One of the most difficult decisions that you can face is whether or not to file for bankruptcy. For individuals, there are basically two types of personal bankruptcy, which includes Chapter 7 and Chapter 13. Designed to give the filer a fresh start in life by wiping out certain debts, a Chapter 7 bankruptcy will rid the filer of credit card and other unsecured debt. A chapter 13 bankruptcy, on the other hand, is a court-approved payment plan in which the filer is required to repay a predetermined percentage of their debt. The determination of which chapter to file will be based on the filer’s disposable income, if any, after paying their necessary monthly bills.
When many people file for bankruptcy, their first thoughts are of their assets and whether or not they may lose their home. In a Chapter 13 repayment plan, the majority of filers are allowed to keep their property in exchange for repaying a portion of their debts. A Chapter 7, however, is designed to be a liquidation process that often results in the sale of non-exempt property. Which property is non-exempt in a bankruptcy proceeding? Each state has it’s own laws pertaining to the amount of property that an individual or married couple can keep without having to worry about it being liquidated.
The official bankruptcy process begins upon filing a petition with the local bankruptcy court. This can either be done individually, also known as pro se, or with the help of an attorney. For most, hiring an attorney is the best way to make sure that every form is completed accurately and in order to make sure their assets are protected as much as possible. Upon the filing of a bankruptcy petition, the court will assign a trustee to the case and will set a date for a Meeting of the Creditors. Although creditors of the filer are invited to attend, they are not required to do so. The filer, however, is required to attend and will be questioned by the trustee, under oath, while having the meeting recorded. This meeting is typically the only appearance required of the filer unless special circumstances are present.
Following the Meeting of the Creditors, often referred to as the 341 meeting, the creditors will have 30 days to object to the filers property exemptions and another 30 days to object to the discharge if the filing is a Chapter 7 bankruptcy. In a Chapter 13 proceeding, creditors may object to the payment plan but the discharge will not be granted until the payment plan is complete. A Chapter 13 bankruptcy can last for up to 5 years before the payments are completed and a discharge is issued. Following the discharge, the bankruptcy case will be closed and the process will be complete.
This article is to be used for informational purposes only. It should not be used as, in place of or in conjunction with professional legal advice regarding bankruptcy. Anyone who is considering filing a petition for either personal or business bankruptcy should consult a licensed attorney in their area for additional information and/or legal advice.
Filed under Uncategorized by on Mar 8th, 2010. 
A record number of people were declared insolvent last year as the recession pushed many homeowners and businesses into the red, new figures revealed today. Across England and Wales, 134,142 people went bankrupt, took out an Individual Voluntary Arrangement or Debt Relief Order in 2009, the Insolvency Service said. This dwarfs the previous record of 107,288 personal insolvencies from 2006. Experts believe this had already been passed by October last year.
Total company liquidations reached 19,077 during 2009, the highest figure since 1993. But the number for companies in the final quarter of the year was lower than both the previous three months and the same quarter of 2008. In contrast, the level of individuals declared insolvent continued to speed up in the last quarter at 35,574 – the highest since records began in 1960.This is a 25 per cent rise on the figure for 2008 and the eight consecutive quarter where the tally has increased.
A breakdown of the total number of insolvencies for the final three months of 2009 showed 17,007 people went bankrupt, 7 per cent fewer than in the previous quarter. But a record 13,219 people took out Individual Voluntary Arrangements, under which interest on debt is frozen in exchange for a set amount being repaid each month. It is thought IVA numbers were boosted by companies cutting staff pay and overtime as an alternative to making redundancies, meaning people were in a position to repay some of what they owed, rather then being forced to declare themselves bankrupt.
There was also a further increase in the number of Debt Relief Orders taken out in the three months to the end of December, with these rising to 5,348, up from 4,505 in the previous quarter. Both chapter 7 bankruptcy and chapter 13 bankruptcy therefore continue to rise.
As consumers across the land continue to struggle, we continue to look for signs that an economic recover is at hand, budding, and springing forth.
Filed under Uncategorized by on Feb 6th, 2010.
Reorganization or liquidation process is what bankruptcy is referred to. Bankruptcy motions happen in federal court to eliminate debt for people and businesses. You can qualify for total debt elimination. The other option will let you pay back some of what you owe. Some are glad to liquidate their property. Some of the debt can be paid by selling your none exempt assets. Liquidation lies under chapter 7 filing. If you would rather keep valuables consider a reorganization of your debt. A person can keep all their belongings with the condition that monthly payments will be made for 3 or 5 years. Most or all debt will be cleared with this choice. The most popular choice is a reorganization filed under a chapter 13 bankruptcy.
Chapter 7 bankruptcy
If you file for bankruptcy you are known as the debtor. The reason people file chapter 7 bankruptcy is to discharge all their debt. You won’t have to repay any discharged debts after a petition is final. A discharge wipes away most debt except for some items held under a lien. Property held by a lien will be repossessed unless you make a payment every month. After a discharge creditors may not try to collect or communicate with a debtor about a debt. Consumers who have way too much debt that cannot be repaid are good candidates for chapter 7 bankruptcy.
Chapter 13 bankruptcy
For chapter 13 bankruptcy a debtor will file a payment plan with the federal courts to pay back some or all the debts that they owe, over a three to five year period. The benefits of a chapter 13 bankruptcy are that a debtor can keep their personal property like a vehicle or home. Included are valuable items that are past due also equity not covered by the exemption. You will want to make monthly payments towards your secured debts and even pay extra to get caught up on past due obligations. You could lose your house or car unless you file a chapter 13 bankruptcy. Debtors can make payments over time on secured debts.
Is bankruptcy a onetime benefit?
You can apply for another chapter 7 after 6 years. Chapter 13 filing has no filing limits. Surprisingly chapter 7 only costs $ 200. Chapter 13 requires a $ 155 filing fee and a $ 30 noticing fee. Filing fees stay the same even if it’s a joint petition for a husband and wife.
Will I be required to go to court?
A debtor is only required to attend a proceeding called a meeting of creditors or a 341 meeting. A bankruptcy trustee and many others may attend. This meeting will happen about 40 days from your filing. At this event your finances may be brought up. Be aware that trustees and or creditor may file a motion or adverse action at this time. Many people will dispute their debts at this time. If you must have another hearing notice will be sent via mail.
Is bankruptcy an unwise decision?
If you are severely behind on debt a bankruptcy will not make things much worse. Unpaid debt is far worse than a bankruptcy. Evidence of a bankruptcy stays on credit for 10 years. A bankruptcy will clear up most or all your bad debt then many creditor will send you new applications to rebuild your credit score. A lot of people would benefit from a fresh start. If you’ve been in debt forever you feel helpless. Use this opportunity to manage money better. Many people were never taught how to handle money. Many people were not taught how to handle money mainly because they never had money or they grew up with parents who were never taught. It’s not fun to be in debt but you can find relief and vow to make smarter decisions in the future.
Filed under Uncategorized by on Jan 28th, 2010.
Bankruptcy is the kind of topic that few people know very much about unless they file for bankruptcy or are somehow involved in the bankruptcy arena for a living. However, if you ever get to the point where you are considering filing for bankruptcy protection, understanding the most commonly asked bankruptcy questions is crucial.
Q. If I file for bankruptcy will I lose my home?
A. Probably not. But the answer depends on the particular laws in the state where you will be filing for bankruptcy protection. Although Chapter 7 bankruptcy involves the surrender of all assets to a trustee, there are a number of state and federal exemptions that allow bankruptcy debtors to keep their homes. If you don’t have any equity in your home, it has no value to a bankruptcy trustee and will not be seized. In Chapter 13 bankruptcy, debtors keep all their property in exchange for a 5-year payment plan distributed to their debtors.
Q. Can I lose my job because I filed for bankruptcy?
A. Absolutely not. Federal laws are on the books that prohibit employees from treating an employee any different from another simply because of a bankruptcy.
Q. Will bankruptcy ruin my credit standing?
A. Probably. Bankruptcy is the worst mark you can have on your credit report and will cause your credit score to take a dive. But most people already had significantly damaged credit before they even filed for bankruptcy. That’s because many people are already behind on credit card and mortgage bills when they decide to file bankruptcy. That means their credit rating has already taken a significant hit. The good news is that most people can get a credit almost immediately after bankruptcy and a car loan 6 months to a year later.
Q. Will everyone know I filed for bankruptcy?
A. It depends. Bankruptcy records are available for anyone to view in the local federal courthouse. Some newspapers print the latest bankruptcies in the community on a weekly or month basis. While bankruptcy records are not private, someone must know your name in order to look up your bankruptcy filing. So if you don’t mention your bankruptcy to anyone, the chances are very good that no one will know.
Q. Will filing for bankruptcy stop the calls and letters from creditors?
A. Yes. A key section of the bankruptcy law includes an automatic stay that is granted to bankruptcy filers as soon as the bankruptcy petition is filed. Creditors who continue to call after being notified of the bankruptcy should be referred to your lawyer, which will generally stop by all the harassing calls.
Q. Is there a chance my bankruptcy case will not be accepted?
A. Yes, but that is only in the smallest minority of cases. Statistics show that about 70 percent of all individual bankruptcy cases are Chapter 7 filings. While greater scrutiny of Chapter 7 cases has been in place since the 2005 changes to bankruptcy laws, about 90 percent of all Chapter 7 cases are accepted and eventually discharged. Most of the rest are rejected and then refilled as Chapter 13 cases. The only Chapter 13 cases dismissed by the court are those that involve fraud or abuse.
Understanding the answers to these bankruptcy questions can be essential as you decide whether or not to proceed with a bankruptcy case. Only rely on advice from a lawyer trained in the bankruptcy field.
Filed under Uncategorized by on Jan 27th, 2010.
If facing a mortgage lender foreclosure many folks are unable as to if they should permit the foreclosure to occur, or if they ought to apply for bankruptcy. Few folks understand how hard the selection is to establish, or recognize the call isn’t an either/or one.
To better understand the process, it is necessary to understand the the mortgage company files a foreclosure action whenever the monthly home loan payments aren’t made. Paying the bank is the only true way this can be forestalled. Understandably, the majority of people do not would like to have their vehicle reclaimed, so they make their auto payments on time monthly. Like repossession, foreclosure will remove a person’s home if they do not keep abreast of the monthly payments they owe on their mortgage.
Bankruptcy is a court action filed by someone that can’t pay his debt. The function of this action is to obstruct all the civil action against the debtor while the debtor is in bankruptcy. A foreclosure can be halted through these means because lender is required to cease all their legal actions against the debtor. When they are granted such relief, they will continue with their legal legal proceedings against the house buyer. Bankruptcy does not allow you to keep a place to live that isn’t obtained to the mortgage bank, and it will not stop foreclosure. The best bankruptcy are able to do is unwind the manner, but it cannot stop it entirely.
Paying the lender is frequently made simpler thru bankruptcy, as it can give a buyer extra time to induce the payments, or make it easier to produce payments, thus stopping a foreclosure. Since bankruptcy needs a mortgage bank to suspend a foreclosure action, a debtor has a little time to raise the money to pay the lender. Also, the bankruptcy frequently frees up additional funds that no longer ought to be paid to other debts so that the buyer can easily pay their mortgage payments. Relating to a chapter 13 bankruptcy, the courts will dictate the payment of the payment of the overdue mortgage should be paid thru many payments, that might further give the debtor time to pay the lender off.
What you have to realize, naturally, is that there are legal fees to buy bankruptcy, and not everyone seems to file for bankruptcy to begin with. As legal charges are considered really high, a debtor can land up in the position of finding their legal bills more expensive than the mortgage owe. If you feel like bankruptcy may help you stop or avoid foreclosure, talk with a licensed lawyer. You’ll~an approved barrister. You’ll need legal help thru your bankruptcy journey, as it is quite intricate by itself. The material tendered in this report should serve only as a general guide, and for sounder facts, you should get hold of an approved barrister in your state.
Filed under Uncategorized by on Jan 27th, 2010.
