People looking for straight answers about bankruptcy, including the new laws going into effect this fall, can find them online at http://www.legalhelpers.com/blog/.
Richard K. Gustafson II, www.legalhelpers.com/legal_helpers/profile_r_gustafson.html, a partner with Legal Helpers, P.C., began writing a semi-daily blog on the firms personal bankruptcy information and assistance site, www.LegalHelpers.com.
In his blog, Gustafson writes in an informal style that will simplify bankruptcy and the law in plain language, he said. Besides drawing on his experiences from more than 11 years as a bankruptcy attorney, the blog will also explain parts of the new bankruptcy laws that go into effect Oct. 17, 2005.
I'll be blogging about personal bankruptcy; how it works, the impact it has on people's lives, and Ill touch on many of the human factors involved in bankruptcy, such as the emotional impact of how it affects people and their families, he explained in his first entry.
His writing will also reflect his deep-rooted sense of ethics, coupled with an uncompromising commitment to aggressive representation of his clients, he said.
Gustafson has advised and represented thousands of consumer bankruptcy clients during his 11-1/2 years as a bankruptcy attorney and is a manager of the bankruptcy practice group at Macey & Aleman.
Gustafson grew up in Wichita Falls, Tx. graduating from the University of the South in Sewanee, Tn., in 1990 with a B.A. in Political Science and Economics and earned his J.D. from Chicagos DePaul University College of Law in 1993.
Gustafson joined Macey & Aleman in 2000, being named a partner at the end of 2003, after working as an associate attorney in the Law Office of Peter F. Geraci. He became a member of the Illinois Bar in 1993, of the California Bar in 1997 and of the Indiana Bar in 2001. He currently lives in Evanston with his wife and two children.
http://www.mad4money.com/Attorneys_Blog_Provides_Plain_Talk_About_Bankruptcy.html
Monday, October 15, 2007
Saturday, October 13, 2007
Federal Bankruptcy Laws
Federal bankruptcy laws are only for companies and firms that wish to file for bankruptcy, individuals cannot go for these options. Chapter 11 and Chapter 7 are the two main categories of federal bankruptcy laws that businesses can choose from.
Chapter 11 provides the company or firm with an opportunity to rebuild the business in spite of crippling debts. The federal court plays an active part in such cases, as it has to give the approval for all the business decisions made once the case is filed. Chapter 11 is preferred to Chapter 7 because the company will not be closed to liquidate its assets in this instance. Also, unlike in Chapter 7, the company does not become a security asset for lien and can still be run as usual.
Like a trustee in Chapter 7 and Chapter 13 cases, the SEC plays an important role in Chapter 11. The SEC has to determine if the case is fraudulent and if the company or firm really needs to file the case instead of just pretension for the benefit of the shareholders and investors. If the company is involved in trading after it has filed for bankruptcy, then the details relating to such must be registered with the SEC.
The money will be repaid to the creditors as decided by the law. Bondholders and investors with secured collateral are usually paid first. Stockholders will be paid only if the company is able to stand back on its feet and able to make some profits in spite of filing the bankruptcy case. However, they may continue to trade with their existing stock in the local stock market unless the company liquidates these shares. Owners will be paid last after all the debt is returned to all the above-mentioned people involved with the company.
During bankruptcy, the company might not be able to provide the bondholders with principle and the stockholders with dividendsPsychology Articles, but they might try to make up for this by providing then with new stock that they put on the market for regaining their stand. The stockholders might not even receive this if the company has more liabilities than assets. A re-organization plan is prepared by a committee of creditors and stockholders of that company and of those appointed by the trustee to enable the company to buy more time while trying to get on to its feet. This plan is reviewed by the SEC and then has to be approved by the court before being put into action.
http://www.articlesfactory.com/articles/finance/federal-bankruptcy-laws.html
Chapter 11 provides the company or firm with an opportunity to rebuild the business in spite of crippling debts. The federal court plays an active part in such cases, as it has to give the approval for all the business decisions made once the case is filed. Chapter 11 is preferred to Chapter 7 because the company will not be closed to liquidate its assets in this instance. Also, unlike in Chapter 7, the company does not become a security asset for lien and can still be run as usual.
Like a trustee in Chapter 7 and Chapter 13 cases, the SEC plays an important role in Chapter 11. The SEC has to determine if the case is fraudulent and if the company or firm really needs to file the case instead of just pretension for the benefit of the shareholders and investors. If the company is involved in trading after it has filed for bankruptcy, then the details relating to such must be registered with the SEC.
The money will be repaid to the creditors as decided by the law. Bondholders and investors with secured collateral are usually paid first. Stockholders will be paid only if the company is able to stand back on its feet and able to make some profits in spite of filing the bankruptcy case. However, they may continue to trade with their existing stock in the local stock market unless the company liquidates these shares. Owners will be paid last after all the debt is returned to all the above-mentioned people involved with the company.
During bankruptcy, the company might not be able to provide the bondholders with principle and the stockholders with dividendsPsychology Articles, but they might try to make up for this by providing then with new stock that they put on the market for regaining their stand. The stockholders might not even receive this if the company has more liabilities than assets. A re-organization plan is prepared by a committee of creditors and stockholders of that company and of those appointed by the trustee to enable the company to buy more time while trying to get on to its feet. This plan is reviewed by the SEC and then has to be approved by the court before being put into action.
http://www.articlesfactory.com/articles/finance/federal-bankruptcy-laws.html
Business Bankruptcy Laws
Businesses, companies, and firms can file for bankruptcy if they are on the verge of failing all their creditors and losing their position in the market. The laws that deal with such cases are federal bankruptcy laws or Chapter 11 and Chapter 13 laws.
One advantage of filing under federal bankruptcy law instead of under Chapter 7 is that this does not require the liquidating of the company. Instead, the company will be run along with the debt being paid as decided, which will give the firm or company a chance to try to make profits again. However, all the decisions made by the management after the case is files must be approved by the federal court.
In case the company files for bankruptcy under Chapter 11, all the assets remain with the company. The company may liquidate stocks and such to pay off some part of the credit but this can be solely at the company\'s discretion. However, regular reports must be sent to the court as to any decision being made in the company.
Cases filed under this law are usually very expensive and take a long time to resolve since they deal with a number of people involved in the company instead of with just one individual as in other cases. Even the filing fee for such cases is very expensive. The management must be in a position to incur all such costs when filing the case. AlsoBusiness Management Articles, a lot of planning must be done before filing the case to avoid too many delays later in the case.
The company can form a committee of creditors to come up with a plan to repay their debts. This involves simultaneously running the company and incurring new expenses and following a court-approved plan to pay off the debt. It is suggested to have attorneys in the committee to avoid litigations in the future relating to this plan.
http://www.articlesfactory.com/articles/finance/business-bankruptcy-laws.html
One advantage of filing under federal bankruptcy law instead of under Chapter 7 is that this does not require the liquidating of the company. Instead, the company will be run along with the debt being paid as decided, which will give the firm or company a chance to try to make profits again. However, all the decisions made by the management after the case is files must be approved by the federal court.
In case the company files for bankruptcy under Chapter 11, all the assets remain with the company. The company may liquidate stocks and such to pay off some part of the credit but this can be solely at the company\'s discretion. However, regular reports must be sent to the court as to any decision being made in the company.
Cases filed under this law are usually very expensive and take a long time to resolve since they deal with a number of people involved in the company instead of with just one individual as in other cases. Even the filing fee for such cases is very expensive. The management must be in a position to incur all such costs when filing the case. AlsoBusiness Management Articles, a lot of planning must be done before filing the case to avoid too many delays later in the case.
The company can form a committee of creditors to come up with a plan to repay their debts. This involves simultaneously running the company and incurring new expenses and following a court-approved plan to pay off the debt. It is suggested to have attorneys in the committee to avoid litigations in the future relating to this plan.
http://www.articlesfactory.com/articles/finance/business-bankruptcy-laws.html
Atlanta Bankruptcy Lawyers
Bankruptcy derives its meaning from the Italian word \"banca rotta\", which means broken bench. Broken bench represents the ancient Italian custom of breaking a businessman\'s trading bench if he did not pay his debts. Over the centuries, the law has been framed to protect the interests of both creditors as well as debtors as a decent way to manage the debtor\'s financial crisis. The US bankruptcy law is a court process for managing bankruptcy that may hit both consumers as well as businesses. A bankruptcy lawyer would help to eliminate and repay debts as per the bankruptcy court\'s protection system.
Bankruptcy is of two kinds: liquidation and reorganization. Liquidation bankruptcy, covered under Chapter 7, involves the wiping out of the debts by selling nonexempt property and using the credits to pay the creditors. On the other hand, in a reorganization bankruptcy, which is covered under Chapters 11, 12 and 13, the debtor makes a plan to repay either a part of the debt or the entire debt. The pay off period under reorganized bankruptcy is usually around 3 to 5 years.
Hiring a lawyer in a bankruptcy case would prove to be very useful at all stages of the bankruptcy process. Bankruptcy lawyers would help in settling unsecured accounts like credit cards, personal loans, utility bills etc for less than the debt amount, thus providing an alternative to bankruptcy. Bankruptcy lawyers would also help to evaluate the options as to the kind of bankruptcy that has to be filed. They also help to settle assets in order and handle the files if the debts are too large and involve considerable assets.
Bankruptcy forms in Georgia are also similar to those in other states, though some additional forms may be required as per local rules. Atlanta bankruptcy lawyers are bound by the fee guidelines given by the Atlanta bankruptcy court. These fees are similar to those paid to bankruptcy lawyers in other major metropolitan area in the US. While choosing a bankruptcy lawyer in Atlanta, care should be taken to select one who has experience in handling bankruptcy cases and who has a proven track record of handling such cases successfully.
Information about Atlanta bankruptcy lawyers is available in yellow pages, via search engines like Google and Yahoo, and through advertisements of law firms. There are also attorney directories available on the internet which would provide comprehensive information about Atlanta bankruptcy lawyers. Information about Atlanta bankruptcy lawyers is also available through the county bar association and the state Bar AssociationFind Article, which is a part of the American Bar Association. Friends and family members may also provide useful referrals for good bankruptcy lawyers.
http://www.articlesfactory.com/articles/law/atlanta-bankruptcy-lawyers.html
Bankruptcy is of two kinds: liquidation and reorganization. Liquidation bankruptcy, covered under Chapter 7, involves the wiping out of the debts by selling nonexempt property and using the credits to pay the creditors. On the other hand, in a reorganization bankruptcy, which is covered under Chapters 11, 12 and 13, the debtor makes a plan to repay either a part of the debt or the entire debt. The pay off period under reorganized bankruptcy is usually around 3 to 5 years.
Hiring a lawyer in a bankruptcy case would prove to be very useful at all stages of the bankruptcy process. Bankruptcy lawyers would help in settling unsecured accounts like credit cards, personal loans, utility bills etc for less than the debt amount, thus providing an alternative to bankruptcy. Bankruptcy lawyers would also help to evaluate the options as to the kind of bankruptcy that has to be filed. They also help to settle assets in order and handle the files if the debts are too large and involve considerable assets.
Bankruptcy forms in Georgia are also similar to those in other states, though some additional forms may be required as per local rules. Atlanta bankruptcy lawyers are bound by the fee guidelines given by the Atlanta bankruptcy court. These fees are similar to those paid to bankruptcy lawyers in other major metropolitan area in the US. While choosing a bankruptcy lawyer in Atlanta, care should be taken to select one who has experience in handling bankruptcy cases and who has a proven track record of handling such cases successfully.
Information about Atlanta bankruptcy lawyers is available in yellow pages, via search engines like Google and Yahoo, and through advertisements of law firms. There are also attorney directories available on the internet which would provide comprehensive information about Atlanta bankruptcy lawyers. Information about Atlanta bankruptcy lawyers is also available through the county bar association and the state Bar AssociationFind Article, which is a part of the American Bar Association. Friends and family members may also provide useful referrals for good bankruptcy lawyers.
http://www.articlesfactory.com/articles/law/atlanta-bankruptcy-lawyers.html
Second Mortgage Loans After Bankruptcy
The purpose of bankruptcy is to give the debtor a new start in his life by repaying creditors in a systematic way. Thus, bankruptcy does not prevent anybody from taking a loan. Today, the lending rules are becoming much more relaxed, and you should not worry that you have lost your dream to buy a home or acquire a property even after you have gone bankrupt.
A second mortgage after bankruptcy requires at least two years waiting on part of the borrower. He should also pay all the bills on time during this period and save for the down payment amount, if possible. One fact that you have to keep in mind is that you may not qualify for the best interest rates, but your determined efforts to re-establish your credit could convince the creditor. A large down payment might impress the lender, and he may offer a lower interest rate. PMI is the other factor that would be involved, due to the poor credit history. Avoid mortgages with two to three years of prepayment penalties. Remember, the rates on mortgage after insolvency may be up to 12 times higher than that of the regular mortgage.
If you plan to get a mortgage within two years of bankruptcy discharge, you have to provide evidence for the flawless on-time payments you have made since your bankruptcy. But after the two-year waiting period, it is easy to get a mortgage with a small down payment, and you may even qualify for a 100% mortgage.
http://www.articlesfactory.com/articles/finance/second-mortgage-loans-after-bankruptcy.html
A second mortgage after bankruptcy requires at least two years waiting on part of the borrower. He should also pay all the bills on time during this period and save for the down payment amount, if possible. One fact that you have to keep in mind is that you may not qualify for the best interest rates, but your determined efforts to re-establish your credit could convince the creditor. A large down payment might impress the lender, and he may offer a lower interest rate. PMI is the other factor that would be involved, due to the poor credit history. Avoid mortgages with two to three years of prepayment penalties. Remember, the rates on mortgage after insolvency may be up to 12 times higher than that of the regular mortgage.
If you plan to get a mortgage within two years of bankruptcy discharge, you have to provide evidence for the flawless on-time payments you have made since your bankruptcy. But after the two-year waiting period, it is easy to get a mortgage with a small down payment, and you may even qualify for a 100% mortgage.
http://www.articlesfactory.com/articles/finance/second-mortgage-loans-after-bankruptcy.html
A Little Advice for Those Considering Chapter 7 Bankruptcy
If you are in a tough financial situation, you may be considering Chapter 7 Bankruptcy. Before you move forward, consider several alternatives first. If your financial pressures are due to Credit Card or other debt, consider debt consolidation or working with a financial counselor. You may have already taken those steps and find no other options than bankruptcy.
Chapter 7 bankruptcy may help you in eliminated most kinds of unsecured debt. Examples of these debts are credit cards; personal loans, judgments, and medical bills.
Most of the time, you can keep your property. You must be current on your car and mortgage payment. In addition, the courts will assess the amount of equity you have in your current property. If you have significant equity, you may be asked to leverage your equity to pay your debts first. The goal with Chapter 7 is to eliminate your debt while keeping your personal belongings.
There are some key facts that you need to know before you commit to Chapter 7 bankruptcy.
Here are a few answers to common questions for those filing for Chapter 7. Please read further.
Will creditors continue to harass me?
You will want to retain a Chapter 7 Attorney immediately. By working with a specialized attorney, they will immediately give you record number. When the creditors call, you can give them your record number and refer them to your attorney.
Will I lost everything if I file for Chapter 7?
Typically, you will retain all your personal belongings, including your house. A good Chapter 7 lawyer will insure that your personal effects are safe. Most often your car will be safe as well. Your attorney will leverage state bankruptcy exemptions to protect these items.
More often than not you will be more at risk in losing your personal property if you do not file for Chapter 7 to protect them. Make sure you file before you get so far behind that you cannot do anything and get out of the rut you find yourself in.
Will everyone know I have filed for bankruptcy?
The short answer is no. The only parties that will know are the IRS, creditors, and the bankruptcy court. Your employer will not be notified when you file for bankruptcy either unless they are also a creditor of yours. Your bankruptcy is public record but no notifications will be made.
How do I know if I should file for Bankruptcy?
If you are currently facing the repossession of your car or home, you will be better off considering Chapter 7. This will be a better alternative and you should move now before it is too late.
How do I choose a good Chapter 7 Attorney?
If you are considering Chapter 7, you must find a specialized Chapter 7 attorney that understands the laws and is current on any changes that my impact your situation.
When you call a bankruptcy attorney ask them how many bankruptcies they have handled in your state. Make sure you educate yourself on all your alternatives. You can easily do a quick search on the internet and do some quick research before you hire and commit to an attorney.
Most legitimate bankruptcy attorney’s will be able to give you a fair assessment over the phone. Make sure you share the facts with your situation. Many times people are embarrassed of their situation and they hide the facts. This will only prevent an attorney from helping you fast and getting the process underway.
We cannot stress enough the need to get several assessments of your situation. This is key in not only getting the right advice, but also to make sure you get an attorney that is sincerely in the business of helping you.
Will I ever get credit again?
Bankruptcy will be reported on your credit report for up to 10 years. That said you can start right away in establishing your credit. Lenders typically consider your debt to income ratio as well your credit history.
Filing for Chapter 7 helps you eliminate your debts, but also helps in reducing your debt to income ratio as well. This does help in establishing good credit for you in the future. Creditors are in the business to make money by lending you money. Remember this and you will be able to find a lender that will sell you money in your situation.
There are lenders in the business of helping people in your exact situation. You may not get the best interest rate, but you have to start somewhere.
Remember, you can only file for bankruptcy every six (6) years. Don’t find yourself in the same situation again! If you need financial counseling, don’t be embarrassed. Learn how to manage your incomeArticle Submission, and your debt after your bankruptcy and you will be on your way to a clean financial bill of health.
ABOUT THE AUTHOR
Matt D Murren owns and operates http://www.chapter7-bankruptcy-advisor.com Chapter 7 Bankruptcy
Chapter 7 bankruptcy may help you in eliminated most kinds of unsecured debt. Examples of these debts are credit cards; personal loans, judgments, and medical bills.
Most of the time, you can keep your property. You must be current on your car and mortgage payment. In addition, the courts will assess the amount of equity you have in your current property. If you have significant equity, you may be asked to leverage your equity to pay your debts first. The goal with Chapter 7 is to eliminate your debt while keeping your personal belongings.
There are some key facts that you need to know before you commit to Chapter 7 bankruptcy.
Here are a few answers to common questions for those filing for Chapter 7. Please read further.
Will creditors continue to harass me?
You will want to retain a Chapter 7 Attorney immediately. By working with a specialized attorney, they will immediately give you record number. When the creditors call, you can give them your record number and refer them to your attorney.
Will I lost everything if I file for Chapter 7?
Typically, you will retain all your personal belongings, including your house. A good Chapter 7 lawyer will insure that your personal effects are safe. Most often your car will be safe as well. Your attorney will leverage state bankruptcy exemptions to protect these items.
More often than not you will be more at risk in losing your personal property if you do not file for Chapter 7 to protect them. Make sure you file before you get so far behind that you cannot do anything and get out of the rut you find yourself in.
Will everyone know I have filed for bankruptcy?
The short answer is no. The only parties that will know are the IRS, creditors, and the bankruptcy court. Your employer will not be notified when you file for bankruptcy either unless they are also a creditor of yours. Your bankruptcy is public record but no notifications will be made.
How do I know if I should file for Bankruptcy?
If you are currently facing the repossession of your car or home, you will be better off considering Chapter 7. This will be a better alternative and you should move now before it is too late.
How do I choose a good Chapter 7 Attorney?
If you are considering Chapter 7, you must find a specialized Chapter 7 attorney that understands the laws and is current on any changes that my impact your situation.
When you call a bankruptcy attorney ask them how many bankruptcies they have handled in your state. Make sure you educate yourself on all your alternatives. You can easily do a quick search on the internet and do some quick research before you hire and commit to an attorney.
Most legitimate bankruptcy attorney’s will be able to give you a fair assessment over the phone. Make sure you share the facts with your situation. Many times people are embarrassed of their situation and they hide the facts. This will only prevent an attorney from helping you fast and getting the process underway.
We cannot stress enough the need to get several assessments of your situation. This is key in not only getting the right advice, but also to make sure you get an attorney that is sincerely in the business of helping you.
Will I ever get credit again?
Bankruptcy will be reported on your credit report for up to 10 years. That said you can start right away in establishing your credit. Lenders typically consider your debt to income ratio as well your credit history.
Filing for Chapter 7 helps you eliminate your debts, but also helps in reducing your debt to income ratio as well. This does help in establishing good credit for you in the future. Creditors are in the business to make money by lending you money. Remember this and you will be able to find a lender that will sell you money in your situation.
There are lenders in the business of helping people in your exact situation. You may not get the best interest rate, but you have to start somewhere.
Remember, you can only file for bankruptcy every six (6) years. Don’t find yourself in the same situation again! If you need financial counseling, don’t be embarrassed. Learn how to manage your incomeArticle Submission, and your debt after your bankruptcy and you will be on your way to a clean financial bill of health.
ABOUT THE AUTHOR
Matt D Murren owns and operates http://www.chapter7-bankruptcy-advisor.com Chapter 7 Bankruptcy
What Happens to Property in a Chapter 7 Bankruptcy Case?
Chapter 7 bankruptcy is a fresh start bankruptcy. A person lists all of his debts in a bankruptcy petition which is filed with the U.S. Bankruptcy Clerk. A typical Chapter 7 debtor receives a fresh start in that many of the debts in a Chapter 7 bankruptcy case are eliminated. There are exceptions to this general scenario which I will explain in greater detail later. Chapter 7 is basically for a person who does not have significant assets and who is strapped with an overburdening amount of unsecured debts. Unsecured debts are debts that are not secured by some form of property. These commonly include debts from credit cards, medical bills, personal loans, utilities, auto deficiencies as a result of a repossessed auto and rental deficiencies among others. Since there is no property or security attached to those debts, the debt is easily eliminated in a Chapter 7 bankruptcy case. Debts that are secured by property such as houses and cars are treated differently in a Chapter 7 bankruptcy case. Those debts must continue to be paid if the debtor wishes to keep the properties.
Options with regard to secured property:
The debtor can simply continue to make the contracted payment, on time, just as he did before he filed for bankruptcy relief. This act of continuing to pay on a debt is known as reaffirming a debt. By reaffirming on a debt, the debtor re-obligates himself on the loan. Another option would be to surrender the property and eliminate the underlying debt. The third option would be to redeem the property secured by the creditor. The act of redemption involves making a lump sum payment for the market value of the property. Since a debtor rarely has the ability to make such a payment, the redemption option is really not invoked all that often. The final option with regard to secured debt is to continue to make voluntary payments on the property. This is sometimes known as the fourth option; however, this option only exists in certain states. This option does not exist with regard to purchase money security interests. A typical purchase money security interest would be a furniture purchase, jewelry purchase or household appliance purchase. The voluntary payment option does exist with regard to real estate property in those states that permit the fourth option.
Property that can be kept in a Chapter 7 bankruptcy
If a person has significant assets, he will not likely decide to file a Chapter 7 bankruptcy. This is because there are limits on the amount of value that one can keep free and clear while at the same time being able to eliminate miscellaneous debt. Each state has exemption amounts that can be readily utilized by a debtor to protect property while he is in a bankruptcy. There are Federal exemptions and individual state exemptions. Some states utilize the Federal exemptions, other utilize the state exemptions, while other states can elect between the two. Obviously, if a debtor resides in a state in which an election can be made, the debtor will choose the exemption that best protects his property. The exemption limits differ so it is extremely important to discuss your rights and options with a qualified attorney who concentrates in bankruptcy law. If property is not protected properly by miss-applying the proper exemption and the proper amount of the exemption, property can be taken in exchange for the fresh start.
How is equity determined?
Some people struggle with the concept of equity in property. They don't know whether it is the market value, the amount owed, both or neither. Here is a simple way to calculate the equity in property. First of all, think of equity as ownership. The amount of equity in property is the amount of ownership that you have in the property. For example, let's say that you have a home with a market value of $250,000.00. Let's further say that you have a mortgage on the property with an outstanding balance of $200,000.00. When you take the market value of the property and subtract the mortgage debt associated with the property, you are left with the equity. In the above example, the equity or ownership in the property would equal $50,000.00. This same concept would apply to vehicles, boats, jewelry, furniture and any other property that is secured by a lien.
How is fair market value calculated?
Another issue arises when calculating the fair market value of property. Fair market value of property is not what you think it is worth. Rather, it is what the property would sell for if placed on the market for a reasonable period of time. When it comes to real estate property, market value can be determined by obtaining an appraisal. Since appraisals can be costly, another option is to get a free, market evaluation from a licensed realtor. Any dedicated realtor would be happy to provide a listing of comparable homes that are currently listed in your area or that have recently sold in your area. When requesting your free market analysis, advise the realtor that you are looking for an accurate evaluation. You don't want one that is elevated or unrealistic. You want one that will accurately list the likely price that the home would sell for if place on the open market. You can check general home values at http://www.realtor.com or http://www.housevalues.com. With regard to autos, you can check the value with Kelly Blue Book or N.A.D.A. (www.kbb.com) You can also have the vehicle evaluated by an auto dealership. They will put in writing what you car is worth as a trade-in. Of courseHealth Fitness Articles, don't rely on only one person or entity to provide a market value for your property. Check with a few sources so that you know that the values being provided are accurate.
http://www.articlesfactory.com/articles/law/what-happens-to-property-in-a-chapter-7-bankruptcy-case.html
Options with regard to secured property:
The debtor can simply continue to make the contracted payment, on time, just as he did before he filed for bankruptcy relief. This act of continuing to pay on a debt is known as reaffirming a debt. By reaffirming on a debt, the debtor re-obligates himself on the loan. Another option would be to surrender the property and eliminate the underlying debt. The third option would be to redeem the property secured by the creditor. The act of redemption involves making a lump sum payment for the market value of the property. Since a debtor rarely has the ability to make such a payment, the redemption option is really not invoked all that often. The final option with regard to secured debt is to continue to make voluntary payments on the property. This is sometimes known as the fourth option; however, this option only exists in certain states. This option does not exist with regard to purchase money security interests. A typical purchase money security interest would be a furniture purchase, jewelry purchase or household appliance purchase. The voluntary payment option does exist with regard to real estate property in those states that permit the fourth option.
Property that can be kept in a Chapter 7 bankruptcy
If a person has significant assets, he will not likely decide to file a Chapter 7 bankruptcy. This is because there are limits on the amount of value that one can keep free and clear while at the same time being able to eliminate miscellaneous debt. Each state has exemption amounts that can be readily utilized by a debtor to protect property while he is in a bankruptcy. There are Federal exemptions and individual state exemptions. Some states utilize the Federal exemptions, other utilize the state exemptions, while other states can elect between the two. Obviously, if a debtor resides in a state in which an election can be made, the debtor will choose the exemption that best protects his property. The exemption limits differ so it is extremely important to discuss your rights and options with a qualified attorney who concentrates in bankruptcy law. If property is not protected properly by miss-applying the proper exemption and the proper amount of the exemption, property can be taken in exchange for the fresh start.
How is equity determined?
Some people struggle with the concept of equity in property. They don't know whether it is the market value, the amount owed, both or neither. Here is a simple way to calculate the equity in property. First of all, think of equity as ownership. The amount of equity in property is the amount of ownership that you have in the property. For example, let's say that you have a home with a market value of $250,000.00. Let's further say that you have a mortgage on the property with an outstanding balance of $200,000.00. When you take the market value of the property and subtract the mortgage debt associated with the property, you are left with the equity. In the above example, the equity or ownership in the property would equal $50,000.00. This same concept would apply to vehicles, boats, jewelry, furniture and any other property that is secured by a lien.
How is fair market value calculated?
Another issue arises when calculating the fair market value of property. Fair market value of property is not what you think it is worth. Rather, it is what the property would sell for if placed on the market for a reasonable period of time. When it comes to real estate property, market value can be determined by obtaining an appraisal. Since appraisals can be costly, another option is to get a free, market evaluation from a licensed realtor. Any dedicated realtor would be happy to provide a listing of comparable homes that are currently listed in your area or that have recently sold in your area. When requesting your free market analysis, advise the realtor that you are looking for an accurate evaluation. You don't want one that is elevated or unrealistic. You want one that will accurately list the likely price that the home would sell for if place on the open market. You can check general home values at http://www.realtor.com or http://www.housevalues.com. With regard to autos, you can check the value with Kelly Blue Book or N.A.D.A. (www.kbb.com) You can also have the vehicle evaluated by an auto dealership. They will put in writing what you car is worth as a trade-in. Of courseHealth Fitness Articles, don't rely on only one person or entity to provide a market value for your property. Check with a few sources so that you know that the values being provided are accurate.
http://www.articlesfactory.com/articles/law/what-happens-to-property-in-a-chapter-7-bankruptcy-case.html
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