Bankruptcy is a legal step that people take when they are deep in debts and their current sources of income are too less to pay off the debts. However, as there are many complexities involved in bankruptcy laws, you need to know many things before filing bankruptcy. To start with, you must be aware of the various steps involved in filing court petition for bankruptcy.
Hiring a bankruptcy lawyer
The bankruptcy laws are very complicated and it is not easy for a common person to be aware of all the ins and outs associated with filing bankruptcy. Therefore, it is always recommended to hire a bankruptcy attorney to deal with your specific bankruptcy case. However, you need to be very careful while choosing the right bankruptcy attorney for you, like, the bankruptcy attorney you hire must be an experienced one. Here, you should also note that bankruptcy laws change from state to state. Therefore, make sure that the bankruptcy attorney you have chosen to deal your bankruptcy case is thoroughly aware of the specific bankruptcy laws, applicable in your state. Also, make sure that the bankruptcy attorney you have chosen is licensed to handle bankruptcy cases in your state.
Bankruptcy cost
The next step in filing bankruptcy is to evaluate the overall filing bankruptcy cost. Filing bankruptcy involves many expenses, which you have to pay like, the filing bankruptcy fee, bankruptcy attorney fee, and various other types of expenses, such as conversion fee. Evaluating the bankruptcy cost beforehand is an important step before filing bankruptcy. In the last four to five years, the filing fee for bankruptcy has risen substantially. You must expect to pay hundreds of dollars for the same. Again, the bankruptcy lawyers will also charge you thousands of dollars, depending upon your specific bankruptcy case.
Types of bankruptcy
While you are filing bankruptcy, one of the most important things that you may have to decide is the type of bankruptcy. However, deciding about the type of bankruptcy is no more a matter of choice. Now, with the inclusion of the new bankruptcy laws, there are certain steps that you need to follow in order to figure out the right type of bankruptcy you are eligible for. For example, now it is mandatory for you to pass a Means Test and go through a Government approved credit-counseling service, before filing bankruptcy.
Your bankruptcy attorney will work with you hand in hand. He or she will guide you through the complete filing bankruptcy procedure.
Filing bankruptcy involves a series of steps that you must be aware of. From hiring a bankruptcy attorney to ascertaining the bankruptcy cost, there are plenty of things that you need to look into. Filing bankruptcy provides all the information you wanted to have about filling bankruptcy process and other bankruptcy related issues.
Article Source: http://EzineArticles.com/?expert=Saurabh_K_Jain
Monday, September 10, 2007
Which Type Of Personal Bankruptcy Is The Best For You
If you have caught yourself in the nasty trap of debts and your financial situation is not strong enough to pay off all these debts, you must be into a dilemma of, what to do or what not to do. May be, you are planning to file for personal bankruptcy. However, do you know that there are two types of personal bankruptcy and you can choose only one? The bankruptcy laws have provided two options for the people, willing to file for personal bankruptcy. The first option is to choose to go for the straight bankruptcy, i.e. chapter 7 bankruptcy and the second option is to choose the Wage earner plan i.e. chapter 13 bankruptcy. This article intends to explain these two options for you and the circumstances in which you can use them. Let us go exploring.
Chapter 7 Bankruptcy
It is important for you to understand that chapter 7 bankruptcy is the most common form of bankruptcy and usually is termed as straight or liquidation bankruptcy. In general, when people talk about personal bankruptcy, they have the concept of liquidation bankruptcy in the mind. Therefore, you must note that the liquidation bankruptcy is not the only type of bankruptcy. As per the chapter 7 bankruptcy, all your assets are sold off, under the supervision of the trustee, appointed by the bankruptcy court. The money thus collected, is then used to pay off the respective debts of the creditors. The creditors get their share as per the priority level, as approved by the bankruptcy court. However, now with the inclusion of the new bankruptcy laws, not everybody can easily qualify for this type of personal bankruptcy. It is mandatory for you to pass the means test and go through the US government approved credit-counseling agency, before you file court petition for chapter 7 personal bankruptcy.
Chapter 13 Bankruptcy
Chapter 13 bankruptcy is commonly known as wage earner plan or reorganization personal bankruptcy. As the term suggests, as per this type of personal bankruptcy, your assets are not sold off. Instead, you are asked by the bankruptcy court to continue with your business venture, and pay the reduced claims of the various creditors simultaneously. As per this form of personal bankruptcy, you may be granted your request to pay off the debts at the rate of 75 cents on each dollar, or may be lesser than that.
There are basically two types of personal bankruptcy –chapter 7 bankruptcy and chapter 13 bankruptcy. The first form is better known as liquidation bankruptcy, where all your assets are sold off, to pay off the debts, and the latter type of bankruptcy is known as wage earner plan, where you get a chance to reorganize your finances, while paying off the debts simultaneously. Visit Filing Bankruptcy for more bankruptcy information; to know about filing bankruptcy costs and the need and role of a bankruptcy lawyer or filing bankruptcy online.
Article Source: http://EzineArticles.com/?expert=Saurabh_K_Jain
Chapter 7 Bankruptcy
It is important for you to understand that chapter 7 bankruptcy is the most common form of bankruptcy and usually is termed as straight or liquidation bankruptcy. In general, when people talk about personal bankruptcy, they have the concept of liquidation bankruptcy in the mind. Therefore, you must note that the liquidation bankruptcy is not the only type of bankruptcy. As per the chapter 7 bankruptcy, all your assets are sold off, under the supervision of the trustee, appointed by the bankruptcy court. The money thus collected, is then used to pay off the respective debts of the creditors. The creditors get their share as per the priority level, as approved by the bankruptcy court. However, now with the inclusion of the new bankruptcy laws, not everybody can easily qualify for this type of personal bankruptcy. It is mandatory for you to pass the means test and go through the US government approved credit-counseling agency, before you file court petition for chapter 7 personal bankruptcy.
Chapter 13 Bankruptcy
Chapter 13 bankruptcy is commonly known as wage earner plan or reorganization personal bankruptcy. As the term suggests, as per this type of personal bankruptcy, your assets are not sold off. Instead, you are asked by the bankruptcy court to continue with your business venture, and pay the reduced claims of the various creditors simultaneously. As per this form of personal bankruptcy, you may be granted your request to pay off the debts at the rate of 75 cents on each dollar, or may be lesser than that.
There are basically two types of personal bankruptcy –chapter 7 bankruptcy and chapter 13 bankruptcy. The first form is better known as liquidation bankruptcy, where all your assets are sold off, to pay off the debts, and the latter type of bankruptcy is known as wage earner plan, where you get a chance to reorganize your finances, while paying off the debts simultaneously. Visit Filing Bankruptcy for more bankruptcy information; to know about filing bankruptcy costs and the need and role of a bankruptcy lawyer or filing bankruptcy online.
Article Source: http://EzineArticles.com/?expert=Saurabh_K_Jain
Effects of Bankruptcy
Once you have been declared bankrupt, under the bankruptcy law all assets that belonged to you, including your home come under the control of a Trustee. The first things to ensure is that you have a good bankruptcy lawyer. If you have dependants, a respite of twelve months is given to find alternative living arrangements. However, at the end of that period, the property will be put up for sale. A court order may come into place if this is not adhered to. If the property is in joint-ownership, the other party may be allowed to make an offer to buy out your interest.
The other critical ramifications of bankruptcy are having the stigma of declaring bankruptcy attached to you and the restrictions placed upon you for certain transactions. A bankrupt person may open a new bank or building society account but is under liability to disclose the fact that he is bankrupt which may result in the bank or building society imposing certain conditions and limitations. He will not be allowed to obtain overdraft facilities or check books, as they are likely to be dishonored. The bankrupt person must inform the Trustee of any funds available in the account, which if in excess of normal living expenses, will have to be distributed among the creditors by the Trustee. He cannot conduct business directly or indirectly in any name other than that in which he was made bankrupt, be involved directly or indirectly in promoting, forming or managing a company without the Court’s permission or hold certain public offices.
Once the bankruptcy proceedings have ended, you can start afresh. The court order will end your responsibility for dischargeable debts. The order will not affect non-dischargeable debts such as alimony, child support and educational loans. After the bankruptcy, your creditors will no longer be able to collect the discharged debts. Since you cannot file again for Chapter 7 for eight years, it may be easier for you to obtain a mortgage loan or installment credit for an auto.
Besides the practical and financial effects of bankruptcy, the psychological and emotional impact on the debtor is enormous. Since a person’s self-worth is often linked to his financial status, loss of money can cause a loss of identity, self-esteem and confidence. Besides the economic security that money lends to a person, it is also viewed as a powerful tool in building relationships and thus bankruptcy may lead to a loss of interpersonal power. People start questioning their trust in themselves, in others and in the world at large. Realizing that you have to start your life all over again, without the ability to fulfill life-long goals and dreams can be painful and difficult.
In order to deal with the effects of bankruptcy, one must work towards the following goals:
Learning to deal with practical realities keeping comfort in the fact that as soon as the financial situation starts improving, things too will fall under control.
Ensuring that old mistakes are not repeated and future financial security is taken care of by learning new skills.
Being able to release the negative emotions of resentment, blame, loss and anger so as to move on.
Even though bankruptcy may feel like the end of life, it would be prudent to exercise self-compassion and start afresh.
William Brister - http://www.debtconsolidationproguide.com - A guide to credit repair
Article Source: http://EzineArticles.com/?expert=William_Brister
The other critical ramifications of bankruptcy are having the stigma of declaring bankruptcy attached to you and the restrictions placed upon you for certain transactions. A bankrupt person may open a new bank or building society account but is under liability to disclose the fact that he is bankrupt which may result in the bank or building society imposing certain conditions and limitations. He will not be allowed to obtain overdraft facilities or check books, as they are likely to be dishonored. The bankrupt person must inform the Trustee of any funds available in the account, which if in excess of normal living expenses, will have to be distributed among the creditors by the Trustee. He cannot conduct business directly or indirectly in any name other than that in which he was made bankrupt, be involved directly or indirectly in promoting, forming or managing a company without the Court’s permission or hold certain public offices.
Once the bankruptcy proceedings have ended, you can start afresh. The court order will end your responsibility for dischargeable debts. The order will not affect non-dischargeable debts such as alimony, child support and educational loans. After the bankruptcy, your creditors will no longer be able to collect the discharged debts. Since you cannot file again for Chapter 7 for eight years, it may be easier for you to obtain a mortgage loan or installment credit for an auto.
Besides the practical and financial effects of bankruptcy, the psychological and emotional impact on the debtor is enormous. Since a person’s self-worth is often linked to his financial status, loss of money can cause a loss of identity, self-esteem and confidence. Besides the economic security that money lends to a person, it is also viewed as a powerful tool in building relationships and thus bankruptcy may lead to a loss of interpersonal power. People start questioning their trust in themselves, in others and in the world at large. Realizing that you have to start your life all over again, without the ability to fulfill life-long goals and dreams can be painful and difficult.
In order to deal with the effects of bankruptcy, one must work towards the following goals:
Learning to deal with practical realities keeping comfort in the fact that as soon as the financial situation starts improving, things too will fall under control.
Ensuring that old mistakes are not repeated and future financial security is taken care of by learning new skills.
Being able to release the negative emotions of resentment, blame, loss and anger so as to move on.
Even though bankruptcy may feel like the end of life, it would be prudent to exercise self-compassion and start afresh.
William Brister - http://www.debtconsolidationproguide.com - A guide to credit repair
Article Source: http://EzineArticles.com/?expert=William_Brister
Edmonton Bankruptcy Series - How To Deal With Tax Debt Without Filing For Bankruptcy
Often I talk with people who want to deal with their outstanding tax debt but don’t want to file for bankruptcy. Whether this is because they are self employed and want to continue to do work on their own, not have as sever of an impact on their credit as they would experience with a bankruptcy or whether they simply want to avoid the stigma of a bankruptcy, it really doesn’t matter. Ultimately, there are two major ways you can deal with outstanding taxes without filing for bankruptcy. The first is to simply make arrangements directly with Canada Revenue Agency (CRA) to make payments over time. The second is to file a formal proposal under the Bankruptcy and Insolvency Act (BIA).
Arrange for payment directly
The first thing you should do when you have outstanding taxes and insufficient money to pay your balance immediately is to contact CRA and see if they will accept payments over time. Typically, if you explain your financial situation to CRA, unless you have had a long period of delinquency, they are often willing to accept a payment plan. For example, if you owe $10,000, they will often allow you to make 24 monthly instalments until your balance is paid in full. Although, keep in mind CRA will continue to chare you both interest and penalties until your outstanding balance is paid in full so the quicker you are able to pay the debt the less costly it will be.
The key thing when you make arrangements directly with CRA is that you have to keep up your end of the agreement and if you fail to do so CRA will act quickly to protect their interests. The reason this is important is that CRA has many powers that they can enact to entice compliance. Whether they take further action against you to collect receivables, seize moneys from bank accounts, garnish wages or or place a lien on any real property, these measures can be enacted immediately (as they don’t need court permission) and may leave you in a worse position than you are now.
File a Formal Proposal
Another way to deal with outstanding taxes is to file a proposal under the Bankruptcy and Insolvency Act. A proposal is a legislated way to protect yourself from your creditors and the only way that CRA will consider accepting less than the full amount owing. This legislation allows for you to make an offer to all your unsecured creditors to amend your existing payment schedule, change the terms of your existing agreement or even to pay them a percentage of what you owe. By filing a proposal you can achieve a fresh start without going bankrupt and in a manner you can afford. To file a proposal you must first contact a liscensed trustee, provide the trustee with a complete list of all of your assets and debts. Based on this information the trusee will be able to help you create a proposal that will be most likely to succeed. But remember, due to the unique nature of finances, some of the terms required in your proposal will depend on your unique situation.
Although, there are some specific terms that are required withing a proposal when dealing with monies owing to CRA (i.e. taxes). For CRA to even consider a proposal you must include the following terms:
o Your tax returns must all be filed and up to date prior to acceptance of the proposal.
o During the proposal you must file all required tax returns on time and pay any outstanding balances as they become due. Failure to do so will be seen as default in performance of your proposal and the full amount of your tax debt will be reinstated.
As well it is important that you are aware that if your taxes are reassessed in any period prior to the date of the proposal, that refund must first be applied to your outstanding debt to CRA, regardless of what stage the in the proposal processes you are in.
If you require any additional information regarding options available to those with outstanding tax debt there is a great deal of useful information you can find at www.bankruptcy-edmonton.com or www.bankruptcy-alberta.com or simply contact me directly via email.
Barton K. Goth is a senior advisor with Goth & Company Inc. – Trustee in Bankruptcy and publiser of the Edmonton Bankruptcy Article Series. Goth & Company Inc. is an Edmonton based firm licensed by the Federal Government and committed to helping people find solutions to financial difficulties. If you require more informaiton bankruptcy or the various alternatives you can visit Goth & Company Inc. at their www.bankruptcy-edmonton.com/, post a question on their Edmonton Blog, or you can contact Goth & Company Inc directly.
Article Source: http://EzineArticles.com/?expert=Barton_K._Goth
Arrange for payment directly
The first thing you should do when you have outstanding taxes and insufficient money to pay your balance immediately is to contact CRA and see if they will accept payments over time. Typically, if you explain your financial situation to CRA, unless you have had a long period of delinquency, they are often willing to accept a payment plan. For example, if you owe $10,000, they will often allow you to make 24 monthly instalments until your balance is paid in full. Although, keep in mind CRA will continue to chare you both interest and penalties until your outstanding balance is paid in full so the quicker you are able to pay the debt the less costly it will be.
The key thing when you make arrangements directly with CRA is that you have to keep up your end of the agreement and if you fail to do so CRA will act quickly to protect their interests. The reason this is important is that CRA has many powers that they can enact to entice compliance. Whether they take further action against you to collect receivables, seize moneys from bank accounts, garnish wages or or place a lien on any real property, these measures can be enacted immediately (as they don’t need court permission) and may leave you in a worse position than you are now.
File a Formal Proposal
Another way to deal with outstanding taxes is to file a proposal under the Bankruptcy and Insolvency Act. A proposal is a legislated way to protect yourself from your creditors and the only way that CRA will consider accepting less than the full amount owing. This legislation allows for you to make an offer to all your unsecured creditors to amend your existing payment schedule, change the terms of your existing agreement or even to pay them a percentage of what you owe. By filing a proposal you can achieve a fresh start without going bankrupt and in a manner you can afford. To file a proposal you must first contact a liscensed trustee, provide the trustee with a complete list of all of your assets and debts. Based on this information the trusee will be able to help you create a proposal that will be most likely to succeed. But remember, due to the unique nature of finances, some of the terms required in your proposal will depend on your unique situation.
Although, there are some specific terms that are required withing a proposal when dealing with monies owing to CRA (i.e. taxes). For CRA to even consider a proposal you must include the following terms:
o Your tax returns must all be filed and up to date prior to acceptance of the proposal.
o During the proposal you must file all required tax returns on time and pay any outstanding balances as they become due. Failure to do so will be seen as default in performance of your proposal and the full amount of your tax debt will be reinstated.
As well it is important that you are aware that if your taxes are reassessed in any period prior to the date of the proposal, that refund must first be applied to your outstanding debt to CRA, regardless of what stage the in the proposal processes you are in.
If you require any additional information regarding options available to those with outstanding tax debt there is a great deal of useful information you can find at www.bankruptcy-edmonton.com or www.bankruptcy-alberta.com or simply contact me directly via email.
Barton K. Goth is a senior advisor with Goth & Company Inc. – Trustee in Bankruptcy and publiser of the Edmonton Bankruptcy Article Series. Goth & Company Inc. is an Edmonton based firm licensed by the Federal Government and committed to helping people find solutions to financial difficulties. If you require more informaiton bankruptcy or the various alternatives you can visit Goth & Company Inc. at their www.bankruptcy-edmonton.com/, post a question on their Edmonton Blog, or you can contact Goth & Company Inc directly.
Article Source: http://EzineArticles.com/?expert=Barton_K._Goth
Reclaiming Unfair Bank Charges
Have you ever been charged penalties on your savings account or current account or credit card? How about charges on returned direct debits? Or on failed standing orders? Or on unauthorized overdraft fees? Or on bounced checks? Or even on late mortgage payments?
These bank charges are legally unenforceable according to an expert on reclaiming penalty charges made by banks. In actuality, the banks know these bank charges and avoid being sued by their clients because these are legal charges. That is why banks, of course, disagree to the accusations. However, these bank charges can be reclaimed even after you have already closed your account with the bank.
The law simply states that any bank charges levied on the bank’s customers must be proportional to the actual costs they incur. The question is, “Does it really cost £35 just to automatically send a letter when someone has gone £1 over the limit?” Therefore, contact your bank and ask for a list of your last six years’ bank charges, then add the interest on top and ask for a full refund. If the bank refuses to give you the refund, and then inform them you’ll go to court under the small claims system. In most cases, banks will merely pay out.
But this is not an official process. This is about challenging the banking world and threatening them with court action. However, there’s no guarantee of winning, and yet so far a lot of people have. Below are a few more ways in helping you understand and get started on checking if you’re one of those with unfair bank charges.
First of all, in a situation where you’ve gone over your overdraft limit or a direct debit payment or check bounces, there’s a penalty of £30 to £35 a time which is one of the bank charges. Is a charge this range really proportionate to the cost? Just remember it could be merely a charge for going a penny over the limit. Significantly, there’s a fine, another one of the bank charges, for going over the limit, and this fine is too high. Thus under the law of penalties, these bank charges are “extravagant.” Nevertheless, it plainly sends a computer-generated automatic letter with a franked stamp.
Lastly, the following are ways in helping you to reclaim the bank charges. These are:
1. Set up a parachute bank account.
2. Find out and total your charges.
3. Write to the bank and ask it for your money.
4. Threaten to take it to court.
5. Take it to cour
But most of all, if the banks still will not acknowledge your claim (since they don’t always pay up automatically even though they have lost the case), you can send in the bailiffs. Don’t worry. There are a number of people exercising this option. These bailiffs will then claim the money for you.
http://www.articlefrenzy.com/Article/Reclaiming-Unfair-Bank-Charges/82675
These bank charges are legally unenforceable according to an expert on reclaiming penalty charges made by banks. In actuality, the banks know these bank charges and avoid being sued by their clients because these are legal charges. That is why banks, of course, disagree to the accusations. However, these bank charges can be reclaimed even after you have already closed your account with the bank.
The law simply states that any bank charges levied on the bank’s customers must be proportional to the actual costs they incur. The question is, “Does it really cost £35 just to automatically send a letter when someone has gone £1 over the limit?” Therefore, contact your bank and ask for a list of your last six years’ bank charges, then add the interest on top and ask for a full refund. If the bank refuses to give you the refund, and then inform them you’ll go to court under the small claims system. In most cases, banks will merely pay out.
But this is not an official process. This is about challenging the banking world and threatening them with court action. However, there’s no guarantee of winning, and yet so far a lot of people have. Below are a few more ways in helping you understand and get started on checking if you’re one of those with unfair bank charges.
First of all, in a situation where you’ve gone over your overdraft limit or a direct debit payment or check bounces, there’s a penalty of £30 to £35 a time which is one of the bank charges. Is a charge this range really proportionate to the cost? Just remember it could be merely a charge for going a penny over the limit. Significantly, there’s a fine, another one of the bank charges, for going over the limit, and this fine is too high. Thus under the law of penalties, these bank charges are “extravagant.” Nevertheless, it plainly sends a computer-generated automatic letter with a franked stamp.
Lastly, the following are ways in helping you to reclaim the bank charges. These are:
1. Set up a parachute bank account.
2. Find out and total your charges.
3. Write to the bank and ask it for your money.
4. Threaten to take it to court.
5. Take it to cour
But most of all, if the banks still will not acknowledge your claim (since they don’t always pay up automatically even though they have lost the case), you can send in the bailiffs. Don’t worry. There are a number of people exercising this option. These bailiffs will then claim the money for you.
http://www.articlefrenzy.com/Article/Reclaiming-Unfair-Bank-Charges/82675
7 Steps to a Fresh Start after Bankruptcy
Bankruptcy is one option to consider in order giving yourself a “fresh start,” when you have more debts than you have assets. There are in fact many types of bankruptcy provided under the law but the most common is Chapter 7 bankruptcy, which is also known as liquidation.
When filing under Chapter 7 bankruptcy, all your assets, excluding those that are exempt under the law of your state, are dissolved and liquidated. Generally, the person tasked to do this is the court-appointed official, called a trustee.
All in all, the vital task of the trustee is selling your properties and using the proceeds to pay your creditors. After doing such, the court will then cancel many of your remaining debts, thus affording you a “fresh start” to life.
Here is a step-by-step guide to filing a bankruptcy under Chapter 7 bankruptcy:
Step 1: Decide whether you should file bankruptcy or not.
Filing bankruptcy is a personal decision, influenced by many factors, such as the amount of serious debts and your ability to meet the original payments or pay the full amount. For starters, when you are broke, it is never a nice experience getting harassed by creditors for debts incurred. For another, your decision to file should not be made for the sole purpose of putting a stop to your demanding creditors.
This is a significant point as secured creditors may apply for “relief from stay,” thus allowing them to continue their efforts to repossess or foreclose even though you already filed for bankruptcy.
Step 2: Get an attorney
While the law on Chapter 7 bankruptcy does not need individual consumers to hire an attorney who would represent them in court, it is still advisable to ask for legal help, particularly concerning critical decisions involved in bankruptcy.
Step 3: Comply with the legal requirements.
File your petition with the bankruptcy court serving in your area. If you are a business debtor, then file with the bankruptcy court in the place where the business was organized or has its principal place of business or principal assets. Your attorney should be able to advise you on how to deal with these required legal forms.
Step 4: Pay the necessary fees.
As with any other court cases, there are certain fees required, such as:
• Case filing fee
• Miscellaneous administrative fee
• Trustee surcharge
Upon filing, you are usually asked to pay these fees to the clerk of court.
Note that the number of installments is limited only to four. Additionally to that, you are also required to make the final installment no later than 120 days after filing the petition.
Step 5: Notice to the creditors and meeting.
After filing your petition for bankruptcy under Chapter 7, paying the necessary fees, and complying with the legal requirements, an “automatic stay” is granted to you by operation of law. This stay will efficiently stop most collection actions against you and your properties. This means that as long as the stay is in effect, creditors cannot initiate or continue lawsuits, wage garnishments, or even telephone calls demanding payments.
After the bankruptcy case has been filed, the bankruptcy clerk will give notice to all creditors whose names and addresses you provided. Then, the case trustee will hold a meeting of creditors between 20 and 40 days after you filed your petition.
Step 6: Cooperate with the trustee.
The case trustee has a vital role in a bankruptcy case. His primary responsibility is to liquidate your nonexempt assets in a manner that maximizes the return to your unsecured creditors. He does this by selling your property, if it is free and clear of liens and as long as it is not exempt, or if it worth more than any security interest or lien attached to the property and any exemption that the debtor holds in the property.
In view of the broadness of a trustee’s power, it is significant therefore that you cooperate with the trustee. Provide any financial records or documents that the trustee requests and answer questions, which the trustee is necessary to ask at the meeting of creditors under the Bankruptcy Code.
Step 7: After the discharge…
If all goes well with your Chapter 7 bankruptcy case – that is, no one files a complaint objecting to the discharge or a motion to extend the time to object – the bankruptcy court will issue a discharge order relatively early in the case, about 60 to 90 days after the date first set for the meeting of creditors
A discharge order is an order issued by the bankruptcy court, releasing you from personal liability for most debts and preventing your creditors from taking any collection actions against you. As a rule, excluding cases that are dismissed or converted, individual debtors receive a discharge in more than 99 percent of Chapter 7 bankruptcy cases.
For someone filing under Chapter 7 bankruptcy, a discharge of almost all of your debts is the ultimate goal. With the release of all your debts and creditors stopped from pursuing any further collection actions against you, the opportunity for a fresh start is apparent.
http://www.articlefrenzy.com/Article/7-Steps-to-a-Fresh-Start-after-Bankruptcy/65656
When filing under Chapter 7 bankruptcy, all your assets, excluding those that are exempt under the law of your state, are dissolved and liquidated. Generally, the person tasked to do this is the court-appointed official, called a trustee.
All in all, the vital task of the trustee is selling your properties and using the proceeds to pay your creditors. After doing such, the court will then cancel many of your remaining debts, thus affording you a “fresh start” to life.
Here is a step-by-step guide to filing a bankruptcy under Chapter 7 bankruptcy:
Step 1: Decide whether you should file bankruptcy or not.
Filing bankruptcy is a personal decision, influenced by many factors, such as the amount of serious debts and your ability to meet the original payments or pay the full amount. For starters, when you are broke, it is never a nice experience getting harassed by creditors for debts incurred. For another, your decision to file should not be made for the sole purpose of putting a stop to your demanding creditors.
This is a significant point as secured creditors may apply for “relief from stay,” thus allowing them to continue their efforts to repossess or foreclose even though you already filed for bankruptcy.
Step 2: Get an attorney
While the law on Chapter 7 bankruptcy does not need individual consumers to hire an attorney who would represent them in court, it is still advisable to ask for legal help, particularly concerning critical decisions involved in bankruptcy.
Step 3: Comply with the legal requirements.
File your petition with the bankruptcy court serving in your area. If you are a business debtor, then file with the bankruptcy court in the place where the business was organized or has its principal place of business or principal assets. Your attorney should be able to advise you on how to deal with these required legal forms.
Step 4: Pay the necessary fees.
As with any other court cases, there are certain fees required, such as:
• Case filing fee
• Miscellaneous administrative fee
• Trustee surcharge
Upon filing, you are usually asked to pay these fees to the clerk of court.
Note that the number of installments is limited only to four. Additionally to that, you are also required to make the final installment no later than 120 days after filing the petition.
Step 5: Notice to the creditors and meeting.
After filing your petition for bankruptcy under Chapter 7, paying the necessary fees, and complying with the legal requirements, an “automatic stay” is granted to you by operation of law. This stay will efficiently stop most collection actions against you and your properties. This means that as long as the stay is in effect, creditors cannot initiate or continue lawsuits, wage garnishments, or even telephone calls demanding payments.
After the bankruptcy case has been filed, the bankruptcy clerk will give notice to all creditors whose names and addresses you provided. Then, the case trustee will hold a meeting of creditors between 20 and 40 days after you filed your petition.
Step 6: Cooperate with the trustee.
The case trustee has a vital role in a bankruptcy case. His primary responsibility is to liquidate your nonexempt assets in a manner that maximizes the return to your unsecured creditors. He does this by selling your property, if it is free and clear of liens and as long as it is not exempt, or if it worth more than any security interest or lien attached to the property and any exemption that the debtor holds in the property.
In view of the broadness of a trustee’s power, it is significant therefore that you cooperate with the trustee. Provide any financial records or documents that the trustee requests and answer questions, which the trustee is necessary to ask at the meeting of creditors under the Bankruptcy Code.
Step 7: After the discharge…
If all goes well with your Chapter 7 bankruptcy case – that is, no one files a complaint objecting to the discharge or a motion to extend the time to object – the bankruptcy court will issue a discharge order relatively early in the case, about 60 to 90 days after the date first set for the meeting of creditors
A discharge order is an order issued by the bankruptcy court, releasing you from personal liability for most debts and preventing your creditors from taking any collection actions against you. As a rule, excluding cases that are dismissed or converted, individual debtors receive a discharge in more than 99 percent of Chapter 7 bankruptcy cases.
For someone filing under Chapter 7 bankruptcy, a discharge of almost all of your debts is the ultimate goal. With the release of all your debts and creditors stopped from pursuing any further collection actions against you, the opportunity for a fresh start is apparent.
http://www.articlefrenzy.com/Article/7-Steps-to-a-Fresh-Start-after-Bankruptcy/65656
Saturday, September 8, 2007
Bankruptcy Law Passes House
Bankruptcy change legislation passed Congress last week in a 302 to 126 vote and was signed into law 4/20/05 by President Bush (Whitehouse Press Release). The changes introduced by this bill are tough on consumers and good for banks. Banks are having their cake and eating it too, as the hackneyed-cliché goes.
This bill has been in the works for eight years. President Clinton vetoed the measure back in 2000 and the banks have been fighting ever since then to get it back on the table. Success for them is at hand, unfortunately for us.
The idea behind amending the bankruptcy law is to stop people from taking advantage of the system. Stop those who would abuse the law by hiding their assets in states where exemptions allow this protection and then claiming bankruptcy, thereby shedding their debt but still holding on to equity.
The reality is that the vast majority of those people seeking bankruptcy protection are not defrauding the system. These are legitimate claims of people who need a fresh start which is what bankruptcy law should be about.
Harvard Law School professor Elizabeth Warren, in her bankruptcy study found that the 90% or more of bankruptcies are still filed by people who get sick, get laid off, or get divorced, not by abusers. Even the industry can only show that 3% of those that go bankrupt might be abusing the system, still, this new law would harm all debtors.
Here are a few highlights of how bankruptcy law is affected:
Chapter 7 means test
Those seeking Chapter 7 must comply with income requirements. That means that they must make less that their state's annual household median income and have less than $100 per month available to repay their debts otherwise they will be forced to do a Chapter 13 bankruptcy. In Chapter 13, debtors restructure their debt and pay much of it back thereby losing that fresh start.
Increased cost of going bankrupt
|Bankruptcy lawyers will be charging more fees because there will be more paperwork and time in court. Also, the attorneys must protect themselves because the new law has reforms that could possibly hold them liable if their clients commit fraud.
Cost of living
The IRS (Internal Revenue Service) guidelines will determine allowed monthly spending for food, housing, clothing, etc. After taking these into account, the amount remaining must be used for debt repayment.
Forced credit counseling
Bankruptcy filers must seek credit counseling. This will also increase costs since they must pay counselors. However, I believe this requirement, and other aspects of the law, will crush the credit counseling industry. For one, people will simply want to fulfill this requirement so they can go bankrupt, and two, banks will reduce the "fair share" to counselors. Fair share is the percentage of the debt paid to counselors for helping to get consumers to pay. That's why I sometimes refer to credit counselors as voluntary debt collection agencies since they're paid by creditors. Banks will reduce this amount further because they know that people won't be able to avoid paying the debt back so why show they pay more to have it collected.
http://www.debtsmart.com/pages/article_law_passes.html
This bill has been in the works for eight years. President Clinton vetoed the measure back in 2000 and the banks have been fighting ever since then to get it back on the table. Success for them is at hand, unfortunately for us.
The idea behind amending the bankruptcy law is to stop people from taking advantage of the system. Stop those who would abuse the law by hiding their assets in states where exemptions allow this protection and then claiming bankruptcy, thereby shedding their debt but still holding on to equity.
The reality is that the vast majority of those people seeking bankruptcy protection are not defrauding the system. These are legitimate claims of people who need a fresh start which is what bankruptcy law should be about.
Harvard Law School professor Elizabeth Warren, in her bankruptcy study found that the 90% or more of bankruptcies are still filed by people who get sick, get laid off, or get divorced, not by abusers. Even the industry can only show that 3% of those that go bankrupt might be abusing the system, still, this new law would harm all debtors.
Here are a few highlights of how bankruptcy law is affected:
Chapter 7 means test
Those seeking Chapter 7 must comply with income requirements. That means that they must make less that their state's annual household median income and have less than $100 per month available to repay their debts otherwise they will be forced to do a Chapter 13 bankruptcy. In Chapter 13, debtors restructure their debt and pay much of it back thereby losing that fresh start.
Increased cost of going bankrupt
|Bankruptcy lawyers will be charging more fees because there will be more paperwork and time in court. Also, the attorneys must protect themselves because the new law has reforms that could possibly hold them liable if their clients commit fraud.
Cost of living
The IRS (Internal Revenue Service) guidelines will determine allowed monthly spending for food, housing, clothing, etc. After taking these into account, the amount remaining must be used for debt repayment.
Forced credit counseling
Bankruptcy filers must seek credit counseling. This will also increase costs since they must pay counselors. However, I believe this requirement, and other aspects of the law, will crush the credit counseling industry. For one, people will simply want to fulfill this requirement so they can go bankrupt, and two, banks will reduce the "fair share" to counselors. Fair share is the percentage of the debt paid to counselors for helping to get consumers to pay. That's why I sometimes refer to credit counselors as voluntary debt collection agencies since they're paid by creditors. Banks will reduce this amount further because they know that people won't be able to avoid paying the debt back so why show they pay more to have it collected.
http://www.debtsmart.com/pages/article_law_passes.html
Subscribe to:
Posts (Atom)