Bankruptcy

Financial Forecast - Bankruptcy Trends 2010

2010-05-19T12:26:00.001-07:00

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There is no question that many people and businesses are happy to put 2009 past them. Nevertheless, what is in the 2010 bankruptcy forecast for them? What shall we see continuing to occur throughout the year? Should people be relieved to ring in the New Year after all? Here are the top bankruptcy trends agreed upon by experts.

Unfortunately, unemployment will continue to be stagnant. The situation is not predicted to become worse, but a significant improvement in this arena is not expected either. The unemployment numbers have a direct affect upon bankruptcy filings. The more unemployed people exist, the more bankruptcy filings occur. This leads to asking why people would still be unemployed in 2010. The reason is more businesses shall be filing for bankruptcy forcing the creation of jobs to stop.

Experts do agree there will be a rise in companies filing for bankruptcy, regardless if it is a small business or a heavy hitter. Small businesses will be filing for they received a big hit during the recession, and still have not had enough time to recover leaving them no choice but to file for bankruptcy. It is difficult for the little businesses to bounce back as quick as major corporations.

For the larger companies, there will be an apparent use of the pre-packaged bankruptcy filings seen with Chrysler and General Motors. The reason this type of cookie cutter bankruptcy is rising in popularity is due to the way creditors are handled. For example, if a creditor is displeased due to the filing and does not agree to the bankruptcy conditions, then the creditor gets nothing. On the other hand, a creditor concurs to the bankruptcy restrictions will receive some interest in return.

Another trend we touched upon above is the unemployment concern originating a direct link to bankruptcy. Thus, we need to take a closer look at where unemployment rate stands today. The government keeps stating how unemployment rates are dropping. Headlines are frequently claiming the situation is improving. Alternatively, experts claim this to be false. The reason being is the government has reported numbers that do not include those who are only working part-time since becoming unemployed or who have not had a job in a year. Therefore, you need to take the percentages printed with a grain of salt.

What does all this mean to bankruptcy trends? It translates to more bankruptcy filings in 2010. Not as many people are working resulting in lack of income producing financial turmoil. Not as much money is spent hurting businesses triggering financial losses with corporations. The mom and pop shops are nearly extinct. The big box companies are barely holding on. The airline industry will continue to apply for bankruptcy. It is a big mess. And the only resolution for countless people and companies is to file bankruptcy.

Bankruptcy is a tedious process an experienced professional should manage. There are many ins and outs not explained upfront. Therefore, if you have someone who is knowledgeable in this field then it is best to speak, meet and hire him/her before proceeding forth.

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Should I File Bankruptcy?

2010-05-18T07:34:00.001-07:00

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Deciding whether or not to file bankruptcy can be tough, but before you make the choice, it's important to understand what, exactly, bankruptcy can and cannot do for you. Here are a few things that you need to consider before you decide to file for bankruptcy.

For one thing, filing bankruptcy should be your absolute last resort option. You shouldn't take it until you check out all of your other options, including selling your home, getting another job to pay off debt, or other options that can help you pay down your debt. You can also talk with your creditors; in general, they would rather work to make your payments easier to make rather than have you file for bankruptcy because they'll get more money if you actually pay off your debts.

Another thing to think about is the balance of your debts that are non-dischargeable. These debts will still be left standing after you file for bankruptcy, so if you have a ton of non-dischargeable debts, bankruptcy might not be the best option. One example of non-dischargeable debt is student loans, but if you can't make your student loan payments, the government will be able to help you change your payment plan so that you can continue to make your payments on time.

Also, take into consideration what filing for bankruptcy will do to your credit score. Bankruptcy will totally trash your score. Although it will be possible to rebuild your score over time, you'll have to spend significant amounts of time and effort getting your score rebuilt after your bankruptcy is declared.

Now, if you have sorted through all your other options, discovered that not too many of your desks are non-dischargeable, and know how you'll rebuild your credit score after you file bankruptcy, you may still want to move on with this plan. One thing that you can do to protect yourself is to choose some of your property to be exempt. Depending on your state's laws, you'll be able to choose different pieces of property to be exempt, which means that it can't be sold to pay your creditors and that you'll be able to keep it when you're rebuilding your life after bankruptcy.

So, if you're asking, "Should I file bankruptcy?" you should keep all these points in mind before you make your decision. Doing your research beforehand can save you extra heartache later on.

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Bankruptcy - Has it Ruined My Credit Forever?

2010-05-16T02:26:00.001-07:00

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Going through bankruptcy and/or foreclosure is a traumatic experience many of us have gone through recently. I know just how it feels...I've just been through it. Financial hardship makes you feel "less than" no matter what the circumstances that caused it...your fault or not. Our financial lives are in ruins. The news indicates more financial hard times are ahead. Recent articles in the news say that only those people who have good credit scores will be able to get credit in the future, including home loans, car loans and credit cards.

With the current economic upheaval nationwide, where do we start to rebuild our good credit? Is it even possible to have good credit again? I have been searching for the right opportunity to begin again, and I've done a lot of research. What? are our choices:

Merchandise Card - a way to obtain a line of credit for products I may wish to purchase, but only for the products available through that merchandise card. Some merchants offer credit reporting to one or two major bureaus, and many do not.

Secured Credit Card - by depositing money in a pledged savings account, I can have a credit card for general purposes, but my deposit cannot be used by me during the term of the card use. By doing this, my credit gets rebuilt if I make my payments on time. Banks report to one, two or three major credit bureaus.

Unsecured Credit Card - by paying fees to obtain a credit card of approximately $300, I can have a credit card for general purposes, but I can only have the limit they grant amount to use. Some banks/merchants report to the major credit bureaus, but some do not.

I weighed the options for me and my family, and think I have found the right answer for me. I found a proven, no-hassle way to get a real general purpose credit card, without having to qualify that reports to all three credit bureaus and started me on the path to financial freedom, even with a bankruptcy...even with bad credit! Sounds too good to be true...right? Well, it is true! This Visa card is available to most everyone, and takes only a few minutes to get set up. If you have as little as $200, you can deposit it into this FIDC insured bank. Then use the credit card to buy things up to the limit set by the amount of your deposit, and pay for it normally. It's that simple. You can, of course, deposit more, and have access to more. There is a one-time application fee of $79.

Now you think...that's crazy, you ask...why would I want to deposit money and still use my own additional money to pay for things through the credit card? The answer is this...if you pay for things yourself, nobody knows about it but you. But if you make a deposit (to guarantee your ability to make payments) and use the credit card to pay for your purchases with your own funds, then the record of those charges and payments gets reported to the credit bureaus as a regular credit card, and you get the benefits of raised scores because of it. The credit bureaus weigh your ability to make monthly payments on time every month as one of the most important things to increase your score.

Actually, this credit card is ingenious! What you want to know is this...Public Savings Bank provides this service to you with no interest charged for the first six months, and then 7.99% thereafter...way below the competing cards. All you have to do is use the credit card to pay for your every day expenses, and you are building a credit history at the same time. Here's the low down...

...you don't have to make your deposit until you're ready to begin using the card.
o 0% APR for 6 Months on Purchases
o No Annual Fee
o They Report to All 3 Credit Bureaus
o No Minimum Credit Score, No Income/Employment Verifications
o 25 Day Grace Period
o Use the Card Everywhere You See the Visa® Logo
o Lifetime Credit Limits up to $10,000
o Choose Your Credit Limit From $200 to $1500 to Start
o 24/7 Online Account Access
o All Applications Accepted!
o Free Visa Rewards Including Auto Collision Damage and Emergency Card Replacement
o Automatic Auto Rental Insurance
o Travel and Emergency Assistance
o $0 Fraud Liability

This bank is insured by the FDIC, so you can rest assured your funds are safe. When you are finished using this credit card, simply request a return of your deposit.

Do like I did and get started. Remember, there's no qualifying...only a one-time cost of $79 accompanies the application, and no interest is charged for the first six months. Deposit $200 to $1500 to start, and start using your Visa card right away for any purpose! Pay your bills, and start spending for those Holiday gifts you must buy. Remember...you must start again to build your credit so that bankruptcy won't have ruined it forever. Don't delay...do it today!

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Bankruptcy - What Can We Expect in 2010

2010-05-15T12:03:00.001-07:00

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There is little doubt that most people and businesses are glad to see 2009 pass, but what does 2010 hold in store particularly when it comes to bankruptcy filings? Let's take a look.

The 2009 calendar year saw the bankruptcy filings of companies that were once thought impervious to such a development. Two that immediately come to mind are Chrysler and General Motors. Both filings were fairly quick because the nature of the reorganizations were figured out before the filings were made. This presents us with our first trend in 2010.

We can expect to see more pre-packaged bankruptcy filings this year by large businesses. This type of bankruptcy has always been around, but it was turned into an art form in 2009. The basic idea is to put the screws to the creditors while threatening a bankruptcy filing. Those creditors that don't agree to the deal being offered are then washed away in bankruptcy while those that agree come out the other side with some interest still in the company, often an equity interest.

The second trend we will see in 2010 is the continuation of huge bankruptcy filings. The difference is you and I will not recognize many of the names. These companies will be behind the seen entities. The number on industry where this will occur is in commercial real estate. Everyone from mall owners to brokers to, well, anyone associated with the industry is going to be in big pain. 2009 started the commercial real estate market implosion, but 2010 will see the biggest bloodletting.

The third development will be the continued "hidden" second great depression. People say we were saved from a great depression, but this isn't true. The key is the banks. More banks failed in 2009 than 2007 and 2008 combined. The government is just doing a good job of keeping the news under wrap. Ah, and what about unemployment? Well, the reported rate is just over 10 percent. In truth, it is closer to 20 percent. The official rate does not include people who are working part time or haven't had a job in a year. All of this will lead to more personal and business bankruptcy filings.

Is there any economic hope in 2010? Yes. The good news is we've stabilized from a confidence stand point. That is important because it means people will go out and spend at least a bit on things. I just bought an exercise bike! Regardless, the panic of 2009 has ended and one can expect a bit of stability in 2010. Will there be a recovery? Technically, we are already in one, but the effects won't be felt by people like you and I until the end of 2010 or early 2011. Still, that is better than where we were in January 2009.

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Bankruptcy Loans

2010-05-14T12:41:00.001-07:00

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Bankruptcy loans offers many people a chance to begin the road to reestablishing a good credit rating, but this will only work if you make your payments on time, The drawbacks to bankruptcy loans are higher interest and bad loan terms. Having filed bankruptcy means that you are at a higher risk to the lenders, but over time, you can prove your ability to meet your obligations and the terms and interest rates improve. If you have filed bankruptcy and think that owning a home or purchasing a new vehicle is no longer a possibility for you, remember that you do have options.

Many times, before you qualify for bankruptcy loans, you must start with something small, such as a secured credit card. After bankruptcy, it is important that payments are made on time. After a certain period of making payments on time, you can apply for a bankruptcy loan to see if you qualify. Remember, though, in order to avoid finding yourself in an impossible situation, it is important to stay within your budget. Be sure your payments can be easily handled, and be sure that you get all your debts paid on time. You will soon find that, yes-there is life after bankruptcy. And. this includes the opportunity of owning your own home It won't be easy- but it is possible.

Bad debt and bankruptcy loans are loans made to help people with bad credit who want to avoid bankruptcy. The most common form of bad debt loans is the debt consolidation loan. Debt consolidation loans are generally used to consolidate all debts into one monthly payment that is significantly lower than the combined payments of all the debts.

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Bankruptcy Filers Get a Second Chance

2010-05-13T08:52:00.001-07:00

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The 2008 financial crisis resulted in a credit freeze and implementation of the $700 billion dollar bailout plan will cause many Americans to feel the burden regarding their existing credit card accounts or when applying for new lines of credit or credit cards.

Well, thanks to several Americans who were fed up with the inaccuracies reported by the credit bureaus a recent court ruling which occurred due to a class action lawsuit that was filed against the 3 major credit bureaus, Experian, Equifax and TransUnion stated that Experian, Equifax and TransUnion violated the Fair Credit Reporting Act (FCRA) by failing to maintain accurate records related to Chapter 7 bankruptcies.

The court ruling required the 3 major credit bureaus, Experian, Equifax and TransUnion to change their reporting system by October 1, 2008 and remove old debts that were included in bankruptcies. This is a HUGE victory for many Americans who had low credit scores and were unable to get approved for loans or credit cards due to: old debts still being reported as open, old debt reported with balances, reported with an "active" status or as a collection account. Accounts included in a Chapter 7 bankruptcy will now be reported with a zero balance and with a closed status.

Many consumers have been impacted because late accounts were reported to collection agencies that ignored the fact that the accounts were included in a Chapter 7 bankruptcy. As a result, the accounts are reported multiple times as delinquent. Each occurrence of the delinquent or unpaid account lowers a consumer's credit score.

Consumers who filed Chapter 7 bankruptcy that has already been discharged will have to request a new credit report after October 1, 2008 to see if their credit report has been updated by going to the annualcreditreport.com website or by calling 877-322-8228.

If you still find errors on your credit report due to a bankruptcy, file a dispute with the credit bureau reporting the inaccurate information. You can file a dispute online which is faster and usually takes 2 weeks for a response or you can file by mail which takes 30 to 45 days for a response.

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How to Declare Bankruptcy

2010-05-13T01:03:00.001-07:00

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How to declare bankruptcy is a question that runs through the minds of many people considering bankruptcy. Making that initial decision to file bankruptcy is hard enough that the last thing you need is a complicated process to follow it up. The following explains what you need to do to get to the point of filing bankruptcy and explains how to declare bankruptcy.

Signs it is the Right Time

There are a few things that will tell you it is time to file bankruptcy. Making that decision to file can be hard because you want to file before it is too late but not so early that you end up no better after than you were before. Watch for these following signs to let you know that it is the right time:

- You can not get creditors to make repayment deals that work for you.

- You are being harassed by collection calls.

- You have been told a creditor plans to file a suit against you in court.

- Your wages are being garnished or about to be.

If you see any of these problems you might be ready to file bankruptcy.

How to Get Started

The first thing you need to do when learning how to declare bankruptcy is to gather all the information on your debts. You also want to gather all your financial information on every bill and your income.

You will need to fill out the proper bankruptcy forms, too. Start by finding out what chapter bankruptcy you need to file. Most people will file a Chapter 7 or 13. Figure out which is best for your situation.

You will also want to consult an attorney so that you have some legal guidance on how to declare bankruptcy. An attorney will help you to ensure that you do not leave out anything important or fail to file important paperwork.

You have to be sure to so everything you need to do or your case can be dismissed and you will have to wait to file again.

What to do Once it's Over

Once your bankruptcy has been filed and the court has discharged your debts you have to move on. You should consider your bankruptcy as a learning experience. You should take away from it more responsibility and knowledge to help keep you from getting into the same situation in the future.

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Filing Bankruptcy in Federal Courts

2010-05-11T23:03:00.001-07:00

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One cannot file for bankruptcy through US state courts, since exclusive jurisdiction is vested with Federal courts. The court charges a certain fee at the time of filing, depending on which category of bankruptcy is being filed for. Specifically, a court fee for filing for Chapter 7 bankruptcy is $274, $1,039 for Chapter 11, $239 for Chapter 12 and $139 for Chapter 13. The charges vary for single individuals and married couples and can be paid in installments over a period of 120 days.

The Federal Rules of Bankruptcy Procedure has a formal procedure for filing, which is further specific to the bankruptcy laws of each judicial district. The US has 90 formal districts in which bankruptcy can be filed for, and the overall power over these is vested with the United States bankruptcy judge. Someone filing for Chapter 7 bankruptcy will usually have no direct dealings with a judge, while someone filing for Chapter 13 bankruptcy will appear before a judge at the official plan confirmation.

The applicant will, however, attend the 341 meeting (so called because it is required by section 341 of the Bankruptcy Code). In this meeting, the person applying for bankruptcy meets with all creditors involved and answers questions pertaining to assets, property, etc.

The form that needs to be filled out for filing bankruptcy encompasses something like 20 pages. It is this extensive because the applicant needs to provide the court with complete information regarding income and expenses, assets and liabilities and all financial transactions in the immediate past. The form is available with most legal stationers and costs around $20.

The bankruptcy petition must be filed in the applicable district's local bankruptcy court, along with documentation pertaining to previous applications for bankruptcy.

Pros and Cons of Declaring Bankruptcy

2010-05-09T13:05:00.001-07:00

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Many people get understandably nervous when the topic of bankruptcy is brought up. They're embarrassed by the thought of having to declare bankruptcy because of what others might think and the effect it will have on their future credit rating. In addition, the new bankruptcy law that was passed in 2005 has added many details and technicalities which tend to make the whole process more confusing for consumers (and even for their lawyers).

Many wrongly assume that bankruptcy is no longer an option because of the law that was passed by President George W Bush in 2005. However, this is simply not the case. Things have changed and there have been some additional requirements placed on consumers, but bankruptcy remains a real option for many Americans. Having said that, what are the pros and cons of declaring bankruptcy?

Well, the obvious advantage of declaring bankruptcy is the possibility of getting your debts wiped out. If you successfully file chapter seven bankruptcy, you can kiss most or all of your debts goodbye without ever having to worry about them again. This can provide much needed relief to families who are struggling with debt and see no end in sight.

Bankruptcy can provide a way out of credit card debts and medical bills while protecting your home and retirement accounts. There are many exceptions and details to be worked out, so you'll want to discuss your case thoroughly with a good bankruptcy lawyer. For example, homestead exemptions vary by state, so your home may be vulnerable depending on your specific circumstances.

Still, bankruptcy provides a legitimate way of wiping out unsecured debts and getting a fresh financial start. Of course, there are many drawbacks to bankruptcy, not least of which will be a severely poor credit rating for the next several years. If your financial situation is bad enough, however, your credit rating is probably the last thing on your mind (and you can improve it gradually in the next few years).

Another problem with bankruptcy is that some debts cannot be wiped out. You generally cannot dismiss student loans or income taxes. Also, you may be out of luck if the court determines that you incur a credit card debt without ever intending to pay it off.

There are many things to consider when looking at bankruptcy, and you should never make a decision without discussing the situation thoroughly with a lawyer. Still, you should know that the option is available, and you should not ignore it simply out of embarrassment or fear.

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File Bankruptcy Online

2010-05-08T10:49:00.001-07:00

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Are you considering bankruptcy? Does your situation seem desperate enough to warrant the use of bankruptcy to get out from under your debts? Even though you cannot file bankruptcy online you can download all the forms you will need to file for bankruptcy in the courts. You do need to make sure you are making the right decision and do not forget about these options.

Your first alternative is to use a credit counseling service. Sure you will have to swallow your pride and tell someone that you could not manage your finances, but they hear this everyday and many of them were in your situation at one point so they understand what you are going through. Plus they are there to help you and not criticize you.

They will help you put together a plan to get out of debt and move on with your life in a better way. They will also counsel you in credit and help you set up a manageable budget so you can live a better financial life.

Another alternative is to go to your priest or pastor and see if anybody within the church has volunteer to help the others with their finances. This is often the case and they are usually a financial advisor, accountant, or someone else that has been in debt and climbed out.

You can get the help you need without having to worry about filing bankruptcy online, but if you do decide to file bankruptcy you can do it without an attorney. You can download all the forms and they have instructions so you can file it yourself and save about 85% of what a bankruptcy attorney would cost you.

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A Post-Holidays Bankruptcy May Leave You in Bankruptcy Fraud

2010-05-08T04:42:00.001-07:00

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In some ways, credit cards have made the holidays easier. You don't have to have the cash in your hands to spend on Christmas gifts. At the same time, credit cards have made it harder for us to avoid over spending. After all, putting your gifts on plastic keeps the amount you've spent "out of sight and out of mind." Well, it does until at least January. The post-holiday bills are often a shock to us-and our bank accounts. If you're thinking, "I should just file bankruptcy after Christmas and erase all my credit card debt," an experienced St. Louis Missouri and Illinois bankruptcy attorney might tell you to start on Plan B.

One of the many benefits of Missouri chapter 7 bankruptcy is that you can find a credit card debt solution. But, if you have incurred a lot of credit card debt right before filing, your creditors might become suspicious. Spending money with no intention or repayment right before filing bankruptcy is considered fraud-and your creditors can sue you to repay the debts after the discharge of your bankruptcy.

That doesn't mean that, when you are wondering when to file bankruptcy, you need to cross late December off your list but it does mean that you shouldn't spend money on your credit cards like it's money in your bank account. To truly get credit card debt help for 2010 from Chapter 7 bankruptcy, you should probably put away your credit cards and only spend what you've got.

So, how will you be able to afford Christmas this year? There are a few short cuts you can take that may save you some cash. First, remember not to go overboard on decorations. Buying four new plastic santas is often an unneeded expense and can be avoided by simply using last year's. Second, if you are traveling, try and find the last minute deals on flights or consider driving. Lastly, consider a gift exchange. If you've got 57 first cousins, buying gifts for all of them will certainly be a headache. Save the trouble and some cash by doing a "Secret Santa" exchange.

Once you've taken the necessary precautions, you can start looking at your fresh start for 2010 with Missouri or Illinois Chapter 7 bankruptcy. Where can you start looking? Look for a Missouri or Illinois bankruptcy lawyer who offers you free information before you even step foot in his or her office. The best bankruptcy attorneys in your area should have articles, blogs, and publications to offer you at no charge.

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How Long will Filing Bankruptcy Delay Foreclosure?

2010-05-05T02:41:00.001-07:00

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Filing bankruptcy is one of the more complex issues for homeowners attempting to save their homes from foreclosure. The likelihood of ever completing the plan is very small, and the drawbacks are numerous, from poor credit to higher monthly payments. Most foreclosure victims file bankruptcy just to get more time to work out a solution, but how much time they will actually obtain is almost entirely dependent on their financial situations.

In theory, filing bankruptcy is designed to delay the foreclosure process indefinitely. There are really only a few ways to take the property out of the Chapter 13 bankruptcy, all but one of which is usually not a very good idea. But if the house is never taken out of the court-ordered plan, the process is designed to get the house caught up and out of foreclosure.

A bankruptcy is designed to give the foreclosure victims time under the protection of the law and the courts to reorganize their debts and pay back the amounts they have fallen behind. In the event they are able to make it through the entire payment plan with the bankruptcy, then they will be caught up on the mortgage loan. The foreclosure will be completely over with, since a bank can not foreclose on a house where the loan is not in default. This is obviously the most desirable resolution to filing bankruptcy to prevent foreclosure, but it is also the most uncommon.

Far more likely is the possibility that the homeowners will simply find themselves unable to keep up with the bankruptcy plan payments. In this case, if they miss a payment, the case will be dismissed from the court, and the lender can start the foreclosure process up again from the day the homeowners had initially filed the bankruptcy. There is no reason for them to start over from the beginning, as bankruptcy just puts collection efforts on hold; it does not stop them entirely. Thus, as soon as the bankruptcy is dismissed, the bank will try to sell the house at a sheriff sale and add all those other late payments to the homeowners' credit report, and increase the total mortgage payoff again, get the attorneys involved again, and do whatever they can to get as much money as possible.

The final way to take a property out of bankruptcy is for the homeowners simply to request that the mortgage be taken out of the plan. They can do this at any time, although it is not recommended except under certain circumstances. Also, if they voluntarily decide to dismiss the bankruptcy, because they have found someone to refinance the loan or a buyer to purchase the property, the foreclosure process can start up again, just as in the case of missing a payment on the plan. Of course, if the foreclosure victims inform the mortgage company that they are working on a solution, and prove that this was the reason the bankruptcy was dismissed from the court, the lender may be very willing to give some extra time to close on the deal.

If the homeowners make all the payments on the reorganization plan during the bankruptcy, though, the process is designed to end the foreclosure entirely. But it will not delay the foreclosure if they start missing payments on the plan. Homeowners who are currently in a diminished or unstable financial position, relative to their position before falling behind, should carefully consider whether or not filing bankruptcy to stop foreclosure is a wise decision or not. This should involve interviewing several potential attorneys who can file the paperwork and walk the foreclosure victims through the process. Going into bankruptcy is never an easy decision or a magic solution, but it can give the homeowner the extra time they need to work out a more permanent conclusion to the foreclosure.

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Bankruptcy - How to Succeed

2010-05-03T13:55:00.001-07:00

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Overview

Bankruptcy may be defined as the legally declared inability of an individual or organisation to pay their creditors, who represent a third party which supplied, to the individual or organisation, a product or service for which they are legally entitled to receive full settlement.

As part of a process called involuntary bankruptcy, a creditor may instigate bankruptcy proceedings against a debtor in order to secure the funds for which they are owed. However, in the majority of cases, such proceedings are not required. Under the auspices of a voluntary bankruptcy, the bankruptcy process is initiated by the debtor, which means that it is filed by the bankrupt individual or organisation.

History

In the Old Testament of the Bible and Hebrew Scriptures, the laws of Moses laid down that one Holy or Jubilee Year should take place every 50 years. Accordingly, on this day, all debts would be expunged from all Jews, and all debt slaves would be freed from their encumbrances, this being part of a heavenly command.

In fact, the Hebrew, or Jewish law of debt forgiveness, can be found in the Bible, in the book of Deuteronomy 15:1-2 which gives gives clear instructions on the release from debt of all encumbered individuals every seven years. In the book of Nehemiah chapter 5, there is an entry relating to debt forgiveness among the Jewish repatriates to Jerusalem.

Further, bankruptcy did not exist in ancient Greece, which relates to the period from circa 1100 BC and the Dorian invasion, to 146 BC and the Roman conquest of Greece after the battle of Corinth. In such times, only locally born adult males could be classified as citizens. Accordingly, it was only the fathers who were entitled to legal ownership of property. Thus, every member of his family would be forced into what was called debt slavery if a father was unable to settle his outstanding debts. This would include his wife, children and servants. Such a status would be retained until the creditor had received due compensation by way of their combined physical labour.

In many city states in ancient Greece, debt slavery was restricted to a period of five years, and debt slaves were given the protection of life and limb, which regular slaves did not enjoy. On the other hand, servants of the debtor were not so fortunate. In fact, they could be retained beyond the five year deadline by the creditor and were often forced to serve their new master for possibly even a lifetime, usually under significantly harsher conditions.

The term Bankruptcy has its origins in the ancient Latin word bancus, which refers to a long bench or possibly a table, and ruptus which means broken. The term bank originally referred to a bench.

The first bankers positioned this bench in public places, in markets, fairs, and such like, and upon which they conducted their financial affairs. They also wrote their bills of exchange, which was a written order by the drawer, who withdraws the funds, to the drawee, the banker, to pay money to the payee, who requires the funds.

Therefore, when a banker's business failed, he broke his bank, that is to say his bench. In this way, the public would be made aware of the fact that the person to whom the bank belonged was no longer able to continue his banking business.

Bankruptcy - How To Succeed

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Chapter 7 Bankruptcy - The Major Reason to File Chapter 7 Bankruptcy

2010-05-01T18:50:00.001-07:00

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If you are in debt and you are considering Chapter 7 Bankruptcy, then you need to know that there are only a few times when you should actually file for this type of bankruptcy. There are some things that you will go through after bankruptcy that should make it a very serious decision to make. Here are the times that you should consider bankruptcy.

If you are unemployed and the debts have piled up to where you cannot get out from under them. This would mean that you are looking very hard for a job and just cannot find one and you have over $30,000 of unsecured debts. This is one of the situations that might cause you to consider bankruptcy, but if it is not a hopeless situation, then you should look at it from all angles before making this decision.

Another time to consider bankruptcy is if you have debts that equal more than twice what you make annually. This cannot include your mortgage because it is a large debt that will be much more than you make. This amount of debt is quite a bit to take on and you should consider getting in contact with a financial advisor to see what your best options are.

The last time you should consider Chapter 7 Bankruptcy is if you have tried everything else and nobody can help you. If you have a home and cannot refinance to pay off debts, if you have tried debt counselors, and you have tried all the options out there, then bankruptcy becomes your last resort and you can use it to get a fresh start.

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Attending Bankruptcy Classes is a Now Requirement When Filing

2010-04-28T06:00:00.001-07:00

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A couple of years ago, the Congress of the United States overhauled the US Federal bankruptcy laws in the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. One of the provisions that was written into the new procedures for filing for bankruptcy, was the requirement that all debtors must attend bankruptcy classes.

The debtor is the person who is going through the chapter bankruptcy filing. The new law mandates that the debtor must take two different types of classes during the course of the proceeding. The first class is for pre-filing counseling. The second required class is for pre-discharge education purposes.

During the first of the set of mandated classes, the debtor must attend a class that provides information and counseling from approved professionals before declaring for brokeness. The purpose of the pre-filing counseling class is to help the debtor gain a full understanding of the process of a new bankrupt filing, to understand the consequences that it leads to with regard to their credit score and long-term ramifications, and to investigate available alternatives to the drastic decision to file.

One of the purposes of pre-filing bankruptcy classes is to take the debtor through the process of thoroughly examining their financial situation with the pre-filing counselor. This includes looking at their earnings, all of the household expenses, all of the debts they have incurred and their monthly obligations. The next step is to do a budget analysis based on this information and to look at any alternatives that may be available, instead of filing for bankruptcy.

As part of the counseling, instruction will be given on the differences between filing Chapter 7 and filing Chapter 13. As well, an overview of both the advantages of declaring for brokeness and the disadvantages will be discussed.

After the debtor goes through the classes for pre-filing counseling, they will be issued a certificate of completion. They must have this certificate of completion in order to proceed to the next step of filing for bankruptcy.

The second of the required classes that a debtor must take is the pre-discharge education class. The debtor is to take this class between the time that they complete the claim form for brokeness and file it with the court and when it is discharged. A bankruptcy is not considered complete, and the debts are not eliminated, until it is discharged by the court. The discharge of it is the final step in the process.

Typically the pre-discharge classes are two hours in length. During that class the consumers learn about budgeting and more effective money management skills. They also learn about the proper uses of credit, how to re-build a positive credit record, how to recognize predatory lending practices and how to avoid such practices, and how to take steps to protect against identity theft.

Under the new laws, it can not be discharged until the debtor shows proof that they have completed both the pre-filing and the pre-discharge classes. Just at with the pre-filing counseling class, the debtor will receive a certificate of completion at the conclusion of the pre-discharge education. They must file this certificate with the court in order for their bankruptcy to be discharged.

The bankruptcy classes have to be taken from an institution that is on an approved list and which is authorized to issue the class completion certifications. The cost of the classes will vary depending on the organization that is offering them and depending on the format of the class.

Some companies offer the classes online, while others provide classes over the phone and still others offer the traditional classroom environment. In most parts of the country, the cost ranges from $50 to $150 per class.

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Is Debt Consolidation a Better Option Than Bankruptcy?

2010-04-26T19:49:00.001-07:00

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There are many people in United States who look to file bankruptcy in order to get rid of some debts, which they are not able to pay off. They think that bankruptcy is one of the best method to get rid off debts being unaware regarding the adverse credit rating it may result in. As Bankruptcy usually results in low credit rating in the market, there is another option to get rid off existing debts, it is called Debt Consolidation.

There are many debt consolidation companies who negotiate with lenders on behalf of the debtors. Debt consolidation companies provides the option to debtors to consolidate all the existing debts into single loan amount and pay it off at reasonable or reduced interest rate without charging any sort of late fees and additional fees.

Some people think that Debt Consolidation Company is a loan company, which pay off their existing loan amount. These debt consolidation companies handle the loan on their behalf and deal with the associated lenders in order to get some concessions on the existing loan amount from the creditors, which provide great sign of relief to the debtors.

Debt consolidation companies helps in combining all the exiting debts in to single loan amount and provides a breathing gap to debtors to pay off the loan amount within stipulated period of time at lower interest rate as compared to what they are paying right now.

The monthly mortgage payments need to be made to the debt consolidation company every month on consistent basis, which will take the debtors away from financial crises. Any kind of default payments from borrowers side can make the things more worse as debt consolidation companies will not make monthly payments to the creditors from their side.

The Lending Rates have been cut to 3% , Give Debt Consolidation a chance before filling for bankruptcy.

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Bankruptcy and Gift Cards Explained

2010-04-25T15:09:00.001-07:00

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What happens to gift cards when a company goes bankrupt? Can a company refuse to redeem outstanding gift cards during bankruptcy? Does it matter whether the company declared Chapter 11 or 7 bankruptcy? Is there federal or state law regarding bankruptcy and gift cards? All these questions are the subject of this article.

Before answering the questions above, it is important to explain the difference between Chapter 11 and Chapter 7 bankruptcy. A company typically files for Chapter 11 bankruptcy protection when it wants to work with creditors to change the terms of its debt obligations and restructure its business in order to emerge from bankruptcy as healthy company. A Chapter 7 bankruptcy involves the liquidation of assets to pay creditors. When a firm files for a Chapter 7 bankruptcy, the company is going out of business and would typically close all stores.

However, a company planning on liquidating can also file a Chapter 11 bankruptcy protection, as in the case of KB Toys Inc, which filed for Chapter 11 bankruptcy protection in December 2008 even though the company plans to liquidate its entire business and close all stores. A company would typically file a Chapter 11 to liquidate in order to gain more control as it sells off assets. Therefore, for this article, what is important is whether the bankruptcy is to reorganize or liquidate, rather than whether it is a Chapter 7 or 11.

The decision to honor gift cards during bankruptcy, regardless of whether it's a reorganization or liquidation is the sole decision of the company, with approval from the judge overseeing the bankruptcy. After the bankruptcy is filed with the court, the company will file what is called "first-day motions", which seek approval from the judge on issues like how the company plans to pay its workers, including whether it plans to honor gift cards. Gift Card redemption requests are typically approved by the judge, although the judge may deny them for whatever reason.

Therefore, when a company decides not to honor gift cards during bankruptcy, it is because they either decided not to petition the judge for approval to do so, or the request was denied by the judge. Generally, it is more of the former than the latter. Considering the fact that some companies go into bankruptcy with millions in outstanding gift card obligations, a company should expect consumer backlash and pressure from politicians if it decides not to honor millions in gift cards during bankruptcy. This happened to the Sharper Image when it initially decided not to honor about $20 million in gift card when it filed for bankruptcy liquidation in early 2008. After pressure from both consumers and a number of state Attorney Generals, the company relented and allowed gift card holders to redeem their gift cards if they purchased goods worth twice the value of their gift cards.

Companies that file for bankruptcy reorganization have several incentives to redeem gift cards during the reorganization. First, the last thing a company planning to stay in business wants to do is upset current customers, and refusing to redeem gift cards is a sure way to do that. Second, gift card holders typically spend more than the gift card value. So redeeming gift cards during a tough time helps the company boast sales. Third, it prevents competitors from stealing customers. When The Sharper Image initially refused to honor gift cards during bankruptcy, competitor Brookstone saw and opportunity to gain more customers by offering Sharper Image gift card holders attractive discounts if they surrendered their gift cards to Brookstone. Finally, honoring gift cards during bankruptcy helps to project a "business as usual" image, which is what a company planning to stay in business should hope to project to its customers.

Companies that file for bankruptcy liquidation have less of an incentive to redeem gift cards, since they don't plan to stay in business. However, there are a number of reasons why it is a good idea to honor gift cards during liquidation. First, it is the right thing to do. Consumers purchase gift cards with the hope that they or their recipients will be able to redeem them during a reasonable timeframe. Refusing to honor gift cards breaks this trust and makes the gift card holders victims of unfair business practice. Second, buy honoring gift cards during the get-out-of-business sale, the merchant will be able to move inventory quickly since gift card holders typically spend as much as 20% more than the card value. This then becomes a win-win situation for both parties.

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Bankruptcy Records

2010-04-24T12:35:00.001-07:00

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Every year many people go through the humiliating process of having to file for bankruptcy. Although this alternative is both depressing and most people do what they can to avoid it, it can at times be inevitable.

Once you have filed for bankruptcy you will receive a copy of the bankruptcy records with the date on which the bankruptcy was discharged. You should take note of this date for it will be important in many issues.

Bankruptcy records must be kept, so that people who have suffered from bankruptcy may eventually buy a house of their own. Mortgage companies will need to see the records of discharge to able to grant you with a loan. With this record, they may decide or not to lend you the money to buy a house, calculating the interests and period the loan must be reimbursed by. Usually when you have filed for bankruptcy the interest rates will be higher and you will have less time to pay back your loan.

Whatever financing project you may have in mind, the bankruptcy records are essential to be able to find a company willing to finance your projects. You should always keep this record in a safe place and readily available if needed.

A bankruptcy record can always be helpful to avoid any further debts. A quick glance at the record will help you stay clear of all other improbable financial projects you may have in mind.

Nobody is free of debt, most of us have to pay off cars or houses, not all of us are lucky enough to be able to pay or car or house with ready cash. This is why we are all liable for bankruptcy. The best option would be to save money and keep it aside and wait. Only when you have enough money to pay, only then, should you purchase whatever it is you wish for. This is not always as easy as it sounds, especially when we are looking for a house of our own.

Before having to resort to debt relief or bankruptcy it may be wise to seek financial counselling, this may help you plan and adapted financial strategy for your investment or purchase, thus avoiding all debts or bankruptcy. If you cannot cope with all the expenses and debts that are accumulating with the years, you do not need to deprive yourself of spending, you may find a good plan with the help of a financial expert to avoid getting into debt.

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Credit after Bankruptcy - Tips to Boost Credit Score

2010-04-20T15:51:00.001-07:00

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Establishing credit after a recent bankruptcy is very important. For
the most part, many consumers acquire excessive debt because of using
credit irresponsibly. Hence, after a bankruptcy is discharged, many people
are hesitant to obtain new credit accounts.

However, opening new credit accounts is the first step to rebuilding
credit. Low credit scores are common following a bankruptcy. This makes
it difficult to obtain a mortgage, auto loan, etc. Here are a few tips
to help you increase your credit score and re-establish a good credit
history.

Understanding the Usefulness of Credit Scores

If you are hoping to make a purchase using credit, credit scores are
essential. Prior to obtaining any sort of credit, lenders must assess a
copy of your credit report. In some cases, lenders simply review your
three digit score. This is practical when approving an applicant for
instant credit. Those with a low credit score are at a disadvantage.

Following a bankruptcy, you can expect your credit score to nosedive.
Thus, it is important to take the necessary steps to improve your credit
standing. Bankruptcy does not last forever. However, you must put forth
the effort to boost your credit and prove your creditworthiness.

Avoid Repeating Past Mistakes

If bad credit or bankruptcy occurred because of using credit unwisely,
learn from your mistakes and move forward. Many young adults acquire an
excessive amount of debt. In some instances, they do not fully
understand how credit works.

If you are drowning in debt, bankruptcy may be the only alternative. If
so, avoid making the same mistake twice. Sadly, there are individuals
who file bankruptcy repeatedly. However, rebuilding credit takes time.
Once you are on the path to increasing your credit standing, avoid bad
credit decisions.

Establish New Credit Accounts

The only approach for establishing new credit is opening new credit
accounts. At first, this may sound scary. However, this maneuver is
necessary to quickly increase credit scores. New credit accounts may consist
of a major credit card, store credit card, automobile loan, etc.

Secured credit cards are very effective and easy to qualify for. These
sorts of credit cards require applicants to have a down payment.
However, it's well worth the fee. Once you have obtained a new credit card,
attempt to do three things: make timely payment, maintain low balances,
payoff the balance each month. By doing so, each month your score will
increase. Soon, you will qualify for an unsecured credit card. Within
24 months, you may also qualify for a mortgage or auto loan with a
comparably low rate.

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Filling For Bankruptcy - Better Options to Avoid Bankruptcy and Eliminate Debt

2010-04-16T11:15:00.001-07:00

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Bankruptcy is not good for the financial matters of a consumer or businesses. This is the stage when people fail to pay their debts and go for filling bankruptcy. There are better options in which you avoid bankruptcy and eliminate your debts. Some of the options are described below.

First of all, if you could manage your income and expenditures, you should try to spare some amount as savings. Saving is the most important thing when trying to eliminate debts. If you want to avoid bankruptcy, then you must have to make some extra savings to eliminate your debts.

Debt consolidation is one of the other options to avoid bankruptcy. This is a part of debt settlement programs. By going through debt consolidation you can avail a cheap loan for your property or any valuable assets and you can eliminate your current debts. This is based on easy installments and you can decide the number of installments with the financial institutions. Although this is an easy solution, it requires mortgage.

Debt settlement in lump sum is also a good option. If you have some cash reserves and want to eliminate your loans at once then you can get the help of a debt settlement company to negotiate with the bank on your behalf. This way you can get maximum discount over debts. The banks and credit card companies have the privilege to reduce your debt in case of lump sum payment.

If you do not have cash reserves, then you can choose debt settlement programs of 12 or 24 months. In these programs you will continually pay some amount in a joint account with a debt settlement company. When the amount will be sufficient, the settlement company will negotiate with the bank as same as in the case of the lump sum. This is the most popular option these days and many people have already eliminated their loans by using debt settlement programs

If you are planning to filing for bankruptcy, you must think and consider the best options in order to avoid bankruptcy at every cost. This is the time to save your financial future. The recession period will end very soon and once again you will be able to take more loans for your businesses and needs.

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Life After Bankruptcy - Bankruptcy Loans

2010-04-14T01:30:00.001-07:00

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Bankruptcy can be in association to the Italian Renaissance Period. Back then, if a merchant debtor were unable pay his debt, then the creditor would destroy his trading bench. This is called Banca Rotta, from this bankruptcy got its name. Of course, back then the penalty was harsh and primitive. But for some people, the penalties and the destruction of their credit can be pretty harsh too.

Nowadays, the Bankruptcy Law is being utilized and followed to give protection to both the debtor and the creditors. All parties generally accept the law. In some way, it takes away the competition aspect and let both parties cooperate for the maximum benefits and satisfaction of their well-being.

It will also give the debtor a second chance in order to rebuild his or her business. As to quote, they say almost all business owners failed a couple of times before they finally made it big.

People most frequently have the misconception that filing for bankruptcy is in many times to be the end of their world. Just because you file for bankruptcy does not mean you will never have to get back on your feet again financially. For a point of fact, the main purpose of filing for a bankruptcy loan is for you to re-establish your life and finances again.

A bankruptcy loan can provide someone the opportunities that he might not have otherwise, for instance the ability of owning a house and automobile or starting up a new business.

Most of the loans are recommended for persons who have declared themselves bankrupt and only after their cases have been discharged and their creditor have been paid.

For Chapter 7 bankruptcy, the person in debt must wait for 2 years after their bankruptcy has been filed for them to apply for a loan. They can apply only after their cases have been dismissed. On the other hand, in Chapter 13, the debtor must first pay in full amount to his creditors, before he can apply for a larger loan.

The only means to reapply for a loan is to prove to your lenders that you are capable enough to pay the loan back and is no longer a high-risk borrower. The most effective way to re-establish your credit is by paying all the bills on the allocated time and retaining your credit card and a good credit rating and report. After doing all these, you can request the credit company to write a letter testifying that you are no longer a risky borrower.

Nevertheless, not all loans are given to people who have spared their life and soul out of the risky and shameful situation. Sometimes, people in debt are tendered with the opportunity of having a loan as a payment alternative they can use to reimburse their creditors, but this is indeed a recipe for disaster.

The last thing a person in debt needs is to have another creditor while they are still buried with liabilities to pay. Truly, a problem would not be a solution to another problem.

In applying for bankruptcy loans, one should be vigilant and cautious enough to read and understand all the terms and conditions made by the company. Also, have the determination to pay all the debts made, keep the budget tight if you want to get out of your tragic financial situation.

Loans can indeed serve as the debtor's life after bankruptcy. Credit, loans, and mortgages can provide the perfect means for a previously bankrupt individual or company to finally re-establish their credit.

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File Bankruptcy Online - Options For Filing Bankruptcy Online

2010-04-12T11:20:00.001-07:00

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Can I file bankruptcy online? That is your question if you can no longer handle your debt. The fact is while you can do much of the paperwork and the like online, ultimately you will have to file your petition at your local courthouse in person.

There are many websites and programs available that can help you through the process. A program called Public Access to Court Electronic Records (PACER), for instance, can give you access to the documentation and other information you may need. But only an attorney can actually file via the PACER system and even then only if that particular court will permit it.

Online bankruptcy Attorneys

Should you hire an attorney? Well, if you already have one on retainer or one in your family that is willing to help you, then the answer is most definitely yes. An attorney can advise you the chapter that is right for your situation, have one of his or her paralegals to correctly fill out your bankruptcy forms for you, and represent you in court. You generally won't need to make an appearance until the meeting of the creditors.

Most attorneys, however, would not prefer to offer online filing services. As attorneys will be held responsible for the entire process they would prefer to work face to face and develop a comfortable personal relationship with each new client rather than risk personal liability to "anonymous" clients.

Online Paralegal and Do It Yourself Bankruptcy

Most folks who are filing for bankruptcy, however, can't handle the bills they already have, much less an attorney's fees. In this case, you have two options: do all the work yourself or hire a paralegal. If you file pro se, you will need to get a list of exemptions that applies to your state and use it fill out your bankruptcy forms yourself. You will also need to represent yourself at your 341 meeting.

There are online paralegal that can help you file your petition online with far less costs than hiring an attorney. Even though a paralegal cannot represent you in court or in any other situation they can fill out your information into the bankruptcy forms and offer advice related to bankruptcy procedures.

What is the Best Option for You?

While you can't really file bankruptcy online, there is a lot that you can do online to expedite the filing process. The entire process for filing bankruptcy has been laid out on many online resources, making it easier for you to understand what you are getting into. But before you take the plunge, make sure you really understand the implications and consider all of bankruptcy options as well as other bankruptcy alternatives.

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GM Bankruptcy?

2010-04-10T22:06:00.001-07:00

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If General Motors were to file bankruptcy, it could change the world or would it? Yes a GM bankruptcy filing would change the world. Right now with all the over regulation it is amazing that any company can make money these days. I guarantee such a move would change the world. It would definitely wake up the Unions and the governments over regulation on our economic engine. In fact sometimes it seems we do everything to hold down our economy from screaming forward.

With all the over regulations in this country to start, grow and run a successful small business, medium size corporation or a multi-national conglomerate based in the US. Why do we attack and use regulations to slow down our economic might? Because folks it is the way it is deliberately set up. You see at every level we have placed rules and bureaucracy to slow ourselves.

The largest corporations in the World are constantly being bombarded by rules and regulations put in place by regulators and politicians. So they are forced to move the operations out of the country to reduce costs, raise prices and pay off all the politicians you can find, no matter what side, fund them, as you will need them just to do business in this nation.

It is interesting the talk now after the 3rd quarter loss at General Motors and how they may sell off GMAC. Right now with the housing boom getting ready to pull back and some over extended upside down foreclosures due to job losses in the downturn of the business cycle, that might not be a bad idea actually. It seems GMAC is going to have its own issues.

The Delphi Bankruptcy deal is a problem indeed, I too worry about the under funded pension costs and these out of control health care costs, as for a company like GM these are problematic issues to say the least. It is good that the Union has been cutting a little slack at GM these days. Ford is next and lay offs there will be big indeed.

Indeed a bankruptcy at GM would change the world, but why do we need such a strong signal as a wake up call when it is obvious that we need to fix the problems that are right their in front of us. We all should be thinking here, as all of this effects us one way or another and China is not getting any smaller so we better get on the stick and take care of business in real time. Think on this.

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Is There Life After Bankruptcy?

2010-04-09T15:30:00.001-07:00

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Yes, there is. In this economy many families have to make that decision. I personally had to file for bankruptcy 7 years ago. During my separation my ex husband wanted our new car. Since he took the car during the divorce I assumed he would pay for the insurance. The car was in both our names. He did not keep up with insurance payments and I was unaware of his lack of payments. He got into a severe car accident. In one night, I was in debt over $20,000.

Since we were in a separation period I still owed money to this car. It was part my debt. I had a choice, to either pay for a car that was totaled or file bankruptcy. I was young and I decided to file Chapter 7. Now this was several years ago before bankruptcy laws took place for Chapter 7. I got lucky. Today you still have to pay back your debts. I got everything wiped clean but in return a horrible credit rating.

At the time, my credit rating was bad. I thought what's the difference? There is a slight difference. You can fix old past due debts and have your credit score bounce back in a few months. With a bankruptcy, you have 7 to 10 years of "bad credit". You are a risk. I was a risk, even though I was not the one who totaled the car and didn't make the insurance payments. I learned that if your name is on it, protect it.

Today I have a fair credit rating. On my credit report still lurks that old bankruptcy. Even after 7 years it's still there. I have three more years till it fully drops off. How did I get my credit rating back up and have credit cards today? The solution is easy, the task it's self is hard.

To get yourself out of debt you need to set goals. You need to save and you need to make a budget. First, look at your monthly income. Second, look at your top debts; mortgage, cars, insurance, utilities, food and gas. This is your basic living needs. Everything else is options. Subtract your income from your top debts and see how much you have left over. Put aside a small amount per week for "extra spending". I put $50.00 for two weeks.

This is for coffee, lunches, a movie rentals or what ever I want to spend it on. The rest goes towards your pending debts. Even if it's $20.00 per month, it's something. Any extra income, like tax returns, all goes towards debts. You will get out of debt faster this way. You have to make choices on wants and needs. Your spending habits have to change. Anytime you see something at the store ask yourself "Do I want this or do I need this?" Most often the answer is want. If you want it, don't buy it.

After bankruptcy you can't get credit cards and you'll have a hard time getting loans. One thing you NEVER do is get a credit card where you have to pay them an annual fee or any upfront fees. This is a huge scam and you will never fix your credit. A good credit card company will never ask you to pay upfront. You are either accepted or denied. Read all information on interest rates, late fees, etc. Don't apply for a high interest credit cards. It's a waste of your time and all they do is take your hard earned income. Cash is the only true way out of debt. Pay for everything cash or through a Visa/MC card attached to your checking account. I did this for 5 years. If I needed a new car I had to get a co-signer. I drove my old truck with no payments for years. I had a roommate and we co-signed for an apartment. Some apartment facilities don't mind bankruptcies. Some do. You have to research and be honest. It can be embarrassing but its life.

Once my credit scores started going up I wanted to increase my rating and prove I can pay my debts. I started out with one department store credit card. Normally department stores will accept previous bankruptcies with a certain amount of year's in-between. I started out slow and only had a limit of $200.00. That's all I needed. You buy one or two items and then pay your card off at the end of the month. If you can't pay off the credit card at the end of the month, make payments above the minimum monthly payment. This is the only way to lower your balance. NEVER pay the just the minimum balance. You will never get your card down to a zero balance.

After 6 months I got an increase of $300.00. I was excited! My credit was building and I was proving I could pay on time. Pull your credit report every year and look to see if everything is correct. You can call and get items removed. Keep copies of everything you pay or pay off. You never know if a debt collector will call you for an old debt. You need to prove you paid it off. I now have 4 credit cards all with low balances. (keep your open credit high and debt low) Read articles on how to save your credit. Clark Howard has some great tips. Once you follow these basic steps you will be debt free and have a great credit score again!!

Making Bankruptcy Easier For You and Your Family

2010-04-07T17:20:00.001-07:00

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Filing for bankruptcy may seem like a tremendous concession; however, when bills are piling up and creditors are filling your voicemail box, you may have few alternatives. More than a million Americans filed for personal bankruptcy in 2009, and the numbers do not seem to be declining. Despite the stigma of bankruptcy, it can be a very beneficial route for people who are in a financial bind.

One of the many concerns of people who are facing bankruptcy is how to present the hard realities to their family. This anxiety can be especially powerful if one person is solely responsible for the household's finances. If you have not kept your family up-to-date on financial matters, the news of bankruptcy may come as a shock.

Tips for Breaking the News

When telling your family about financial hardships, there are a few tips which may make the news easier to accept:

• Consult your spouse first. If you have not informed your significant other, this is imperative. The sooner you tell them, the better. Oftentimes people are ashamed of their financial difficulties, so they try to hide it from their families. Unfortunately, this is not just a recipe for financial ruin; it may devastate your marriage, as well. Speak with your spouse about the best way to recover. Together, the two of you can come up with a game plan.

• Consult a bankruptcy attorney to learn about the ways that bankruptcy can help. Filing for personal bankruptcy may affect your credit; however, this is only temporary. The immediate benefits may make bankruptcy worth your while. Outstanding debts may be discharged or consolidated into a reasonable payment plan that can help you emerge from debt.

• Tell your children the truth. It is best if both parents speak to the children as a unified force. During the discussion, encourage questions. Be sure to explain to your children that certain lifestyle changes are mandatory. A child's ability to cope with repercussions of bankruptcy largely depends on their age. Younger children may not notice a difference, while older children may experience resentment and anger.

• Consult a therapist. If your family is having an especially difficult time coping with the realities of your financial hardships, you may want to consider going to a family counselor. Lifestyle changes and communication barriers may negatively affect relationships. Attending therapy sessions may help release repressed frustrations.

Filing for bankruptcy is a complex undertaking. If you are in a financial rut, an experienced attorney may be able to help. For more information about how bankruptcy can resolve your debts, or for assistance filing for bankruptcy, contact the West Palm Beach bankruptcy attorneys at the law office of Eric N. Klein & Associates, P.A.

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Bankruptcy Credit Repair - The Power of Post Bankruptcy Credit Cleanup

2010-04-06T19:23:00.001-07:00

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For some strange reason, we love to be pessimistic as far as our finances are concerned. Once bankruptcy is declared, we simply let go of all financial planning and live life anyway we want. As far as we are concerned, we have hit rock bottom and there is no other place to go.

Well, we forget that there is one direction which you can travel once you hit rock bottom-up. Do you know that you can repair your credit score and credit history even after you have filed for bankruptcy?

There is absolutely no denying that your public record will clearly state that you have a bankruptcy on your conscience. However, that is not the end of the world. Do you know that you can still improve your financial condition?

Do you know that you can at least be ranked as a person with the best credit score amongst those who have filed bankruptcy in the past? You may not get the best loan as compared to a person with a good credit score. However, you may definitely end up with better loans as compared to a person who has also filed for bankruptcy in the past.

So what does a post bankruptcy cleanup involved? Never believe any professional who advises you to get in touch with your lenders and request them to change their opinion. For starters, no lender will agree to such a transaction. Bankruptcy forces lenders to accept a few cents for every dollar owed.

Secondly, even if the lenders were to agree to such a deal, the law requires the mention of bankruptcy. Nothing is going to change that. Hence, your lenders consent or lack of it will not make a huge difference. Instead, you should focus on all those points that may be incorrect or that may have been presented incorrectly.

Just because you have a bankruptcy on your record does not mean a potential lender will not view or check rest of the transactions. If the credit card transaction that you obtained after the bankruptcy was an unsecured one, then incorrect presentation of this information can affect your credibility. The fact that you actually qualified for an unsecured credit card will definitely work in your favor.

If this information is not presented properly, you stand to lose the benefits that you otherwise would have gained. Considering the fact that bankruptcy often leaves you in a state of mental trauma, it is advisable to go in for a solution that will take the load of your shoulders. Employing a professional to help you out is one such solution.

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Bankruptcy Credit Repair - The Power of Post Bankruptcy Credit Cleanup

2010-04-06T16:01:00.001-07:00

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Understanding Bankruptcy

2010-04-03T04:56:00.001-07:00

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Bankruptcy affects both corporations and consumers. Many companies considering bankruptcy will consult with a management corp so that they can get the best information possible. A management corp will help ease them through the transition of it. Here is some information about corporate bankruptcy.

Chapter 7 Bankruptcy

Chapter 7 of the corporate bankruptcy code says that all of the business operations must stop and the company goes out of business. A trustee is placed in charge of selling off all of the business assets. The proceeds from the sale of the assets is then used to pay off the creditors.

The investors who took the least amount of risk in the company by purchasing bonds get paid first. This is because of the risk-return trade off. This means that the investors who bought corporate bonds do not see as much profit from the company, but they have the most protection against losing their money. Those who are equity holders, however, have the potential to make more money by sharing in the companies growth. These investors stand to lose the most though, and are paid last if the company files bankruptcy.

Chapter 11 Bankruptcy

Much like consumer Chapter 13 bankruptcy, the corporate Chapter 11 bankruptcy does not forgive all of the companies debts. Instead, it allows them to restructure and repay their debts over a reasonable period of time. Companies that consider filing chapter 11 bankruptcy expect to be able to resume normal operations and eventually try to get out from under it. They prefer this option since they would still be in business and be able to keep their company. They simply have some debt that has gotten out of control and they need a plan to help them get back on track.

Chapter 11 bankruptcy is by far the most expensive corporate option. The reason many companies choose it is because it allows them to retain control of their business and oversee the bankruptcy process. When a company files chapter 11 they are assigned a committee to go over all of their debt and holdings. Some shareholders may be able to offer their input, but the decisions are ultimately up to the committee to make. First priority is given to the creditors, since the money in question is owed to them.

In some cases the committee cannot agree on a reasonable plan that will be given the go ahead by the courts. In these instances, business owners or shareholders may end up seeing their assets being sold to satisfy their debts anyway.

Conclusion

A chapter 7 bankruptcy means the end of the company. They are no longer in business and their investors will largely lose the money they put into the company. A chapter 11 bankruptcy allows a company that is in dire financial straits to regroup and reorganize. They are given an opportunity to repay their debts and try to become a functioning and profitable company once again. Neither bankruptcy choice is ideal, but at times it is the only option.

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Bankruptcy and Buying a Home

2010-04-02T14:43:00.001-07:00

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Filing bankruptcy is a stressful time in a person's life. Along with discharging your debts and gaining a fresh start, you may wonder if you will be able to buy a home after a bankruptcy. The answer is yes! Mortgage companies and online lenders are now offering home loans for those who have a bankruptcy on their credit report. Some lenders will even approve your loan as soon as one day after your bankruptcy has been discharged.

Buying a home after bankruptcy is no longer impossible. There are many reasons a person chooses to file bankruptcy. The loss of a job, unexpected medical bills, and overwhelming credit card debt are just a few of the factors that can lead to filing bankruptcy. The mortgage lending industry has created special loan packages and terms for those who have filed bankruptcy in the past. Lenders have little to lose in approving a home loan after bankruptcy. With your home serving as collateral for the loan, the lender can feel confident in approving you for a home loan, often soon after your bankruptcy has been discharged.

Filing bankruptcy and buying a home are no longer mutually exclusive terms. Both traditional and online lenders can give you a good interest rate and payments you can afford, even after filing bankruptcy. If you have filed Chapter 11 or Chapter 7 bankruptcy and are wondering if you can obtain a home loan, contact a lender today who specializes in approving mortgages after bankruptcy. Interest rates are currently lower that they have been in decades. Even after filing bankruptcy you can get your new home loan approved and receive a great interest rate. Online lenders and mortgage companies are competing for your business. Do not let a past bankruptcy prevent you from purchasing the new home of your dreams.

If you have filed bankruptcy in the past and would like to purchase a home, there are numerous programs and loan products that will suit your needs. Lenders will approve your loan quickly and give you excellent terms on your mortgage. Some lenders will require that a certain amount of time pass before approving a new home loan after a bankruptcy while other lenders can approve your loan in a little as one day after your bankruptcy has been discharged. Now is the perfect time to apply for a mortgage, even if you have filed for bankruptcy in the past.

To view our list of recommended mortgage lenders for buying a home after
bankruptcy visit this page:
Recommended
After Bankruptcy Mortgage Lenders.

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Bankruptcy Filings - Thinking About Bankruptcy?

2010-04-02T01:50:00.001-07:00

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Are you considering bankruptcy? Do you know what you will be getting yourself into with bankruptcy filings? If you are thinking about bankruptcy to clear your debts and get a fresh start you need to understand exactly what you are getting yourself into. Here is what no bankruptcy attorney will ever tell you about what you will be doing if you file for bankruptcy.

First, you will be telling your creditors that your word, signature, and agreement with them was never good and will never be good. This is a huge blow to your pride and to your sense of trust. When you give people a reason not to trust you, you also give yourself a reason to struggle to trust others. This is one of the major side effects of bankruptcy because it can become a way of like.

There are people that use credit cards until they cannot get anymore and have run up their limits completely, then they file bankruptcy. After their bankruptcy they do it again until they can file for bankruptcy again. This is not meant to be a way of life, but some people have made it a way of life.

Bankruptcy was meant for those that are in a pit, black hole, or just cannot make it happen on their income. They have been working very hard and have been trying to pay off their creditors, but they just cannot do it. This could be caused by being laid off, losing a job, or because of a medical emergency.

Second, bankruptcy will completely kill your credit. This will make is as hard as possible for you to get a loan for at least 2 years, except credit cards. They will try to get you to go for the highest possible interest rate and the loan or credit card will cost you more than it is worth.

Last, you have to know how to deal with your credit after a bankruptcy. You need to get some counseling and hire a financial advisor to help. Sometimes there are volunteers at local churches that will help you set up a budget, and they will even help you take care of your debts if you choose not to file for bankruptcy.

You need to know what you are getting into with bankruptcy filings. Make sure to ask each and every question you have and get the answers you need so that you know what you are getting into and what to expect.

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Understanding Bankruptcy

2010-04-01T08:24:00.001-07:00

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Chapter 7 Bankruptcy

Chapter 11 Bankruptcy

Conclusion

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Bankruptcy and Buying a Home

2010-03-31T11:25:00.001-07:00

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To view our list of recommended mortgage lenders for buying a home after
bankruptcy visit this page:
Recommended
After Bankruptcy Mortgage Lenders.

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Bankruptcy Chapter 7 Exemptions

2010-03-31T02:06:00.001-07:00

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Chapter 7 is a 'liquidation' of nonexempt assets to pay debts. In an orderly, court-supervised procedure, a court appointed trustee liquidates the non-exempt assets of the debtor's estate and makes distributions to creditors. In Chapter 7, the debtor selects property he/she is eligible to keep from either a list of state exemptions or exemptions provided in the Federal Bankruptcy Code. Although the debtor files a schedule C form for property claimed as exempt, the property is not exempt until the trustee files the property exemption report which actually divides the property as exempt or non-exempt.

Although state exemption laws are different from state to state, these states typically allow the debtor to keep these types of property: The debtor can exempt Up to $17,425 of equity in the home (homestead exemption). Some states have no homestead exemption; some allow debtors to protect all or most of the equity in their home. The debtor may be able to keep jewelry only worth up to $1,000, a vehicle with more than $2,400 of equity. The debtor is allowed to keep the cash value of Insurance policies. Pensions under the Employee Retirement Income Security Act (ERISA) are fully exempted in bankruptcy. Not only all public benefits, such as welfare, social security, and unemployment insurance but also tools used on job and at least 75% of wages are fully protected.

To get exemption the debtor must file the bankruptcy case in the state he/she lived in for the 730 days (2 years) before filing; or the state where he/she lived the majority of the 180 period preceding the 2-year period. Federal exemptions are retirement benefits (veteran's benefits etc.), survivor's benefits (judicial center director's benefits, lighthouse worker's benefits etc.), death disability benefits (injury compensations etc.) and miscellaneous (military group insurance etc.). One must note that federal exemptions are not available for all states.

The Bankruptcy Code allows the debtor to keep certain exempt property; but a trustee will liquidate the debtor's remaining assets.

Filing Bankruptcy As Per Idaho Bankruptcy Laws

2010-03-29T23:48:00.001-07:00

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With the introduction of the new bankruptcy laws that are effective from October 2005, the Idaho bankruptcy laws have become a bit more complicated. Furthermore, the rules in the state vary from those in other states in several respects. Therefore, you must keep in mind the following things before you file for insolvency:

Hiring A Bankruptcy Attorney In Idaho

Because of the fact that the Idaho insolvency rules and regulations are a bit different from other state, it is important for you to be very prudent in choosing the right attorney to handle your specific case. Your lawyer must be highly experienced and knowledgeable. In particular, he or she must be aware of the specific bankruptcy laws that are applicable in the state. More importantly, make sure that the attorney you have chosen has the license to handle the impoverishment cases in the state. You cannot hire a bankruptcy attorney from other state to handle the liquidation cases. State-specific license is important.

filing Bankruptcy In Idaho

Filing liquidation in the state requires you to fulfill certain conditions. For example, you must note that as per the state rules, in order to file for impoverishment in court, you have to be a permanent resident of the state.

Federal Exemptions Or Idaho-Specific Exemptions

The various properties exemptions have been interpreted in the bankruptcy laws in a different way. In fact, it is important for you to understand that the basic thing that differentiates the laws in Idaho from those in other states is the different interpretation of properties exemptions. However, Idaho is some of those states that allow the debtor to use the federal supplement exemptions along with the Idaho specific exemptions. However, at the same time, you should also note that you cannot completely substitute the State specific exemptions with the federal supplement exemptions. Following are some of the important points regarding the properties exemptions:

The homestead exemptions as per the Idaho bankruptcy laws include real property or mobile home up to the amount of fifty thousand dollars. The court also makes it mandatory for you to record homestead exemption for property that has not yet been occupied.
Jewelry products have also been declared as exemptible properties, as per the Idaho laws. The maximum amount that you can exempt in this regard is one thousand dollars.
Likewise, you can also exempt motor vehicles, but only up to the amount of three thousand dollars.
The impoverishment laws also declare one firearm, up to five hundred dollars, as exemptible personal property.

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Bankruptcy Filings - Thinking About Bankruptcy?

2010-03-29T23:34:00.001-07:00

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Filing Bankruptcy As Per Idaho Bankruptcy Laws

2010-03-28T23:10:00.001-07:00

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Hiring A Bankruptcy Attorney In Idaho

filing Bankruptcy In Idaho

Federal Exemptions Or Idaho-Specific Exemptions

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Bankruptcy Chapter 7 Exemptions

2010-03-28T18:18:00.001-07:00

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The Bankruptcy Code allows the debtor to keep certain exempt property; but a trustee will liquidate the debtor's remaining assets.

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Bankruptcy Insurance

2010-03-27T19:10:00.001-07:00

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From unsecured risks to insured risks, people seem to be drawn towards the calculated risks. It is unfortunate that insurance industry provides no insurance for bankruptcy; however, there are many clauses that provide that may extend their helping hand as bankruptcy help. As such, there are many forms of insurance that may protect you and your family from the hardships of unexpected losses and let you save yourself from being bankrupt.

If taken well thought steps, bankruptcy insurance may prove to be a big help. As such, a person when gets bankrupt may create many problems for the insurer and certain cases are tough to resolve. But, with apt bankruptcy information, decisions can be made that suit both the parties.

Unexpected bankruptcy of insured, leads to the non-payment of premiums and thus expiry of insurance contract. It creates a need to develop and implement innovative strategies to cover up and reorganize the opportunities of liquidation of all sizes by the insurer company. Though filling for bankruptcy may get into the reconsideration of this contract. These insurance coverage disputes and policy holder bankruptcy may then be sorted out in courts.

There are many challenges faced by the insured in the court. There are certain claims that may be discharged in case of undue hardships like bankruptcy student loan, but other loans have to be paid by the debtor. Even the student loan is non-dischargeable but clauses of undue hardships make it half discharged or discharging of the interest amounts.

Bankruptcy insurance disputes are quiet disturbing for the parties, hence; there are many companies that provide services for both insured and insurer. These companies provide various services. Firstly, they appeal of a decision denying insurer participation to comply with Chapter 11, reorganization plan representing the insurance industry. Secondly, they also represent a general liability insurer supporting massive industries bankruptcy case.

Apart from the above clauses there are many clauses for the insured too. But, it should be kept in mind that sudden bankruptcy of the insured provides great financial instability for the financial service companies. Large companies may cover their risks on new insurance products, interest rates and so on but for small companies it is difficult to manage on bankruptcy insurance.

Purchasing bankruptcy insurance may take you at the doors of some bankruptcy insurance company, however, it should be noted that it is a fixed time venture, say about 5 years or so.

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Bankruptcy Definitions

2010-03-27T17:04:00.001-07:00

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Bankruptcy means an official declaration of economic failure or mutilation of ability of a person or company to pay their creditors. A bankruptcy petition may be filed against a debtor. Sometimes creditors file this kind of "involuntary bankruptcy" petition to recover their due payment. In most of the cases, however, the debtor, individual or organization, initiates the economic collapse, known as the "voluntary bankruptcy".

Know More 1: The word bankruptcy shares its root with the ancient Latin bancus (a bench, table or bank) and ruptus (broken).

Records say that consumers who have effectively cleaned their credit report denied a bankruptcy or judgment, second and even a third time, and finally they got it cleared. So never get discouraged! Your patience and resolution could be the two important keys in repairing a damaged credit report.

Do you know why it is so? It is simple! When you challenge an older account or item presently charged off, the creditor is not too bothered with the account any more. Even they may fail to find the required information to bear out the dispute.

Therefore, in other words, bankruptcy is a legal filing that relieves a person of responsibility for all or some of their debts because they are unable to pay. Credit history or credit report, as you wish to call it, is nothing but, the record of past borrowing and repaying of an individual or company. This record, as you understand, includes information about late payments and bankruptcy as well.

Fact 1: Bankruptcy is submitted to the jurisdiction of the bankruptcy court

Bankruptcy allows the unfortunate debtor an honest and "fresh start" in financial life by relieving most debts. It also allows creditors to restore some portions of what they owe.

Fact 2: Bankruptcy case begins by legally filing a petition containing defaulter's economic information.

How well is this going to work for you depend on how patiently you try ...

However, you must know that certain items are easier to remove than others.

Fact 3: A married couple may file a joint petition.

Here is a list of easier Items to dispute and get removed Stuff older than 2 years:

* Discharged bankruptcy

* Charge-offs

* Inquiries

* Repossessions

* Late payments

* Accounts that were late but now paid off

Fact 4: Liquidation and Reorganization are two common forms of bankruptcy.

Know More 2: Some scholars still believe that the term bankruptcy is originated from the Italian banco rotto meaning broken bank.

And a list of more difficult items to dispute:

* Accounts currently due

* Recent bankruptcy

* Judgments

* IRS or State Tax Liens

* Current collection accounts

Fact 5: liquidation bankruptcy is a kind of bankruptcy in which the defaulter's non-exempt (means legally unprotected) asset/possessions/properties are distributed to suit creditor claiming.

These are the items which you can say are trickier as creditors keep track of these in their current files and expect you to pay them. This is the reason why it will be easier for them to verify the information and keep the item on your credit file. However, it is always good to try.

Fact 6: In reorganization bankruptcy the defaulter rearranges/redistributes possessions and unpaid amounts.

Important: It is completely legal for you to contest items on your credit file even though you know they are correct. When you do so, you are only trying to see if your creditors have maintained proper account to verify the dispute. Your pretext could be a very bad memory that makes you forget that the negative accounts on your credit file are really yours ... and in case they are unable to verify your dispute, it must be removed from your file, this is what the law says!!

Know More 3: In the years 1557, 1560, 1575 and 1596 four state bankruptcy cases were declared by Philip II of Spain. Thus historically, Spain, the sovereign nation, held the first place to declare bankruptcy.

Removing Negative Credit

First, identify the negative items that you want removed.

Secondly, after you review your updated credit file and getting most or all the negative items removed, you may go for building a positive credit profile. Positive information will always overshadow the residual negative items that may still remain in your file.

Fact 7: The law of United States offers a single chapter on liquidation bankruptcy (chapter 7); all other chapters are provided only for reorganization bankruptcy (chapter 9, chapter 11, chapter 12 and chapter 13.)

Thirdly, as you know already, if the dispute is sent in from anyone other than you, it raises all sorts of Red Flags. As they themselves make so many mistakes they believe you are working alone and trying to fix a real lawful mistake.

If there is a negative item, such as a bankruptcy, charge off or collection account, just write it that this is NOT your account and you want it removed immediately.

Fourthly, if in case the creditor is able to supply you with the written proof you asked for, propose to settle the debt for 10 cents on the dollar if you have the money. Thus, if you owe $1,000, offer $100 to the creditor. If they refuse, tell them that you will file Bankruptcy and they will get nothing. This will certainly open them up to negotiating with you.

"Bankruptcy is a legal proceeding in which you put your money in your pants pocket and give your coat to your creditors." - Joey Adams

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Bankruptcy Protection - Saving Your Assets

2010-03-26T17:56:00.001-07:00

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Bankruptcy was designed to help out people who are in serious financially situations. It is considered a protection against the range of things that can threaten you when you have debt problems. It is a serious way out of debt and should only be considered as a last resort.

How Bankruptcy Protects You

Bankruptcy protects you from having court cases filed against you and from having your property seized. In addition, you will be given the chance to save your assets and avoid having your finances ruined further through collection actions.

Bankruptcy protection is the main benefit of bankruptcy. Most people assume that clearing debts is the main benefit. However, before bankruptcy laws people could be jailed, forced to work and have their property taken away due to debt.

Things to Consider About Bankruptcy Protection

Since bankruptcy is a legal process, there are a lot of different factors involved that you must consider. The two main things you will want to think about before filing are exemptions and unqualified debts.

Exemptions are assets that you can keep despite filing bankruptcy. There are both federal and state exemptions. You should choose the exemptions that work best for your situation. In most cases your home and personal belongings are protected, however, anything considered excessive in value is often not protected.

Some debts are not able to be claimed and cleared through bankruptcy. Things like child support and student loans are examples of debt that can not be cleared through filing bankruptcy. You should really consider an alternative to bankruptcy if you have mostly unqualified debts.

Bankruptcy is not for everyone, so you really have to consider everything before you start the process.

Best Scenario for Bankruptcy Protection

The best scenario for filing bankruptcy depends on the type of bankruptcy being filed. Below the criteria for a successful filing are listed for both main types of individual bankruptcy types.

For those filing Chapter 7-

Limited assets that are exempt
Inability to repay debts through asset sale or through employment
Limited or no unqualified debts

For those filing Chapter 13 -

A stable and secure job that enables you to repay debts

Ultimately a person who is considering bankruptcy should end up in a better place at the end. A person should be able to wipe out all or the majority of their debt while also being able to hold onto the majority or all of their assets.

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Bankruptcy Insurance

2010-03-26T15:18:00.001-07:00

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Purchasing bankruptcy insurance may take you at the doors of some bankruptcy insurance company, however, it should be noted that it is a fixed time venture, say about 5 years or so.

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Bankruptcy Definitions

2010-03-25T17:03:00.001-07:00

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Know More 1: The word bankruptcy shares its root with the ancient Latin bancus (a bench, table or bank) and ruptus (broken).

Fact 1: Bankruptcy is submitted to the jurisdiction of the bankruptcy court

Bankruptcy allows the unfortunate debtor an honest and "fresh start" in financial life by relieving most debts. It also allows creditors to restore some portions of what they owe.

Fact 2: Bankruptcy case begins by legally filing a petition containing defaulter's economic information.

How well is this going to work for you depend on how patiently you try ...

However, you must know that certain items are easier to remove than others.

Fact 3: A married couple may file a joint petition.

Here is a list of easier Items to dispute and get removed Stuff older than 2 years:

* Discharged bankruptcy

* Charge-offs

* Inquiries

* Repossessions

* Late payments

* Accounts that were late but now paid off

Fact 4: Liquidation and Reorganization are two common forms of bankruptcy.

Know More 2: Some scholars still believe that the term bankruptcy is originated from the Italian banco rotto meaning broken bank.

And a list of more difficult items to dispute:

* Accounts currently due

* Recent bankruptcy

* Judgments

* IRS or State Tax Liens

* Current collection accounts

Fact 5: liquidation bankruptcy is a kind of bankruptcy in which the defaulter's non-exempt (means legally unprotected) asset/possessions/properties are distributed to suit creditor claiming.

Fact 6: In reorganization bankruptcy the defaulter rearranges/redistributes possessions and unpaid amounts.

Removing Negative Credit

First, identify the negative items that you want removed.

If there is a negative item, such as a bankruptcy, charge off or collection account, just write it that this is NOT your account and you want it removed immediately.

"Bankruptcy is a legal proceeding in which you put your money in your pants pocket and give your coat to your creditors." - Joey Adams

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Chapter 13 Bankruptcy Dismissal

2010-03-25T14:10:00.001-07:00

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Bankruptcy is a legally declared inability of an individual or organization to pay creditors. During the course of a bankruptcy, a debtor may ask a court to dismiss the case. If the court finds that dismissal will not harm the creditors, ordinarily a court will grant a petition to dismiss a Chapter 7 or a Chapter 13 bankruptcy.

There are several reasons a debtor may prefer to file a Chapter 13 bankruptcy petition. The reasons include the debtor wishes to resolve certain debts that may not be discharged in a Chapter 7 bankruptcy. The debtor may also wish to protect certain cosigners on personal loans from being pursued by creditors for repayment or feels obligated to repay certain debts. The debtor may believe that future creditors will look more favorably on Chapter 13 reorganization than a Chapter 7 discharge. A debtor may be required to file a Chapter 13 bankruptcy if he or she has received a Chapter 7 bankruptcy discharge within the prior six years, or obtained a Chapter 13 bankruptcy discharge within the prior six years and has not paid off at least 70% of the unsecured debts and was subject to the discharge of a prior Chapter 7 or Chapter 13 bankruptcy filing within the prior 180 days, because the debtor violated a court order, or requested dismissal after a creditor sought relief from the automatic stay.

After filing a Chapter 7 bankruptcy petition, some debtors discover that they are better served by pursuing relief under Chapter 13. By filing an appropriate motion with the bankruptcy court, the debtor has an absolute right to convert the petition to a Chapter 13 filing, if the debtor has not previously converted a Chapter 7 bankruptcy to a Chapter 13 bankruptcy, and the debtor's estate qualifies for Chapter 13 relief.

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Bankruptcy - Timeframe From Start to Finish

2010-03-24T16:09:00.001-07:00

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Chapter 7 bankruptcy is a process whereby a debtor eliminates the majority of unsecured debt by filing a petition and appearing at a meeting of creditors. The entire process takes approximately 120 days and could require as little as one court appearance. The typical time-frame is as follows:

1) Filing of the petition with the clerk of the U.S. bankruptcy clerk. A notice is sent to all creditors, the debtor, the debtor's attorney and the panel trustee.

2) The 341 meeting of creditors is held approximately four to six weeks after the date of filing.

3) The debtor waits an additional 60 to 90 days until receiving a discharge order. The discharge may be delayed by the panel trustee.

If everything goes well, the debtor's case will last approximately 120 days from start to finish. If a creditor objects, there may be a separate case within the bankruptcy case to determine the dischargeablility of the debt. That case is typically not covered in the attorney's representation agreement. That is because the adversarial case is far more difficult than the total bankruptcy filing in a simple case.

Absent an adversarial complaint, the debtor is well on his way to a fresh start within four to five months at the latest. That means that the debtor can start saving money, can obtain auto financing and can start rebuilding. What may have seemed like an impossible option turns out to be a lifesaver for many individuals. Only an experienced bankruptcy attorney can advise you regarding your rights under the U.S. Bankruptcy Code.

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Chapter 13 Bankruptcy Dismissal

2010-03-24T13:58:00.001-07:00

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Chapter 13 Bankruptcy Dismissal

2010-03-23T15:35:00.001-07:00

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Bankruptcy Protection - Saving Your Assets

2010-03-20T13:41:00.001-07:00

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How Bankruptcy Protects You

Things to Consider About Bankruptcy Protection

Bankruptcy is not for everyone, so you really have to consider everything before you start the process.

Best Scenario for Bankruptcy Protection

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Bankruptcy and IRS Collections - How to Beat the System

2010-03-12T01:21:00.001-08:00

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You're in serious debt. You owe a number of creditors and have no hope of paying them. The worst part is one of your creditors is the most powerful collection agency in America...the Internal Revenue Service.

A fateful decision...You've decided to declare bankruptcy, and while going through your creditors you wonder if the IRS can be included. The IRS has a number of rules and restrictions on including an IRS debt in a bankruptcy. Not only that, but you're not completely free of IRS collection actions while you're in bankruptcy.

Let's go through the life cycle of an IRS debt and a bankruptcy:

Can you include your IRS debt in a bankruptcy? Yes, but your debt has to meet 3 standards. If it doesn't meet even one of them then you've got to figure out another way to pay the debt. The 3 standards are:

1. You can not include any tax debt that is less than 3 years old. So if your tax debt is from last year it can't be included.

2. You can not have any unfiled tax returns.

3. You can not have any tax returns that were audited because you committed tax fraud.

One down...Let's say that your IRS debt meets the requirements and you can include it in your bankruptcy; now what? The IRS can't take any collection action against you while you're in bankruptcy under the Automatic Stay of Collections.

There is a loophole for the IRS if you're a serial bankruptcy filer. If you've filed bankruptcy and it had been dismissed within the last year the IRS only has to abide by the Automatic Stay for 30 days. If you've filed two bankruptcies then the IRS can ignore the Automatic Stay.

Do they ever quit? While the IRS can't collect from you here's what they can do: The IRS can perform an audit to determine your tax debt amount. The IRS can send you an annual notice stating your debt amount. The IRS can take any tax refund you would have due and apply it to your debt, or if you have a trustee handling your bankruptcy the refund goes to them to be distributed to your creditors.

An end in sight...What happens to your IRS tax debt after the bankruptcy is discharged. If your tax debt was included and discharged then the debt is non collectible. But wait; remember those 3 standards for including a debt in bankruptcy. Any tax debt that happened because of one or all of those reasons is still eligible for collections. In addition interest and penalties have accrued on that portion of the debt during the time you were in bankruptcy.

The IRS and bankruptcy do not go together, but if you know your rights you can make the decision you need about your debts and be able to get your life back on track.

Now you have the smoking gun...Use it!

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Chapter 7 Bankruptcy Regulations - Exempt vs Non-Exempt Property

2010-03-05T16:53:00.001-08:00

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Chapter 7 bankruptcy requires for the liquidation of debtor's assets in order to pay back money owed to debtors. Nevertheless, the government allows individuals to retain certain belongings which are referred to as Exempt Property, while other assets, known as Non-exempt property, are automatically placed in the hands of a court trustee to be sold off. While specific exemptions and values vary from state to state, the following is a general listing of exempt and non-exempt property for individuals filing Chapter 7 bankruptcy:

Exempt Property:

1. Home Equity, up to a certain value.

2. Motor Vehicles, up to a certain value.

3. Household Appliances.

4. Household furnishings deemed reasonably necessary.

5. Clothing deemed reasonably necessary.

6. Jewelry, up to a certain value.

7. Earned wages not yet paid, up to a certain value.

8. Tools used by the debtor as part of his profession, up to a certain value.

9. Pensions.

10. Government assistance: welfare, social security, unemployment.

11. Compensation awarded due to personal injury.

Non-Exempt Property

1. Cash, stocks, bonds, bank accounts, and other investments.

2. Family heirlooms.

3. A second motor vehicle.

4. A second home.

5. Expensive musical instruments that are not necessary for the debtor's profession.

6. Personal Collections: coins, stamps, or other valuable items

7. Belongings deemed not reasonably necessary or that exceed determined values.

Please remember that before you make any decision about filing any form of bankruptcy you should consult with a profession. He or she will be able to explain your options to you in a more thorough manner. This will help you become more informed about all of you Debt Relief options and possibly prevent you from making a decision that you might regret in the future.

The Truth About Bankruptcy - Bankruptcy Myths

2010-03-01T00:04:00.001-08:00

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Bankruptcy is on the rise thanks to the credit crisis affecting the US, Britain and most of Europe. However, many people are filing for bankruptcy without knowing the full story. This article explodes some bankruptcy myths.

Myth 1: You can Keep Inherited Money

If you come into any money while bankrupt, whether it be inherited or won, it must be declared. Any money newly obtained will be used to repay your creditors. If you are caught having not declared additional funds, a Bankruptcy Restraining Order will be imposed which will extend the terms of your bankruptcy.

Myth 2: Bankruptcy is an Easy Way to Escape Debt

Bankruptcy is a very serious matter, it affects your credit rating which damages your eligibility for future credit, your business, your career, and even your health. If you are planning on applying for bankruptcy you should be fully aware of bankruptcy consequences.

Myth 3: Your House and Car are Safe

Sadly you have every chance of losing your most valuable assets in order to make repayments on loans. For most people this means their home and car have to be sold to raise adequate funds. All going well you should be able to keep the contents of your home, such as your white appliances and sofa etc.

Myth 4: You Could Lose Your Job

Bankruptcy will not cost you a job unless you hold certain governmental or financial positions. Nor are you obliged to inform your employer of your bankruptcy, however, it will be a matter of public record. Click the link for alternatives to bankrutpcy and get debt help.

Myth 5: Bankruptcy Makes Future Credit Impossible

Even people who have filed bankruptcy can get a mortgage and credit card. Unsurprisingly, it puts the best mortgage deals out of reach if you have bankruptcy on your credit history, however, is it impossible to get a mortgage? No. What may be surprising however, is that bankruptcy can make getting a credit card easy. Card companies know that if you have filed bankruptcy you should have no debt.

Myth 6: Bankruptcy Discharges All Debts

Not all debts can be discharged under bankruptcy, such as child support contributions, fines and student loans.

Bankruptcy Help - Where to Get It

2010-02-27T22:48:00.001-08:00

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Require bankruptcy help? A lot of citizens do not like to take notice of it, but if you require economic failure help, the finest place to get help is to twist to the experts. Get in touch with a bankruptcy lawyer. Here's the reason.

Bankruptcy, whether individual insolvency or business insolvency, is very prolonged, technological, and is capable of being difficult. An attorney who manages individual bankruptcy is qualified to think all of the subsequent areas that are interweave:

The people's requirement for Bankruptcy:

Individual bankruptcy comprises of both Chapter 7 bankruptcy as well as Chapter 13 Bankruptcy. These are dissimilar laws and events and they deal with liabilities and belongings in unlike ways. People must be eligible for bankruptcy and the requirements are different for every kind of bankruptcy.

The people's Debt:

The people's liabilities are moreover secured or unsecured. Secured liabilities may be also unpaid (such as a car or else home credit) or may be forced by law (such as a judgment or tax lien). The various kinds of liabilities are treated in a different way in each of the two kinds of individual bankruptcy.

The personnel belongings:

The kind of bankruptcy, kind of belongings, sum of property, and whether or not belongings protects a liability, all have an effect on the consequences of a private bankruptcy. A defaulter may or may not lose land in the bankruptcy procedure.

Motions to stay away from liens:

During an episode 7 bankruptcy procedures, a defaulter can file a movement to stay away from Liens on definite individual belongings. This has the consequence of permitting a defaulter to keep the belongings, but not paying the liability. There are limitations on movement to stay away from the Liens and it does not affect the credits used to buy property.

Motions to keep away from Judicial Liens:

Various defaulters have been charged and have judgments in opposition to them. Usually, these judgments require to be paid previous to genuine belonging (such as a residence) can be put up for sale. Though, a defaulter can file a movement to keep away from Judicial Liens and get rid of the judgment from its attachment to genuine belongings (such as a residence) and not pay the judgment liability.

Reaffirmation conformity:

There are times when the defaulter needs to repeat a liability and it is in the defaulters best curiosity to do so. Since bankruptcy is to assist the defaulter get rid of liability, there are necessities to be fulfilled before a bankruptcy court approves the reaffirmation agreement.

Bankruptcy Chapter 13 Mortgage Foreclosure

2010-02-26T22:40:00.001-08:00

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In bankruptcy Chapter 13 mortgage foreclosure is either stopped or at least temporarily avoided.
Here's how.

First, just in case you are not familiar with a Chapter 13 bankruptcy, it is a bankruptcy court approved payment plan where the debtor (the person filing bankruptcy) pays a bankruptcy trustee each month and then the trustee pays the debtor's creditors.

There are several aspects of a Chapter 13 bankruptcy that work to help people facing mortgage foreclosure. The first aspect is actually applicable to all bankruptcies. It is called the "automatic
stay".

By law, whenever anyone files bankruptcy, regardless of the type of bankruptcy, there is an immediate "automatic stay" (automatic temporary stopping) of most civil proceedings against the person filing bankruptcy. What this means is that if someone is facing mortgage foreclosure and the person files bankruptcy, the mortgage lender has to immediately stop its' foreclosure action until it gets permission for the bankruptcy court to proceed.

In a Chapter 13, the bankruptcy court will not lift the "automatic stay" and grant the mortgage lender permission to proceed with a foreclosure until the debtor (the person filing bankruptcy) fails to make his payments to the bankruptcy trustee. As long as the debtor pays the monthly payments to the trustee and pays his regular mortgage payments, the "automatic stay" will remain in force and the mortgage lender can not do anything.

The second aspect of a Chapter 13 that works in favor of people facing foreclosure is that it allows a debtor to pay mortgage arrearage over time, normally 3 to 5 years. In most foreclosure cases, a person has not paid his monthly mortgage payment for several months and the mortgage lender demands full payment of the delinquent monthly payments (arrearage) in lump sum before the lender will consider stopping foreclosure. Most people cannot pay the lump sum.

In a Chapter 13 bankruptcy, a debtor can pay the arrearage over time. He does not have to pay it all at one time. Spreading the lump sum over time means paying smaller monthly payments until the total arrearage is paid. A creditor can object to the amount to be paid each month towards the arrearage, but once the bankruptcy court approves the payment plan, the creditor can not do anything except take the payments.

A third aspect of a Chapter 13 bankruptcy that helps people facing mortgage foreclosure is that unsecured creditors may be paid a portion or all of what is owed to them. What this is really doing is reducing the amount of debt that a person has to pay back each month. By paying unsecured creditors less each month, there is more money available with which to pay a secured creditor such as a mortgage lender. Therefore, it should be easier for a debtor to pay his monthly mortgage payment.

This is general information. If you need specific information or have any questions of any nature whatsoever, talk with a lawyer licensed in your state.

This article may be republished, but the wording must not be changed and the author links must
remain active.

Filing Bankruptcy - New Bankruptcy Laws Create Confusion For Consumers

2010-02-25T22:36:00.001-08:00

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Many Americans are filing bankruptcy in hopes of eliminating debts or saving their home from foreclosure. While it is true bankruptcy can offer a fresh financial start, undergoing the process is no easy task. New bankruptcy laws, enacted in 2005, have made filing bankruptcy complicated and confusing.

For most people filing bankruptcy requires legal assistance. When possible, it is a good idea to interview three or four bankruptcy lawyers. Most law firms offer complimentary consultations to review financial information and provide advice. Filing bankruptcy can be an emotionally-charged experience, so it is important to work with a lawyer whose personality is complimentary to yours.

Prior to or during the bankruptcy process, debtors are required to undergo credit counseling. The Bankruptcy Abuse Prevention and Consumer Protection Act requires consumers to obtain counseling through a U.S. Trustee Program agency. Credit counseling must take place a maximum of 180 days prior to filing.

Debtors must also undergo the "means" test to determine if they are eligible to file for personal bankruptcy protection. A provision of BAPCPA requires consumers must pay a portion of their debts if possible. The means test is used to determine how much debt will be repaid.

In cases where debtors fall significantly below the median income level of their state, they may be allowed to file Chapter 7 bankruptcy. Chapter 7 involves liquidation of assets and discharge of debts. Otherwise, debtors will be required to file Chapter 13 bankruptcy and repay debts over an extended period of time.

In order to file bankruptcy, debtors must petition the bankruptcy court in the judicial district where they reside. A creditor meeting will be arranged and a repayment plan submitted to the court. BAPCPA requires debtors to pay a substantial amount of disposable income toward repayment of debts. If the debtor is unable to adhere to the repayment plan, they will fail out of bankruptcy and lose protection of the court. Failing out of bankruptcy means creditors can proceed with collection actions including initiating foreclosure.

When homeowners file bankruptcy to stop foreclosure, it is crucial they understand the consequences of failing out of bankruptcy. Mortgage lenders can commence the foreclosure process where it left off when bankruptcy was filed. In many instances, homeowners are only days away from eviction when they file. If they fail out of bankruptcy, the lender can foreclose in a matter of days.

Filing bankruptcy has far-reaching effects and should only be considered when all other debt elimination plans have failed. These might include debt settlement, debt consolidation or credit counseling. Take time to become educated about bankruptcy and fully understand the pros and cons. Look for alternatives that can yield the same results without being as detrimental to your credit.

Bankruptcy - Do's and Don'ts

2010-02-24T22:32:00.001-08:00

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Filing for bankruptcy is a serious decision and you have to be very careful in your approach towards the same. The procedure is a bit complex. Therefore, make sure that you follow the following do's and don'ts:

The Do's

Following are some important things that you must DO.

You must take your case very seriously. You have the constitutional right to use it as a tool to get rid of the debts that you are unable to pay.
While you are filing your petition, you have to be very honest and forthcoming in providing all the details. Make sure that the information that you are providing is accurate and has not been manipulated. Your purpose is to get a discharge from your debts and you may not be able to achieve that by concealing your assets or providing false data on your bankruptcy petition. Such things will only guide you into a much deeper trouble.
While you are working with your attorney, you should try to provide all the details to them without concealing any facts. Even if it is embarrassing for you, your lawyer must know about it.

You must work in full co-operation with your attorney. You have to make yourself available for him whenever he wants to discuss any issues regarding your case.
Meeting with your creditors is an important part of the process. Before, you participate in such meetings, it is always better to seek advice from your attorney about how you should behave in the meeting.
Last, but not the least, you must also consider the bankruptcy alternatives before you actually file your case. Credit counseling and debt consolidation are some of the best tools that can help you pay off your existing debts without filing your petition.

Don'ts

Following are some of the things that you should not do.

You should not consider bankruptcy as an easy alternative to get rid of all your debts. Not all kinds of debts are dischargeable. Some non-dischargeable debts include Student loans, specific tax liabilities, etc.
The meeting with the creditors must be held before filing the petition. You should not talk to them after you have filed your petition. Furthermore, any attempt from the creditors' side to contact you must be informed to your bankruptcy attorney.
You should not keep any of the creditors out of the petition. Make sure that all of them have been included. The ones that are not mentioned in your petition will still claim their money even after you have been declared as bankrupt and you would be liable to pay them back.
Do not try to misuse your filing by availing lots of credit cards or running up a huge amount of bills. Such attempts may dismiss your case, as the court may consider your bankruptcy case to be fraudulent.

Steps In Filing Bankruptcy - Bankruptcy Process Made Clear

2010-02-23T22:27:00.001-08:00

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Filling bankruptcy is not just the case with individuals under enormous debts. It so happens that several small and large corporations face the same problems many a time. These are difficult times for the company in question. There are issues regarding the employees and the investing agents as well. The steps in filing bankruptcy are made simple if there is a good lawyer representing the client to sort out the matter. Filing bankruptcy online is also a feasible option.

There are several separate steps in filing bankruptcy. About six months before the actual filing bankruptcy, the applicants must compulsorily undergo counselling for credit. The applicants also need to fill out forms and declare all their property. Second in the list of steps in filing bankruptcy is to check for chapter. It is decided by the federal organization if the applicant can opt for chapter 7 or 13 as per the policy. Next, means such as income and expenses are tested.

Individual owned property that does not come under any exemption is liquidized and equally partitioned among the claimants. Assets or possessions owned by the particular corporate entity are entrusted to a 'trustee' who liquidates them and distributes the money among all the creditors. Payments are also made to the investors of the corporation. The corporate entity is currently out of business and bankrupt. Hence, its normal operations are not permitted to be carried out.

In terms of steps in filing bankruptcy for corporations, the creditors come under the secured and unsecured categories. The former includes banks that have proper mortgage claims and are always given higher priority during payments.

The latter comes second in terms of priority and these have taken more risks than the secured creditor. However, the third category of investors (stock holders) has the last claim. They are ensured payment only if the first two investors have received theirs.

Filing bankruptcy costs vary for each step. The counselling is normally free or goes up to fifty dollars. They provide free means test. The ticket out is also charged nominally but court and attorney expenses and fees may go up to a few thousand dollars in all. Straight bankruptcy filings that come under the chapter 7 are usually more expensive and up front.

Bankruptcy Law - An Outline

2010-02-22T22:24:00.001-08:00

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Bankruptcy law is the governing laws that say what happens in the bankruptcy process, who can file what type of bankruptcy and every other detail involved in filing bankruptcy. It is important that you are serious when filing bankruptcy and that you make sure your completely understand the process.

An Establishment of Bankruptcy Law

The United Bankruptcy Code is the law that regulates and establishes bankruptcy. This is a federal law and bankruptcy is held in federal bankruptcy courts. Federal bankruptcy judges hear bankruptcy cases.

States get involved on some level with the process. Each state has one or more bankruptcy courts to hear resident cases. Additionally, exemptions are established under federal law, but states also have exemptions that can be chosen instead of the federal exemptions.

Variations of Bankruptcy Law

There are many variances in the bankruptcy laws that can be confusing. Here are some top things you should know about:

Exemptions - Exemptions are assets that are protected. You will have a federal list and a state list. You have to choose one or the other. The idea is to go with the one that protects the most of your assets.

Different types of bankruptcy - There are many different types of bankruptcy. Individuals usually either file Chapter 7 or Chapter 13. In any case it is important to understand the difference. You also have to make sure that you qualify for the chosen type under the new laws.

Alternatives - Nobody really wants a bankruptcy filed. It will ruin your credit and possible cause you to lose assets. Creditors lose money and the government racks up costs during the process, too. In the end everyone benefits more from an alternative to bankruptcy. Many times during the process alternatives are explored to see if they would make more sense then filing bankruptcy.

The New Bankruptcy Laws

New laws were designed to help reduce the number of bankruptcies being filed and to help prevent abuse of the system. These new laws made several changes.

One of the best known changes is the new requirement of credit counseling. This is done two times during the process. The first time is to help a person make sure they should file bankruptcy and that an alternative is not a better solution. The second session helps the person to be a better consumer and learn about being responsible with credit.

Another major change is the limitation on who can file Chapter 7. This limitation makes a Chapter 7 based on income. Those making too much have to file a Chapter 13.

Bankruptcy - What Are the Types of Bankruptcy Cases?

2010-02-21T22:19:00.001-08:00

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The current bankruptcy law, enacted in 1978, is known as the Bankruptcy Code. The Code was amended in 2005, however, the 2005 amendments do not apply to cases filed before or pending on the amendments' effective date, Oct. 17, 2005. The Code is supplemented by the Federal Rules of Bankruptcy Procedure, as well as local rules, which govern the procedures used in the bankruptcy courts.

The Code is set forth in Title 11 of the U.S. Code. It consists of nine chapters: 1, 3, 5, 7, 9, 11, 12, 13 and 15. Chapters 1, 3 and 5 are general applicability. Chapters 7, 9, 11, 12, 13 and 15 each deal with a particular type of bankruptcy proceeding. The Code refers to the financially troubled person or entity as the "debtor."

Debtors file bankruptcy for a variety of reasons; including divorce, job loss and health problems. Pursuant to various stay provisions, debtors are, upon filing, entitled to a break from collection activities. By filing for bankruptcy, debtors may obtain a discharge of personal liability from many debts and may be able to restructure others.

There are two basic types of bankruptcy proceedings: liquidations and reorganizations. In liquidations, governed by chapter 7, the debtor's non-exempt assets are sold for the benefit of creditors. In exchange for surrendering these assets, the debtor generally obtains a discharge of personal liability for pre-bankruptcy debts and may enjoy assets acquired after the filing.

Chapters 11, 12 and 13 involve various types of reorganizations or payment plans. In bankruptcy reorganizations, the debtor's assets are not sold. Individual debtors, often file chapter 13 cases in order to save their homes. Reorganization bankruptcies allow a debtor the opportunity to restructure the debt and to pay it, either partially or in full, through a plan funded by his income. The plan must be confirmed by the court for it to be mandated upon creditors.

Bankruptcy Process - Essential Steps Overview

2010-02-20T22:16:00.001-08:00

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If you are considering bankruptcy, you'll need to know what to expect during each phase of the process after filing.

Here's a basic overview of what to expect during the entire process:

First, you must decide which type of bankruptcy you want to file. Chapter 7 will free you of all of your debt, and allow you to begin rebuilding your credit after a few years. Many people do not qualify for this type of bankruptcy under new government guidelines established in 2005, however, which allow the court to determine if you indeed do qualify. Basically, the law requires you make less than the medium income in your state to file for Chapter 7 bankruptcy.

Chapter 13 bankruptcy requires you to pay back all of your debt within a specific timeframe in accordance to a schedule set by the court. While this may sound like a good solution, after all it's allowing you to pay back everyone you owe, it can be difficult since the court decides how much of your income is used for debt payments, and how much you are able to keep to live on. Their criteria is usually stringent, and doesn't allow for anything but necessities during the repayment period.

Once you've decided which type of bankruptcy to file for, it's time to start filing out mounds of legal paperwork. If you'll be filing yourself, be prepared to file app. 30 to 60 pages in your petition, including schedules and other papers filed at the time of your bankruptcy. You must follow all local and federal bankruptcy court rules carefully when completing these forms. It can be very tedious and confusing work. You must learn and understand a variety of bankruptcy laws and requirements specific to your state, and be able to type them in a specific manner.

About 4-6 weeks after filing for bankruptcy with the court, you will be required to attend a hearing presided over by the bankruptcy trustee called the First Meeting of Creditors. You will be required to answer detailed questions about your bankruptcy papers, assets, debts and other matters from both the trustee and your creditors.

Your creditors now have 60 days in most states to contest your bankruptcy filing. Once that deadline has passed you can expect the court t notify you of your official debt discharge in about 60 to 75 days.

Does filing bankruptcy mean the end of credit for a lifetime? Absolutely not! You can begin to reestablish your credit two years after the discharge of Bankruptcy. However, it will be recorded for 10 years and must be reported if asked. You may not file a new bankruptcy request for six years.

Chapter 7 Bankruptcy Vs Chapter 13 Bankruptcy

2010-02-19T22:12:00.001-08:00

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Petitioning a court for a judicial declaration of bankruptcy is always an option for people who simply cannot fulfill their debts because of some financial woes.

There are 2 kinds of bankruptcy: voluntary bankruptcy where the debtor himself initiates the proceedings; and involuntary bankruptcy where the creditors are the ones who initiate the proceedings to protect their interests and enforce their rights.

There are 2 kinds of voluntary bankruptcy: one which is filed under Chapter 7 of the Bankruptcy Code, and another which is filed under Chapter 13 of the same law.

Chapter 7 bankruptcy, once granted, will ask the debtor to surrender his properties - at least those which are not exempted by law - to a trustee who will thereafter liquidate the same and send the proceeds to the unsecured debtors in proportion to how much they have lent the debtor. Regardless of whether or not the liquidated properties will be enough to satisfy these debts, they will be discharged upon distribution of the proceeds. The debtor can start his financial life all over again.

Chapter 13 bankruptcy, on the other hand, works the same way, with one major difference. The debtor will be asked to satisfy a portion of his unsecured loans before he will be discharged of the same. This portion depends on the court's judgment, taking into consideration the debtor's financial abilities in the foreseeable future, no matter how woeful it may seem at the time of the grant of the petition.

Immediately, one would think that Chapter 7 bankruptcy is a better option.

Well, it is.

Unfortunately, it's not up top the debtor to decide under which chapter of the statute should he file his petition for judicial declaration of bankruptcy.

The law is quite explicit when it comes to this matter. First, the petitioner's income will be taken into consideration. If his income is below the median, then he will be allowed to file for bankruptcy under Chapter 7. But if his income is slightly above the median, he will be asked to undergo a "means test."

This "means test" will gauge his ability to pay his debts, as well as how much of such debts he will be able to pay. This will be the basis of the terms and conditions under Chapter 13 of the Bankruptcy Law.

The above is a relatively new law passed by Congress in 2005.

A debtor is advised to seek the services of a bankruptcy lawyer so that his interests will be protected in the best way possible. An attorney will defend the petitioner against any and all attacks against his petition so that, at the end of the day, he may be declared bankrupt and his financial misery will be alleviated.

Financing a Home After Bankruptcy

2010-02-18T22:09:00.001-08:00

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I'm often asked, "can I still buy a home if I've had a recent

bankruptcy?". Absolutely! Now, for obvious reasons, you can expect to

pay a higher rate on your mortgage than those who haven't had a

bankruptcy. You actually have a couple of choices when it comes to

purchasing a home after a bankruptcy. You can get your mortgage through

a non-prime lender, or seek out an FHA Loan. Whichever mortgage lender

type you go with, be prepared to produce an explanation of the

circumstances of the BK, as well as the documentation and schedule of

debtors. You'll also need to have re-established some credit in most

cases, to show the mortgage lender that you can now handle paying your

bills again. You needn't be a novelist to write you BK explanation

letter, your mortgage broker can help with that. At our company, it's

no big deal to help 20-30 people each month at writing their

explanation letter for Bk's. We know what the mortgage lender is

looking for and what format they like, so relax when it comes to this

part of the loan. They really just want to know what the circumstances

surrounding your BK were, in layman's terms. There are basically two

kinds of personal bankruptcies that mortgage lenders deal with; Chapter

13, where your debts are reorganized and paid out over time and Chapter

7, where your assets are liquidated. I'm not an attorney, so speak to

your tax advisor about each of these bankruptcies if you'd like

in-depth information about what they mean. You can usually get a home

mortgage in 12 months with a chapter 13 bankruptcy. You can expect to

wait at least 2 years for a chapter 7 bankruptcy. Either way, you can

expect to produce a trustee letter. It's dis-heartening, but I meet

couples and individuals all the time who have either just filed

bankruptcy, or they have one being discharged and I'm unable to help

until they get a trustee letter, authorizing a home purchase. I hope

this helps you in your mortgage endeavor!

View this and other articles at The Mortgage
Blog

Chapter 13 Bankruptcy - Wage Earner Plan

2010-02-17T06:23:00.001-08:00

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Because of its specific nature, the chapter 13 bankruptcy is also known as Wage Earner Plan. As per this type of bankruptcy, the debtors are provided an opportunity to reorganize their finances and put their business on the path of profit making. They are also provided with a repayment plan and they have the obligation to repay the reduced claims of the creditors on a fixed monthly schedule basis.

Advantages Of Chapter 13 Bankruptcy

The chapter 13 bankruptcy has been deigned in a way to protect both the debtors and the creditors. This type of bankruptcy ensures that the creditors get their money back. At the same, it allows the debtors to continue with their existing business operations and regain control of their finances under the expert guidance of the trustee appointed by the bankruptcy court. What is more, the debtors are also protected from foreclosure, garnishment, levy, or similar consequences. This way, we can see that the chapter 13 bankruptcy is advantageous for both the debtors and the creditors.

How To Qualify For Chapter 13 Bankruptcy?

If you are planning to file for bankruptcy under chapter 13 of the bankruptcy code, you must be aware of certain eligibility criteria that you need to fulfill. To start with, you must have a regular source of income that exceeds your reasonable living expenses. If you do not have income enough to pay even your reasonable living expenses, you will not be able to file for chapter 13 bankruptcy. If you have already applied for the same, the bankruptcy court will order you to file for bankruptcy again under chapter 7 of the bankruptcy code where you will not be able to continue with your existing business, as all your assets will be sold off to pay off the debts you owe.

Do You Need To Pay The Full Amount Of Debts Under Chapter 13?

The amount payable as debt repayment will depend upon how much money is left with you on a monthly basis after paying all your necessary living expenses. In some cases, where the amount left is much higher, the debtor is asked to pay the full amount of debts and the repayment plan is designed accordingly. In some other cases, where the amount left is very little, the debtor is asked to pay the partial amount of debts and the repayment plan is designed accordingly. For example, in such cases, the debtor may be allowed to pay 25 cents for each dollar.

However, you should note that filing for bankruptcy is not a matter of choice. It is not that just because you want to continue with your business operation, you can file for chapter 13 bankruptcy and be granted the same. The bankruptcy court will look into all the facts and then make a decision. Therefore, the bottom line is that the more informed you are regarding the various bankruptcy laws, the better decision you can take.

How Bankruptcy Works

2008-06-19T11:03:00.000-07:00

by: John Mussi
Bankruptcy… a frightening word with serious connotations. In recent years governments have been cracking down, making penalties for bankruptcy more severe in an attempt to make them more difficult to attain so that only those in serious need can apply for them.
Despite the negative image that is associated with bankruptcy and the various problems that come along with declaring a bankruptcy, it doesn't have to be frightening; after all, bankruptcy was designed as a way for those individuals and businesses who find that their finances are out of control to get the help that they need to organize their finances and pay off their debts.
Once you take the time to understand what bankruptcy is and how it works, you won't find it as scary as you did at first.
Defining Bankruptcy
Bankruptcy is a legal term, meaning that an individual cannot within reason pay off their various debts and have allowed the court system to take over their finances for this purpose.
When filing for bankruptcy, the court will appoint someone to work out the payments to your creditors and to determine how much of your income must go to repay these debts. The court will either allow you to make payments, or more likely will deduct a portion of your paycheck toward this goal.
During this time, your credit will be limited… both by legal action and by the reluctance of creditors to issue credit lines to individuals who have declared bankruptcy.
Once the total amount set by the court has been repaid, the bankruptcy will be discharged and you will be able to start rebuilding your credit from the ground up.
Different Types of Bankruptcy
Several different types of bankruptcy exist, defined by legal codes for certain purposes. The exact types of bankruptcy available differ from one country to the next… in the United Kingdom bankruptcy can only legally be applied to individuals and partnerships, whereas in other countries such as the United States or Canada they can be applied to businesses as well.
Regardless of the limitations or allowances set by the government on who is allowed to declare bankruptcy, the general purpose of bankruptcy remains the same.
Lasting Effects of Bankruptcy
While you are working towards discharging a bankruptcy, your options for credit will be exceedingly limited. Even after you've had your bankruptcy filing discharged, though, you'll still find that you won't have many options for a while… many creditors will still be hesitant to work with you from between six months to two years depending upon the creditor and the service that you're applying for.
You should also take care with any offers that you do receive, because they will likely come with high interest rates and additional fees attached.
Life After Bankruptcy
Bankruptcy isn't the end of the world… it's actually a chance for a new beginning. As time goes by, the bankruptcy on your credit report will begin to matter less and less as you eventually start to establish new positive credit lines and build up your credit again.
Just like negative reports, your bankruptcy will eventually expire from your credit history; the process may take up to seven years, and until it expires there will still be those who are hesitant to deal with you.
Once it expires, however, the negative reports that preceded it will also be long gone… and you'll find that your newer reports are all that remain.

How To Avoid Being A Victim Of Ebay Buyer’s Fraud.

2008-06-19T11:02:00.002-07:00

by: Kirsten Hawkins
From everything you’ve heard about the risk of fraud on eBay, you might think it’s only buyers getting scammed – but you couldn’t be more wrong. Here are a few common scams that sellers fall for every day.The Rubber Cheque.This one obviously isn’t limited to eBay – it’s been going on for years in all kinds of business. It works like this: a buyer sends you a cheque that they don’t have the funds to cover and you pay it in your bank. You then send the goods right away, only to find out a few days later that the cheque bounced.The solution to this is simple: don’t send anything to a buyer until their payment has cleared, no matter how quickly they might say they need it. Advise them to pay electronically if they don’t want to wait so long for their items. Then again, if your items are quite small, you could just take the loss from an occasional bounced cheque. Think of it as a small price to pay for faster and better customer service.‘I Never Bought Anything!’This is one of the riskiest scams to fall victim to. In this case, the credit card’s real owner still has control over it – no-one has stolen their details. They have realised, however, that they can phone up the bank who issued their card to say that it’s being used fraudulently and they never bought any such thing, and the bank will often reverse the transaction without even investigating. The only way to beat this scam is to make all your sales through eBay, as they keep a record of transactions.The Unconfirmed Address.It is quite easy to steal PayPal accounts from inexperienced users: all you need, after all, is their email address and password. PayPal tries to protect against credit cards registered on stolen accounts being used to buy things by listing a ‘confirmed address’ for each buyer – an address that matches what is registered with their credit card issuer. What many scammers will do is ask you to ship to a different address – unless you’re very sure of them, this is a bad idea, as they could be trying to commit credit card fraud. Be especially suspicious of anyone who wants to pay a higher price and get overnight shipping, especially if not even to the same country as the confirmed address. The fraudster is trying to make sure the item reaches them before they are discovered.It’s up to you to take responsibility for fraud on PayPal, as eBay’s favourite way to refund fraudulent payments to their rightful owner is to just reverse it from you! This is considered an occupational risk of PayPal usage, and sellers who get burned severely sometimes go as far as moving to a rival electronic payment service. See http://www.nopaypal.com for more.In the next email, we’ll take a closer look at PayPal, and ask: should it be the only kind of payment you accept? About the author:Kirsten Hawkins is an Ebay and internet auction enthusiast from Nashville, TN. Visit for more great tips on how to make the most from Ebay and other online auctions.

Bankruptcy 101

2008-06-19T11:02:00.001-07:00

by: Mansi gupta
‘Bankruptcy’ the term that can raise the goose bumps of almost every individual who hears it and even a nervous breakdown to those who confront it. Bankruptcy stands for the situation when a person runs into huge debts and there is hardly any money left with him to repay those debts. The clouds of bankrupt situation can hover over anybody’s life be it a successful business man who has never ever fathomed it or any greenhorn entrepreneur who had thought of going a long way ahead. There are several reasons behind this insolvency-Indebtedness-people usually take big loans from the banks and private companies in order to run successfully their business or company. However, since the economy is constantly fluctuating, one might not be able to incur expected results or profits. So, the loan debt with interest rates gets piling on. The loan can also be taken to pay off a bill that you missed paying. The loan is taken instantly in this case without an assessment of the interest rates. This can be cause snags later.The credit card bills are also a source of trouble. They are charged with good interest and at the end of the month when the expenditure has chewed your month’s income; the credit card bill can make you bite the dust. In the world today where fraud and betrayals are considered to be the bets virtues, any partner or shareholder or director might connive to pitch the company or business to bankruptcy. Here the reasons can be mutual squabbles and vengeance.Gradual denouncement from the market- the commodity you sell today at price X, may be sold tomorrow by some other company at a much cheaper price Y. This can oust or eject your product from the market replacing it with a relatively cheaper one. However, where there is a will, there is definitely a way. Just as there are two sides of a coin, there are two aspects attached to everything. When you glare at the negative side of the situation, its positive aspect is lurking behind according to which bankruptcy can be seen a situation that provides you a golden chance to start things afresh. This is done by filing your application for bankruptcy, in a way seeking help from the government to help you overcome the disaster. Once you forward your application and it is accepted, the government repays most of your debts. This becomes possible by taking hold of your assets and dividing them amongst the creditors in an organized manner. But the debts that are associated with embezzlement or those huge ones that cannot be covered up via one’s assets can be problematic. In case of businesses filing for bankruptcy, certain procedure has to be followed up. Besides this there are a few debt consolidation services that advertise themselves through television, print media etc. Debt consolidation signifies using a loan provided by that service to repay other debts. This loan is comparatively at a lower rate of interest and it often becomes easier for many to repay one loan instead of five to six ones. In any case, if you are seeking financial aid from the government, banks, services etc., there stands the barrier of qualification. It is that you should be able to prove the service or the bank that your case is authentic and not a fraud. In order to escape future troubles, the government has formulated strict laws and eligibility criterion in this area. However, in any case it is better to seek the advice of an advisor before seeking help to make up your crisis. This will not just educate you about all the related terms and conditions but also the possible legal and financial consequences. Just keep in mind that help always comes to those who are look for it with a true heart. About the author:Mansi gupta writes about bankruptcy Learn more at