Non-Dischargeable Debts

Most debts are eliminated through a Chapter 7 Bankruptcy. However, there are a select few types of debts that cannot be discharged through bankruptcy. These types of debts are categorized as "non-dischargeable", which means that after you file bankruptcy, you will still owe these debts.

Below are the debts that fit into this category:

Student Loans and Educational Based Debt: Loans for "educational benefits" cannot be discharged through a bankruptcy, unless you can show that they cause you an undue hardship. This includes loans for tuition, books, room, board, etc. (11 U.S.C. 523(a)(3)).

Child Support and Alimony: child support and alimony cannot be discharged through the filing of a bankruptcy. (11 U.S.C. 523 (a)(5) and 523 (a)(18)).

Taxes: taxes will not be discharged by filing a Chapter 7 Bankruptcy unless they meet all four of the following points. For taxes to be dischargeable, (1) they must be income taxes (or taxes measured by gross receipts), (2) must be over three tax years old, (3) they must have been filed on time (meaning before April 15th of that tax year, unless an extension was given) and (4) they must be accurate (this means that the IRS did not later find errors or omissions in the return).

It is also possible for taxes filed late to be discharged, but only if the returns were actually filed more than 2 years prior to the bankruptcy and all other conditions of discharge discussed here are met. Unless the taxes owed meet all four of these criteria they will not be discharged in a bankruptcy. (11 U.S.C. 523 (a)(1)).

Marital/Divorce Debts: any debt that was incurred through a divorce decree will not be discharged through Chapter 7. Any debts awarded through a divorce decree can no longer be included within a bankruptcy, regardless of whether the ex-spouse objects to the bankruptcy or not. This is a change from the previous Bankruptcy Code. (11 U.S.C. 523 (a)(15)).

Court Imposed Restitution: any money owed to the court or victim as a result of criminal activity is not dischargeable through a bankruptcy. (11 U.S.C. 523 (a)(7) and 11 U.S.C 3613).

Court Fees: debts owed to the court are also not dischargeable in a Chapter 7 Bankruptcy. (11 U.S.C. 523 (a)(17)).

Fraud/Theft: debts incurred in the commission of a fraudulent act will not be discharged if the creditor objects to the dischargeable of the bankruptcy. This includes debts incurred through larceny and embezzlement. (11 U.S.C. 523 (a)(2) and 11 U.S.C 523 (a)(4)).

Intentional Torts: debts arising from intentional acts to injure a person or their property are not dischargeable. (11 U.S.C. 523 (a)(6)). These acts include battery and assault.

Debts Not Previously Discharged in other Bankruptcies: debts that were included in a previous bankruptcy that was dismissed due to fraud. (11 U.S.C. 523 (a)(10)).

Conclusion

These are the major categories of debt that are "non-dischargeable" through a bankruptcy. If you are in debt and would like to find out what your legal options are, give us a call at 888.743.5787 or fill out our free legal evaluation form. The evaluation is free, no obligations attached.

http://www.legalhelpers.com/legal_helpers/brc_articles_nondisharge.html

And just where did this whole bankruptcy thing begin?

One of the earliest recorded descriptions of the concept underlying bankruptcy may be found in Deuteronomy 15:1-2:

At the end of every seven years, thou shalt make a release. And this is the manner of the release: Every creditor that lendeth ought unto his neighbor shall release it: he shall not exact it of his neighbor, or of his brother, because it is the Lord's release.

Obviously, bankruptcy has evolved since biblical time. Let us travel in time to Italy sometime between the 9th and 14th Century. Here we can find the root of the word "bankruptcy". Whenever a man refused to pay his debts, those he owed would storm into his house or workplace and destroy his workbench. In Italian broken bench means "banca rotta". Today, that set of words has combined to form bankruptcy.

The First "bankruptcy" laws were established in England during the 16th Century. Generally it was considered a criminal offense. Even today in England the bankruptcy laws are strict and debtors are not left with much for their own. Loss of job, divorce, unforeseen medical problems, or the rocket launch of interest rates on credit cards or loans, will leave an English debtor in a bad spot.

In America, we established "bankruptcy" laws under our civil code. Modern bankruptcy is based on Article 1, Section 8 of the United States Constitution which gives Congress the exclusive power "to establish uniform laws on the subject of bankruptcies throughout the United States." Bankruptcy law is designed to provide a "fresh start" for debtors through either liquidation or reorganization. America first established Bankruptcy Laws in 1800 because Americans were facing a harsh economy. Throughout the 19th and most of the 20th Century many bankruptcy laws were passed and repealed, mainly because of changing economic conditions.

Finally, in 1978, The Bankruptcy Reform Act was passed. The Act made it easier for individuals and businesses to dissolve debts or reorganize. The Bankruptcy Law is one of the keys that make the United States an economically superior country. The Bankruptcy Reform Act allowed previously indebted consumers to spend again, and helped to stimulate the economy. If people are not given more chances to save and spend, our economy would suffer and more people would lose jobs. When an economy is doing well, consumers are spending and companies are growing. The Bankruptcy Law is so important because it actually allows people a chance to cut their losses and spend again, which in turn stimulates the economy.

Many consumers are hoping Congress does not lose sight of the fact that the proposed new bankruptcy laws could make it tougher on individuals to gain bankruptcy protection, and in turn, hurt the economy

http://www.legalhelpers.com/legal_helpers/brc_articles_bankruptcy_history.html

Women and Bankruptcy

Today more single mothers file bankruptcy than ever before. The numbers alone are staggering. Harvard law professor Elizabeth Warren found in a recent study that almost 1 million women filed for bankruptcy in the year 2001. Warren found in this same study that single women made up 40% of all bankruptcy filings.

According to Warren, divorce is one of the biggest reasons behind this steadily escalating trend. When a couple separates, the mother often gains primary custody of the children. The now-single mother must now support her children on only one income, and this arrangement can become even more problematic if she does not have an education or job skills to fall back on.

Child support is not always a safe fallback for divorce, either. Warren notes that the United States Office of Child Support Enforcement found only 51% of custodial parents were paid full child support in 1997. 25% of custodial parents received no child support at all.

A new widow may face many of the same problems supporting her children if her husband dies unexpectedly. Additionally, both divorced mothers and single mothers may find themselves in financial trouble if they were uninvolved in financial matters during marriage. In this case, single mothers could find themselves in unexpected amounts of debt after a divorce or death of a spouse.

If you are a mother in the process of a divorce, brace yourself for the financial consequences. You might have to scale back on your lifestyle considerably in order to pay your bills and support your children on your own.

If you are a married woman, you should get involved with financial decisions- even if you are happily married. Your husband would want you to take care of yourself if something ever happened to him. Educating yourself on how to handle financial matters is something everyone should do. I know it's easier to just "let my husband do it," but that is not the best approach to avoid financial disaster in the event something unexpected happens. Both of you will know how to run the household finances.

There are other benefits to sharing this responsibility. Each of you will know your bank balances. This helps prevent frivolous spending by either of you. I know, sometimes taking the "ignorant bliss" approach is easier, but it's definitely not the financially responsible approach to take. Another benefit of sharing the bill-paying responsibility is that it reduces the stress on the partner who "normally" does the bill paying. The financial "stress" can be shared and hopefully you then work together to relieve the stress.

Working together also allows you to spend time together. I know, it's not like going out to dinner or enjoying a movie together, but it is important time you can spend together discussing hopes and dreams. You each can have input and help plan your family's finances. Sharing the responsibility promotes communication and can help you learn how to work together to solve problems. These are important skills to deal with any family problems, not just finances.

Ultimately, all of these suggestions can be incorporated into any area of family life. The goal is to lead to more successful marriages and the suggestions discussed here in relation to finances apply to all aspects of your life. Communication, spending time together, sharing hopes and dreams, sharing responsibility for family finances, and sharing decision-making are all important cornerstones of healthy finances and more importantly, healthy relationships.

Conclusion

If you are in debt and would like to find out more about the legal options available to you, give us a call at 888.743.5787 or fill out our free legal evaluation form.

http://www.legalhelpers.com/legal_helpers/brc_articles_women_bankruptcy.html

Bankruptcies are Rising Again Despite Legislative Intent to Curb Filings

When Congress enacted the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA), it made its intentions clear. Lawmakers and lobbyists set out to decrease the total number of filings and force more debtors into Chapter 13 repayment plans instead of Chapter 7 debt liquidation. For a while, decreased filings turned out as planned, but now the numbers are trickling up again.

Impact of bankruptcy law changes

The changes in the bankruptcy laws that took effect on Oct. 17th last year put a huge curb on bankruptcy filings in the fourth quarter of last year. According to LexisNexis U.S., filings dropped by 91 percent in November 2005 and 87 percent in December 2005, compared to the same months in 2004. Additionally, Chapter 13 filings exceeded Chapter 7 filings, as the Chapter 13 numbers totaled 24,656, surpassing Chapter 7 filings by 1,988. While supporters argued that the statistics demonstrate the success of the legislation, most tout that the immediate effect of the law was probably so drastic due to the surge in bankruptcy filings just before the new law went into effect.

Many of the attorneys at Legal Helpers have found that a number of misconceptions exist amongst the public about the new law. The misconceptions may have contributed to some of the decline in filings. Many people who contact us think they cannot file bankruptcy any more, or that they can no longer eliminate credit card debt. Some think they earn too much for any bankruptcy relief or that they cannot file because of the assets they have. Many debtors come to these incorrect conclusions without consulting with practicing bankruptcy attorneys.

The need for Bankruptcy has not changed

Most bankruptcy attorneys are not surprised to see a slow rise in bankruptcies now that the flood of cases from last year has passed. The problems that led people to file bankruptcy in the past are still present. Job loss, medical problems, and divorce continue to force people into considering bankruptcy. Henry Sommer, Esq., co-editor-in-chief, of Collier on Bankruptcy, says this decline was expected. "It's not a surprise to me personal bankruptcies are on the rise again….Think about it - doubling of minimum credit card payments; higher interest rates; energy costs; and questions about whether the housing bubble can be sustained - all contribute to financial disaster for American families."

Debtors are slowly getting the word that they can indeed qualify for bankruptcy relief. In March 2006, Chapter 7 filings rose to 31,615, compared to 19,481 Chapter 13 filings. So already the Chapter 7 debt liquidation has surpassed the Chapter 13 repayment plans in numbers of filings. Chapter 7s amounted to 60% of the total number of personal bankruptcy filings. These numbers are twice the January 2006 statistics when a lesser 25,005 filings were counted.

All indicators show that the bankruptcy volume is on its return to normalcy. Debtors are learning that bankruptcy help is still available.

Conclusion

Are you one of the many that suffer from insurmountable debt and thought bankruptcy was no longer an option? Give us a call at 888.743.5787 or fill out our free legal evaluation form. The evaluation is free, no obligations are attached.

http://www.legalhelpers.com/legal_helpers/brc_articles_bankruptcy-rising.html

Determining Purchasing Power

A popular term amongst economists to determine the value of currencies and its purchasing power is a currencie's "purchasing power parity" (PPP). Under this terminology, economists examine the long term exchange rate of two currencies to determine what equalizes their purchasing power. This is based on the theory that every good should have an identical market value. It also assumes the theory called "one price" which means that beyond outside influences like tariffs, taxes, shipping costs, etc., the product will have the same price regardless of location. This means that a Nike shoe in the U.S. should have the same value as the identical Nike shoe in England. The theory behind PPP is that it equalizes the purchasing power of different currencies.

Many economists use these adjustments to equalize what a specific item or service should cost based on a countries economy. It gives a clearer picture of a country's economy than by comparing their gross domestic product (GDP) using exchange rates. The reason why GDP does not give an accurate picture is that it doesn't take into account the differences between different countries income and money expended, it only takes into account the total income of the country.

The way the economists are able to determine the difference between economies is to examine the difference in price of like goods. An example would be a can of Coke in the U.S. will cost $1, while in England it would cost 1.50 pounds. This illustrates that PPP exchange rate is $1 = 1.5 pounds. However, in other areas the price may differ because the purchasing power of other currencies is not as strong. Thus, the currency may have different variables based on the purchasing power within different countries that use the same currency.

This formula also allows us to get an accurate picture about the value of other countries. An example is if the value of a currency falls by ¼ then their GDP will be reduced by ¼ as well. The reason for the reduction in value of the currency is because of international trade and financial markets. In reality though, by using the PPP we can see that this country is not any poorer because the income and products have remained the same. This is why the PPP is a more accurate way to determine the spending power and exchange rates amongst the currencies of the world.

Conclusion

As the world continues to get smaller, financial issues abroad will begin to have more of an impact on our personal lives than ever. Understanding some of the factors involved makes us all better consumers.

If you are in debt and would like to find out more about the legal options available to you. Give us a call at 888.743.5787 or fill out our free legal evaluation form.

http://www.legalhelpers.com/legal_helpers/brc_articles_determining-purchase-power.html

Identity Theft: Your chances of becoming a victim may depend where you live

Year after year in this information age, the problem of identity theft has become a widespread mareketplace issue. As recent as last year the Federal Trade Commission reportedly received over 250,000 complaints. The business sector estimates much higher figures of damage, reporting that it affected more than 18 million Americans over the past two years and cost business and government billions of dollars.

There is reason to believe now that the chances for you, the consumer, to become a victim may depend on what geographic location you reside. Best Places Expert, Bert Spelling, announced on July 13, 2006, the results of a national study he lead to discover that there are clear geographic and socio-economic divides that affect cities at risk.

iJacking - Identity Theft defined

Intersections, Inc., an identity management solutions company, concurrently coined a new term,

iJacking: (i-jak-ng) noun: - An emotionally devastating crime that drains your accounts, hurts your reputation and leaves you financially paralyzed when thieves assume your identity or use your Social Security number to commit fraud crimes.
The term attests to the great personal harm caused by identity theft and the limited ability to recover financially in most cases. See Identity and Theft Prevention in the Articles section of www.legal Helpers.com.

Bay Area, West Coast Most "At Risk"

The study came up with a number of links between behavioral tendencies prevalent in various regions as well as a rating list of the 50 largest U.S. metropolitan areas from most to least risky for identity theft. It finds the San Francisco Bay Area to be the most at risk area of the country for identity theft. The West Coast appears to be the most unsafe for this relatively burgeoning threat as nine of the top ten cities most at risk for identity theft are on the West Coast, while most of the cities rated safest fall to the East.

The study found a number of behavioral trends that seem to lead to increased risk of identity theft exposure, and found that cities with higher occurances of risky attributes also had higher occurances of identity theft. It used over 80 metrics grouped into four categories:

1. Technology Impact
2. Lifestyle Risks
3. Transaction Habits
4. At Risk Behavior

Everyday transactions appear to put millions at risk. Frequent credit card use such as when dining or online, frequent ATM use, and frequent Internet use all contribute to overall increased likelihood of falling prey to identity theft. These trends make the West Coast most susceptible as cities like San Franciso, San Jose, and Denver rank with the highest percentiles for related technology risk factors like frequency of online banking, purchasing , and overall spending online.

Methamphetamines and Identity Theft

Another interesting correlation is that between methamphetamine and identity theft. The study also finds a clear connection between an increased rate of methamphetamine usage and and increased occurance of identity theft. The cities with the highest rates of methamphetamine usage, San Francisco, San Jose, Salt Lake City, and Denver, also rank first, fourth, seventh, and third, respectively, as the the cities most at risk for identity theft.

Identity theft is obviously a new type of growing crime with a number of risk factors that are seemingly difficult to avoid in everyday life. As we learn about this problem errupting in our society, more and more information becomes available to help consumers defend themselves against this faceless threat. Data from studies is still limited.

Legal Helpers will continue to update our site with information regarding this problem and suggest potential remedies as they become available, and expresses no opinion as to the usefulness of the subscription services that Intersections Inc., the company referenced above that supported this study and its publication, provides to consumers to protect them from identity theft.

Conclusion

Until solutions and safeguards in the marketplace become more effective, bankruptcy can become the last resort for clearing up debt resulting from identity theft. There are some who have exhausted all administrative remedies but find themselves with no other option beside bankruptcy to eliminate debt they never incurred and can never hope to pay. Unfortunately our firm sees a growing number of clients that suffer from identity theft as they become completely exasperated from failed attempts to correct their liabilty and reports of disputed debts. If you find yourself in this unfortunate situation, we are willing and able to help you.

If you are in debt and would like to find out more about the legal options available to you. Give us a call at 888.743.5787 or fill out our free legal evaluation form.

http://www.legalhelpers.com/legal_helpers/brc_articles_identity-theft.html

Do you make these mistakes with your household budget?

Budgeting is hard and quite frankly, it isn't much fun. Yet for those of us who find ourselves barely getting by each month, a disciplined approach by way of a household budget is the solution. Before we discuss specifics, let's cover a few basics.

Avoid Impulse Purchases

Many people rack up debts by making impulse purchases. These are the types of purchases that can be rather expensive, are rarely practical and are often not necessary. These purchases lead many people onto the "debt treadmill" where they are forced to keep paying a minimum balance and never seem to get caught up. By avoiding these purchases, you can pay down existing debt, be prepared for emergencies or save for future expenses.

Avoid Making Minimum Payments on Credit Cards

The biggest trap that people fall into is paying only the minimum balance on their credit cards. This is how the credit card companies make money off of you!!!

The reason is that you are paying mostly the interest off the balance; the balance still remains to be paid. If you are only making your minimum payment you are just throwing your money out the window because you are not making any headway on the principal balance.

Pay more than the minimum each month. This will allow you to pay off the balance quicker and start using that money that you are paying on interest for other expenses or savings.

Avoid premium purchases

Try to avoid making premium purchases for everyday items like aspirin, paper towels, soda, etc. Plan a trip to the grocery store, create a list of items you will need and look for bargains, specials or discounts.

Track your spending

Start paying attention to where you are spending money. Track your cash expenditures as well as your credit card expenses. Get receipts for everything you buy, even that cup of coffee in the morning or that quick stop at the gas pump. At the end of the month, gather all your receipts and sort by category. Total your expenses; you'll be amazed at just how much you are spending on little impulse items (see the first point above).

Conclusion

These are a few areas that you can start with to improve your financial outlook. If you can avoid some or all of these pitfalls it can lead to financial freedom. If you are in debt and would like to find out more about the legal options available to you. Give us a call at 888.743.5787 or fill out our free legal evaluation form.

http://www.legalhelpers.com/legal_helpers/brc_articles_budget.html