A bankruptcy is the last option any businessman wants to take. They can cause a big dent on their credit rating and deeply ruin their reputation. But sometimes filing for bankruptcy is the only solution to get a person out of dire straits.
A bankruptcy is the last option any businessman wants to take. They can cause a big dent on their credit rating and deeply ruin their reputation. But sometimes filing for bankruptcy is the only solution to get a person out of dire straits. Here are the nine steps to be followed in filing a bankruptcy:
1. See to it that there is no other solution that you can do to avoid filing for bankruptcy. Bankruptcy allows for a fresh start. Under the Bankruptcy Abuse Prevention and Consumer Protection Act ("BAPCPA"), which significantly amended the U.
S. Bankruptcy Code effective October 17, 2005, prior to filing a bankruptcy case, an individual must obtain some consumer credit counselling from an entity approved by the U.
S. Trustee within 180 days of the date of the filing of a bankruptcy case. Such counselling is intended to provide an individual with alternatives in filing a bankruptcy case.
2. Consider the two common bankruptcy types. The most popular is the chapter 7 (which is a straight or liquidation bankruptcy), and there is also the chapter 13 (which is a repayment plan for individuals). BAPCPA has made chapter 7 to be more difficult to file, because of the means test. Many individuals will be forced to file a chapter 13 case because of this test.
3. Research your options as it relates to filing. Some people choose to file without the aid of a lawyer. But it's highly recommended to hire a lawyer. Your research should help you decide on a lawyer. In most cases, people who choose large firms to represent them will work with a paralegal and not the lawyer. Try to find a firm in which you have direct contact with your lawyer.
4. Meet with the lawyer you've selected and go over your case. Your lawyer should be asking and answering all of your questions. They will determine which chapter is best for you, based on your financial affairs. A lawyer will also assist you with completing the BAPCPA's means test.
5. Find out how much it will cost. The fees for filing are varied. Some lawyers will charge a flat fee, while others will charge based upon the amount of debt that you have. Some lawyers will require that you pay up front before they file. Refer all creditors to your lawyer's office, once he or she has been retained.
6. Wait for a meeting of creditors. Once your lawyer has submitted your petition, you will be notified by mail with your date for a meeting of creditors (or a "341 meeting," named after the section of the Bankruptcy Code requiring it). This will allow the trustee to ensure that you have given truthful answers on your bankruptcy petition, and that you understood and agreed to filing for bankruptcy.
Your lawyer should have met with you prior to this meeting to go over all of your debt to ensure that it is all listed. You must also list all of your assets. He or she will also go over sample questions that will be asked at the meeting. Prior to the meeting, you should have reviewed your file with your lawyer. Once you are sworn in at the meeting, you will answer questions that are recorded.
7. In filing a bankruptcy case, do not use your credit cards. If you do so with the intent to file, a creditor can challenge the discharge of the debt owed or even your right to discharge any debt. If you obtained the debt knowing that you could not repay it, you may not be able to discharge that debt if the creditor challenges it through a lawsuit, or adversary proceeding, in your bankruptcy case.
8. In a chapter 7 bankruptcy case, the trustee will determine whether or not there are assets that can be liquidated and used to repay your creditors. If the trustee determines that all your assets are exempt, a report of no distribution will be filed with the bankruptcy court. If the trustee determines that there are non-exempt assets, they will be sold and payments may be made to your creditors. In a chapter 7 case, you may never have to pay a creditor back. In a chapter 13 bankruptcy, you will be required to enter into a 3 to 5 year plan, in which you will pay creditors as much as you can over time, taking into consideration the BAPCPA means test.
9. The 60th day after your meeting of creditors is first set is the deadline for creditors to file lawsuits to challenge the discharge of a particular debt or your entire discharge.
If no such lawsuits are filed, shortly after that 60th day you will receive notification of a discharge of debt if you filed chapter 7 bankruptcy. A discharges means that you have no further obligation to repay the discharged debt, the existence of that discharged debt may still appear in your credit reports though, and that your creditors can never collect the debt from you.
If you filed a chapter 13 bankruptcy caseFree Articles, you will receive the notice of discharge approximately 30 to 60 days after your final payment has been made and the trustee ensures your payment plan has been followed and completed.
ABOUT THE AUTHOR
Dean Shainin offers online bankruptcy and debt advice. For more information, articles, news, tools and valuable resources on bankruptcy and debt solutions, visit this site: http://bankruptcy.deans-knowledgebase.com
Tuesday, May 8, 2007
Rebuilding Your Credit After Bankruptcy
In the past, filing bankruptcy was like having a Scarlet Letter on your chest. Bankruptcy made people outcasts and pariahs. It was as if a contagious disease struck, and no one wanted to be near you for fear of infection.
In the past, filing bankruptcy was like having a Scarlet Letter on your chest. Bankruptcy made people outcasts and pariahs. It was as if a contagious disease struck, and no one wanted to be near you for fear of infection.
Today, bankruptcy doesn’t quite have the stigma it used to. Many of the world’s most successful people have filed for bankruptcy. These people hit rock bottom, and have bounced back to become wildly successful.
To emerge from bankruptcy requires diligence and discipline. In order to get back on your financial feet, you must rebuild your credit.
If you filed a chapter 13 bankruptcy, you had to make your court-ordered payments until the bankruptcy was satisfied. Even though you made great strides financially by doing so, lenders don’t see it quite that way. Lenders don’t consider your bankruptcy payments as a way to rebuild your credit. In fact, the “rebuilding credit” clock starts after it’s discharged, no matter how long it takes you to pay while in chapter 13.
If you filed a chapter 7 bankruptcy, rebuilding won’t take quite as long. When you file for chapter 7 bankruptcy, your debts are essentially wiped out, and you start all over. Once your chapter 7 is discharged, which usually takes a few months from when you filed, your rebuilding credit clock starts.
When you file for chapter 7 bankruptcy, you have the choice of reaffirming some of your debt. In other words, you can choose to keep some of your credit lines open instead of having them wiped out. This is an option you might want to consider, especially if you have smaller credit cards with low balances (under $500). By continuing to pay your reaffirmed debt, you can help rebuild your credit with timely payments and low balances.
Regardless of which bankruptcy you file, there will come a time when the bankruptcy is fully discharged. It’s almost like being free after years in prison – you made some mistakes, you paid for them, you (hopefully) learned your lesson, and you’re looking to make a fresh start. Now, you have to rebuild your credit.
Paradoxically, you need to obtain credit to rebuild credit, but you can’t obtain credit if you just invalidated your creditors. One of the best and most popular ways to begin the process is to obtain a secured credit card. With a secured credit card, a credit company will extend you a credit line in exchange for a cash deposit. Your credit limit is usually equal to, or a percentage of, your deposit. Rarely, if ever, will it be higher than your deposit.
These credit cards are not hard to find. In fact, since bankruptcy is public record, many of these companies will find your name at the county courthouse and send you a solicitation to apply. You must be careful when dealing with these companies. Some are notorious for “kicking you when you’re down.” In addition to the deposit, they will charge you exorbitant junk fees and interest rates. Always read the fine print in the solicitation. As required by law, they must disclose their fees and rates to you.
As well, make absolutely sure that the credit card company actually reports your payment history to the three major credit bureaus. Getting a secured credit card is worthless if your history isn’t reported. It’s worth repeating that you must find out if they report to all three bureaus, as opposed to just one or two. You will handicap your rebuilding efforts if the history does not show up on all three.
Lastly, make sure the credit card is an actual Visa or MasterCard. Some credit companies offer credit cards that are only usable on their own products. They look like real credit cards, but if they’re not Visa or MasterCard, you can’t use them anywhere of consequence.
Once you have discharged your bankruptcy, obtain a copy of your credit report from the three major bureaus. In order to start your rebuilding credit campaign, you must know where you stand. Filing bankruptcy will have a tremendous impact on your credit scores. When you know where your score standsFree Web Content, you can take the necessary steps to boost them in the shortest possible amount of time.
ABOUT THE AUTHOR
Frank Bruno has spent the last 3 years assisting hundreds of clients in saving thousands of dollars in Interest rates by teaching them unique techniques on how to quickly and dramatically raise their credit scores. For more information please visit his website- http://www.CreditScoreBooster.com
In the past, filing bankruptcy was like having a Scarlet Letter on your chest. Bankruptcy made people outcasts and pariahs. It was as if a contagious disease struck, and no one wanted to be near you for fear of infection.
Today, bankruptcy doesn’t quite have the stigma it used to. Many of the world’s most successful people have filed for bankruptcy. These people hit rock bottom, and have bounced back to become wildly successful.
To emerge from bankruptcy requires diligence and discipline. In order to get back on your financial feet, you must rebuild your credit.
If you filed a chapter 13 bankruptcy, you had to make your court-ordered payments until the bankruptcy was satisfied. Even though you made great strides financially by doing so, lenders don’t see it quite that way. Lenders don’t consider your bankruptcy payments as a way to rebuild your credit. In fact, the “rebuilding credit” clock starts after it’s discharged, no matter how long it takes you to pay while in chapter 13.
If you filed a chapter 7 bankruptcy, rebuilding won’t take quite as long. When you file for chapter 7 bankruptcy, your debts are essentially wiped out, and you start all over. Once your chapter 7 is discharged, which usually takes a few months from when you filed, your rebuilding credit clock starts.
When you file for chapter 7 bankruptcy, you have the choice of reaffirming some of your debt. In other words, you can choose to keep some of your credit lines open instead of having them wiped out. This is an option you might want to consider, especially if you have smaller credit cards with low balances (under $500). By continuing to pay your reaffirmed debt, you can help rebuild your credit with timely payments and low balances.
Regardless of which bankruptcy you file, there will come a time when the bankruptcy is fully discharged. It’s almost like being free after years in prison – you made some mistakes, you paid for them, you (hopefully) learned your lesson, and you’re looking to make a fresh start. Now, you have to rebuild your credit.
Paradoxically, you need to obtain credit to rebuild credit, but you can’t obtain credit if you just invalidated your creditors. One of the best and most popular ways to begin the process is to obtain a secured credit card. With a secured credit card, a credit company will extend you a credit line in exchange for a cash deposit. Your credit limit is usually equal to, or a percentage of, your deposit. Rarely, if ever, will it be higher than your deposit.
These credit cards are not hard to find. In fact, since bankruptcy is public record, many of these companies will find your name at the county courthouse and send you a solicitation to apply. You must be careful when dealing with these companies. Some are notorious for “kicking you when you’re down.” In addition to the deposit, they will charge you exorbitant junk fees and interest rates. Always read the fine print in the solicitation. As required by law, they must disclose their fees and rates to you.
As well, make absolutely sure that the credit card company actually reports your payment history to the three major credit bureaus. Getting a secured credit card is worthless if your history isn’t reported. It’s worth repeating that you must find out if they report to all three bureaus, as opposed to just one or two. You will handicap your rebuilding efforts if the history does not show up on all three.
Lastly, make sure the credit card is an actual Visa or MasterCard. Some credit companies offer credit cards that are only usable on their own products. They look like real credit cards, but if they’re not Visa or MasterCard, you can’t use them anywhere of consequence.
Once you have discharged your bankruptcy, obtain a copy of your credit report from the three major bureaus. In order to start your rebuilding credit campaign, you must know where you stand. Filing bankruptcy will have a tremendous impact on your credit scores. When you know where your score standsFree Web Content, you can take the necessary steps to boost them in the shortest possible amount of time.
ABOUT THE AUTHOR
Frank Bruno has spent the last 3 years assisting hundreds of clients in saving thousands of dollars in Interest rates by teaching them unique techniques on how to quickly and dramatically raise their credit scores. For more information please visit his website- http://www.CreditScoreBooster.com
Bankruptcy Best Bet?
Filing bankruptcy is a common practice among the U.S. Over 2 million people file for bankruptcy every year. So many families today are swimming in debt, which is not surprising with the amount of credit that is being offered. If you pay your bills, you're given the opportunity to run up more bills. For young people, this is often too much responsibility to handle. Many people choose bankruptcy in order to gain a fresh start.
However, bankruptcy leaves you with a bad record. This makes it harder to buy a house, a car, or any other big-ticket item soon after you have filed for bankruptcy. Mortgage lenders will certainly be more cautious before granting a loan to someone with a history of bankruptcy.
Luckily, there are other choices.
Debt Consolidation
It seems like every other TV commercial is talking about debt consolidation. Why? Well, it's a big market and many people are opting for debt consolidation before taking the plunge into bankruptcy. Before you decide to take this route, you must ask yourself: Will I be able to pay all of my other bills on time and still be able to survive monthly? Failing to pay a debt consolidation loan could cause you to lose your home to a creditor. So, before you decide to consolidate your debt, make sure you can handle the payments. Know all of the facts.
Quick Tip... Shop around for a loan consolidation company. Compare interest rates and company reputation. Get as much information as you can about each potential company so that you will receive the most manageable payment.
Another option is to make a settlement. If possible, it is best to try and pay off your debt in full or to make an arrangement for payments with the creditor. Do not borrow money to pay off your debts. For most people, this only leads them deeper into debt.
Credit Counseling
Credit counseling agencies will contact your creditors and make new payment arrangements on your behalf. Most of them are able to get your interest rate lowered or even have your interest payments stopped.
Some families have found credit counseling to be one of the best solutions for avoiding bankruptcy. It will also give you some breathing room, without creditors calling you off the hook.
However, sometimes bankruptcy is the only option. Personal bankruptcy allows people with overwhelming debt to get a fresh start. Although it will tarnish your credit rating, bankruptcy is sometimes the only choice. In this case, it is important to find a good debt settlement company. As alwaysArticle Submission, researching different bankruptcy companies and options is the best thing you can do.
ABOUT THE AUTHOR
Find some interesting
Bancrupcy Statistics. Alli Ross is the webmaster at the Baby Names Box
However, bankruptcy leaves you with a bad record. This makes it harder to buy a house, a car, or any other big-ticket item soon after you have filed for bankruptcy. Mortgage lenders will certainly be more cautious before granting a loan to someone with a history of bankruptcy.
Luckily, there are other choices.
Debt Consolidation
It seems like every other TV commercial is talking about debt consolidation. Why? Well, it's a big market and many people are opting for debt consolidation before taking the plunge into bankruptcy. Before you decide to take this route, you must ask yourself: Will I be able to pay all of my other bills on time and still be able to survive monthly? Failing to pay a debt consolidation loan could cause you to lose your home to a creditor. So, before you decide to consolidate your debt, make sure you can handle the payments. Know all of the facts.
Quick Tip... Shop around for a loan consolidation company. Compare interest rates and company reputation. Get as much information as you can about each potential company so that you will receive the most manageable payment.
Another option is to make a settlement. If possible, it is best to try and pay off your debt in full or to make an arrangement for payments with the creditor. Do not borrow money to pay off your debts. For most people, this only leads them deeper into debt.
Credit Counseling
Credit counseling agencies will contact your creditors and make new payment arrangements on your behalf. Most of them are able to get your interest rate lowered or even have your interest payments stopped.
Some families have found credit counseling to be one of the best solutions for avoiding bankruptcy. It will also give you some breathing room, without creditors calling you off the hook.
However, sometimes bankruptcy is the only option. Personal bankruptcy allows people with overwhelming debt to get a fresh start. Although it will tarnish your credit rating, bankruptcy is sometimes the only choice. In this case, it is important to find a good debt settlement company. As alwaysArticle Submission, researching different bankruptcy companies and options is the best thing you can do.
ABOUT THE AUTHOR
Find some interesting
Bancrupcy Statistics. Alli Ross is the webmaster at the Baby Names Box
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