12,000. Since $12,000 is above $10,000, you're stuck with Chapter 13.
What happens if you are above the median income but do NOT have at least $166.67 per month to pay toward your debts? Then the final part of the means test is applied. If the available income is less than $100 per month, then Chapter 7 again becomes an option. If the available income is between $100 and $166.66, then it is measured against the debt as a percentage, with 25% being the benchmark.
In other words, let's say your income is above the median, your debt is $50,000, and you only have $125 of available monthly income. We take $125 times 60 months (5 years), which equals $7,500 total. Since $7,500 is less than 25% of your $50,000 debt, Chapter 7 is still a possible option for you. If your debt was only $25,000, then your $7,500 of available income would exceed 25% of your debt and you would be required to file under Chapter 13.
To sum up, first figure out whether you are above or below the median income for your state - median income figures are available at http://www.new-bankruptcy-law-info.com. Be sure to account for your spouse's income if you are a two-income family. Next, deduct your average monthly living expenses from your monthly income and multiply by 60. If the result is above $10,000, you're stuck with Chapter 13. If the result is below $6,000, you may still be able to file Chapter 7. If the result is between $6,000 and $10,000, compare it to 25% of your debt. Above 25%, you're looking at Chapter 13 for sure.
Now, in these examples, I have ignored a very important aspect of the new bankruptcy law. As stated above, the amount of monthly income available toward debt repayment is determined by subtracting living expenses from income. However, the figures used by the court for living expenses are NOT your actual documented living expenses, but rather the schedules used by the IRS in the collection of taxes.
A big problem here for most consumers is that their household budgets will not reflect the harsh reality of the IRS approved numbers. So even if you think you are "safe," and will be able to file Chapter 7 because you don't have $100 per month to spare, the court may rule otherwise and still force you into Chapter 13. Some of your actual expenses may be disallowed.
What remains to be seen is how the courts will handle cases where the cost of mortgages or home rentals are inflated well above the government schedules. Will debtors be expected to move into cheaper housing to meet the court's required schedule for living expenses? No one has any answers to these questions yet. It will be up to the courts to interpret the new law in practice as cases proceed through the system.
http://www.articleson.com/Article/The-New-Bankruptcy-Means-Test-Explained-in-Plain-English/9157
Bankruptcy Lawyer: When to Hire One
If you are having difficulties with finances and are considering debt consolidation or bankruptcy, you may also be considering hiring a bankruptcy lawyer. Of course for those who are in a financial rut or on the verge of financial ruin, coming up with extra funds to pay a bankruptcy lawyer can be downright impossible. Despite the shortage of money, it is often best to still consider at least consulting with a bankruptcy lawyer before you begin the process.
The main purpose of a bankruptcy lawyer is to help an individual or business go through the legal procedures for filing bankruptcy. Lawyers are meant to help deal with creditors, meet with the court systems to set up payment plans or repayment programs, gather together and liquidate assets, and fill out and file necessary paperwork. Just as a realtor would be the knowledgeable party in the selling or buying of a home, a bankruptcy lawyer will be that knowledgeable source during a bankruptcy proceeding.
In most state and county legal systems, you are not required to have a bankruptcy lawyer for the legal proceedings. This does not always mean it is wise to do without a bankruptcy lawyer, though, as most specialize in just financial law. Unless the court case would be easily cut and dry or you already know a great deal about the legal system in this case, a bankruptcy lawyer can help from becoming overwhelmed with the legalities of the system.
From the start, a good bankruptcy lawyer should help you to determine which chapter of bankruptcy to file and will offer sound reasons why. If you don’t know anything about the different chapters, this is an excellent reason to begin consulting a lawyer. Many lawyers will even offer a free consultation where you can simply claim the advice and move on to take care of the remainder of the case yourself. Often, though, lawyers will charge by visit or by activity, such as appearing at the courthouse or filing paperwork.
Keep in mind that not all bankruptcy lawyers specialize in the same type of cases, so it is important to find a lawyer who can help you with the type of financial difficulties you are having. Some bankruptcy lawyers work specifically with businesses, while others work solely with individuals. Having a good experience with your lawyer will undoubtedly include finding someone knowledgeable in the areas you need expertise.
Another excellent reason to consider hiring a bankruptcy lawyer is simply to have someone knowledgeable who can help guide you through the paperwork process. In bankruptcy cases the paperwork is the most overwhelming aspect and more often than not, bankruptcy lawyers will actually fill out and file all of the paperwork for you. This takes away the burden of dealing with paperwork in the middle of a financially and emotionally straining time.
If you decide that hiring a bankruptcy lawyer is right for you, ask the local court house for names of lawyers in the area. You may also want to consider asking trusted friends or family advice for finding bankruptcy lawyers. If all else fails, take advantage of technology and research cases in your area to see which bankruptcy lawyers most often represent individuals or businesses. This is a great way to determine who the best lawyers are for your financial needs.
http://www.articleson.com/Article/Bankruptcy-Lawyer--When-to-Hire-One/9185
The main purpose of a bankruptcy lawyer is to help an individual or business go through the legal procedures for filing bankruptcy. Lawyers are meant to help deal with creditors, meet with the court systems to set up payment plans or repayment programs, gather together and liquidate assets, and fill out and file necessary paperwork. Just as a realtor would be the knowledgeable party in the selling or buying of a home, a bankruptcy lawyer will be that knowledgeable source during a bankruptcy proceeding.
In most state and county legal systems, you are not required to have a bankruptcy lawyer for the legal proceedings. This does not always mean it is wise to do without a bankruptcy lawyer, though, as most specialize in just financial law. Unless the court case would be easily cut and dry or you already know a great deal about the legal system in this case, a bankruptcy lawyer can help from becoming overwhelmed with the legalities of the system.
From the start, a good bankruptcy lawyer should help you to determine which chapter of bankruptcy to file and will offer sound reasons why. If you don’t know anything about the different chapters, this is an excellent reason to begin consulting a lawyer. Many lawyers will even offer a free consultation where you can simply claim the advice and move on to take care of the remainder of the case yourself. Often, though, lawyers will charge by visit or by activity, such as appearing at the courthouse or filing paperwork.
Keep in mind that not all bankruptcy lawyers specialize in the same type of cases, so it is important to find a lawyer who can help you with the type of financial difficulties you are having. Some bankruptcy lawyers work specifically with businesses, while others work solely with individuals. Having a good experience with your lawyer will undoubtedly include finding someone knowledgeable in the areas you need expertise.
Another excellent reason to consider hiring a bankruptcy lawyer is simply to have someone knowledgeable who can help guide you through the paperwork process. In bankruptcy cases the paperwork is the most overwhelming aspect and more often than not, bankruptcy lawyers will actually fill out and file all of the paperwork for you. This takes away the burden of dealing with paperwork in the middle of a financially and emotionally straining time.
If you decide that hiring a bankruptcy lawyer is right for you, ask the local court house for names of lawyers in the area. You may also want to consider asking trusted friends or family advice for finding bankruptcy lawyers. If all else fails, take advantage of technology and research cases in your area to see which bankruptcy lawyers most often represent individuals or businesses. This is a great way to determine who the best lawyers are for your financial needs.
http://www.articleson.com/Article/Bankruptcy-Lawyer--When-to-Hire-One/9185
Some Important Bankruptcy Information
It seems as if a lot of people are going bankrupt, if you think about it. A lot of famous people, as well as regular citizens. It is not the end of the world, and you can always earn back the money. As long as you have substantial bankruptcy information, you can get quality advice on how to get back on your feet, in case anything happens. This kind of bankruptcy information makes us confident about ourselves. You know that a lot of people have come upon the same difficulties that you are experiencing. This can be comforting.
There are a lot of self-help books, which help us deal with money problems. If you use one, you will discover that so many others used to have the same trouble that you have now. Especially the do-it-yourself bankruptcies are long, and heavily detailed. They comprise a lot of vital legal bankruptcy information. They are different for each state, because of the judicial practices in the case of bankruptcy. It tends to differ in different countries, as well as in different states. They give you information about everything: the petitioner reports (in a series of forms), assets, liabilities, and offers, as well as full disclosure of information on all creditors—names, addresses, phone numbers, amounts owed, etc..
Bankruptcy information can be given to anyone. You need to know important things about debtors, credits, financial support, interest rates and so on. A lot of bankruptcy information is dedicated to debt taking. You need to be careful when you take debts: consider such things as interests, period of re-pay, bank information and so on. Pick up from where you want to take debts, and make sure your debtors have put strict conditions about the whole debt-taking thing. When you have these pieces of information in mind, you may be sure that you will never go in the red. Bankruptcy can be avoided as long as you plan every single financial step you take in advance.
http://www.articleson.com/Article/Some-Important-Bankruptcy-Information/17689
There are a lot of self-help books, which help us deal with money problems. If you use one, you will discover that so many others used to have the same trouble that you have now. Especially the do-it-yourself bankruptcies are long, and heavily detailed. They comprise a lot of vital legal bankruptcy information. They are different for each state, because of the judicial practices in the case of bankruptcy. It tends to differ in different countries, as well as in different states. They give you information about everything: the petitioner reports (in a series of forms), assets, liabilities, and offers, as well as full disclosure of information on all creditors—names, addresses, phone numbers, amounts owed, etc..
Bankruptcy information can be given to anyone. You need to know important things about debtors, credits, financial support, interest rates and so on. A lot of bankruptcy information is dedicated to debt taking. You need to be careful when you take debts: consider such things as interests, period of re-pay, bank information and so on. Pick up from where you want to take debts, and make sure your debtors have put strict conditions about the whole debt-taking thing. When you have these pieces of information in mind, you may be sure that you will never go in the red. Bankruptcy can be avoided as long as you plan every single financial step you take in advance.
http://www.articleson.com/Article/Some-Important-Bankruptcy-Information/17689
How Do You Rebuild Your Credit After Bankruptcy So You Can Get Your Finances Back Together Again? -
There's no need to be worried about rebuilding credit after bankruptcy. In this article, I will give you some general advice about how to find your way back to the top.
What filing bankruptcy is all about
Bankruptcy is a legal procedure whereby a person in debt can crawl out from under it and start again. The idea behind the personal bankruptcy law is to help out those who are in dire financial straits, and are in debt over their heads. The result is that you do not have to pay back most of your debts. When you file bankruptcy, you are debt free and can move on. The drawback is that it leaves a nasty stain on your credit report and this will remain for the next ten years. This makes it harder but not impossible to reestablish yourself and recover.
Do I really have to wait another ten years before I can get a loan again?
No. As a matter of fact it is possible to get credit again. However, it will be a bit more difficult. One possibility is to get a protected or pre-paid credit card which can be used by depositing money into it, like a bank debit card. This can help you rebuild your credit again, and establish yourself. After a while it can help you start to get loans and credit again before the ten years is up.
What about my debts?
One of the best things about filing is that it gets rid of the creditors once and for all. You won't be bothered with them anymore. As soon as all the paperwork is in and processed, it is illegal for them to keep harassing you, which means you have the law on your side!
Will everybody know that I filed?
No. Very few will actually know about it. However, since the file is accessible to the public it will be visible on your credit rating, and will be kept on file for ten years.
What are the changes I've been hearing about?
The original laws were passed in 1978, and were revised in 2005. The general idea of the new legislation is to make people
who CAN pay some of their debts pay. The laws were being abused by those who could have paid. Here are the major changes that went into effect last year:
-You have to meet certain requirements in order to be able to file. This means that you will be checked out and they will see if your family has an income over the state average. They also want secure that your family is able to make the regular payments.
-You must submit your last year's tax return, in addition to all the other paperwork.
-You must have lived in the state in which you file for at least two years. The reason is that some states have more or less lenient laws.
-Alimony and child support are the debts that have to be paid first.
http://www.articleson.com/Article/How-Do-You-Rebuild-Your--Credit-After-Bankruptcy-So-You-Can-Get-Your-Finances-Back-Together-Again-/21988
What filing bankruptcy is all about
Bankruptcy is a legal procedure whereby a person in debt can crawl out from under it and start again. The idea behind the personal bankruptcy law is to help out those who are in dire financial straits, and are in debt over their heads. The result is that you do not have to pay back most of your debts. When you file bankruptcy, you are debt free and can move on. The drawback is that it leaves a nasty stain on your credit report and this will remain for the next ten years. This makes it harder but not impossible to reestablish yourself and recover.
Do I really have to wait another ten years before I can get a loan again?
No. As a matter of fact it is possible to get credit again. However, it will be a bit more difficult. One possibility is to get a protected or pre-paid credit card which can be used by depositing money into it, like a bank debit card. This can help you rebuild your credit again, and establish yourself. After a while it can help you start to get loans and credit again before the ten years is up.
What about my debts?
One of the best things about filing is that it gets rid of the creditors once and for all. You won't be bothered with them anymore. As soon as all the paperwork is in and processed, it is illegal for them to keep harassing you, which means you have the law on your side!
Will everybody know that I filed?
No. Very few will actually know about it. However, since the file is accessible to the public it will be visible on your credit rating, and will be kept on file for ten years.
What are the changes I've been hearing about?
The original laws were passed in 1978, and were revised in 2005. The general idea of the new legislation is to make people
who CAN pay some of their debts pay. The laws were being abused by those who could have paid. Here are the major changes that went into effect last year:
-You have to meet certain requirements in order to be able to file. This means that you will be checked out and they will see if your family has an income over the state average. They also want secure that your family is able to make the regular payments.
-You must submit your last year's tax return, in addition to all the other paperwork.
-You must have lived in the state in which you file for at least two years. The reason is that some states have more or less lenient laws.
-Alimony and child support are the debts that have to be paid first.
http://www.articleson.com/Article/How-Do-You-Rebuild-Your--Credit-After-Bankruptcy-So-You-Can-Get-Your-Finances-Back-Together-Again-/21988
The Growing Wave of Bankruptcies
Are you fond of using credit cards? If you are then I know you are aware that you have to be careful when using them. I’m a big spender and I often use credit cards to buy any item that catches my fancy. The problem is that I was getting so carried away with my shopping that I did not realize that I accumulated close to $20,000 in debts. As a result of my spending habits, I was having a hard time keeping up with paying my monthly bills. I was so worried with my predicament that when that new laws for bankruptcies were being passed, I was tempted to file.
Since the deadline for filing bankruptcies before the implementation of the new laws was approaching and I have yet to make a decision about filing, I decided to talk it over with my husband. After a long discussion I decided that I would not do it. I realized that I have to take responsibility for being careless with using credit cards. My conscience just couldn’t bear taking the easy way out. I was disgusted when I heard that a friend chose to file despite only having a few thousand in debts. They even have the nerve to purchase a brand new car and to go on a cruise on some tropical island before they filed. Since they charged the car and the cruise, they were able to enjoy them for free.
News about the passing of the new laws caused a 30% increase in the number of bankruptcies filed in 2005. More than two million people filed for personal bankruptcies, making it the highest number ever filed in a one year period. Those statistics means that millions of people found themselves in deep financial trouble last year. A number of reasons have been given for having severe debts including job loss, credit cards, and medical bills. Among them high medical bills seems to be the most frequent cause of huge debts. It just goes to show how important it is to have adequate health care. A major accident or illness can quickly put you into insurmountable debts.
Hopefully the new laws will be able to discourage people from taking advantage of filing bankruptcies. They should encourage people to be more responsible with their money. Filing will not bail them out from spending money on unnecessary furniture or luxury cruises. On the other hand the laws can also make it tougher for people who acquire uncontrollable debts from unexpected mishaps. Be more responsible with using credit cards and make sure that you keep an eye on your financial situation to avoid the complications of filing for bankruptcies.
http://www.articleson.com/Article/The-Growing-Wave-of-Bankruptcies/24508
Since the deadline for filing bankruptcies before the implementation of the new laws was approaching and I have yet to make a decision about filing, I decided to talk it over with my husband. After a long discussion I decided that I would not do it. I realized that I have to take responsibility for being careless with using credit cards. My conscience just couldn’t bear taking the easy way out. I was disgusted when I heard that a friend chose to file despite only having a few thousand in debts. They even have the nerve to purchase a brand new car and to go on a cruise on some tropical island before they filed. Since they charged the car and the cruise, they were able to enjoy them for free.
News about the passing of the new laws caused a 30% increase in the number of bankruptcies filed in 2005. More than two million people filed for personal bankruptcies, making it the highest number ever filed in a one year period. Those statistics means that millions of people found themselves in deep financial trouble last year. A number of reasons have been given for having severe debts including job loss, credit cards, and medical bills. Among them high medical bills seems to be the most frequent cause of huge debts. It just goes to show how important it is to have adequate health care. A major accident or illness can quickly put you into insurmountable debts.
Hopefully the new laws will be able to discourage people from taking advantage of filing bankruptcies. They should encourage people to be more responsible with their money. Filing will not bail them out from spending money on unnecessary furniture or luxury cruises. On the other hand the laws can also make it tougher for people who acquire uncontrollable debts from unexpected mishaps. Be more responsible with using credit cards and make sure that you keep an eye on your financial situation to avoid the complications of filing for bankruptcies.
http://www.articleson.com/Article/The-Growing-Wave-of-Bankruptcies/24508
Credit Can Be Repaired - Use The Three Bandages for Life after Bankruptcy
Millions of Americans are forced to declare bankruptcy every year, but even if you're one of those people, you can begin immediately to rebuild your damaged credit by taking a few relatively easy steps. Here are some ideas to help you get on with your life after bankruptcy:
1. Pay all of your bills on time from now on. Make a pact with yourself never to be late with a payment again. It may require some stricter discipline than you have been used to, but it will go a long way toward reestablishing your creditworthiness in the eyes of potential creditors like banks and credit card companies.
2. Monitor credit applications. Although it will be tempting to do because you'll be eager to get another credit card, resist the temptation to apply for a lot of new credit. Making a bunch of credit applications all at once actually can lower your credit score and make it harder to secure new lines of credit.
3. Get a Secured credit card. Whether you love them or hate them, credit cards are a necessity in today’s world, even if you don't actually plan to use them. There are many things you simply can't do if you don't have a Visa card or other major credit card, such as rent a car, since rental companies will require you to show them a credit card even if you're paying cash. Since that's the reality of the modern world, look into getting a secured credit card.
Secured credit cards require you to put a certain amount of money into an account (typically between $300 and $500), which is then considered as collateral for your purchases using the card. You're then allowed to charge any amount of money on your card, up to the amount you have in your account, and repay it in monthly installments.
The nice thing about secured cards is that they look no different from any other card, so you can use them as ID or to make purchases (as long as you don't go over your limit) and they allow you to begin reestablishing your credit by showing that you can make payments in a timely fashion, regardless of your previous history. As you begin to prove your creditworthiness, you may be rewarded with an increase in the amount you can charge that’s above what you have in your account.
A good place to begin your search for your first secured credit card is through your local credit union. They're often more flexible than banks, and a number of them will actually waive the annual fee that most secured cards charge. If you aren't a member of a credit union, shop hard for your secured card, because there are wide variations in the terms, fees, interest rates, and requirements. Some companies will even charge you a fee just to apply for a card!
You can begin rebuilding your credit almost immediately following a bankruptcy, but it will take time and a commitment to handle your finances more carefully in the future. It just takes self-control and discipline.
http://www.articleson.com/Article/Credit-Can-Be-Repaired---Use-The-Three-Bandages-for-Life-after-Bankruptcy/28568
1. Pay all of your bills on time from now on. Make a pact with yourself never to be late with a payment again. It may require some stricter discipline than you have been used to, but it will go a long way toward reestablishing your creditworthiness in the eyes of potential creditors like banks and credit card companies.
2. Monitor credit applications. Although it will be tempting to do because you'll be eager to get another credit card, resist the temptation to apply for a lot of new credit. Making a bunch of credit applications all at once actually can lower your credit score and make it harder to secure new lines of credit.
3. Get a Secured credit card. Whether you love them or hate them, credit cards are a necessity in today’s world, even if you don't actually plan to use them. There are many things you simply can't do if you don't have a Visa card or other major credit card, such as rent a car, since rental companies will require you to show them a credit card even if you're paying cash. Since that's the reality of the modern world, look into getting a secured credit card.
Secured credit cards require you to put a certain amount of money into an account (typically between $300 and $500), which is then considered as collateral for your purchases using the card. You're then allowed to charge any amount of money on your card, up to the amount you have in your account, and repay it in monthly installments.
The nice thing about secured cards is that they look no different from any other card, so you can use them as ID or to make purchases (as long as you don't go over your limit) and they allow you to begin reestablishing your credit by showing that you can make payments in a timely fashion, regardless of your previous history. As you begin to prove your creditworthiness, you may be rewarded with an increase in the amount you can charge that’s above what you have in your account.
A good place to begin your search for your first secured credit card is through your local credit union. They're often more flexible than banks, and a number of them will actually waive the annual fee that most secured cards charge. If you aren't a member of a credit union, shop hard for your secured card, because there are wide variations in the terms, fees, interest rates, and requirements. Some companies will even charge you a fee just to apply for a card!
You can begin rebuilding your credit almost immediately following a bankruptcy, but it will take time and a commitment to handle your finances more carefully in the future. It just takes self-control and discipline.
http://www.articleson.com/Article/Credit-Can-Be-Repaired---Use-The-Three-Bandages-for-Life-after-Bankruptcy/28568
Bankruptcy Not As a Debt Solution
When people are flooded with debts, and they see no way out of their situation, they start thinking bankruptcy could be the only possible solution towards a debt free life. Almost all debtors are not aware of two main points about bankruptcy:
- Bankruptcy is not a wise method for debt solution
- Bankruptcy brings noxious consequences, affecting financial and social status
Here is a list of the aforementioned noxious consequences:
1. A bankruptcy filing remains on a Credit Report for as long as 10 years, and it also stays on Court Records for as long as 20 years. Thanks to this, your chances of getting a loan and even a job again, will be minimal.
2. You can also lose valuable assets when filing for bankruptcy, or you have to pay the equivalent in money.
3. As we said before, your financial and social status will be deeply affected. People tend to loose faith upon someone who has filed for bankruptcy.
4. If a business owner files for bankruptcy, he will suffer the same consequences as any other person who has filed for bankruptcy. He will not qualify again for a business loan.
5. After declaring bankruptcy, your bank accounts will be closed, credit cards, and everything that has been bought on hired purchase, such as a car or a house will be returned to the owner.
People really need to understand how the bankruptcy process works in order to use it as a last resort, and not as an easy way out.
Not true about Bankruptcy
- Bankruptcy will not get rid of all of your debts. There are some debts that cannot be canceled, such as tax claims, alimony, child support, among others.
- Although bankruptcy relieves the pressure of debt, it still leaves so many consequences that it does not feel like a fresh start. Because of this, bankruptcy is considered a temporary relief.
- Bankruptcy laws are rigorous about including all your accounts. You will not be given the chance to hide any account from the bankruptcy process.
- Bankruptcy turns you into a debt free person at the cost of your assets, either by liquidating them or by putting you into a new payment plan.
http://www.articleson.com/Article/Bankruptcy-Not-As-a-Debt-Solution/29077
- Bankruptcy is not a wise method for debt solution
- Bankruptcy brings noxious consequences, affecting financial and social status
Here is a list of the aforementioned noxious consequences:
1. A bankruptcy filing remains on a Credit Report for as long as 10 years, and it also stays on Court Records for as long as 20 years. Thanks to this, your chances of getting a loan and even a job again, will be minimal.
2. You can also lose valuable assets when filing for bankruptcy, or you have to pay the equivalent in money.
3. As we said before, your financial and social status will be deeply affected. People tend to loose faith upon someone who has filed for bankruptcy.
4. If a business owner files for bankruptcy, he will suffer the same consequences as any other person who has filed for bankruptcy. He will not qualify again for a business loan.
5. After declaring bankruptcy, your bank accounts will be closed, credit cards, and everything that has been bought on hired purchase, such as a car or a house will be returned to the owner.
People really need to understand how the bankruptcy process works in order to use it as a last resort, and not as an easy way out.
Not true about Bankruptcy
- Bankruptcy will not get rid of all of your debts. There are some debts that cannot be canceled, such as tax claims, alimony, child support, among others.
- Although bankruptcy relieves the pressure of debt, it still leaves so many consequences that it does not feel like a fresh start. Because of this, bankruptcy is considered a temporary relief.
- Bankruptcy laws are rigorous about including all your accounts. You will not be given the chance to hide any account from the bankruptcy process.
- Bankruptcy turns you into a debt free person at the cost of your assets, either by liquidating them or by putting you into a new payment plan.
http://www.articleson.com/Article/Bankruptcy-Not-As-a-Debt-Solution/29077
5 Easy Steps to Rebuild Your Credit after Bankruptcy
Bankruptcy often is the last ultimate solution for many debtors who have unbearable debts. With filing a bankruptcy, you will get rid of your debts instantly and relief you from the harassing call of your creditors.
Although bankruptcy has many undesirable consequences such as your bad credit record will remain on your credit report for 7-10 years, but with a little work, you can improve your credit even before these negative records expire. Here are five easy steps you can take to rebuild your credit.
Step 1: Get to know your current credit status
The first step to rebuilding your credit is to look at exactly where you stand. Order all your three credit reports from those three national credit bureaus: TransUnion, Equifax, and Experian. You can order these reports online, it easy and secure.
Print each report and review it closely. Try to understand the information listed in your credit reports and highlight any negative records or inaccuracies that are damaging your credit score.
Step 2: Check the expiration dates
By law, your bad credit record will remain in your credit report for 7 to 10 years, but the exact expiry date might be different among these 3 reports. Your bad record will still remain at your credit report although you have pay off your old debts and discharge from bankruptcy.
Look up the exact date of each of bad records including judgments, liens, charge-offs, late payments, bankruptcy filings, and collection records. You will likely see a major improvement in your credit score when these records expire.
Step 3: Request For Correct On Any Inaccurate Records
If you find inaccurate records, fraudulent accounts, or records that should have expired on you credit reports, you have the right to send a separate dispute letter to each of the credit bureaus to correct your Equifax, Experian, and TransUnion records. The bureaus will initial a 30 days investigation to see whether your requests are valid and if so, they will correct the inaccuracy in your credit report.
Just one note, don't try to dispute any of the positive information listed in your credit reports and it is a waste of time to attempt to dispute these records. Disputing positive information may actually harm your credit scores.
Step 4: Start to create good credits
Since there is no way to remove your bad record from your credit report, the best way to improve your credit score is to add good credits and building up your credit from there. You can easy do this by open up a new credit card from banks like Orchard Bank (Orchard bank has credit card plan designed specially to help people rebuild their credit after bankruptcy).
Use this new credit card responsibly and make the monthly payment timely; with this you are building new history of good credit behavior on your credit report. Over time, you may want to open additional credit card accounts or obtain a loan to boost your credit score even higher.
Step 5: Monitor your progress
Subscribe to a credit card monitoring service or get a credit card monitoring software and use it to track your credit score progress closely. Your credit score should improve steadily as you continue to use credit responsibly and add new positive information to your credit reports.
http://www.articleson.com/Article/5-Easy-Steps-to-Rebuild-Your-Credit-after-Bankruptcy/30000
Although bankruptcy has many undesirable consequences such as your bad credit record will remain on your credit report for 7-10 years, but with a little work, you can improve your credit even before these negative records expire. Here are five easy steps you can take to rebuild your credit.
Step 1: Get to know your current credit status
The first step to rebuilding your credit is to look at exactly where you stand. Order all your three credit reports from those three national credit bureaus: TransUnion, Equifax, and Experian. You can order these reports online, it easy and secure.
Print each report and review it closely. Try to understand the information listed in your credit reports and highlight any negative records or inaccuracies that are damaging your credit score.
Step 2: Check the expiration dates
By law, your bad credit record will remain in your credit report for 7 to 10 years, but the exact expiry date might be different among these 3 reports. Your bad record will still remain at your credit report although you have pay off your old debts and discharge from bankruptcy.
Look up the exact date of each of bad records including judgments, liens, charge-offs, late payments, bankruptcy filings, and collection records. You will likely see a major improvement in your credit score when these records expire.
Step 3: Request For Correct On Any Inaccurate Records
If you find inaccurate records, fraudulent accounts, or records that should have expired on you credit reports, you have the right to send a separate dispute letter to each of the credit bureaus to correct your Equifax, Experian, and TransUnion records. The bureaus will initial a 30 days investigation to see whether your requests are valid and if so, they will correct the inaccuracy in your credit report.
Just one note, don't try to dispute any of the positive information listed in your credit reports and it is a waste of time to attempt to dispute these records. Disputing positive information may actually harm your credit scores.
Step 4: Start to create good credits
Since there is no way to remove your bad record from your credit report, the best way to improve your credit score is to add good credits and building up your credit from there. You can easy do this by open up a new credit card from banks like Orchard Bank (Orchard bank has credit card plan designed specially to help people rebuild their credit after bankruptcy).
Use this new credit card responsibly and make the monthly payment timely; with this you are building new history of good credit behavior on your credit report. Over time, you may want to open additional credit card accounts or obtain a loan to boost your credit score even higher.
Step 5: Monitor your progress
Subscribe to a credit card monitoring service or get a credit card monitoring software and use it to track your credit score progress closely. Your credit score should improve steadily as you continue to use credit responsibly and add new positive information to your credit reports.
http://www.articleson.com/Article/5-Easy-Steps-to-Rebuild-Your-Credit-after-Bankruptcy/30000
Simple Check to Test Your Eligibility for Filling Chapter 7 Bankruptcy
Most people who file for bankruptcy choose Chapter 7 instead of Chapter 13 because it's fast, effective, easy to file, and doesn't require payments over time. Chapter 7 bankruptcy usually takes the least time to complete. The process is over in about 4 to 6 months, commonly requiring only one trip to the courthouse by the person filing for bankruptcy to emerge debt-free.
However not every persons who are seeking of getting debt free by filling bankruptcy will be eligible to file under chapter 7. If you remaining income after subtracting what you will spend on certain allowed expenses and monthly payments for child support, tax debts, secured debts such as a mortgage or car loan, and a few other types of debts is sufficient to support the payment under chapter 13 repayment plan, then, you will not allow to file bankruptcy under chapter 7.
Check Your Eligibility Criteria
The first step to check your eligibility of filling chapter 7 bankruptcy is to measure your average income for past six months against the median income for a family of your size in your state.
Once you have calculated your income, compare it to the median income for your state (You can find the median income by state information from www .usdoj.gov/ust; click the Mean Testing Information). If your calculated average income is less than or equal to the median income of your state, you can file under chapter 7 bankruptcy, else you need to go through another eligibility test, called "Mean Test".
The "Mean Test" based on the outcome from calculated disposable income. To get your disposable income, calculate your average monthly income as describe in above paragraph. From that amount, you subtract both of the following:
* Certain allowed expenses such as clothing, transportation, food and so on; in amounts set by the IRS (Note that this amount may be lower than your actual spending).
* Monthly payments you will have to make on secured and priority debts. Secured debts such as mortgage and/or car loan; priority debts include child support, alimony, tax debts, and wages owed to employees.
If your total monthly disposable income after subtracting these amounts is less than $100, you pass the means test, and will be allowed to file for Chapter 7. If your total disposable income is more than $166.66 then your will automatically force to Chapter 13 unless your have a solid reason with proven facts that you are facing a special circumstances that aren't reflected in the calculations above. You may be allowed to file under chapter 7, but this is a case by case basic.
What if you disposable income fall in between $100 and $166.66? If your disposable income is in this range, you must figure out whether what you have left over is enough to pay more than 25% of your unsecured, non priority debts such as credit cards, student loans and medical bills. If not, you pass the means test, and Chapter 7 remains an option else you have flunked the means test, and will be prohibited from using Chapter 7.
http://www.articleson.com/Article/Simple-Check-to-Test-Your-Eligibility-for-Filling-Chapter-7-Bankruptcy/31210
However not every persons who are seeking of getting debt free by filling bankruptcy will be eligible to file under chapter 7. If you remaining income after subtracting what you will spend on certain allowed expenses and monthly payments for child support, tax debts, secured debts such as a mortgage or car loan, and a few other types of debts is sufficient to support the payment under chapter 13 repayment plan, then, you will not allow to file bankruptcy under chapter 7.
Check Your Eligibility Criteria
The first step to check your eligibility of filling chapter 7 bankruptcy is to measure your average income for past six months against the median income for a family of your size in your state.
Once you have calculated your income, compare it to the median income for your state (You can find the median income by state information from www .usdoj.gov/ust; click the Mean Testing Information). If your calculated average income is less than or equal to the median income of your state, you can file under chapter 7 bankruptcy, else you need to go through another eligibility test, called "Mean Test".
The "Mean Test" based on the outcome from calculated disposable income. To get your disposable income, calculate your average monthly income as describe in above paragraph. From that amount, you subtract both of the following:
* Certain allowed expenses such as clothing, transportation, food and so on; in amounts set by the IRS (Note that this amount may be lower than your actual spending).
* Monthly payments you will have to make on secured and priority debts. Secured debts such as mortgage and/or car loan; priority debts include child support, alimony, tax debts, and wages owed to employees.
If your total monthly disposable income after subtracting these amounts is less than $100, you pass the means test, and will be allowed to file for Chapter 7. If your total disposable income is more than $166.66 then your will automatically force to Chapter 13 unless your have a solid reason with proven facts that you are facing a special circumstances that aren't reflected in the calculations above. You may be allowed to file under chapter 7, but this is a case by case basic.
What if you disposable income fall in between $100 and $166.66? If your disposable income is in this range, you must figure out whether what you have left over is enough to pay more than 25% of your unsecured, non priority debts such as credit cards, student loans and medical bills. If not, you pass the means test, and Chapter 7 remains an option else you have flunked the means test, and will be prohibited from using Chapter 7.
http://www.articleson.com/Article/Simple-Check-to-Test-Your-Eligibility-for-Filling-Chapter-7-Bankruptcy/31210
What are your alternatives for filing bankruptcy?
The term ‘bankruptcy’ conjures up an image of someone publicly disgraced and broke. When in deep debts, one might feel that bankruptcy is their only hope. But bankruptcy alternative can help you eliminate debt without encountering any negative publicity.
Why should you consider bankruptcy alternative?
Bankruptcy has many undesirable consequences that will trail your life for long. It will remain on your credit report for nearly 10 years due to which no reputed lender will consider you as a borrower. There is a lot of negative publicity involved with a bankruptcy as well.
The advent of technology has made available information and help for a debtor who is considering bankruptcy alternative with a simple click. The debtors must research before they choose a bankruptcy alternative to ensure that it does not have much worse consequences.
Bankruptcy Alternatives:
• Consolidation loans: You can consolidate all your debts into one affordable and easy to manage monthly payment with consolidation loans. These loans speed up paying time and reduce your monthly bills to a great extent. Consolidation loans will also help get harassing creditors off your back and help you avoid bankruptcy.
• Out-of-Court Settlement: The debtor can also opt to settle his/her unsecured debt at a reduced amount through an out-of-court settlement. Independent advisors who work with various companies will help negotiate an out-of-court settlement with your creditor.
• Individual Voluntary Agreement (IVA): IVA stands for Individual Voluntary Agreement. It was introduced as a part of the Insolvency Act of 1986 and is a legally approved debt solution. When you opt for an IVA as a debt solution, you enter in to an agreement with your creditors. An Insolvency Practitioner helps to formulate your IVA. It will help freeze your high interest debts and ensure that you are debt free in five years or less without any negative publicity.
• Credit Counseling: Credit counseling agencies will deal with your creditors. They will negotiate lower interest rates and comfortable repayment options to suit your pocket. Credit counseling will offer all the information and help you need to deal with your debts.
Whatever you choose as an alternative to bankruptcy, act fast! There are a number of online services which can help you with your queries. They will be able to achieve the results that you were unable to achieve on your own. Apart from avoiding bankruptcy right now, it is important to understand how you can avoid the pitfalls of debt in the future.
http://www.articleson.com/Article/What-are-your-alternatives-for-filing-bankruptcy-/31546
Why should you consider bankruptcy alternative?
Bankruptcy has many undesirable consequences that will trail your life for long. It will remain on your credit report for nearly 10 years due to which no reputed lender will consider you as a borrower. There is a lot of negative publicity involved with a bankruptcy as well.
The advent of technology has made available information and help for a debtor who is considering bankruptcy alternative with a simple click. The debtors must research before they choose a bankruptcy alternative to ensure that it does not have much worse consequences.
Bankruptcy Alternatives:
• Consolidation loans: You can consolidate all your debts into one affordable and easy to manage monthly payment with consolidation loans. These loans speed up paying time and reduce your monthly bills to a great extent. Consolidation loans will also help get harassing creditors off your back and help you avoid bankruptcy.
• Out-of-Court Settlement: The debtor can also opt to settle his/her unsecured debt at a reduced amount through an out-of-court settlement. Independent advisors who work with various companies will help negotiate an out-of-court settlement with your creditor.
• Individual Voluntary Agreement (IVA): IVA stands for Individual Voluntary Agreement. It was introduced as a part of the Insolvency Act of 1986 and is a legally approved debt solution. When you opt for an IVA as a debt solution, you enter in to an agreement with your creditors. An Insolvency Practitioner helps to formulate your IVA. It will help freeze your high interest debts and ensure that you are debt free in five years or less without any negative publicity.
• Credit Counseling: Credit counseling agencies will deal with your creditors. They will negotiate lower interest rates and comfortable repayment options to suit your pocket. Credit counseling will offer all the information and help you need to deal with your debts.
Whatever you choose as an alternative to bankruptcy, act fast! There are a number of online services which can help you with your queries. They will be able to achieve the results that you were unable to achieve on your own. Apart from avoiding bankruptcy right now, it is important to understand how you can avoid the pitfalls of debt in the future.
http://www.articleson.com/Article/What-are-your-alternatives-for-filing-bankruptcy-/31546
Can You Choose the Type Of Bankruptcy Filling?
In general, you can choose the type of bankruptcy for filling, under certain circumstances you may only eligible for certain type of bankruptcy filling. In most cases, debtors will choose chapter 7 for filling because it's fast, effective, easy to file, and doesn't require payments over time. Chapter 7 bankruptcy usually takes the least time to complete. Other common types of bankruptcy filling include chapter 12 and chapter 13.
Yes, you can choose the type of bankrupt filling but you may not eligible for it. Let see the criteria of filling for a few common bankruptcy types.
Bankruptcy - Chapter 12
If you are a farmer or a fisherman, for instance, you may consider chapter 12 filing. Chapter 12 bankruptcy filling is tailored for "family farmers" or "family fishermen" with "regular annual income". It is more streamlined, less complicated, and less expensive than chapter 11 (bankruptcy filling for large corporate reorganization).
Chapter 12 has allowance for situations in which family farmers or fishermen have income that is seasonal in nature. Thus, debtors with seasonal income will find it to be advantageous to file their bankruptcy under chapter 12. In additional, Relief under chapter 12 is voluntary, and only the debtor may file a petition under the chapter.
Bankruptcy - Chapter 7
Beside the farmer and fishermen, most ordinary debtors will choose chapter 7 as their bankruptcy filling type. The key factors of the popularity of this bankruptcy type are it does not need payments over time, easy to file and less expensive. However not every persons who are seeking of getting debt free by filling bankruptcy will be eligible to file under chapter 7. To be eligible for chapter 7 bankruptcy filling, you must meet the below criteria:
* You must pass the median income test:
You calculated average income must not more than the median income for your state (You can find the median income by state information from www .usdoj.gov/ust; click the Mean Testing Information).
* If you failed the median income test, you second chance for chapter 7 filling is on mean test:
Mean test is calculated based on your disposable income. To get your disposable income, calculate your average monthly income as describe in above paragraph. From that amount, subtract your allowed expenses (stated in IRS) and monthly payments you will have to make on secured and priority debts. If your monthly disposable income after subtracting these amounts is less than $100, you pass the means test, and will be allowed to file for Chapter 7.
Bankruptcy - Chapter 13
You will be forced to file your bankruptcy under chapter 13 if you are not eligible for chapter 7. Or if you have file bankruptcy before under chapter 7, then you need to go for chapter 13 for second bankruptcy filling.
Chapter 13, which has also been known as a wage earner's plan, is an interest-free repayment plan where a debtor repays at least some of his or her unsecured debts with regular payments over five years.
In chapter 7 filling, debtors need to liquidate their assets to pay to their creditors (creditors will share the amount from the liquidation); whereas, the debtor generally can continue to live in his or her home so long as the debtor complies with the terms of the Chapter 13 arrangement. This is one of the advantages of chapter 13 over chapter 7 bankruptcy filling.
http://www.articleson.com/Article/Can-You-Choose-the-Type-Of-Bankruptcy-Filling-/32419
Yes, you can choose the type of bankrupt filling but you may not eligible for it. Let see the criteria of filling for a few common bankruptcy types.
Bankruptcy - Chapter 12
If you are a farmer or a fisherman, for instance, you may consider chapter 12 filing. Chapter 12 bankruptcy filling is tailored for "family farmers" or "family fishermen" with "regular annual income". It is more streamlined, less complicated, and less expensive than chapter 11 (bankruptcy filling for large corporate reorganization).
Chapter 12 has allowance for situations in which family farmers or fishermen have income that is seasonal in nature. Thus, debtors with seasonal income will find it to be advantageous to file their bankruptcy under chapter 12. In additional, Relief under chapter 12 is voluntary, and only the debtor may file a petition under the chapter.
Bankruptcy - Chapter 7
Beside the farmer and fishermen, most ordinary debtors will choose chapter 7 as their bankruptcy filling type. The key factors of the popularity of this bankruptcy type are it does not need payments over time, easy to file and less expensive. However not every persons who are seeking of getting debt free by filling bankruptcy will be eligible to file under chapter 7. To be eligible for chapter 7 bankruptcy filling, you must meet the below criteria:
* You must pass the median income test:
You calculated average income must not more than the median income for your state (You can find the median income by state information from www .usdoj.gov/ust; click the Mean Testing Information).
* If you failed the median income test, you second chance for chapter 7 filling is on mean test:
Mean test is calculated based on your disposable income. To get your disposable income, calculate your average monthly income as describe in above paragraph. From that amount, subtract your allowed expenses (stated in IRS) and monthly payments you will have to make on secured and priority debts. If your monthly disposable income after subtracting these amounts is less than $100, you pass the means test, and will be allowed to file for Chapter 7.
Bankruptcy - Chapter 13
You will be forced to file your bankruptcy under chapter 13 if you are not eligible for chapter 7. Or if you have file bankruptcy before under chapter 7, then you need to go for chapter 13 for second bankruptcy filling.
Chapter 13, which has also been known as a wage earner's plan, is an interest-free repayment plan where a debtor repays at least some of his or her unsecured debts with regular payments over five years.
In chapter 7 filling, debtors need to liquidate their assets to pay to their creditors (creditors will share the amount from the liquidation); whereas, the debtor generally can continue to live in his or her home so long as the debtor complies with the terms of the Chapter 13 arrangement. This is one of the advantages of chapter 13 over chapter 7 bankruptcy filling.
http://www.articleson.com/Article/Can-You-Choose-the-Type-Of-Bankruptcy-Filling-/32419
Friday, September 28, 2007
Is Filing For Bankruptcy The Solution?
Bankruptcy may seem to be an easy solution for major financial problems. But it is always better to avoid filing bankruptcy at all cost and to turn to it only as a last resort.
Once you file for bankruptcy, this point will remain on your credit record for ten years. This will make it difficult for you to receive loans and credit. Some lenders may allow for limited credit with bankrupt; but only after extensive explanations, and at a higher interest rate and with added credit fees. Another reason for avoiding bankruptcy is that some types of bankruptcy call for repossession of assets. Once the bank finds that there is something with you that is not necessary for living, the item may be seized to pay for debts and bankruptcy expenses.
With bankruptcy, financial difficulty will not be solved and your life becomes an open book as the court pries into all aspects of life wherein you will have to provide all financial information like savings, investments and assets. Though bankruptcy may seem to suggest some freedom from financial debts, there may be other debts that will have to be paid like alimony, court judgment costs or child support.
So keeping these points in mind, it is always better to avoid bankruptcy. Debt consolidation is one of the best means of avoiding bankruptcy. These companies help you by examining your current loans and come up with a program that incorporates all these debts. The company handles the payment to all the creditors; you just have to make a single payment to them every month. They will also get you a lower rate of interest and a longer time period to repay the loans, thus making you save some money.
Easy access to credit cards and credit accounts at department stores has now made it rather easy to fall into debt. It is better to pay bills with cash, and not use credit when money runs low. So cancel the credit card account! If you fall in debt, instead of hiding from the debt companies, it is better to talk to them as they may be able to negotiate and help you solve your debt. It is always better to plan a budget calculating debt ratio to income when in debt. Just write all the bills and expenditure that you have. Then you can determine how much has to be paid for bills, and how much is left for other spending. If required, you can also sell your home and downsize to avoid bankruptcy.
The only benefits of filing for bankruptcy are that the stress of dealing with numerous creditors is relieved. Once bankruptcy is discharged, as most of the debts get written off, creditors cannot pursue them. However, the disadvantages to bankruptcy are many. Businesses can be sold and employees dismissed with bankruptcy. Equity in a home is most likely to be sold as with bankruptcy, reliable assets of value are lost.
Bankruptcy is a costly process where all the fees for courts and trustee are drawn from the debtor�s assets. On filing for bankruptcy, it is not possible to hold certain public offices like MP, magistrate or even practice as an accountant or a solicitor. Moreover, with the new bankruptcy reform law, it is difficult to use Chapter 7 bankruptcy to get a new start in one�s financial lives.
Under the old law, one could file for bankruptcy through Chapter 7 or 13. In Chapter 7, you can keep your exempt property like the equity in your home. Here most of the debts are discharged. However, in Chapter 13 bankruptcy, you have to agree to pay off all your debts over a period of three to five years. So according to the new bankruptcy law, most of the bankruptcies are forced to file for Chapter 13 bankruptcy.
Moreover, according to the new law, you have to meet with a credit counselor for six months before applying for bankruptcy. However, as there are insufficient credit counselors, it is rather hard to accomplish this. It is also required that you attend money management courses at your expense before discharging your debts. However, it is always better to approach a good bankruptcy lawyer before taking any steps!
http://www.articlecat.com/Article/Is-Filing-For-Bankruptcy-The-Solution-/4267
Once you file for bankruptcy, this point will remain on your credit record for ten years. This will make it difficult for you to receive loans and credit. Some lenders may allow for limited credit with bankrupt; but only after extensive explanations, and at a higher interest rate and with added credit fees. Another reason for avoiding bankruptcy is that some types of bankruptcy call for repossession of assets. Once the bank finds that there is something with you that is not necessary for living, the item may be seized to pay for debts and bankruptcy expenses.
With bankruptcy, financial difficulty will not be solved and your life becomes an open book as the court pries into all aspects of life wherein you will have to provide all financial information like savings, investments and assets. Though bankruptcy may seem to suggest some freedom from financial debts, there may be other debts that will have to be paid like alimony, court judgment costs or child support.
So keeping these points in mind, it is always better to avoid bankruptcy. Debt consolidation is one of the best means of avoiding bankruptcy. These companies help you by examining your current loans and come up with a program that incorporates all these debts. The company handles the payment to all the creditors; you just have to make a single payment to them every month. They will also get you a lower rate of interest and a longer time period to repay the loans, thus making you save some money.
Easy access to credit cards and credit accounts at department stores has now made it rather easy to fall into debt. It is better to pay bills with cash, and not use credit when money runs low. So cancel the credit card account! If you fall in debt, instead of hiding from the debt companies, it is better to talk to them as they may be able to negotiate and help you solve your debt. It is always better to plan a budget calculating debt ratio to income when in debt. Just write all the bills and expenditure that you have. Then you can determine how much has to be paid for bills, and how much is left for other spending. If required, you can also sell your home and downsize to avoid bankruptcy.
The only benefits of filing for bankruptcy are that the stress of dealing with numerous creditors is relieved. Once bankruptcy is discharged, as most of the debts get written off, creditors cannot pursue them. However, the disadvantages to bankruptcy are many. Businesses can be sold and employees dismissed with bankruptcy. Equity in a home is most likely to be sold as with bankruptcy, reliable assets of value are lost.
Bankruptcy is a costly process where all the fees for courts and trustee are drawn from the debtor�s assets. On filing for bankruptcy, it is not possible to hold certain public offices like MP, magistrate or even practice as an accountant or a solicitor. Moreover, with the new bankruptcy reform law, it is difficult to use Chapter 7 bankruptcy to get a new start in one�s financial lives.
Under the old law, one could file for bankruptcy through Chapter 7 or 13. In Chapter 7, you can keep your exempt property like the equity in your home. Here most of the debts are discharged. However, in Chapter 13 bankruptcy, you have to agree to pay off all your debts over a period of three to five years. So according to the new bankruptcy law, most of the bankruptcies are forced to file for Chapter 13 bankruptcy.
Moreover, according to the new law, you have to meet with a credit counselor for six months before applying for bankruptcy. However, as there are insufficient credit counselors, it is rather hard to accomplish this. It is also required that you attend money management courses at your expense before discharging your debts. However, it is always better to approach a good bankruptcy lawyer before taking any steps!
http://www.articlecat.com/Article/Is-Filing-For-Bankruptcy-The-Solution-/4267
Loan After Bankruptcy: Steps To Take Before You Apply
When it comes to a loan after bankruptcy, here are some steps you can take before applying which could increase your chances of qualifying.
First, work on increasing your credit score. This is very important, because most lenders will review your credit report when deciding whether or not to extend you a loan after bankruptcy. This is true
whether you are talking about a car loan after bankruptcy, a conventional home loan after bankruptcy, or a personal loan after bankruptcy.
So how do you increase your credit score? There are a number of ways. One is by removing any inaccurate or obsolete negative information from your credit reports. Another way is to open some new accounts and pay them in a timely manner over time. There are more ways to increase your credit score, but I don't have enough space to cover them here.
Second, you will need to know which lenders to approach when it comes to applying for a loan after bankruptcy. For example, if you apply for with a lender that doesn't accept applicants that have a
recent bankruptcy on their credit report then you never had a chance to begin with.
So how do you know which lender to approach? Ask questions. This is critical when applying for a loan after bankruptcy. What kind of questions should you ask? While there are several, let me give you two as an example:
1) Do you consider applicants who have a bankruptcy on their credit report?
The lender will probably want to know how old the bankruptcy is, whether it was discharged or dismissed, etc.. You will want to have that information available should the lender consider extending you a loan after bankruptcy.
2) What are your qualification guidelines?
Most lenders have a minimum criteria that applicants must meet in order to qualify for a loan. For example, if you apply for a home loan after bankruptcy, the lender will probably require a minimum credit score, a minimum debt to income ratio, etc. in order to qualify for the loan. You need to find out what the lenders' minimum criteria is before you apply for a loan after bankruptcy.
Finally, after you've increased your credit score and found a lender who will consider your application for a loan after bankruptcy you will need to negotiate the terms such as the interest rate, finance charges, down payment, etc.
This is where a lot of people get taken advantage of when it comes to getting a loan after bankruptcy. Some lenders will act like they are doing you a "favor" and tack a pile of interest on top of the loan - and add extra finance charges. Depending on what you're financing, this can add $100s or even $1,000s to your loan after bankruptcy. In After Bankruptcy Credit Solutions, I cover specific strategies you can use to stop lenders who try to take advantage of your situation.
Now you know some specific steps you can take before applying for a loan after bankruptcy which could help increase your chances of qualifying - as well as what to watch out for once you've found a lender who will extend you a loan after bankruptcy.
DISCLAIMER:
This information is designed to provide only a general overview of the subject matter herein.
This information is provided with the understanding that neither the publisher nor author is engaged in rendering legal, accounting or other professional advice. If legal or other expert assistance is required, the services of a professional should be sought.
Neither the publisher nor author shall be liable for any loss or damages, including but not limited to special, consequential, incidental or other damages, caused by the information contained herein.
http://www.articlecat.com/Article/Loan-After-Bankruptcy--Steps-To-Take-Before-You-Apply/4944
First, work on increasing your credit score. This is very important, because most lenders will review your credit report when deciding whether or not to extend you a loan after bankruptcy. This is true
whether you are talking about a car loan after bankruptcy, a conventional home loan after bankruptcy, or a personal loan after bankruptcy.
So how do you increase your credit score? There are a number of ways. One is by removing any inaccurate or obsolete negative information from your credit reports. Another way is to open some new accounts and pay them in a timely manner over time. There are more ways to increase your credit score, but I don't have enough space to cover them here.
Second, you will need to know which lenders to approach when it comes to applying for a loan after bankruptcy. For example, if you apply for with a lender that doesn't accept applicants that have a
recent bankruptcy on their credit report then you never had a chance to begin with.
So how do you know which lender to approach? Ask questions. This is critical when applying for a loan after bankruptcy. What kind of questions should you ask? While there are several, let me give you two as an example:
1) Do you consider applicants who have a bankruptcy on their credit report?
The lender will probably want to know how old the bankruptcy is, whether it was discharged or dismissed, etc.. You will want to have that information available should the lender consider extending you a loan after bankruptcy.
2) What are your qualification guidelines?
Most lenders have a minimum criteria that applicants must meet in order to qualify for a loan. For example, if you apply for a home loan after bankruptcy, the lender will probably require a minimum credit score, a minimum debt to income ratio, etc. in order to qualify for the loan. You need to find out what the lenders' minimum criteria is before you apply for a loan after bankruptcy.
Finally, after you've increased your credit score and found a lender who will consider your application for a loan after bankruptcy you will need to negotiate the terms such as the interest rate, finance charges, down payment, etc.
This is where a lot of people get taken advantage of when it comes to getting a loan after bankruptcy. Some lenders will act like they are doing you a "favor" and tack a pile of interest on top of the loan - and add extra finance charges. Depending on what you're financing, this can add $100s or even $1,000s to your loan after bankruptcy. In After Bankruptcy Credit Solutions, I cover specific strategies you can use to stop lenders who try to take advantage of your situation.
Now you know some specific steps you can take before applying for a loan after bankruptcy which could help increase your chances of qualifying - as well as what to watch out for once you've found a lender who will extend you a loan after bankruptcy.
DISCLAIMER:
This information is designed to provide only a general overview of the subject matter herein.
This information is provided with the understanding that neither the publisher nor author is engaged in rendering legal, accounting or other professional advice. If legal or other expert assistance is required, the services of a professional should be sought.
Neither the publisher nor author shall be liable for any loss or damages, including but not limited to special, consequential, incidental or other damages, caused by the information contained herein.
http://www.articlecat.com/Article/Loan-After-Bankruptcy--Steps-To-Take-Before-You-Apply/4944
Unwrapping Bankruptcy
Bankruptcy is a choice many consider when faced with unmanageable multiple debts. But finance experts agree that declaring oneself bankrupt should be an indebted individual's last resort to meet his dues. It may free a person's mind from the pressure of paying his debts but it can also seriously damage the person's morale and credit history for a long time. Aside from this, people who declared themselves bankrupt are often met with hostility by the people around them. But as an option to reduce financial burden, bankruptcy is still worth considering.
By filing for and declaring oneself bankrupt, a debtor's relationship with his creditors is adjusted. Many of his debts are forgiven and he is also allowed to keep some properties labeled as exempt items. However, all of his valuable properties are sold off and the proceeds are distributed among his creditors. As a result, some of his debts can be paid in full or just partly. If most of his valuable properties (i.e. house, car) are named as collateral for any debt such as mortgage or a car loan, the proceeds from the selling of these items are used to pay these specific debts. Only the balance or excess is used to pay off the other debts. In a sense, bankruptcy fulfills two objectives: it frees the debtor from paying his debts and ensures that all assets are distributed among the his creditors.
Bankruptcy happens in two ways: voluntary or involuntary. Declaring oneself bankrupt is categorized as voluntary whereas being forced into declaring bankruptcy by creditors is involuntary. Lawyers who specialize in finance cases advise debtors to cooperate in cases of involuntary declarations. There are also different types of being bankrupt. One is filing for a straight bankruptcy wherein all your properties are sold to pay off debts and the other is arranging for a repayment plan to avert foreclosure or repossession of properties. People whose debts are incurred by temporary setbacks (sickness, divorce) are usually considered for the partial type.
Although being bankrupt does lighten one's financial burden, it also has drawbacks. First, the debtor loses all control over his properties and assets. Any business the debtor owns is closed and all its employees are dismissed. Second, his credit accounts are closed such as loans, credit cards, and bank accounts. Also, bankruptcy remains in a person's credit history for 10 years which can seriously damage his credit reputation. Third, his bankrupt state is made public by advertisements in local papers. In addition, the bankrupt individual must inform every person he deals with about his bankrupt state unless after he is discharged. As a result, the bankrupt often faces hostility, or prejudices in terms of business or professional opportunities.
Finance experts generally recommend assessing financial situations before filing for bankruptcy. It is often the case that debtors declare bankruptcy without first exploring other options to settle their debts. However, if it is unavoidable, they advise debtors to seek professional help such as financial advisors or finance lawyers to help them understand the process and its effects. Debtors need to pay court application fees, but if they cannot afford it, there are non-profit legal aid organizations that are willing to help.
http://www.articlecat.com/Article/Unwrapping-Bankruptcy/5093
By filing for and declaring oneself bankrupt, a debtor's relationship with his creditors is adjusted. Many of his debts are forgiven and he is also allowed to keep some properties labeled as exempt items. However, all of his valuable properties are sold off and the proceeds are distributed among his creditors. As a result, some of his debts can be paid in full or just partly. If most of his valuable properties (i.e. house, car) are named as collateral for any debt such as mortgage or a car loan, the proceeds from the selling of these items are used to pay these specific debts. Only the balance or excess is used to pay off the other debts. In a sense, bankruptcy fulfills two objectives: it frees the debtor from paying his debts and ensures that all assets are distributed among the his creditors.
Bankruptcy happens in two ways: voluntary or involuntary. Declaring oneself bankrupt is categorized as voluntary whereas being forced into declaring bankruptcy by creditors is involuntary. Lawyers who specialize in finance cases advise debtors to cooperate in cases of involuntary declarations. There are also different types of being bankrupt. One is filing for a straight bankruptcy wherein all your properties are sold to pay off debts and the other is arranging for a repayment plan to avert foreclosure or repossession of properties. People whose debts are incurred by temporary setbacks (sickness, divorce) are usually considered for the partial type.
Although being bankrupt does lighten one's financial burden, it also has drawbacks. First, the debtor loses all control over his properties and assets. Any business the debtor owns is closed and all its employees are dismissed. Second, his credit accounts are closed such as loans, credit cards, and bank accounts. Also, bankruptcy remains in a person's credit history for 10 years which can seriously damage his credit reputation. Third, his bankrupt state is made public by advertisements in local papers. In addition, the bankrupt individual must inform every person he deals with about his bankrupt state unless after he is discharged. As a result, the bankrupt often faces hostility, or prejudices in terms of business or professional opportunities.
Finance experts generally recommend assessing financial situations before filing for bankruptcy. It is often the case that debtors declare bankruptcy without first exploring other options to settle their debts. However, if it is unavoidable, they advise debtors to seek professional help such as financial advisors or finance lawyers to help them understand the process and its effects. Debtors need to pay court application fees, but if they cannot afford it, there are non-profit legal aid organizations that are willing to help.
http://www.articlecat.com/Article/Unwrapping-Bankruptcy/5093
5 Bankruptcy Questions To Ask Your Attorney Before Filing
If you think that being bankrupt is the worst thing that could happen to you than think again! Yes you are right�Worst is yet to come, but of course you can control and eliminate that worst scenario by simply making correct decisions! Hiring a wrong attorney for filing your bankruptcy can be like a nightmare coming true!
So it is better that before hiring you do some research and make sure that you find an attorney who could really show you way attorney who could really show you way out from the bankruptcy mess!
Facts about selecting the Attorneys:
As most of the attorneys are usually overworked, they aren't able to give ear to full details of your case. You may feel that your attorney isn't pursuing your case the way you want him to pursue and ultimately you will feel irritated.
Many of the attorneys aren't qualified enough to lead your bankruptcy case. So such attorneys don't fulfill your expectations. Certificates are important indicators to judge whether the attorney is qualified enough or not.
Asking from friends won't take you to any good lawyer, unless your friend has gone through filing for bankruptcy but it may be useful to take advice from legal professionals.
You can even go to a bankruptcy court and observe the attorneys there. Maybe during your observation, you will find some attorneys who are good enough for you.
Once you find the attorney, you can satisfy yourself completely by asking him the right questions. A short conversation can tell you a lot about the attorney you have chosen. You can ask him about his expertise and his working and consultation hours. After conversation, you can evaluate the attorney to see if that attorney is really right for you or not!
Once you select the attorney, you must discuss with him what type of bankruptcy should you file? There are eight different types for filing bankruptcy. You attorney can best point out which type suits you for filing bankruptcy.
Secondly, you need to ask him how you can file for bankruptcy. You have to file for your bankruptcy in the state where you are living. The Attorney can prepare the necessary paperwork that would be needed to present to the courts.
Thirdly, you must know the fees that are involved in the filing for bankruptcy. The total fees will comprise of the attorney's fees plus the court fees that you need to submit to file for your bankruptcy.
Fourth, you must know where you should file your bankruptcy claim. You need to consult your attorney on how to get there and what documentation is required.
Finally you must know the after effects of filing for bankruptcy. As soon as you file for bankruptcy, creditors will receive notification from the courts and will not be allowed to contact debtor for payments. A hearing in court will be set. The case will proceed depending on type of bankruptcy filed.
Remember that this is your fight, so you have to be really involved in it and follow the case. You just cannot leave everything on the attorney!
http://www.articlecat.com/Article/5-Bankruptcy-Questions-To-Ask-Your-Attorney-Before-Filing/6434
So it is better that before hiring you do some research and make sure that you find an attorney who could really show you way attorney who could really show you way out from the bankruptcy mess!
Facts about selecting the Attorneys:
As most of the attorneys are usually overworked, they aren't able to give ear to full details of your case. You may feel that your attorney isn't pursuing your case the way you want him to pursue and ultimately you will feel irritated.
Many of the attorneys aren't qualified enough to lead your bankruptcy case. So such attorneys don't fulfill your expectations. Certificates are important indicators to judge whether the attorney is qualified enough or not.
Asking from friends won't take you to any good lawyer, unless your friend has gone through filing for bankruptcy but it may be useful to take advice from legal professionals.
You can even go to a bankruptcy court and observe the attorneys there. Maybe during your observation, you will find some attorneys who are good enough for you.
Once you find the attorney, you can satisfy yourself completely by asking him the right questions. A short conversation can tell you a lot about the attorney you have chosen. You can ask him about his expertise and his working and consultation hours. After conversation, you can evaluate the attorney to see if that attorney is really right for you or not!
Once you select the attorney, you must discuss with him what type of bankruptcy should you file? There are eight different types for filing bankruptcy. You attorney can best point out which type suits you for filing bankruptcy.
Secondly, you need to ask him how you can file for bankruptcy. You have to file for your bankruptcy in the state where you are living. The Attorney can prepare the necessary paperwork that would be needed to present to the courts.
Thirdly, you must know the fees that are involved in the filing for bankruptcy. The total fees will comprise of the attorney's fees plus the court fees that you need to submit to file for your bankruptcy.
Fourth, you must know where you should file your bankruptcy claim. You need to consult your attorney on how to get there and what documentation is required.
Finally you must know the after effects of filing for bankruptcy. As soon as you file for bankruptcy, creditors will receive notification from the courts and will not be allowed to contact debtor for payments. A hearing in court will be set. The case will proceed depending on type of bankruptcy filed.
Remember that this is your fight, so you have to be really involved in it and follow the case. You just cannot leave everything on the attorney!
http://www.articlecat.com/Article/5-Bankruptcy-Questions-To-Ask-Your-Attorney-Before-Filing/6434
Tips On Buying a House after Bankruptcy
Nowadays, people file for bankruptcy for a number of reasons. Some unexpected medical bills, the loss of a job or perhaps overwhelming debt can be some of the reasons for one to file for bankruptcy. One may then start thinking if it is possible to buy a home after bankruptcy. And the answer is in the affirmative. There are many mortgage companies and online lenders out there who offer home loans for even those who have bankruptcy on their credit report.
You will then have to rebuild your credit once your bankruptcy is discharged. You can do this by opening a credit card account to which you will have to make regular payments. Another alternative is to save for a considerable down payment as the larger the cash reserve is, the better the rates you will get! Check on your credit report to make sure that all accounts linked with your bankruptcy are closed.
Make sure that the payment history information is right too as the difference in one late payment can greatly increase your interest rates by a percent or more. Once you improve your credit score through the repayment of the home loan, you can easily take out an equity loan on the home to consolidate any other debt you have since your bankruptcy or to use the extra cash on some business venture.
Before you actually start looking for the right house loan, it is better to look at your budget. Decide how much you can afford as a loan, how much you can make as a down payment, and the monthly payments you can make. With this information, you can decide how much loan to apply for, and the type of financing to opt for.
However, if you intend to live in that house for more than seven years, it is better to find a fixed rate mortgage as it saves money; in the long term. To get an idea of the type of loan to get, you could use a mortgage calculator for estimations.
Once you have an idea of the type of loan you need, you should start investigating the various financing companies. Lenders have little to lose when approving home loans after bankruptcy as the lender feels confident when your home serves as collateral for the loan. There are some lenders who need a certain amount of time to pass before approving for the loan. However, there are also lenders out there who will approve your loan even a day after the bankruptcy has been discharged.
Request free quotes and then investigate their rates. To get these quotes, you need only to furnish basic information, with no need of showing your credit card. This way your credit score is not affected. Once you get all the quotes, compare the APR for the real cost of the loan. It is no point just looking at the interest rates, as they are rather misleading.
Ask if there are any; fees related to the loan as if you plan in refinancing your home, you may have to pay thousands as fees. However, these fees can be negotiated.
http://www.articlecat.com/Article/Tips-On-Buying-a-House-after-Bankruptcy/7107
You will then have to rebuild your credit once your bankruptcy is discharged. You can do this by opening a credit card account to which you will have to make regular payments. Another alternative is to save for a considerable down payment as the larger the cash reserve is, the better the rates you will get! Check on your credit report to make sure that all accounts linked with your bankruptcy are closed.
Make sure that the payment history information is right too as the difference in one late payment can greatly increase your interest rates by a percent or more. Once you improve your credit score through the repayment of the home loan, you can easily take out an equity loan on the home to consolidate any other debt you have since your bankruptcy or to use the extra cash on some business venture.
Before you actually start looking for the right house loan, it is better to look at your budget. Decide how much you can afford as a loan, how much you can make as a down payment, and the monthly payments you can make. With this information, you can decide how much loan to apply for, and the type of financing to opt for.
However, if you intend to live in that house for more than seven years, it is better to find a fixed rate mortgage as it saves money; in the long term. To get an idea of the type of loan to get, you could use a mortgage calculator for estimations.
Once you have an idea of the type of loan you need, you should start investigating the various financing companies. Lenders have little to lose when approving home loans after bankruptcy as the lender feels confident when your home serves as collateral for the loan. There are some lenders who need a certain amount of time to pass before approving for the loan. However, there are also lenders out there who will approve your loan even a day after the bankruptcy has been discharged.
Request free quotes and then investigate their rates. To get these quotes, you need only to furnish basic information, with no need of showing your credit card. This way your credit score is not affected. Once you get all the quotes, compare the APR for the real cost of the loan. It is no point just looking at the interest rates, as they are rather misleading.
Ask if there are any; fees related to the loan as if you plan in refinancing your home, you may have to pay thousands as fees. However, these fees can be negotiated.
http://www.articlecat.com/Article/Tips-On-Buying-a-House-after-Bankruptcy/7107
3 Simples Ways To Avoid Bankruptcy
In this debt-ridden society, many people are in severe financial difficulties. While bankruptcy is the last step in a long road of financial pressures for many, others opt for this solution too early, sometimes without considering suitable bankruptcy alternatives.
There are several options available for you if you are in debt and do not wish to declare bankruptcy. The most sought-after option is obtaining a debt-consolidation loan and closing all existing credit lines.
Debt consolidation is where you take a new unsecured loan and use the funds to pay off your outstanding debts.
An unsecured debt consolidation loan will help you consolidate all your unsecured debt and avoid bankruptcy. This new money can save you hundreds of dollars per month if you choose to use your loan to pay off existing debt - especially high rate credit cards. Even if you don't own a home, you could qualify for their debt consolidation loan.
Debt consolidation loans are repayable over a longer term at a relatively low interest rate. This means that the monthly repayments are lower. If the loan is secured on your property then the interest rate and payments may be even lower.
But you must compare the pros and of debt consolidation loans before taking the plunge. There are two options for consolidating debts - either you borrow money to pay off all your debts or seek assistance from a debt consolidation service. The decision on which option will meet your needs has a lot to do with whether you can qualify for qualify for low mortgage rates on debt consolidation loans , and the total amount of debt you need to consolidate.
Borrowing for debt consolidation immediately eliminates multiple debt payments. All debt collection actions eliminated. Most importantly, it won't impact your credit rating; infact it may help improve your credit rating. Seeking debt consolidation services immediately decreases your monthly payments. It also brings to a stop, and in some cases, eliminates some interest and fees.
By getting this loan and using it to pay off credit cards, you'll pay much less interest. Once you've paid off your credit cards or other debt, you'll have a fresh start with your finances and can set up a budget within which you can live comfortably without ever having to run up credit card debt again.
Debt consolidation is an excellent tool that can help you manage and decrease your debt when you just can't seem to do it on your own. There is no way that you can completely fix bad credit without the ability to reduce debt and pay your bills on time. However, once your debt has reached a certain level, this can seem almost impossible to accomplish.
A credit counsellor can provide you with the option of enrolling in a debt management plan, which provides immediate relief and allows repayment of debts without the high fees and negative ramifications of bankruptcy.
However, your choice has to be based upon your financial situation, as well as fit in with your own belief system and lifestyle.
http://www.articlecat.com/Article/3-Simples-Ways-To-Avoid-Bankruptcy/7137
There are several options available for you if you are in debt and do not wish to declare bankruptcy. The most sought-after option is obtaining a debt-consolidation loan and closing all existing credit lines.
Debt consolidation is where you take a new unsecured loan and use the funds to pay off your outstanding debts.
An unsecured debt consolidation loan will help you consolidate all your unsecured debt and avoid bankruptcy. This new money can save you hundreds of dollars per month if you choose to use your loan to pay off existing debt - especially high rate credit cards. Even if you don't own a home, you could qualify for their debt consolidation loan.
Debt consolidation loans are repayable over a longer term at a relatively low interest rate. This means that the monthly repayments are lower. If the loan is secured on your property then the interest rate and payments may be even lower.
But you must compare the pros and of debt consolidation loans before taking the plunge. There are two options for consolidating debts - either you borrow money to pay off all your debts or seek assistance from a debt consolidation service. The decision on which option will meet your needs has a lot to do with whether you can qualify for qualify for low mortgage rates on debt consolidation loans , and the total amount of debt you need to consolidate.
Borrowing for debt consolidation immediately eliminates multiple debt payments. All debt collection actions eliminated. Most importantly, it won't impact your credit rating; infact it may help improve your credit rating. Seeking debt consolidation services immediately decreases your monthly payments. It also brings to a stop, and in some cases, eliminates some interest and fees.
By getting this loan and using it to pay off credit cards, you'll pay much less interest. Once you've paid off your credit cards or other debt, you'll have a fresh start with your finances and can set up a budget within which you can live comfortably without ever having to run up credit card debt again.
Debt consolidation is an excellent tool that can help you manage and decrease your debt when you just can't seem to do it on your own. There is no way that you can completely fix bad credit without the ability to reduce debt and pay your bills on time. However, once your debt has reached a certain level, this can seem almost impossible to accomplish.
A credit counsellor can provide you with the option of enrolling in a debt management plan, which provides immediate relief and allows repayment of debts without the high fees and negative ramifications of bankruptcy.
However, your choice has to be based upon your financial situation, as well as fit in with your own belief system and lifestyle.
http://www.articlecat.com/Article/3-Simples-Ways-To-Avoid-Bankruptcy/7137
A Look At Personal Bankruptcy & What To Expect
One of the most difficult decisions that you can face is whether or not to file for bankruptcy. For individuals, there are basically two types of personal bankruptcy, which includes Chapter 7 and Chapter 13. Designed to give the filer a fresh start in life by wiping out certain debts, a Chapter 7 bankruptcy will rid the filer of credit card and other unsecured debt. A chapter 13 bankruptcy, on the other hand, is a court-approved payment plan in which the filer is required to repay a predetermined percentage of their debt. The determination of which chapter to file will be based on the filer�s disposable income, if any, after paying their necessary monthly bills.
When many people file for bankruptcy, their first thoughts are of their assets and whether or not they may lose their home. In a Chapter 13 repayment plan, the majority of filers are allowed to keep their property in exchange for repaying a portion of their debts. A Chapter 7, however, is designed to be a liquidation process that often results in the sale of non-exempt property. Which property is non-exempt in a bankruptcy proceeding? Each state has it�s own laws pertaining to the amount of property that an individual or married couple can keep without having to worry about it being liquidated.
The official bankruptcy process begins upon filing a petition with the local bankruptcy court. This can either be done individually, also known as pro se, or with the help of an attorney. For most, hiring an attorney is the best way to make sure that every form is completed accurately and in order to make sure their assets are protected as much as possible. Upon the filing of a bankruptcy petition, the court will assign a trustee to the case and will set a date for a Meeting of the Creditors. Although creditors of the filer are invited to attend, they are not required to do so. The filer, however, is required to attend and will be questioned by the trustee, under oath, while having the meeting recorded. This meeting is typically the only appearance required of the filer unless special circumstances are present.
Following the Meeting of the Creditors, often referred to as the 341 meeting, the creditors will have 30 days to object to the filers property exemptions and another 30 days to object to the discharge if the filing is a Chapter 7 bankruptcy. In a Chapter 13 proceeding, creditors may object to the payment plan but the discharge will not be granted until the payment plan is complete. A Chapter 13 bankruptcy can last for up to 5 years before the payments are completed and a discharge is issued. Following the discharge, the bankruptcy case will be closed and the process will be complete.
This article is to be used for informational purposes only. It should not be used as, in place of or in conjunction with professional legal advice regarding bankruptcy. Anyone who is considering filing a petition for either personal or business bankruptcy should consult a licensed attorney in their area for additional information and/or legal advice.
http://www.articlecat.com/Article/A-Look-At-Personal-Bankruptcy---What-To-Expect/7317
When many people file for bankruptcy, their first thoughts are of their assets and whether or not they may lose their home. In a Chapter 13 repayment plan, the majority of filers are allowed to keep their property in exchange for repaying a portion of their debts. A Chapter 7, however, is designed to be a liquidation process that often results in the sale of non-exempt property. Which property is non-exempt in a bankruptcy proceeding? Each state has it�s own laws pertaining to the amount of property that an individual or married couple can keep without having to worry about it being liquidated.
The official bankruptcy process begins upon filing a petition with the local bankruptcy court. This can either be done individually, also known as pro se, or with the help of an attorney. For most, hiring an attorney is the best way to make sure that every form is completed accurately and in order to make sure their assets are protected as much as possible. Upon the filing of a bankruptcy petition, the court will assign a trustee to the case and will set a date for a Meeting of the Creditors. Although creditors of the filer are invited to attend, they are not required to do so. The filer, however, is required to attend and will be questioned by the trustee, under oath, while having the meeting recorded. This meeting is typically the only appearance required of the filer unless special circumstances are present.
Following the Meeting of the Creditors, often referred to as the 341 meeting, the creditors will have 30 days to object to the filers property exemptions and another 30 days to object to the discharge if the filing is a Chapter 7 bankruptcy. In a Chapter 13 proceeding, creditors may object to the payment plan but the discharge will not be granted until the payment plan is complete. A Chapter 13 bankruptcy can last for up to 5 years before the payments are completed and a discharge is issued. Following the discharge, the bankruptcy case will be closed and the process will be complete.
This article is to be used for informational purposes only. It should not be used as, in place of or in conjunction with professional legal advice regarding bankruptcy. Anyone who is considering filing a petition for either personal or business bankruptcy should consult a licensed attorney in their area for additional information and/or legal advice.
http://www.articlecat.com/Article/A-Look-At-Personal-Bankruptcy---What-To-Expect/7317
Home Loan after Bankruptcy Is it Possible?
After the crisis of bad credit and filing for bankruptcy, perhaps you may feel intimidated of starting up new transactions. For instance, you may feel disheartened about purchasing a new home because of your bad credit history. However, even if you have a record of bankruptcy in your credit report, there is still a chance to make a new start.
Today, there are mortgage companies who are willing to grant home loan approvals for those who filed for bankruptcy in the past. Tough competition among lending companies in the market drives these lenders to give special home loan packages for those who have been through bankruptcy. As long you have been discharged from your debts, you can go right ahead and submit that home loan application.
Will Lenders Accept Your Application?
Lenders are not merely taking chances. After all, your home property will be used as a security for your loan so theres really not much risk involved. If youre done filing Chapter 11 or Chapter 7 of bankruptcy, you can call a lending company and ask about your chances of getting an approval.
While other lenders require 2 years of interval after your bankruptcy has been discharged, other lenders also grant home loan approvals after just one day of discharge. If you have been submitting your payments religiously and all your payments are reported to the major credit bureaus, you should have no problem getting a loan approval.
What About the Down Payment?
You might also be required to give at least 3 to 5% of down payment in order to get an approval. If you do not have the money to use as down payment perhaps you can borrow from a friend or a relative. However, if the money you will put down is borrowed, you should disclose this to your lender before closing. It is important to declare to your lender where the money is coming from since not doing so can be counted as defrauding your lender.
Another option can be programs such as Neighborhood Gold or the Nehemiah. These down payment assistance programs help you get the loan even if you dont have enough cash to put down. Use the internet to search about down payment assistance programs.
Starting New
Once your home loan is granted, dont forget that youll be paying monthly payments for your mortgage. This is your chance to rebuild your credit history. If your reason for filing bankruptcy in the past were circumstances beyond your control such as illness, loss of job, death in the family, calamities and other unfortunate events, then you may not accountable for bad credit.
However, if the reason behind your bankruptcy is due to unpaid debts because of irresponsible management of your finances, then you might have already learned your lesson. Keeping up with your monthly payments is the best way to avoid being caught in bad debt. Live according to your means and do not waste time in making adjustments with your lifestyle if you see the need to change. This is your chance to own a home and to regain your reputation.
http://www.articlecat.com/Article/Home-Loan-after-Bankruptcy--Is-it-Possible-/52595
Today, there are mortgage companies who are willing to grant home loan approvals for those who filed for bankruptcy in the past. Tough competition among lending companies in the market drives these lenders to give special home loan packages for those who have been through bankruptcy. As long you have been discharged from your debts, you can go right ahead and submit that home loan application.
Will Lenders Accept Your Application?
Lenders are not merely taking chances. After all, your home property will be used as a security for your loan so theres really not much risk involved. If youre done filing Chapter 11 or Chapter 7 of bankruptcy, you can call a lending company and ask about your chances of getting an approval.
While other lenders require 2 years of interval after your bankruptcy has been discharged, other lenders also grant home loan approvals after just one day of discharge. If you have been submitting your payments religiously and all your payments are reported to the major credit bureaus, you should have no problem getting a loan approval.
What About the Down Payment?
You might also be required to give at least 3 to 5% of down payment in order to get an approval. If you do not have the money to use as down payment perhaps you can borrow from a friend or a relative. However, if the money you will put down is borrowed, you should disclose this to your lender before closing. It is important to declare to your lender where the money is coming from since not doing so can be counted as defrauding your lender.
Another option can be programs such as Neighborhood Gold or the Nehemiah. These down payment assistance programs help you get the loan even if you dont have enough cash to put down. Use the internet to search about down payment assistance programs.
Starting New
Once your home loan is granted, dont forget that youll be paying monthly payments for your mortgage. This is your chance to rebuild your credit history. If your reason for filing bankruptcy in the past were circumstances beyond your control such as illness, loss of job, death in the family, calamities and other unfortunate events, then you may not accountable for bad credit.
However, if the reason behind your bankruptcy is due to unpaid debts because of irresponsible management of your finances, then you might have already learned your lesson. Keeping up with your monthly payments is the best way to avoid being caught in bad debt. Live according to your means and do not waste time in making adjustments with your lifestyle if you see the need to change. This is your chance to own a home and to regain your reputation.
http://www.articlecat.com/Article/Home-Loan-after-Bankruptcy--Is-it-Possible-/52595
ARIZONA TRUSTEE'S SALE AND BANKRUPTCY
Many times people call me for advice on bankruptcy because their home is in the middle of a trustee's sale (sometimes called a "foreclosure"). For some reason many wait until almost too late to ask for any help. In fact, one couple waited to call until day before the sale; expecting that the process to stop the sale was so simple that anyone could do it in a moments notice. The Bankruptcy laws became so complex after October 17, 2005 that it is extremely difficult to do all that must be done in just a few hours. Therefore, I urge you to NEVER wait until just a few days, or even a couple of weeks before a sale is scheduled for your home. This last minute rush puts everyone in a position of extreme stress and your attorney will not have the time necessary to properly review your situation. Unless the filing of a bankruptcy is done correctly you may only delay your problems and still lose your home. It takes time to properly complete, review, sign and file the huge stack of bankruptcy documents. Those documents must be accurate because you are going to testify, under oath, that they are true and correct to the best of your knowledge. Also, you are required to take a Credit Counseling class BEFORE filing your bankruptcy documents.
What should you do if you are behind on your mortgage payments? Once you realize that you cannot pay the regular payments you need to be immediately pro-active. Contact your mortgage company to determine if they have programs to help you. Find out from all your lenders the amount that is owed against the house. Determine the true value of your home. Talk to neighbors and realtors to determine the true value of your home; make sure to consider all necessary repairs. Deduct the costs repairs and the costs of selling your home (closing costs and realtor fees) from the value. After you have these numbers decide whether you can afford to keep this house and whether there is value (equity) over and above the debt(s) owed on the home. Do not include judgments; but do include IRS or Arizona Department of Tax liens - if they have been recorded. Options: (1) workout payment arrangements with the lender; (2) sell the house and use the equity to start over; or (3) rent to house for enough to pay the mortgage(s). If there is no equity and you cannot sell the house for what is owed against it, then you have to consider letting the lender foreclose, or talk to the lender about a "short sale" or Deed in Lieu of Foreclosure. All of this work must be done before you can make a decision as to the next step - whether or not to file bankruptcy.
Understand that if you wait until after a trustee's sale has been started there will be additional fees and costs for the trustee who is conducting the trustee's sale. Those fees and costs will be at least $1,500. You must pay those additional trustee's fees and costs, plus all past due mortgage payments. In addition, your past due payments will increase if your loan has a default rate of interest and late charges. The quicker you do something, the less money you will need to pay. If none of the options above work for you, then you may need to consider bankruptcy. Bankruptcy is not a long term answer if you cannot afford to pay the regular monthly payments. There are two types of bankruptcy which are applicable in your situation. The first is a chapter 7 and second type is a chapter 13 - see Bankruptcy FAQ for more information about the differences.
What is a trustee's sale? If you are behind in our mortgage payments the lender has the right to start a judicial foreclosure or trustee's sale of your home. Ultimately your home will be sold, whether through a trustee or by a sheriff. Once this happens you will no longer own the property and you must move. The following is the normal procedure followed by creditors to foreclose on your property. In Arizona there are two possible procedures (1) a judicial foreclosure, or (2) a trustee's sale. Most likely your lender will elect to proceed with a trustee's sale. It is the cheapest and quickest method to protect their interest in your property. This article is not going to discuss the judicial foreclosure process.
Trustee's Sale is recorded
Before the lender commences a trustee's sale they will normally send you demand letters identifying the default. It is very important that you respond to these demands. Ask for an accounting of the loan payments and compare them with your records. If there is any discrepancy - work diligently and quickly to fix the problem. Follow through on any requests for information and agreements to pay. Sometimes it is not possible for you to pay what you owe (the arrears). The lender will most likely start the trustee's sale. A Notice of Sale is recorded with the County Recorder and you, along with all those that have interests in your property, will receive a copy of the Notice of Sale and the Statement of Breach. The Statement of Breach will identify the defaults (e.g. failure to make monthly payments).
By Arizona State law the trustee's sale auction cannot be completed until at least 90 days after the date that the Notice of Sale was recorded (Arizona Revised Statutes: 33-807 D). Therefore, once you receive the notice you still have time to try to cure the back payments, sell the property and pay the debt or enter into a workout with the lender.
Curing the House Payment Arrears
The law is very specific as to the property owner's rights and what the trustee must do with regards to accepting payment to cure all the arrears. These rights also apply to all junior lienholders (other lenders secured by your home). There are some very specific steps to follow in order for the lender/servicer to provide the property owner with the exact amount necessary to cure the arrears. DO NOT WAIT UNTIL THE LAST MINUTE TO REQUEST THIS INFORMATION - IT WILL MOST LIKELY TAKE TWO WEEKS TO GET THE AMOUNTS DUE.
First you must contact the lender/servicer/trustee (best to contact all three) in writing and request a reinstatement through and including a specific date when you are sure you will have the money to pay the arrears. The trustee is required by law to respond to your request for a reinstatement (cure of the arrears or payoff - Arizona Revised Statues: 33-803.01). Include a request for them to identify where you should make the payment and what form (e.g. cashier's check).
If you do not receive a response within 72 hours then send another request. Keep sending requests every 3 days until you receive a response with the information that you requested. Keep copies of each demand in case you need them later to prove how difficult the lender/servicer/trustee has been to deal with. If the lender/servicer/trustee does not respond after four or five demands then immediately hire an attorney. You can also file a complaint with the Arizona Banking Department. In addition, go to the Arizona Corporation Commission's web site and find the shareholders for each of these entities. Send each of the shareholders a certified demand for information, along with the copy of the complaint that you have filed. If the Trustee is a lawyer than file a complaint with the State Bar of Arizona. Of course, you can always file a complaint in court to ask a judge to make the lender perform as request. Beware - none of these action will terminate the trustee's sale.
Once you have received the accounting compare it with your records. If you have not been keeping copies of payments, then you have no proof that you made any missing payments. Do not chance losing your home because you are stubborn and will not pay one or more mortgage payments you are sure you paid, but do not have proof. Immediately make arrangements to pay the full amount. Remember that the longer you wait to pay the more the late charges and other penalties you incur. Keep copies of all correspondence, keep diary of the person you talked to, including the date and time of the discussion. Confirm all verbal communications by sending a letter, fax or e-mail detailing your understanding of the agreement.
The following is the law governing reinstatement and cancellation of trustee sales as of February 2006. For updates you can go to the current Arizona Statutes.
33-813. Default in performance of contract secured; reinstatement; cancellation of recorded notice of sale
A. If, prior to the maturity date fixed by the contract or contracts, all or a portion of a principal sum or interest of the contract or contracts secured by a trust deed becomes due or is declared due by reason of a breach or default in the performance of the contract or contracts or of the trust deed, the trustor or the trustor's successor in interest, any person having a subordinate lien or encumbrance of record thereon or any beneficiary under a subordinate trust deed, before 5:00 p.m. mountain standard time on the last day other than a Saturday or legal holiday before the date of sale or the filing of an action to foreclose the trust deed, may reinstate by paying to the beneficiary, the trustee or the trustee's agent in a form acceptable to the beneficiary or the trustee the entire amount then due under the terms of the contract or contracts or trust deed, other than the portion of the principal as would not then be due had no default occurred, by curing all other defaults and by paying the amounts due under subsection B of this section.
B. The beneficiary shall notify the trustee in writing of the performance and the name of the person who performed the conditions. The proceedings shall be cancelled and the contract or contracts and trust deed shall be deemed reinstated and in force as if no breach or default had occurred upon performance of those of the following which may be applicable:
1. Payment of the entire amount then due.
2. Payment of costs and expenses incurred in enforcing the terms of such contract or trust deed. These costs and expenses may include the following:
(a) Reasonable costs for mailing and photocopying.
(b) Actual expenses incurred for recording, publication, posting of notice of sale, auctioneer's fee, postponement fees and title costs.
(c) Other reasonable costs and expenses.
3. Payment of the recording fee for a cancellation of notice of sale.
4. Payment of the trustee's fees, in an amount not to exceed six hundred dollars or one-half of one per cent of the entire unpaid principal sum secured, whichever is greater.
5. Payment of expenses and reasonable attorney fees that are not otherwise provided for in this section and that are incurred in protecting and preserving the beneficiary's interest in the trust property.
C. On request from the trustor or any person entitled to notice pursuant to section 33-809, subsection B, at any time that the trust deed is subject to reinstatement, the trustee shall provide a good faith estimate of the sums that appear necessary to reinstate the trust deed.
D. On written request from the trustor or any person entitled to notice pursuant to section 33-809, subsection B that is delivered to the trustee after the recording of the notice of trustee's sale, the trustee shall inform the person of the exact amount necessary to reinstate the trust deed, separately specifying costs, fees and any other amounts that are required to be paid as a condition to reinstatement of the trust deed. The trustee shall provide that information within five business days after receipt of the written request. If the written request is received by the trustee during the five business days before the day of the sale, the trustee shall provide the information to the person as soon as practicable. This subsection does not require the extension of the period for reinstatement of the trust deed prescribed in subsection A of this section.
E. If the trust deed is reinstated as provided in subsection B of this section, the trustee shall have a cancellation of the notice of sale recorded in the same county recorder's office where the notice of sale was recorded. A trustee who, for thirty days after reinstatement, fails to have proper notice of the cancellation of the notice of sale recorded is liable to the person who performed the conditions resulting in reinstatement for all actual damages resulting from such failure.
F. If the trust deed is paid in full or if the sale is not held or is not properly postponed pursuant to this chapter, the trustee shall record a cancellation of the notice of sale. The cancellation of the notice of sale shall be recorded in the office of the county recorder in which the notice of sale was recorded.
Getting Information About the Credit Bid:
Others may be interested in coming to the trustee's sale and purchasing your property. The amount that the lender is going to bid at sale is called the credit bid. A.R.S. Section 33-809(E) provides that beginning at 9:00 a.m. and continuing until 5:00 p.m. on the last business day preceding the day of sale and beginning at 9:00 a.m. and continuing until the time of sale on the day of the sale, the trustee shall provide to any person who requests of the actual bid or credit bid the beneficiary is entitled to make at the sale. If the trustee is unable to provide the credit bid during the prescribed time period, the trustee shall postpone the sale until the trustee is able to comply with this subsection. Again, the trustee has no liability for the accuracy or completeness of the information.
Filing Bankruptcy Before the Trustee's Sale is Completed
IMPORTANT NOTE: After October 17, 2005 this area of law is in flux - anyone who has filed more than one bankruptcy in the last 12 months may find that they cannot get the protection explained below. You must seek experienced bankruptcy attorney in order to determine your rights.
I have had several clients decide to file bankruptcy at this point because it can be a scary situation when they receive the Notice of Sale, or the investors start calling to "help them out of their situation". Unfortunately, by waiting until after a trustee's sale has actually been started you may have incurred $2,000 or more in fees and costs which must be paid as part of the arrears. All arrears can be included in the Chapter 13 bankruptcy plan and paid over a period of time stopping all additional service and late fees. The law is currently in flux as to exactly how long that period may be – probably 3-5 years. In order to qualify for a chapter 13 you must have more income than you have basic living expenses (excluding credit cards and other debts that will be discharged in your bankruptcy) and you must keep the new monthly mortgage payments current. Bankruptcy Monitoring fees, such as "drive by fees" cannot be charged to Debtor during an open chapter 13 (but see contract). (In re Stark vs Crestar Mortgage, (WD NC, 3/31/99) 242 B.R. 866)
If you are in a situation where you do not qualify for a chapter 13 then you might be able to file a chapter 7. The chapter 7 will delay the trustee's sale for a short period of time. The filing of a chapter 7 requires the creditor to file additional paperwork with the Bankruptcy Court called a Motion for Relief from the Automatic Stay. The Credit must obtain a signed court Order before proceeding with the trustee's sale. In that you have filed for bankruptcy the lender is not allowed to sue you and obtain money judgment. This result is that you can get rid of the debt on the house and all the other debts.
How Long Does All This Take?
Because every mortgage company is different and has different collection methods, it could take from 3 to 9 months for everything explained above to occur, your house to be sold at trustee's public auction and the new owner to require you to move out of the home. While it is not suggested that you live "rent free" in your home until the last minute before the Sheriff sets you out on the street, if you are severely behind in your mortgage payments and cannot afford to keep the house, use that time to save for a down payment on an rental and move as soon as possible.
http://www.dianedrain.com/Bankruptcy/BankruptcyArticles/Articles/TrusteeSaleForeclosuresinBankruptcy/trusteessaleandbankruptcy.htm
What should you do if you are behind on your mortgage payments? Once you realize that you cannot pay the regular payments you need to be immediately pro-active. Contact your mortgage company to determine if they have programs to help you. Find out from all your lenders the amount that is owed against the house. Determine the true value of your home. Talk to neighbors and realtors to determine the true value of your home; make sure to consider all necessary repairs. Deduct the costs repairs and the costs of selling your home (closing costs and realtor fees) from the value. After you have these numbers decide whether you can afford to keep this house and whether there is value (equity) over and above the debt(s) owed on the home. Do not include judgments; but do include IRS or Arizona Department of Tax liens - if they have been recorded. Options: (1) workout payment arrangements with the lender; (2) sell the house and use the equity to start over; or (3) rent to house for enough to pay the mortgage(s). If there is no equity and you cannot sell the house for what is owed against it, then you have to consider letting the lender foreclose, or talk to the lender about a "short sale" or Deed in Lieu of Foreclosure. All of this work must be done before you can make a decision as to the next step - whether or not to file bankruptcy.
Understand that if you wait until after a trustee's sale has been started there will be additional fees and costs for the trustee who is conducting the trustee's sale. Those fees and costs will be at least $1,500. You must pay those additional trustee's fees and costs, plus all past due mortgage payments. In addition, your past due payments will increase if your loan has a default rate of interest and late charges. The quicker you do something, the less money you will need to pay. If none of the options above work for you, then you may need to consider bankruptcy. Bankruptcy is not a long term answer if you cannot afford to pay the regular monthly payments. There are two types of bankruptcy which are applicable in your situation. The first is a chapter 7 and second type is a chapter 13 - see Bankruptcy FAQ for more information about the differences.
What is a trustee's sale? If you are behind in our mortgage payments the lender has the right to start a judicial foreclosure or trustee's sale of your home. Ultimately your home will be sold, whether through a trustee or by a sheriff. Once this happens you will no longer own the property and you must move. The following is the normal procedure followed by creditors to foreclose on your property. In Arizona there are two possible procedures (1) a judicial foreclosure, or (2) a trustee's sale. Most likely your lender will elect to proceed with a trustee's sale. It is the cheapest and quickest method to protect their interest in your property. This article is not going to discuss the judicial foreclosure process.
Trustee's Sale is recorded
Before the lender commences a trustee's sale they will normally send you demand letters identifying the default. It is very important that you respond to these demands. Ask for an accounting of the loan payments and compare them with your records. If there is any discrepancy - work diligently and quickly to fix the problem. Follow through on any requests for information and agreements to pay. Sometimes it is not possible for you to pay what you owe (the arrears). The lender will most likely start the trustee's sale. A Notice of Sale is recorded with the County Recorder and you, along with all those that have interests in your property, will receive a copy of the Notice of Sale and the Statement of Breach. The Statement of Breach will identify the defaults (e.g. failure to make monthly payments).
By Arizona State law the trustee's sale auction cannot be completed until at least 90 days after the date that the Notice of Sale was recorded (Arizona Revised Statutes: 33-807 D). Therefore, once you receive the notice you still have time to try to cure the back payments, sell the property and pay the debt or enter into a workout with the lender.
Curing the House Payment Arrears
The law is very specific as to the property owner's rights and what the trustee must do with regards to accepting payment to cure all the arrears. These rights also apply to all junior lienholders (other lenders secured by your home). There are some very specific steps to follow in order for the lender/servicer to provide the property owner with the exact amount necessary to cure the arrears. DO NOT WAIT UNTIL THE LAST MINUTE TO REQUEST THIS INFORMATION - IT WILL MOST LIKELY TAKE TWO WEEKS TO GET THE AMOUNTS DUE.
First you must contact the lender/servicer/trustee (best to contact all three) in writing and request a reinstatement through and including a specific date when you are sure you will have the money to pay the arrears. The trustee is required by law to respond to your request for a reinstatement (cure of the arrears or payoff - Arizona Revised Statues: 33-803.01). Include a request for them to identify where you should make the payment and what form (e.g. cashier's check).
If you do not receive a response within 72 hours then send another request. Keep sending requests every 3 days until you receive a response with the information that you requested. Keep copies of each demand in case you need them later to prove how difficult the lender/servicer/trustee has been to deal with. If the lender/servicer/trustee does not respond after four or five demands then immediately hire an attorney. You can also file a complaint with the Arizona Banking Department. In addition, go to the Arizona Corporation Commission's web site and find the shareholders for each of these entities. Send each of the shareholders a certified demand for information, along with the copy of the complaint that you have filed. If the Trustee is a lawyer than file a complaint with the State Bar of Arizona. Of course, you can always file a complaint in court to ask a judge to make the lender perform as request. Beware - none of these action will terminate the trustee's sale.
Once you have received the accounting compare it with your records. If you have not been keeping copies of payments, then you have no proof that you made any missing payments. Do not chance losing your home because you are stubborn and will not pay one or more mortgage payments you are sure you paid, but do not have proof. Immediately make arrangements to pay the full amount. Remember that the longer you wait to pay the more the late charges and other penalties you incur. Keep copies of all correspondence, keep diary of the person you talked to, including the date and time of the discussion. Confirm all verbal communications by sending a letter, fax or e-mail detailing your understanding of the agreement.
The following is the law governing reinstatement and cancellation of trustee sales as of February 2006. For updates you can go to the current Arizona Statutes.
33-813. Default in performance of contract secured; reinstatement; cancellation of recorded notice of sale
A. If, prior to the maturity date fixed by the contract or contracts, all or a portion of a principal sum or interest of the contract or contracts secured by a trust deed becomes due or is declared due by reason of a breach or default in the performance of the contract or contracts or of the trust deed, the trustor or the trustor's successor in interest, any person having a subordinate lien or encumbrance of record thereon or any beneficiary under a subordinate trust deed, before 5:00 p.m. mountain standard time on the last day other than a Saturday or legal holiday before the date of sale or the filing of an action to foreclose the trust deed, may reinstate by paying to the beneficiary, the trustee or the trustee's agent in a form acceptable to the beneficiary or the trustee the entire amount then due under the terms of the contract or contracts or trust deed, other than the portion of the principal as would not then be due had no default occurred, by curing all other defaults and by paying the amounts due under subsection B of this section.
B. The beneficiary shall notify the trustee in writing of the performance and the name of the person who performed the conditions. The proceedings shall be cancelled and the contract or contracts and trust deed shall be deemed reinstated and in force as if no breach or default had occurred upon performance of those of the following which may be applicable:
1. Payment of the entire amount then due.
2. Payment of costs and expenses incurred in enforcing the terms of such contract or trust deed. These costs and expenses may include the following:
(a) Reasonable costs for mailing and photocopying.
(b) Actual expenses incurred for recording, publication, posting of notice of sale, auctioneer's fee, postponement fees and title costs.
(c) Other reasonable costs and expenses.
3. Payment of the recording fee for a cancellation of notice of sale.
4. Payment of the trustee's fees, in an amount not to exceed six hundred dollars or one-half of one per cent of the entire unpaid principal sum secured, whichever is greater.
5. Payment of expenses and reasonable attorney fees that are not otherwise provided for in this section and that are incurred in protecting and preserving the beneficiary's interest in the trust property.
C. On request from the trustor or any person entitled to notice pursuant to section 33-809, subsection B, at any time that the trust deed is subject to reinstatement, the trustee shall provide a good faith estimate of the sums that appear necessary to reinstate the trust deed.
D. On written request from the trustor or any person entitled to notice pursuant to section 33-809, subsection B that is delivered to the trustee after the recording of the notice of trustee's sale, the trustee shall inform the person of the exact amount necessary to reinstate the trust deed, separately specifying costs, fees and any other amounts that are required to be paid as a condition to reinstatement of the trust deed. The trustee shall provide that information within five business days after receipt of the written request. If the written request is received by the trustee during the five business days before the day of the sale, the trustee shall provide the information to the person as soon as practicable. This subsection does not require the extension of the period for reinstatement of the trust deed prescribed in subsection A of this section.
E. If the trust deed is reinstated as provided in subsection B of this section, the trustee shall have a cancellation of the notice of sale recorded in the same county recorder's office where the notice of sale was recorded. A trustee who, for thirty days after reinstatement, fails to have proper notice of the cancellation of the notice of sale recorded is liable to the person who performed the conditions resulting in reinstatement for all actual damages resulting from such failure.
F. If the trust deed is paid in full or if the sale is not held or is not properly postponed pursuant to this chapter, the trustee shall record a cancellation of the notice of sale. The cancellation of the notice of sale shall be recorded in the office of the county recorder in which the notice of sale was recorded.
Getting Information About the Credit Bid:
Others may be interested in coming to the trustee's sale and purchasing your property. The amount that the lender is going to bid at sale is called the credit bid. A.R.S. Section 33-809(E) provides that beginning at 9:00 a.m. and continuing until 5:00 p.m. on the last business day preceding the day of sale and beginning at 9:00 a.m. and continuing until the time of sale on the day of the sale, the trustee shall provide to any person who requests of the actual bid or credit bid the beneficiary is entitled to make at the sale. If the trustee is unable to provide the credit bid during the prescribed time period, the trustee shall postpone the sale until the trustee is able to comply with this subsection. Again, the trustee has no liability for the accuracy or completeness of the information.
Filing Bankruptcy Before the Trustee's Sale is Completed
IMPORTANT NOTE: After October 17, 2005 this area of law is in flux - anyone who has filed more than one bankruptcy in the last 12 months may find that they cannot get the protection explained below. You must seek experienced bankruptcy attorney in order to determine your rights.
I have had several clients decide to file bankruptcy at this point because it can be a scary situation when they receive the Notice of Sale, or the investors start calling to "help them out of their situation". Unfortunately, by waiting until after a trustee's sale has actually been started you may have incurred $2,000 or more in fees and costs which must be paid as part of the arrears. All arrears can be included in the Chapter 13 bankruptcy plan and paid over a period of time stopping all additional service and late fees. The law is currently in flux as to exactly how long that period may be – probably 3-5 years. In order to qualify for a chapter 13 you must have more income than you have basic living expenses (excluding credit cards and other debts that will be discharged in your bankruptcy) and you must keep the new monthly mortgage payments current. Bankruptcy Monitoring fees, such as "drive by fees" cannot be charged to Debtor during an open chapter 13 (but see contract). (In re Stark vs Crestar Mortgage, (WD NC, 3/31/99) 242 B.R. 866)
If you are in a situation where you do not qualify for a chapter 13 then you might be able to file a chapter 7. The chapter 7 will delay the trustee's sale for a short period of time. The filing of a chapter 7 requires the creditor to file additional paperwork with the Bankruptcy Court called a Motion for Relief from the Automatic Stay. The Credit must obtain a signed court Order before proceeding with the trustee's sale. In that you have filed for bankruptcy the lender is not allowed to sue you and obtain money judgment. This result is that you can get rid of the debt on the house and all the other debts.
How Long Does All This Take?
Because every mortgage company is different and has different collection methods, it could take from 3 to 9 months for everything explained above to occur, your house to be sold at trustee's public auction and the new owner to require you to move out of the home. While it is not suggested that you live "rent free" in your home until the last minute before the Sheriff sets you out on the street, if you are severely behind in your mortgage payments and cannot afford to keep the house, use that time to save for a down payment on an rental and move as soon as possible.
http://www.dianedrain.com/Bankruptcy/BankruptcyArticles/Articles/TrusteeSaleForeclosuresinBankruptcy/trusteessaleandbankruptcy.htm
Filing Chapter 13 Bankruptcy
Filing chapter 13 bankruptcy is usually one of the last resorts for those facing debilitating financial circumstances. It is generally the last thing anyone wants who has tried to protect their financial investments, credit histories and future fiscal stability. However, there are times when choosing to use the protection provided through a chapter 13 bankruptcy filing may be the right move in order to stop the snowballing effect of clamoring creditors and foreclosures. For whatever reason a person finds himself in the paralyzing position of burdensome debt and crushing pressure, there are solutions that can be employed to regain security, restore credit and remove obstacles that hinder a prosperous future.
Many people find themselves dealing with unforeseen circumstances such as long-term illnesses, employment lay-offs or personal tragedies such as divorce. Sudden tragedies can alter the fiscal status of a family very quickly and send the family finances spinning out of control. In order to regain control and to alleviate the pressure caused by defaulted payments and persistent creditors, many consumers have had to consider using the legal measures provided through bankruptcy court. There are two types of legal fillings that can be made through the courts that address individual issues. Chapter 7 and chapter 13 bankruptcy has been set up by law to provide a system of repayment to creditors as well as financial protection for consumers who are trying to rebuild their crumbling finances.
Chapter 7 applies to the liquidation of assets in order to repay creditors while also imposing an automatic stop on collections until the court instructions are carried out. This allows creditors to receive at least some of what is owed them while also protecting the consumer from accruing more financial problems. Chapter 13 bankruptcy filing is a reorganization of finances on behalf of a consumer in order to repay debt as well as provide protection for some of their property such as a personal home. In this case, a consumer files a reorganization strategy to the court that agrees to legally appointed oversight of a personal budget and any liquidation of assets that are deemed reasonable.
The benefits of filing chapter 13 bankruptcy often outweigh the chapter 7 alternative in that some assets may be retained, a repayment plan is implemented and it is usually paid off in up to 5 years, if not sooner. Some debt is required to be paid off completely, some may be paid off by a percentage of the total debt and others may be forgiven. There is a mandatory budget required by the courts when a chapter 13 bankruptcy is filed that must be followed to the letter. A plan for repayment is set up that may include wage garnishments and management of how a person can spend his or her money during the repayment plan. An appointed representative of the court will be provided that oversees transactions and makes sure that creditors are repaid on a schedule according to the earnings of an individual.
For those who carefully follow the repayment process as outlined by the court as a result, debt will be resolved and many creditors will be willing to extend credit again. This type of court managed financial resolution is more appealing to creditors and lenders which will be useful to those who are committed to restoring their future options. Consumers who file chapter 13 can expect to have it show up on the credit history for at least 6 years. It is less damaging for credit purposes than for those who file for chapter 7 bankruptcy, in that these cases usually receive poor credit standing for 10 years following court proceedings. Although filing chapter 13 bankruptcy allows greater protection for assets and offers a payment plan for creditors, there are some debts that cannot be forgiven by law. Alimony, back taxes, child support, any hidden debts not reported at filing and most student loans are some of the areas that are required to be repaid no matter what the situation.
Most individuals who are considering which avenue to take, prefer chapter 13 because of the shorter penalty on their credit history, greater protection for assets and court imposed solutions for repayment to creditors. While this option may be a bit more appealing, choosing chapter 13 bankruptcy is not a magic bullet for clearing up troubled, personal finances. If possible, it is always best to manage personal finances with commitment to fiscal freedom and integrity. There are, of course, times when no matter what a person does, tragedy strikes. When it does, only God and good, personal choices based on biblical principles can bring anyone out of the stress and pain of imminent financial ruin. "The young lions do lack, and suffer hunger: but they that seek the Lord shall not want any good thing." (Psalm 34:10) While filing chapter 13 bankruptcy may not be the first choice for fiscal resolution, it may be a solution that can provide a plan and give hope for a stable, fiscal future.
http://www.christianet.com/bankruptcy/chapter13bankruptcy.htm
Many people find themselves dealing with unforeseen circumstances such as long-term illnesses, employment lay-offs or personal tragedies such as divorce. Sudden tragedies can alter the fiscal status of a family very quickly and send the family finances spinning out of control. In order to regain control and to alleviate the pressure caused by defaulted payments and persistent creditors, many consumers have had to consider using the legal measures provided through bankruptcy court. There are two types of legal fillings that can be made through the courts that address individual issues. Chapter 7 and chapter 13 bankruptcy has been set up by law to provide a system of repayment to creditors as well as financial protection for consumers who are trying to rebuild their crumbling finances.
Chapter 7 applies to the liquidation of assets in order to repay creditors while also imposing an automatic stop on collections until the court instructions are carried out. This allows creditors to receive at least some of what is owed them while also protecting the consumer from accruing more financial problems. Chapter 13 bankruptcy filing is a reorganization of finances on behalf of a consumer in order to repay debt as well as provide protection for some of their property such as a personal home. In this case, a consumer files a reorganization strategy to the court that agrees to legally appointed oversight of a personal budget and any liquidation of assets that are deemed reasonable.
The benefits of filing chapter 13 bankruptcy often outweigh the chapter 7 alternative in that some assets may be retained, a repayment plan is implemented and it is usually paid off in up to 5 years, if not sooner. Some debt is required to be paid off completely, some may be paid off by a percentage of the total debt and others may be forgiven. There is a mandatory budget required by the courts when a chapter 13 bankruptcy is filed that must be followed to the letter. A plan for repayment is set up that may include wage garnishments and management of how a person can spend his or her money during the repayment plan. An appointed representative of the court will be provided that oversees transactions and makes sure that creditors are repaid on a schedule according to the earnings of an individual.
For those who carefully follow the repayment process as outlined by the court as a result, debt will be resolved and many creditors will be willing to extend credit again. This type of court managed financial resolution is more appealing to creditors and lenders which will be useful to those who are committed to restoring their future options. Consumers who file chapter 13 can expect to have it show up on the credit history for at least 6 years. It is less damaging for credit purposes than for those who file for chapter 7 bankruptcy, in that these cases usually receive poor credit standing for 10 years following court proceedings. Although filing chapter 13 bankruptcy allows greater protection for assets and offers a payment plan for creditors, there are some debts that cannot be forgiven by law. Alimony, back taxes, child support, any hidden debts not reported at filing and most student loans are some of the areas that are required to be repaid no matter what the situation.
Most individuals who are considering which avenue to take, prefer chapter 13 because of the shorter penalty on their credit history, greater protection for assets and court imposed solutions for repayment to creditors. While this option may be a bit more appealing, choosing chapter 13 bankruptcy is not a magic bullet for clearing up troubled, personal finances. If possible, it is always best to manage personal finances with commitment to fiscal freedom and integrity. There are, of course, times when no matter what a person does, tragedy strikes. When it does, only God and good, personal choices based on biblical principles can bring anyone out of the stress and pain of imminent financial ruin. "The young lions do lack, and suffer hunger: but they that seek the Lord shall not want any good thing." (Psalm 34:10) While filing chapter 13 bankruptcy may not be the first choice for fiscal resolution, it may be a solution that can provide a plan and give hope for a stable, fiscal future.
http://www.christianet.com/bankruptcy/chapter13bankruptcy.htm
Bankruptcy Law
Bankruptcy law used to be more lenient. As a result, people began to abuse the system, filing when they really didn't need to file and making huge purchases on credit before filing. For these reasons and more, changes had to take effect. When The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 took effect, they now make it much harder for people to be able to file and eliminate their debts. The new bankruptcy law has new requirements and restrictions, some of which are beneficial. It will be important to look over the bankruptcy law changes to determine if they will affect any attempts to file. Consider other options you have if you actually can no longer qualify for bankruptcy under the new rules.
Eliminating or pay off debt under the protection of the government is one program to look into. Under Chapter 7, debt is forgiven while under Chapter 13, it is expected that a person follow a debt payback plan. The old bankruptcy laws allowed filers to basically choose which chapter they preferred to file under. Also, Chapter 7 filers could value their property at the auction price under the old bankruptcy law. The new law puts the retail price on personal property, increasing the value and the chance of the property being repossessed. Under the old law, debtors were allowed to keep an amount of personal property regulated by the filers state of residence. The new law requires at least two years of residence in the state before using their exemption laws. When the old law was enacted, housing and food allowances were determined by the actual cost.
Under the law changes, there are fewer leniencies for housing and food allowances. The IRS sets these allowances around $200 for food per month and less than $800 for housing and utilities. Income has to be below the state's median income for your size family. A repayment plan will also need to be enforced under Chapter 13 if the court determines owing is $100 or more of disposable income. Child support becomes a high priority debt. Also, if you file now, credit-counseling courses within 180 days of filing are also required. The new bankruptcy law changes also limit home exemptions to $125,000 nationally if the home was purchased less than three year and four months before filing for bankruptcy.
These changes not only affect those filing, but everyone involved. The new bankruptcy law affects credit card companies. They now have to include on the bill how long it would take to pay off the current balance at the minimum payment rate. Lawyers are expected to raise their fees for these services because of the liability issues the new rules imposes. The lawyers will have to spend more time crossing their T's and dotting their I's to make sure not to break any laws and meet all requirements when filing client documents and processing files. Thus, this type for debt elimination is becoming more expensive for those filing. With the new bankruptcy law changes, came a flood of last minute filings under the old law. Thus, the sudden number of filings affected the courts. Overall, the new laws force those who would otherwise qualify for Chapter 7 to file under Chapter 13.
As you look into filing, you will want to seriously consider other options. Filing for bankruptcy can eliminate a large portion of your debts, but it is a black mark on your credit for ten years. After reading up on this course of action, consider talking with a free credit or financial counselor. Finding these companies on the Internet or even through various Christian ministries. They will be able to look at the debt situation and help to determine other methods of paying off the debt. Working on a budget and managing spending should be in the overall plan as well. Cutting up credit cards is a good start. Another option is taking out a consolidation loan for all debts. Be careful about this, though. Watch out for hidden charges, high interest and pay-off penalties. A counselor can help review all of these options in detail so take the time to talk to one before calling a lawyer for bankruptcy.
Finding out more information about bankruptcy law and bankruptcy law changes by searching the Internet or through an attorney who handles this sort of case. Be sure that to understand the whole process as well as the consequences. Responsibilities to debts and finances will still be a reality. Remember vows made when signing for loans and credit cards. "The wicked borroweth, and payeth not again: but the righteous sheweth mercy, and giveth." (Psalm 37:21) Understanding how God desires money to be used is a great step toward freedom from debt and a more positive financial future.
http://www.christianet.com/bankruptcy/bankruptcylaw.htm
Eliminating or pay off debt under the protection of the government is one program to look into. Under Chapter 7, debt is forgiven while under Chapter 13, it is expected that a person follow a debt payback plan. The old bankruptcy laws allowed filers to basically choose which chapter they preferred to file under. Also, Chapter 7 filers could value their property at the auction price under the old bankruptcy law. The new law puts the retail price on personal property, increasing the value and the chance of the property being repossessed. Under the old law, debtors were allowed to keep an amount of personal property regulated by the filers state of residence. The new law requires at least two years of residence in the state before using their exemption laws. When the old law was enacted, housing and food allowances were determined by the actual cost.
Under the law changes, there are fewer leniencies for housing and food allowances. The IRS sets these allowances around $200 for food per month and less than $800 for housing and utilities. Income has to be below the state's median income for your size family. A repayment plan will also need to be enforced under Chapter 13 if the court determines owing is $100 or more of disposable income. Child support becomes a high priority debt. Also, if you file now, credit-counseling courses within 180 days of filing are also required. The new bankruptcy law changes also limit home exemptions to $125,000 nationally if the home was purchased less than three year and four months before filing for bankruptcy.
These changes not only affect those filing, but everyone involved. The new bankruptcy law affects credit card companies. They now have to include on the bill how long it would take to pay off the current balance at the minimum payment rate. Lawyers are expected to raise their fees for these services because of the liability issues the new rules imposes. The lawyers will have to spend more time crossing their T's and dotting their I's to make sure not to break any laws and meet all requirements when filing client documents and processing files. Thus, this type for debt elimination is becoming more expensive for those filing. With the new bankruptcy law changes, came a flood of last minute filings under the old law. Thus, the sudden number of filings affected the courts. Overall, the new laws force those who would otherwise qualify for Chapter 7 to file under Chapter 13.
As you look into filing, you will want to seriously consider other options. Filing for bankruptcy can eliminate a large portion of your debts, but it is a black mark on your credit for ten years. After reading up on this course of action, consider talking with a free credit or financial counselor. Finding these companies on the Internet or even through various Christian ministries. They will be able to look at the debt situation and help to determine other methods of paying off the debt. Working on a budget and managing spending should be in the overall plan as well. Cutting up credit cards is a good start. Another option is taking out a consolidation loan for all debts. Be careful about this, though. Watch out for hidden charges, high interest and pay-off penalties. A counselor can help review all of these options in detail so take the time to talk to one before calling a lawyer for bankruptcy.
Finding out more information about bankruptcy law and bankruptcy law changes by searching the Internet or through an attorney who handles this sort of case. Be sure that to understand the whole process as well as the consequences. Responsibilities to debts and finances will still be a reality. Remember vows made when signing for loans and credit cards. "The wicked borroweth, and payeth not again: but the righteous sheweth mercy, and giveth." (Psalm 37:21) Understanding how God desires money to be used is a great step toward freedom from debt and a more positive financial future.
http://www.christianet.com/bankruptcy/bankruptcylaw.htm
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