How Can I Escape Bankruptcy?

Kim and her husband were teetering on the edge of financial ruin just months ago after a decline in the car-buying market cut his salary nearly in half. He worked as a trucker hauling cars for a living. Kim says they began to worry about how they would make ends meet. Were they saying, "I can become a millionaire!", no, they were just thinking about survival. The need and drive to just survive sparked something in Kim and they forged ahead in a wonderful adventure.

I'm getting ahead of myself, so let's back up a bit. Formerly a nine-to-five corporate employee, Kim had decided to quit her job there and pursue her business after her family experienced amazing success with the products. Her 17-year-old son greatly improved his health and mental clarity and she lost 50 pounds and was able to kick her 15-sodas-a-day habit. She was convinced that she needed to share the products with others and believed she could make a decent income at it. The products are just outstanding and my family's success was so great, it was easy to talk with people about all the positive things that were going on for us.

"Ironically, I've still had family members ask me why I don't get a job," says Kim with a laugh. "But I couldn't be generating the income or the financial freedom I have with my own business at a nine-to-five job. It just wasn't an option anymore. Besides, Kim has a career, maybe not the way some family thinks it should be done, but really much better.

Now Kim is setting her goals high. A few of her major ones include creating 10, six-figure earners and retiring her husband from his job. She confesses that at her former job her husband was never able to set a "freedom date" because he hadn't witnessed the incredible results physically or financially the way he has now.

"My business has continued to thrive in the midst of this challenging economy and he's seen that it's practically recession-proof," shares Kim. "All of these things have built his belief in me and in the company."

She says it's key to not only share the products with people you connect with, but also the business opportunity, especially in these tough economic times.

"The best part is this company has made it so simple to build your business with all of the tools that are available. They've got all of the bases covered and made it very simple even for people who've never done network marketing before," says Kim.

If I Do an IVA What Will Happen to My Credit Rating?

One of the major concerns people have when thinking about an IVA is how his type of debt solution will affect their credit rating. We consider what will happen to your credit rating if you start an IVA.

If you are in a position where you are unable to maintain your debt repayments, the best thing to do is consider a debt management solution. One of the most common solutions for debts of £15,000 or more is the individual voluntary arrangement (IVA).

An IVA allows you to reduce your monthly payments to a manageable amount. The agreement may also allow you to write of a considerable amount of your debt.

However, carrying out an IVA will have a negative effect on your credit rating.

Applications for standard credit

The fact that you have started an IVA will be registered on your credit file for six years. During this time, if you apply for credit, your IVA will show up and lenders will be less likely to want to lend you money.

You IVA will normally last for five years. During this time you are not allowed to apply for a new credit facility such as a credit card or personal loan. As such, the fact that your credit rating has been negatively affected should not be a concern.

Once your IVA is finished, you can apply for this type of credit again although most people do not want to take credit again and prefer to live within their means.

Mortgages and car HP

The negative effect on your credit rating needs to be given more consideration if you are a home owner.

If your current mortgage deal comes to an end while you are in your IVA, your lender will not cancel your mortgage. However you may find difficulty moving to a new lender to get a deter deal. You may therefore have to stay on your current lender's standard variable rate.

You also need to consider your options if you have a car on a lease or HP. When this agreement comes to an end you may not be able to automatically start a new one. Generally speaking you should therefore plan to keep your car until your IVA has finished.

If your lease agreement requires you to make a lump sum payment to allow you to keep your car, this can normally be financed while your IVA is still running. However, you may not be offered the most competitive interest rate.

The effect of doing nothing

While considering the effect that an IVA will have on your credit rating is important, you should also understand how it will be affected if you choose not to do an IVA.

Given that you cannot afford to continue to pay your creditors, unless a friend or family member can pay them for you, it is inevitable that you will start to miss payments.

As this happens, default notices will be issued against you by your creditors and recorded on your credit file.

This will negatively affect your credit rating in the same way as if you had started an IVA. Therefore the issues concerning applying for new credit, changing your mortgage or a car finance agreement will be the same even without an IVA.

If you are facing a serious personal debt problem, it is right to consider how the various options for solving this will affect your credit rating.

However, it is also important to understand that doing nothing and missing or reducing your required monthly creditor payments will also negatively affect your credit rating and cause you similar credit rating issues.

For this reason worrying about the effect on your credit rating is not a sensible reason for not starting a debt solution such as an IVA.

Filing Bankruptcy: A Modern Pastime?

What is it about our modern economy that has so many people filing bankruptcy? Has it just become the "in" thing to do? Or is there something else happening behind the scenes to sink so many people into the bankruptcy hole?

More than Popular

The rate of those using a bankruptcy filing went up 8.1% from 2009 to 2010. This sounds like a big increase until you realize it is actually down from a 31.9% increase that occurred from 2008 to 2009. These figures come straight from the U.S. bankruptcy courts, which is the authority in charge of collecting data on the number of filings, discharges and pending cases.

What this shows is the drastic rise in bankruptcy filings in recent years with the hint of relief coming right now. Filings were still on the rise in 2010, but the increase was much less dramatic than in previous years.

With increases nearly 40% in most of the past five years, it's no wonder filing bankruptcy seems to be a popular pastime in the United States. Virtually everyone in the country knows at least a few people who have filed bankruptcy or have filed themselves. Many have contemplated a bankruptcy filing themselves, but may have found other ways out of their situation.

What is noteworthy about the bankruptcy filings in the past five years is that they have come from people of all classes. While most are from working families in the lower to middle classes, there have been many people from the higher classes filing bankruptcy as well. There seems to an economic crisis that has affected everyone in the country. In fact, many around the world have been suffering from this crisis.

Unfortunately, bankruptcy hasn't just come into fashion. It is being forced upon millions of people who simply can no longer survive in our modern economy. Filing bankruptcy is not something that admits a person into a special club and the gifts of shame and broken credit are far from exclusive and desirable.

Bankruptcy in Our Economy

So, what is it about the economy that seems to be forcing so many people into filing bankruptcy? There are some interesting trends that have led to the mass filing of bankruptcy:

Prices on everything from food to gasoline continue to go up, increasing the cost of living. Unemployment rates have been very high with massive layoffs from many of the country's biggest employers. Open jobs receive thousands of applicants, making it very difficult for most to land a good paying job. College graduates struggle to find employment in their fields, forcing deferment and default on student loans and other financial obligations. Many well educated job applicants are considered over qualified for the positions they find available.

The first two facts listed here spell out the whole picture: the cost of living continues to rise while jobs continue to decrease. This is what has sent so many people to the bankruptcy attorney to file.They lose their jobs and can no longer keep up with their credit cards, mortgages, and car loans. They are forced to live on less money yet have to pay more for the basics such as heating their homes and putting food on the table for their families.

The fact that the number of people filing bankruptcy each year continues to escalate is disheartening, but the fact that the increase was much less in 2010 than 2009 should give some hope.

New Laws a "Game Changer" for Those Considering Bankruptcy

On April 20, 2005, after many years of lobbying by the credit card companies, President George W. Bush signed into law the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA). Among the arguments for passing the bill was that credit card abuse had become rampant, and with the relative ease in which consumers could file for bankruptcy, filings had steadily increased throughout the 1990s.

Another factor compelling the federal government to address the bankruptcy law was the impact the influx of bankruptcy filings was starting to have on the economy. Lenders that couldn't recover debt inevitably passed it on to the consumer in the form of higher prices for goods and services.

The law changed in 2005, making guidelines and requirements more stringent for filing bankruptcy. After the bill went into effect on October 17, 2005, those who chose to file were subject to a "means test" and were also screened to see if they were eligible to file for Chapter 7 bankruptcy instead.

Some of the main differences between Chapters 7 and Chapter 13 bankruptcy:

Chapter 7

• Mainly for those unable to pay their debts.

• Qualified assets worth more than a certain amount are sold and the money given to creditors.

• Remaining debts are cancelled.

• If the filer has no qualifying or redeemable assets, the creditors get nothing and essentially the filer gets a "fresh start."

Chapter 13

• The filer agrees to a payment plan (usually around 3-5 years) to pay off at least part of their debt.

• Debts not included in the payment plan do not have to be paid.

• After the payment plan is complete, the filer is typically allowed to keep remaining property and assets. Balances on unsecured debts are discharged as well.

The means test mainly consists of two inquiries determining whether an applicant is eligible for bankruptcy:

1. A formula gauging the filer's ability to pay a percentage of their debt under their current financial situation.

2. An assessment comparing the filer's income to the median income level of their state. If the filer's income is less than the state median, they might be eligible to file for Chapter 7 bankruptcy. Income levels above the state median indicate the filer might be able to pay some or all debt via payment plan, making them potentially eligible for Chapter 13 bankruptcy.

One of the intentions of the revised bankruptcy code is to push people toward Chapter 13 who would have qualified for Chapter 7 before 2005 under the old law. This allows lenders to recover at least a portion of the consumer's debt.

All Bankruptcy applicants must also now take a brief credit counseling course from a government-approved organization within 180 days before filing. Bankruptcy lawyers cannot file bankruptcy for their clients until all of the prerequisites under the BAPCPA are met.

Because the new laws have made filing for bankruptcy more difficult, prospective applicants should find a lawyer that will give them step-by-step guidance in order to stay organized throughout this sometimes confusing process. At Mark Godbey & Associates, our attorneys are experienced with the new bankruptcy laws. We will guide you through the process of gathering all necessary documents and information, and help you complete all paperwork properly so that your bankruptcy gets approved. We offer a FREE initial consultation to determine if you are eligible to file and whether it is a Chapter 7 or 13. To schedule some time to meet with us, call 513-241-6650.

Disappearing Debt: A Common Misconception About Bankruptcy

The other day a prospective client came to my office for a free bankruptcy consultation. Her case wasn't terribly complicated. Her most pressing concern was that she didn't want to lose her car. She was afraid that if she included her car in the bankruptcy, the bank would be forced to take it away from her. In responding to this concern, I found myself answering one of most interesting questions, and at the same time common misconceptions, about bankruptcy. And that is...

What Happens To The Debt When A Person Files For Bankruptcy?

Most people think that the debt just goes away. Wrong! When you file for either chapter 7 bankruptcy or chapter 13 bankruptcy, the debt still exists. The only thing that goes away is your liability for the debt.

Confused?

It helps if you think of debt in two separate parts. Those parts are:

The Money That Is Owed The Liability Of The Person Who Owes It

Now let's bring the woman's car into the context of those two parts of debt.

Part 1: There is money owed on the car loan. That is an absolute. The only way to make it go away is to pay it.

Part 2: She is liable (which is another way of saying "responsible") for the money that is owed. Her liability (or responsibility) is not an absolute. Bankruptcy relieves her of that responsibility. Once the responsibility is gone, it's gone. She can't be made to pay for something the courts have relieved her of personal liability/responsibility for.

So, there is still debt, it just isn't hers (or yours, as the case may be).

So Does This Mean I Get A Free Car When I File For Bankruptcy?

Nope. Or, at least, the answer is "nope" assuming you bought the car the same way everyone else does - with a "secured loan." A secured loan is a debt in which money is owed and collateral has been pledged as security for the loan. When a person receives a loan to buy a car, the car typically serves as collateral. Same thing goes for a mortgage - you get a loan to buy a house, the house is the collateral. Sometimes furniture or appliances are used as collateral on the line of credit used to purchase them. These are all secured debts.

A key component of nearly every secured loan is that the loan contract gives the lender the right to repossess the collateral (the car, house, furniture, or appliances) if payments are not made towards the debt. The lender has that right until the debt is extinguished.

So, Are They Going To Take My Car or Aren't They?

That was the original question, wasn't it?

Well, because I'm a bankruptcy lawyer, I have to say "There are several scenarios that would need to be considered to answer this question fully." But the best rule-of-thumb is that if you keep making your payments on your car after you file for bankruptcy, you can keep your car.

So, now let's add a twist to this scenario. Say you keep your car with the intent to keep making payments, but somewhere down the road your situation changes and you can no longer make the payments. The bank would then have the right to come and take (repossess) the car. (I want to reiterate here: If you want to keep your car after you file for bankruptcy - just keep making the payments on time!)

What Happens If They Take My Car After I File For Bankruptcy?

You defaulted (failed to make the payments) on the car loan. The bank repossessed the car. Now what?. Well, the lender is required to sell the car (typically at auction). The hope is that by selling the car the loan can be satisfied (paid off). If the car sells for more than the value of the loan, the excess proceeds from the sale must be given to you. Most of the time, however, the car is sold for less than the balance of the loan. The unpaid balance of the loan is called the deficiency.

Can The Bank Try To Collect The Deficiency From Me After They Sell My Car?

To answer that question, let's consider two key points I've tried to make in this post:

You can only be sued for a debt that you are personally liable to pay. Bankruptcy eliminates personal liability towards debt.

So based on those two points, we can fairly and accurately conclude that you cannot be sued for the deficiency from the sale of your car if you filed for bankruptcy. More plainly stated, the bank cannot sue you for the deficiency because you filed for bankruptcy and are thus no longer personally liable for the debt.

Unsecured Debt Relief - How To Avoid Bankruptcy And Legally Settle Unsecured Debt

We all know that people from all around the world have suffered massively due to the wave of continuous recession. Working people have lost their well earning jobs while those who are still working and running businesses are also feeling the effects of this recession. In short, we can say that people have lost their income sources due to which they are unable to pay back their due payments in time which ultimately results into the higher interest rate converting small and manageable debt amounts into massive and uncontrollable hefty due payments. Moreover, the matters are made worse for the people with the harassing phone calls of the money recovering agents. To get rid of all these things and tensions, a massive amount of people opt to file for bankruptcy because they think that it will provide them instant relief from all fiscal tensions and issues.

We can say that bankruptcy do provides instant relief to the people but it has large negative impacts which do not appear after a person is declared bankrupted. They appear after some years when the credit rank of a person is completely destroyed which ultimately results into no cooperation from banks and other financial institutions in the future.

This is very critical and people should avoid bankruptcy and should opt for debt settlement instead of it because through this settlement process, a person can easily manage and solve the unsecured debts. The working process of this program is really simple as well. So, people should opt for these programs because they can secure their future as well as their present because it doesn't destroy the credit rank of person. Instead of destroying it, these programs offer a person a new way of getting his financial lives back on track. These settlement deals show a light in the tunnel for the people and people should opt for them in order to secure their future financially. In a nutshell, we can say that a person should never opt for bankruptcy instead he should prefer settlement deals.

How To File For Bankruptcy

The process on how to file for bankruptcy can is a very long task. This should only be done if you are sure that there are absolutely no alternatives left to pay off your debt. You should remember that once you filed for this, it would remain on your credit for approximately ten years. If you think you can last that long, then here is a step-by-step process of how it is done.

The first step would be to seek out consumer credit counseling within 180 before filing for bankruptcy. This will give you the opportunity to really understand the consequences of accepting a deal that is truly life changing. The point of the counseling is to show the individual that there could be other solutions to get out of their predicament. Once you have finished with the counseling you will be educated on the different kinds of bankruptcy.

How to file for bankruptcy falls under two categories; the most popular being the chapter 7 (wherein bankruptcy is straight or liquidation) and chapter 13 wherein there is a repayment plan for the individual). The Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCP) has issued individuals to take a means test to see under which category they will fall under. There has been a tendency in the past where people chose to directly file for chapter 7 cases.

It is highly recommended that when you file for bankruptcy, you should hire a lawyer to help you out. Even if you have done your research on the consequences and different scenarios that surround being bankrupt, it is better that you seek out professional help. The best lawyer to find would be the ones who you can easily have direct contact with. With that being said you can freely talk with your lawyer about your concerns and questions before filing anything.

The next steps on how to file for bankruptcy rely on you and your lawyer making a petition to file, and then meeting with creditors in order for them to approve the statement. Next the creditors and yourself will have meetings where you will plan out how to challenge the discharge of your debt. You still want to be able to rid yourself of the debt because that is the reason that you are filing for this.

Filing for bankruptcy is serious and should be taken that way. Too often individuals simply see bankruptcy as a way of not having to pay off their debts. It doesn't work like that. There are consequences, and serious one at that. Weigh them carefully and don't make this decision on your own. Take the advice of your attorney as someone who has seen this many times before and may be able to give you a better way.

Ignorance of the Law Will Not Help You in Bankruptcy Court

If you file for bankruptcy obey the Bankruptcy Certification requirements or your debts will not be discharged.

The US Bankruptcy Code is very complicated and has many rules which you must obey or the court will not discharge your debts.

Follow your attorney's instructions carefully. If you do not have an attorney and you are acting as your own attorney you will be held to the same standards as a licensed attorney. You should carefully review and be familiar with the Bankruptcy Code, Bankruptcy Forms and Bankruptcy Rules.

In 2005 the law was amended to add two new requirements. The Bankruptcy Code now requires that debtors complete a program in Credit Counseling before filing their case with the court. After filing their case with the court the debtor must complete a course in Personal Financial Management before they are eligible to have any of their debts discharged by the court.

Before filing your case with the Bankruptcy Court, a course in Credit Counseling must be completed and a Bankruptcy Counseling Certificate of completion obtained. Credit Counseling must be completed not more than 180 days before filing with the court. The certificate must be filed with the court. (Exh D to Petition). If the case is not filed within the 180 day period counseling must be repeated and an new certificate of counseling must be obtained before filing with the court.

After filing your case you must complete a second course often referred to as a Bankruptcy Discharge Course (this course is sometimes referred to as 'Personal Financial Management' or 'Debtor Education') and obtain a certificate of completion. Do not take this course until after you file your case with the court and the court assigns a file number to your case. After completing the course in Personal Financial Management you must file a Certificate of Completion with the court (Form 23).

Why is this important?

The law requires that Credit Counseling be completed before filing. Don't be fooled by the clerk at the court filing window accepting your filing even if it does not include the Credit Counseling certificate. The clerk at the window is not permitted to make the legal determination that a filing is insufficient or to give you legal advice. Legal determinations are made by the Bankruptcy Judge. If a certificate of Counseling is not filed several things may happen depending on how the assigned Judge handles such matters. If you are lucky the Court may give you a few days to complete Counseling and file the certificate. If you are not lucky the court may simply dismiss your case and if you file again you will have to pay a new filing fee.

The law requires that the course in Personal Financial Management be completed after you file. If you do not complete the Personal Financial Management Course and file the required Certificate of Completion (Form 23) with the Court the Court will close your case without a discharge. This means that all your creditors are free to resume their collection efforts. It may be possible to move the court to reopen your case (requires a fee) and to permit you to complete the course in Personal Financial Management after which the court could enter a discharge..

These are simple rules but failure to comply with them can cause big problems.

A debtor is responsible for obeying the rules and simply saying you didn't understand is not sufficient.

Will I Lose All My Assets in Bankruptcy?

For those who are considering filing a Chapter 7 bankruptcy, a common misconception is that the bankruptcy trustee will seize or take away all of a debtor's existing property. This is untrue.

 

Debtors are entitled to certain exemptions when a bankruptcy is filed. An exemption allows a debtor to keep property up to a certain amount, and in some instances the exemption is unlimited, such as with retirement funds held within a qualified account such as a 401(k) or IRA.

 

Debtors may keep exempt assets. Any assets that are not fully exempt may be turned over to the bankruptcy trustee to liquidate and distribute to creditors. The exemptions are applied to the equity of an asset. Equity refers to the market value of a certain asset after all liens against it have been paid. Because a debtor is entitled to a fixed amount of certain exemptions, it is important to value your assets accurately.

 

For example, in California, debtors filing bankruptcy are entitled to a motor vehicle exemption in the amount of up to $3,525.00 depending on the system of exemptions chosen by the debtor. If a debtor has a car with a market value of $5,000.00 and no debt against it, the latter vehicle exemption will cover $3,525 of the equity in the car. Obviously, the vehicle exemptions does not fully cover the market value of the car. Fortunately, California will also allow the debtor to use a wildcard exemption to make up for the difference in equity in the car. Currently, the combined "wildcard" exemption in California is $23,250.00 (under the CCP 703 exemptions). The wildcard may be used for a debtor's miscellaneous property not covered by an existing exemption or to make up for an exemption that may not fully cover the market value of property, such as in this example. Because the motor vehicle and wildcard exemptions fully cover the market value of the car, the debtor will be allowed to keep the car even though a bankruptcy is filed.

 

Certain exemptions are unlimited. This means that a debtor may keep certain assets regardless of the value of that asset. Most notably are valid retirement accounts. If a debtor has accumulated retirement funds within a 401(k), for example, the entirety of that 401(k) is exempt and the debtor may keep it. Please note that funds kept in a regular savings account that have been designated by the debtor as retirement money does not qualify for this exemption. The funds must be placed in a legitimate qualified retirement vehicle to be exempt form creditor access.

 

For assets that are only partially covered by a debtor's allowable exemptions (i.e., the equity exceeds the amount of the exemption(s) used), the bankruptcy trustee may seize the entire asset and sell it. The trustee will return, and the debtor will be allowed to keep, the amount of equity covered by the exemption. The remaining proceeds of the sale will be distributed to the debtor's creditors.

 

There are a number of other assets that qualify for an unlimited or nearly unlimited exemption amount, such as IRA savings depending on when contributions were made. The analysis of a debtor's assets, their values, and the available exemptions in Chapter 7 are critically important and among the reasons it is imperative to consult with an experienced bankruptcy attorney.

 

For more information on specific Chapter 7 exemptions applicable to California residents in bankruptcy, please visit our article "What Are Bankruptcy Exemptions?" at our San Jose Bankruptcy Attorney website.

Benefits Of The Automatic Stay When Filing For Bankruptcy

Filing for bankruptcy is never an easy proposition. However, when your debts reach a point where it is not possible for you to meet your financial obligations or to cover your debts, you may need to file for bankruptcy protection. On the surface, most people will look towards the restructuring of debt and potential discharge from certain debts as the most beneficial aspects of filing for bankruptcy. On many levels, it would certainly be accurate to note that such benefits are pronounced and helpful. However, many others may note that one of the very best benefits to filing for bankruptcy protection would be the attainment of an automatic stay.

Such an assessment is frequently accurate. The automatic stay component can be considered the best immediate benefit gained from filing for bankruptcy.

What does an automatic stay refer to? Basically, it is common to define an automatic stay as an injunction. The injunction is completely automated (Hence - an automatic stay) which means once you have filed for bankruptcy, an injunction is put into play as it ceases all collection action from creditors.

In general, this will mostly impact unsecured debt. For those debts that are secured, a creditor will need to petition the bankruptcy court in order to receive an agreement to continue collection. Granted, it will be the court that decides how such collection action is to be undertaken.

The sheer numbers of benefits which can be derived from an automatic stay are almost too many to list. Among the most common and helpful benefits are:

Increased liquidity begins immediately. Why is this so? Basically, you will no longer be required to meet obligations other than what the courts determines equitable to all parties involved. In some instances, a lender could be 'denied' any payments for several months. All of this serves the very helpful purpose of providing much needed liquidity which is another word for cash flow. With greater cash flow, you can then take the needed steps required to effectively develop a workable budget for your current situation in life.

It should also go without saying that there are many helpful psychological components to an automatic stay in bankruptcy. The most obvious of which would be the tremendously reduced stress that will likely derive when your creditors are no longer pressuring you to make payments you do not have the cash available to make. Additionally, you would not be required to seek out a source of additional revenue or to increase further liquidations of assets in order to make such payments. Once the bankruptcy court has issued the injunction stay, you will be freed from the extreme stress situations like this are prone to cause.

There are clearly a number of positive benefits which come from a stay of action and these benefits are both fiscal and even psychological. Because of these benefits, it becomes obvious that such a stay aids greatly in your ability to get your life back in order. And is that not what filing for bankruptcy should entail in the first place?

Bankruptcy Assets - Identifying Which Assets Are Non-Divisible Assets

Are you confused on what assets a bankruptcy can keep? The assets you can keep are otherwise referred to non-divisible assets. These bankruptcy assets are protected from the Trustee and most commonly include the following.

• Household items - this includes all necessary household items such as furniture, bedding, laundry equipment, sporting equipment, clothing and educational tools. It is important to place emphasis on the word necessary, a bankrupt with multiple televisions or expensive antique furniture will not be protected from the trustee to recover.

• Personal items - these items may include photographs, wedding ring or any other items of sentimental value. However as a bankrupt you need to be aware that these items needs to be disclosed to your trustee and on some occasions certain items need the approval of your creditors before they can be retain as a non-divisible bankruptcy asset.

• Motor vehicles - these are vehicles with an equity value of $6,850 or lower. The vehicles need to be for primarily transport purposes. The equity values of the vehicles are regularly updated by the Insolvency Trustee Services Australia.

• Tools of trade - as a bankrupt you are able to keep tools up to a value of $3,400 that will help you earn an income. The values of tools of trade a bankrupt can keep are regularly updated by the Insolvency Trustee Services Australia.

• Superannuation - Generally speaking the funds held in a bankrupt's superannuation account is protected from the trustee. However if funds were deposited into your superannuation account out of the ordinary course of business prior to the date of bankruptcy then that amount deposited will be available for the trustee of your bankrupt estate to realise.

• Life insurance policies for yourself or your spouse - if you or your spouse receives a life insurance policy payout subsequent to the date of your bankruptcy, that payout will be protected from the recovery of the trustee.

• Compensation of personal injury - the funds received by you for the compensation of personal injury are exempt from the trustee to recover. Further to this, the assets that you buy with this money are also exempt from the trustee to recover.

• An asset held by you for another person - if you held assets in trust for another person e.g. your child's education fund or your child's bank account, the funds are exempt from the trustee to recover.

We hope this article has given you a clearer understanding on which assets fall within this category of non-divisible bankruptcy assets.

Find the Financial Balance With Bankruptcy Credit Counseling

A lot of people are facing difficulty in repaying their unpaid bills especially after the recession and liquidity crunch of 2007. Some are even taking more and more payday loans and at the end, finding themselves knee deep in debt. They have crossed all the limits for getting approved for other debt relief options. So, to them the only way for getting out of debt is filing for bankruptcy.

If a person is intending to file insolvency, he may not be acquainted with all the complexities of the legal procedure. Bankruptcy is a federal court process that needs legal representation. Certain changes have been introduced in the new bankruptcy laws. Only a bankruptcy education can help him go through the process easily.

Deciding on a good financial system through the many experts out there is the first step toward financial freedom and well as simple survival. Due to the overwhelming rate of bankruptcy filers failing to keep it together financially, focus and professional help is key to success. Understanding personal habits leading to financial ruin allow for better future planning including savings for emergencies.

Sticking with one system increases the chances for success. Counseling may include tracking expenses, using an envelope system, and changing habits. Making these changes may be difficult, but with professional planning success is just a matter of time. Taking advantage of bankruptcy credit counseling offers the required structure and knowledge for a person to be successful and financial management.

A lot of people rush into bankruptcy because they think that it is an easy solution to their problems, it isn't. The biggest thing that will be covered during counseling is looking to see if you have other options

At the end of this you will be given a bankruptcy certificate that you are required to present when you are filing for bankruptcy. The purpose of this counseling is to make sure that you understand how the bankruptcy procedure works, the consequences of it and whether or not it is really necessary or if you have other options.

Bankruptcy is a last resort you will likely have other options that would be better for you long term. In most cases the other options are going to take quite a bit of sacrifice on your part. However if you can at all work out a plan that will allow you to pay off your bills you should do just that.

What Are The Three Types Of Bankruptcy?

A bankruptcy attorney can assist you if you are in debt that you cannot pay back. This situation can usually be remedied by filing for bankruptcy, but knowing more about the types of bankruptcy under the law will help you to determine which one is going to be right for your situation.

Chapter 7 bankruptcy, or liquidation, is the most common form of bankruptcy in regard to individuals, particularly in regards to credit card bills and medical expenses. It can be filed for by individuals and businesses that can pass a test which will assess the income of the debtor, with qualifying parties earning below the state average annually. With a Chapter 7 bankruptcy, a party, referred to as a "trustee," is appointed by the court to take possession of assets which are nonexempt and liquidate them, with the sum being paid towards the secured portion of the debt. The debtor will be able to retain exempted property.

Individuals who do not qualify for Chapter 7 bankruptcy may instead consider Chapter 13 bankruptcy. With this type of proceeding, the debtor will follow a court approved plan of repayment of a set period of time. Unlike Chapter 7, Chapter 13 allows the debtor to retain ownership of their assets, so long as they maintain their payments according to the approved plan. They will be protected from any lawsuits, tax garnishments, repossessions, and foreclosures related to the debt as well. This will ensure that the debtor will be able to maintain their living accommodations, food expenses, and other needs while repaying their debt on what is typically a monthly repayment schedule. All debt filed under chapter 13 must be repaid within five years time at the latest.

Chapter 11 bankruptcy is almost always applied towards businesses which wish to continue their operations. While corporations may be able to file for Chapter 7 bankruptcy as well, Chapter 11 allows a company to remain in business with the goal of regaining profitability through active restructuring. The company may discharge a portion of its debt, while repaying the remaining sum. Debtors may be able to recover from Chapter 11 within months of filing.

Speaking with a bankruptcy attorney about your options can help you to determine which type of proceedings will best benefit your financial situation. While circumstances may initially dictate that one type of bankruptcy is more viable than another, professional consultation may reveal other options.

What Happens to Intellectual Property During Bankruptcy

Intellectual Property during a Chapter 11 Bankruptcy

Many of you would recognize the name CBGB from t-shirts and slogans, all without knowing that the name originated from a legendary music venue in Manhattan. Even more interesting, the club has been closed since 2006. Yet, the investors who purchased it bought it for the naming rights, not the club. These rights, called intellectual property rights, are now in the midst of a Chapter 11 Bankruptcy filed on behalf of the investors. So the question is, what happens to those intellectual property rights during a Chapter 11 Bankruptcy?

In a typical Chapter 11 Bankruptcy, the case is administered in the following way: 1) rejection or assumption of executory contracts; (2) sale of assets; (3) claims adjudication; (4) litigation. For this article, we are only concerned with the first issue, the executory contract. A contract is considered to be executory if there is still an outstanding obligation by one or both parties to the contract, of which the terms were the consideration for entering into the contract. Bankruptcy Courts have found that non-exclusive licenses of intellectual property can not be assumed and assigned unless there is consent. Everett Systems, Inc. v. Cadtrack Corp, 89 F.3d (9th Cir. 1996).

Stepping back for a moment, let's put ourselves in the shoes of the person who has licensed intellectual property from a licensor who subsequently becomes bankrupt. In this scenario, when the license is an exclusive one, then it is treated as an executory contract. The licensor cannot sell those rights to anyone else, no more than the licensee can stop paying royalties. See Encino Bus. Management, Inc. v. Prize Frize, Inc. In those cases where the license is non-exclusive, Section 365(n) of the Chapter 11 Bankruptcy Code states that if the trustee or the Chapter 11 Debtor rejects "an executory contract under which the debtor is a licensor of a right to intellectual property", the licensee under the contract may:

1) treat the license as terminated and assert a claim for breach of contract; or

2) elect to retain its rights to the use of the intellectual property as such rights existed immediately before the commencement of the bankruptcy case, or the duration of the contract. 11 U.S.C. 365(n)(1)(B)

Thus, no matter what they choose the the licensee must be allowed to exercise either of its rights, and it must continue to make payments for the rights it is licensing for the duration of the contract.

It is important to note though that Section 365(n) does not apply to ALL contracts which contemplate or involve intellectual property. Rather, the contract must be one which the debtor is a "licensor of a right to intellectual property".

Bankruptcy in a Nutshell: The Different Types of Bankruptcy

When considering whether to file bankruptcy, it is important to take into account all of the options available. For many, the need for and advantages of bankruptcy are obvious. To others, it will be a last resort. As the debts pile up and the creditors hound you, it is important to consider what can be done. This article will provide basic information on the types of bankruptcies available to both consumers and businesses.

Chapter 7 Bankruptcy - Liquidation

Chapter 7 Bankruptcy is designed for debtors who are having financial difficulties and are not able to repay their debts. If your current monthly income is above the State Median Income you will be required to perform a Means Test to determine if you are eligible for this type of bankruptcy relief. If you do not meet the requirements of the Means Test then you may be precluded from filing a Chapter 7 Bankruptcy and have the option of converting to Chapter 13 Bankruptcy or filing a Chapter 13 Bankruptcy.

Under Chapter 7 Bankruptcy a Trustee takes possession of all your property. You may claim certain property as exempt under Arizona law. A copy of the Arizona Exemption Law is attached to this notice. You can only exempt value of property that is not subject to the liens of your creditors. The Trustee then liquidates the non-exempt property and uses the proceeds to pay off your creditors according to priorities of the Bankruptcy Code.

The purpose of filing a Chapter 7 Bankruptcy is to obtain a discharge of your existing debts. If, however, you are found to have committed certain kinds of improper conduct described in the Bankruptcy Code, your discharge may be denied by the Court, and the purpose for which you filed the bankruptcy petition will be defeated.

Even if you receive a discharge, there are some debts that are not discharged under the law. Therefore, you may still be responsible for such debts as certain taxes and student loans, alimony and support payments, criminal restitution, and debts for death or personal injury caused by driving while intoxicated with alcohol or drugs.

Under certain circumstances you may be able to keep property that you have purchased subject to a valid security interest. Some of these options include what is called redemption and the renewal or reaffirmation of an existing pre-bankruptcy debt. Your attorney can explain the options that are available to you.

Chapter 13 Bankruptcy - Repayment of All or Part of the Debts of an Individual with Regular Income

Chapter 13 Bankruptcy is designed for individuals with a regular and stable source of income who are temporarily unable to pay their debts but who desire to use their best efforts and good faith to pay them in installments over a period of time subject to the protections afforded by the Chapter 13 Bankruptcy rules. You are only eligible for Chapter 13 if your debts do not exceed certain dollar amounts set forth in the Bankruptcy Code.

Under Chapter 13 Bankruptcy you must file a plan with the Court to repay your creditors all or part of the money that you owe them, using your earnings or by the disposition and/or abandonment of certain collateral such as land and motor vehicles. You are protected from your creditors in most cases upon the filing of your case but your plan must be approved by the Court before it can take effect. Under Chapter 13 Bankruptcy, unlike Chapter 7 Bankruptcy, you may keep all of your property, both exempt and non-exempt, as long as you continue to make payments under the plan.

After completion of payments under the plan your debts are discharged except for any domestic support obligations, student loans, and certain taxes, among others.

Chapter 11 - Reorganization

Chapter 11 Bankruptcy is designed primarily for the reorganization of businesses but is also available to consumer debtors. Its provisions are quite complicated, and any decision for an individual to file a Chapter 11 Bankruptcy petition should be reviewed with an attorney. Most Chapter 11 Bankruptcy cases are simply too expensive for the great majority of consumer debtors.

Chapter 12 Bankruptcy Family Farmer

Chapter 12 is designed to permit family farmers to repay their debts over a period of time from future earnings and is in many ways similar to a Chapter 13. The eligibility requirements are restrictive, limiting its use to those whose income arises primarily from a family-owned farm.

Credit Counseling

Reputable credit counselors can advise you on managing your money and your debts. They may also be able to develop a plan to repay your debts. But, most credit counselors are not reputable and charge high fees and contributions that will cause you to fall deeper into debt. Furthermore, many misrepresent their non-profit status and/or their affiliations with religious or charitable organizations. The Kelly Law Firm, L.L.C. only recommends that a person seek the credit counseling services of a group that has been approved by the United States Trustee Department or the Bankruptcy Administrator.

Honesty is Required

A person who knowingly and fraudulently conceals assets or makes a false oath or statement under penalty of perjury in connection with a case under this the bankruptcy code shall be subject to fine, imprisonment, or both and all information supplied by a debtor in connection with a case under this title is subject to examination by the Attorney General.

Final Thoughts

There is a general consensus in the legal community that the Bankruptcy Code has become much more complex since it was reformed in 2005. After the Bankruptcy Code was reformed, many attorneys decided to stop practicing bankruptcy law because of how complex the law became. Clearly, if licensed attorneys are baffled by the new law, clients should not rely on themselves or "licensed document preparers" to get through this difficult process. A qualified attorney, who will personally help you through this trying ordeal, should be employed. Like the old saying goes, you get what you pay for.

We are available to help you get through this difficult process.

Chapter 9 Bankruptcy For Municipalities

Many people are familiar with personal bankruptcy cases, which are known as Chapter 7 and Chapter 13. Chapter 7 allows an individual to eliminate their debts, while Chapter 13 repays the debts through a structured payment plan. Both types can provide financial relief while protecting a person's assets. In business, bankruptcy protection is offered through either a Chapter 7 or through a Chapter 11 restructuring process. A business can opt to close the business and liquidate its assets in efforts to satisfy their debts through Chapter 7, or may remain in operation and reorganize their debts through a Chapter 11 repayment plan. But what happens to bigger entities when they become overburdened by debt?

What Is Chapter 9 Bankruptcy?

A Chapter 9 bankruptcy provides debt restructuring and asset protection to cities, or municipalities. When a city government becomes overburdened by debt, they have the option to reorganize their funds and develop a debt repayment plan. There is no liquidation option available to municipalities and the hardest part of a city entering into bankruptcy is the debt negotiation process. All of the creditors want to stake their claim to monies being repaid and coming to an agreement with so many creditors at once can often be difficult. Even further, cities are still responsible for paying bills, funding programs and keeping the city profitable. When a municipality seeks bankruptcy, their mission has to be less about the creditors and focused more towards the citizens.

Chapter 9 Benefits

A financially strapped city has many challenges ahead; fortunately, Chapter 9 offers many benefits to resolving their debts over managing the problems alone. As in any bankruptcy case, a Chapter 9 will issue an automatic stay order, which will cease all collection efforts. Many times, cities get flooded with lawsuits by creditors when they cannot pay their debts. More lawsuits equal more money and, therefore, more debt. Chapter 9 puts a stop to collections and prohibits creditors from filing any further lawsuits.

In Chapter 9, the city holds the negotiating power, not the creditors. The repayment plan must be developed by the municipality and submitted to the creditors. Creditors are not allowed to submit their own plans for repayment. Also, there is very little interference from the bankruptcy court in a Chapter 9 case, which can facilitate the process much faster. The court also cannot force the city to sell assets, obtain a trustee or dictate much of how the Chapter 9 plan will work.

In the event the city needs to cut funding or increase revenue, a Chapter 9 plan allows them to change, or amend, municipal contracts. This includes union contracts, labor contracts and can reduce city expenses. However, this usually comes at a cost as the pension or benefits of such contracted workers are reduced in these contractual changes.

Chapter 9 Disadvantages

As in any bankruptcy case, even a Chapter 9 has a few minor pitfalls. Obtaining a discharge in Chapter 9 can be difficult as the eligibility criteria can be restrictive. Furthermore, successfully completing a Chapter 9 can be expensive when high-priced counsel is used. Municipalities often leave with a compromised credit standing and acquiring new sources of credit can be difficult. Many times, cities are forced to turn to private investors to help them "get back on their feet" after a Chapter 9.

Chapter 7 Vs Chapter 13 Under The New Bankruptcy Code

Since bankruptcy laws changed in 2005 it has been quite a bit harder to file Chapter 7 for the debtor. Critics of the bankruptcy code, prior to the changes, complained that filing bankruptcy was just too easy. Many of these critics, obviously also creditors, lobbied with Congress for changes to the law. Those filing for bankruptcy increased over 300% from the early 80s until the law changed in 2005. With a huge number of filings, millions of dollars were lost each year in bankruptcy proceedings. It's always been a fact that the reason most Americans end up in Chapter 7 is because of a job loss, a medical problem, divorce or some kind of natural disaster. The reason that Congress had to change the law was because of those who found themselves in a financial mess by overspending. The bankruptcy code that was released in October of 2005 was intended to protect the good hard-working Americans that were dealt a bad hand and not allow those who overspent and wanted a do over.

The bankruptcy code was created to protect the consumers and the creditors alike. Bankruptcy provides a way for people that are suffering from mountains of debt to wipe out these debts and start over. The intention of the law was also to try and return some of the money owed to the creditors that took a chance. In the case of a Chapter 7 bankruptcy most creditors take a total loss as many filings end up being no asset cases. The bankruptcy law is found in the US Bankruptcy Code under Title 11. Whether a debtor files under Chapter 13 or Chapter 7, they are still both handled in the federal district courts. Most individuals try and qualify to file Chapter 7 because there is no repayment plan and a discharge can be received usually in 4 to 6 months. There are generally two reasons why an individual would file Chapter 13. The first being, their income is too high and they don't qualify under the means test for Chapter 7 bankruptcy. The second reason is, the individual owns a lot of property that they would like to protect and keep. In a Chapter 13 bankruptcy a debtor and their bankruptcy attorney will negotiate with the creditors to pay back a reduced amount over a 3 to 5 year repayment plan. But with a Chapter 13 the individual generally gets to keep all of their property while paying a Court approved reduced amount.

Those filing for bankruptcy can qualify for Chapter 13 much easier than a Chapter 7. There are still many benefits for the Chapter 13 petitioner. As long as the debtor can continue making the court approved payment plan, they will walk away keeping their property and be debt free. The court trustee oversees the entire process and makes sure that when the payment plan is set up, it will be something that's doable for the debtor. The last thing the court wants to see is a debtor going into bankruptcy and not being able to afford the court-ordered payments. The individual pays the trustee for payment and the trustee will disperse it to the creditors. In the case of a piece of real estate the court will sometimes eliminate the second and third trust deed lowering the balance due on the property because of the current real estate collapse. This can be very beneficial to a person that is upside down in their house and still has a consistent decent income. Whichever chapter of bankruptcy you decide to file, always consult with a local bankruptcy attorney to get their views on your individual situation.

Going Bankrupt May Not Be The Right Answer

For most of us, being faced with incredible debts means that we really want to run away from the problem. However, the problem does not simply disappear so finding an expert who can work through the problems is a good idea. A bankruptcy attorney is well placed to guide the affected person through the legal maze and come out the other side with little problems in between. A bankruptcy lawyer also knows any rules and regulations which pertain to the cases and could just find an answer to not losing everything that the affected person has worked for.

Indeed, it is not always a good idea to rush into this kind of action since there could be ways out of debt that the person has not thought about. If the debts have a credit card element about them, they could be wiped out by the court if the person meets certain criteria. On the other hand, if he does not meet the criteria, repaying the debt could be made much simpler once the court has become involved.

Chapter 7 was introduced by the government to stop people losing everything and to help them get through the crisis brought on in no small part by the global economic downturn that we have all had to face. If the debt is all credit card based, the person will certainly be asked to undergo a means test where all the expenses of the family are scrutinized to see where the person is being wasteful. Only necessary expenses are allowed so it is not a good thing to have to go through. However, if the income of the family is less than the outgoings, then the credit card debt is cancelled out right there.

On the other hand, if the income is more than the outgoing payments, the person can file for Chapter 13 which means that his debts are amalgamated and a reasonable amount is paid each month for a set period of time. By going this route there is less impact on his credit rating and this should be good for any future purchases etc which require a good credit rating.

Although these options look as if they are favoring the debtor over the creditor, very often credit card companies charge extortionate interest rates and this is what gets people into some rather terrible problems. They give out cards like candy and people start getting more and more to pay off their existing debts without thinking through the whole deal.

The government brought in these measures because they realized that eventually they would have to mop up the mess. If more people had to claim assistance from the government because they had to give up their homes, the government itself would be left with the huge bill that would result from this action. By putting a penalty on the credit card companies, they have made them think more about how easy it is to give out cards to people who really cannot afford to pay back what they borrow.

Using A Bankruptcy Attorney Or Doing It Yourself

In the recent years, the bankruptcy law has seen many changes. The biggest change was when Congress enacted the 2005 bankruptcy code. Since then there has been numerous changes year-to-year. When looking for information on bankruptcy, it's important to check more than one website to check and see if information is even current. After making the decision to file, individuals should remember to be totally honest with everyone. If the person decides to hire a bankruptcy attorney, they must disclose all their unsecured debt, every asset, including their true value. If a filer isn't truthful, and the trustee finds out, the debtor will have serious problems. Depending on how flagrant the violation is the judge, in the least, will impose fines and possible jail time. That's why it's pertinent when filing bankruptcy to show the court complete honesty.

In a bankruptcy filing, anyone can file themselves if they want. Hiring a bankruptcy attorney is probably a better idea as the laws have changed dramatically. If you decide to try and go it alone, remember to be very thorough when filling out the bankruptcy forms. It's advisable to buy software that will help you learn how to file for bankruptcy. If you get through all the paperwork make sure that the petition is signed in all places necessary. If you don't qualify for the means test or have a lot of property you want to protect, you'll have to file a Chapter 13 bankruptcy. With the complexity of a Chapter 13 bankruptcy, a bankruptcy attorney will definitely be necessary.

When someone has a foreclosure pending, Chapter 13 can give a debtor a chance to catch up on payments that are in arrears. Immediately following the filing of a Chapter 13 bankruptcy the automatic stay is put in place, stopping all collection efforts against the debtors. Having an attorney help with a Chapter 13 can be an invaluable resource. The bankruptcy attorney will review their client's financial situation and give them advice on what would be the most beneficial financial moves for their future. With a Chapter 13 being very involved, the attorney and their staff will make sure that the I.'s are dotted and T.'s are crossed. They will make sure that your credit counseling courses are completed and sent in at the proper time. If everything isn't properly done the petition will be dismissed without prejudice. The creditors then can come after the debtors with a vengeance.

Deciding on hiring a bankruptcy attorney or trying to do it alone should be a well thought out decision. If you decide on the do-it-yourself route make sure you're very thorough learning the state exemption laws where you reside. If you don't think that you're confident with the filing of the petition, look for a bankruptcy attorney that will fit in your budget. The attorney route will be a little more expensive, but you should be able to sleep at night knowing that your bankruptcy was properly prepared. If you consider the legal expense of $1500, for a Chapter 7 and double that for a Chapter 13, to write off $25,000-$50,000 or more, it is really quite a value. When it comes to protecting your family's property and future it's very important to have your bankruptcy filed properly.

Bankruptcy Information and Advice to Avoid Debt

If you are looking for bankruptcy information, you are likely dealing with a large amount of debt and want relief. However, most people do not need to declare bankruptcy in order to get help with their debt situation. It is important to understand what bankruptcy entails and to see what alternatives are available. Bankruptcy is an option that an individual or one of their creditors can ask the courts to declare. It means that you are no longer able to pay any or all of your debts. The petition goes to the insolvency court where they look at the situation and can declare you are bankrupt or not.

It is important to get both sides of bankruptcy information. There are advantages to bankruptcy. You get relief from all of your debt after the discharge. It is a good alternative for someone facing an overwhelming amount of financial baggage. It also provides your creditors with some amount of relief since your assets go out amongst them. Nevertheless, there are many serious disadvantages with bankruptcy as well. You lose all control over your assets. You can lose your home, your life insurance, and, in some case, your pension. You can stand to lose insurance settlements and inheritances as well. All of your bank accounts and credit cards go away. You find yourself denied credit for many years afterwards. Future employers and property owners may reject you due to the bankruptcy.

There are alternatives to bankruptcy available. One popular option is the Individual Voluntary Arrangement, or IVA. This is formal, legally binding agreement that you can attempt to get your creditors to agree to. If you can get 75% of your creditors to agree to the arrangement, you can have all of them bound by the agreement. You will need the help of an Insolvency Practitioner to get this started. You can try to get informal arrangements set up with each of your creditors as an alternative. However, these are not binding and often difficult to get in place. Use bankruptcy information wisely.

The best bankruptcy information you can get is to avoid it whenever possible. If you find that you feel overwhelmed with debt, step back and look at the situation. Are you spending more than you bring in each month? If so, cut back on expenses. Eat in more often. Put any savings towards bringing down the debt amount. Making fundamental changes will allow you to avoid bankruptcy and potentially to avoid debt in the future.

Operation Debt and Business Bankruptcy Advisory Solution

Business owners sometimes presume true a situation like exceeding reputation assets besides they are not able to meet financial obligations. This may result weight Business Bankruptcy. It is not a pleasant experience for business owner. The Bankruptcy Abuse further Prevention and Consumer Protection Act of 2005 are new laws that made difficult for business owners.

Filing a bankruptcy leaves a contrary mark for 10 agedness and courts take govern of their process and to attend lordship lawsuit. It leads to Harassing phone calls and letters from creditors, collection agencies also attorneys. All businesses, large and small, experience the challenges of managing the cash flow are immense. At these times challenges may be more difficult. In this position you can contact some business debt advisory tete-a-tete. It will stock owners emolument of filing besides it benefit creditors.

Business Debt restructuring is a better solution than bankruptcy. existing involves reorganizing its tardy amounts so creditors can be paid irrecoverable filing. sincere is one of ways to avoid bankruptcy. It can save the business cash in terms of lower legal fees. It is friendlier to flurry owners who have found themselves monopoly a debt situation.

Debt restructuring is the terrific passage to get out of debt, keep the creditors pleased and keep vim running. unaffected helps to reach a business once again become financially solvent and even helps a company become profitable. If you are having small business or large corporation, restructuring of your company may be selection in reducing debt.

Some business owners consign more to creditor than they transact in business. It may result in accounts payable problem. insignificant energy that has accounts payable problem is file now small response bankruptcy. lofty scale ball game that has accounts payable demanding is file for corporate bankruptcy. Through the Debt Resolution plan, a lot of problems connected with the accounts payable problem charge be reduced or eliminated. physical works on the flat fee schedule. It provides a way to avoid bankruptcy. A bag that owes more than it profit make to fiscal disaster and business closure for this debt reduction is the object. Debt shortening is one way to relief increase the trust back to business owner.

Filing Bankruptcy - A Pill For The Financially Ill

Money problems can adversely affect your entire life, including your health. Extreme stress can cause physical problems like stomach ulcers, heart problems, high blood pressure, and not to mention, lack of sleep. When you're buried under mountains of debt your marriage and family will suffer because of the stressful financial problems. Being under a huge amount of pressure will also have a negative impact on your performance at work, and if you're not careful it can complicate your problems with job loss. With all of this going on in your life it's easy to become overwhelmed, leading to self destructive depression. Individuals that become inundated with their financial problems should consider filing bankruptcy before their health suffers.

When an individual finally decides that filing bankruptcy is in their best interest, it should be considered a medicine that is taken to help the financially sick. The creditors want people to feel like failures and have the guilt that comes along with it. People are quick to forget that the creditors are not on their side and have other motives. That's why the U.S. Congress instituted bankruptcy to forgive debts and give people a second chance.

Once an individual files, they'll feel like the weight of the world has been lifted off of them. It's amazing how this legal action will relieve stress almost immediately because creditors can no longer aggressively pursue debt collection on the debtors. The average guy that has to file for bankruptcy has an income of around $30,000 a year and usually has had something devastating happen in their life. No longer does bankruptcy carry a mark of shame as creditors would like you to believe. When the bankruptcy is filed with the court, the automatic stay goes in place and creditors will immediately have to stop calling and mailing you. This will give you time to try and get your life back in order.

A hot tip for those who have decided to file for bankruptcy is to order a tri-merge credit report before you start the process. This will give you a total overview of your finances, and helps you to make sure that you remember to include all of your creditors. Sometimes, individuals might forget about a creditor and fail to list them if the debt got sold and no one is currently pursing collections on that account. Actually, it's a good idea for everyone to run a credit report annually to make sure all debt is reported correctly. When running the credit report make sure you run the big three, Experian, TransUnion, and Equifax. This will make sure that you cover all of your bases just in case one of them doesn't include all the debts. Another thing to remember is just because it's not listed on your credit report, it doesn't mean that the debt doesn't exist.

If you want to know everything you can about filing bankruptcy search the Internet. There are many elaborate legal sites that offer a lot of good information. Always cross reference information found online with multiple websites and with the US bankruptcy court websites. After gathering as much information as possible it's advised to consult with a local bankruptcy attorney that can discuss your individual financial situation. Most attorneys offer a free initial consultation. This should give you a jumpstart to becoming debt-free. Always remember that money and stuff can be replaced, but you can't replace your health and your family.

Credit Card Debt Relief Tips - How To Get The Credit Card Company To Settle Your Debt For Less

Credit card debt relief is in high demand. Coming off the worst economic recession since the great depression there are more consumers and small businesses deeply in credit card debt than any other time. One effective way to reduce your credit card bills is to negotiate with your creditors and settle your balance for less. Thanks to the increasing amount of consumers on the verge of bankruptcy, credit card companies are having no choice but to negotiate and make settlement deals.

Credit card companies know that if you file bankruptcy they will receive little to none of their money back. Knowing this, if they believe you are a legitimate candidate for bankruptcy they will be more than willing to negotiate with you and settle your balance for a lower amount. Getting half of their money back is better than nothing.

With the ever increasing amount of consumers and small businesses on the verge of bankruptcy, credit card companies are having no choice but to make debt settlement deals. The thing is though, they will only negotiate with you if they believe you are a legitimate candidate for bankruptcy.

So how do you convince your creditors that you are experiencing a financial hardship and are on the verge of bankruptcy? The best way to do this is by stop making your payments. This is a tough decision but necessary if you want to eliminate up to 60% of your balance through the debt settlement process. By going delinquent you are displaying your inability to pay and creditors will be much more generous when negotiating a settlement deal. The last thing they want is for you to file bankruptcy.

Credit Debt Bankruptcy - How New Federal Laws Make Debt Settlement Better Than Filing Bankruptcy

There are more consumers and small businesses on the verge of credit debt bankruptcy than ever before. For those that are experiencing a severe financial hardship it may seem as though filing bankruptcy is the only option. While filing bankruptcy would have been an appropriate option is the past, new federal laws made other options such as debt settlement much more financially attractive.

These new federal laws effectively prohibit debt settlement companies from collecting upfront fees from their clients. Now consumers and small businesses will not have to pay a dime until their debts actually settle for an acceptable amount. Typically the company must be able to negotiate a settlement for at least 60% of your balance. This means that if you have $20,000 in credit card debt and they can't settle the balance for at least $12,000, then you won't have to pay a dime.

Filing for credit debt bankruptcy is not nearly as advantageous as it used to be. New bankruptcy laws that were passed in 2005 have made filing and getting approved for Ch. 7 bankruptcy much more difficult. Ch. 7 is consider the "clean slate" bankruptcy where the majority of your debts are completely forgiven. This used to be a financially attractive option. Even though you would get a lower credit score you would get almost all your unsecured debts legally forgiven. Now it is much more difficult to qualify for. You pretty much have to have no income coming in and a negative net worth to get accepted for Ch. 7 now.

What Happens When You File Bankruptcy?

When you find that you are not able to meet payments because of a hardship, then bankruptcy is the best way to help you get a new start in life. Many people who have lost their jobs, ran out of unemployment, or had a sudden illness are no longer to pay off their bills. You are being constantly hounded by collection agencies and you feel trapped. The best thing to do is to declare bankruptcy.

Looking at the Chapter 7 options

Chapter 7 Bankruptcy is usually the best one to declare. You need an attorney to help you. You want to make sure that all the paper work is filed correctly and that all your debtors are contacted a bankruptcy lawyer will be better able to help and make sure that this is all done. You are able to keep your home, car, and personal items. Usually all the other bills are closed and you won't have to worry about them. This leaves you free to start all over with a fresh slate. Chapter 7 Bankruptcy will take care of medical bills but it will not take care of any bills you owe on taxes or child support.

Looking at the Chapter 13 options

Chapter 13 Bankruptcy will help you with your creditors but it will not pay off all your bills. The court decides how much you can pay. They will then consolidate all your bills and you pay the court system so much a month which they distribute to your debtors. Usually you only pay pennies on the dollars and the debtors are willing to take a settlement for much less than what you owe them. In any case taking bankruptcy can help you to get a new lease on life.

While there is a difference, you will find that the best route to take is by hiring a bankruptcy attorney. You will find that he/she is going to be able to help you with getting on the right path. Since every situation is different, Chapter 7 works for some, while Chapter 13 works for others.

Bankruptcy: Things That It Can Do

People who are burdened by debt or strapped for cash are entitled to file for total bankruptcy or any other types of it so that they can have a fresh start and a second chance in their lives. These bankruptcy laws are aimed to give honest debtors a shot at redemption. Total bankruptcy and a few of its variants in the Bankruptcy Law can be a bit complex as there are a lot of considerations that must be taken into account in view of the whole process. For people who are thinking of filing bankruptcy, it is important to seek an expert's help first before making any decisions about filing this and that or signing this and that.

Bankruptcy: What it does?

1. People filing for total bankruptcy or any type of bankruptcy for that matter can discharge your liability for most if not all of your debts. The moment that the debt is discharged, the debtors has no legal obligation about that debt whatsoever.

2. Total bankruptcy and other types of bankruptcies can put a halt to foreclosures. Nobody wants to give up their homes that easily and bankruptcy can help people keep their homes regardless of their debt by enabling them to catch up on their missed payment in accordance to their ability to pay.

3. Repossessions can be prevented by bankruptcy as well. Therefore your car and other properties are safe with bankruptcy. In cases where repossession has already taken place, the bankruptcy law can force them to give back the repossessed items to you.

4. Bankruptcy can put an end to different types of harassment brought about by debt collection including wage garnishment.

5. Utility services such as electricity, telephone ad the like can be restored if already cut prior to the filing of total bankruptcy. In cases where it is not yet disconnected, prevention of it is most likely to happen.

6. Interest rates and monthly payments will be lowered dramatically the moment one files for bankruptcy. These include car loans, secured debts and the like.

7. Another thing about total bankruptcy and its variants is that it the debtors a chance to challenge claims of creditors whom they think are falsely accusing them of debts or those which charge more than what they actually owed.

Credit After Bankruptcy: The Facts

You might be considering bankruptcy to fix your massive debt issue but you are afraid that the consequence might lead to you not getting credit. One might also believe the myth that it would take 10 years before they get credit. That's all there is to these statements: they are nothing more but a bunch of myths.

If you owe some money to a credit card company before the filing of your bankruptcy, you can add the card as debt. The schedules are listed on perjury and it could result to denial of discharge of the debts. Do not fall into the issue of having your debt be transformed to a federal crime. If you do not owe money from the credit card company, they do not really need a notice of bankruptcy. However, you have to be prepared since they can and will find ways to cancel out your card. In some cases, companies can allow you to keep the account but only if you agree that you will affirm to enter a new agreement.

Even if you just got out of bankruptcy, it is possible to get credit. It is a lot more expensive than the regular one and it is also quite costly and the limit can be pretty low but it is possible. If you want a lower rate, getting a secured card is possible since they are also offered even after you get out of bankruptcy. After that, you need to start building good credit. You have to be very careful now and treat it with respect. You still are at a very fragile situation. If you are not careful, you might end up with poor rates, and scams. Always be aware of the advantages and limitations of each card options.

It is also very possible to purchase a home after the bankruptcy phase. Within a period of 2 to 3 years, it is possible that lenders can offer the same loan terms as with people who have not filed for Chapter 13. Most of the time, the lender is more interested on the down payment. They will also be more interested if you have a stable job.

Overall, bankruptcy does not really have that much effect to credit. Your net worth is more important than credit. It is necessary that when you get out of bankruptcy, you put yourself in more stable situation. You cannot remove the painful financial past but you can make it work to your future financial endeavors.

Bankruptcy - A Good Idea?

Recent economic times have spelt disaster for many in the West with the collapse of businesses and the resultant loss of jobs. Many people have found themselves struggling to cope with levels of debt accrued when times were good, but which are now unmanageable.

The problem with this sort of situation is that people get into a downward spiral from which they can see no escape. The stress of being unable to meet one's day-to-day spending commitments becomes unbearable, and when this is combined with the easy come easy go attitude of certain companies who specialise in bankruptcy and promise removal of all of one's debt and a financial clean start, bankruptcy appears to become a logical means of escape.

When faced with huge financial problems and stress that comes with them it can be hard to think objectively. The problem is that whilst bankruptcy appears to offer the door to financial freedom this is far from the case.

The fact that one can declare oneself bankrupt and become debt free within a few months is the carrot many companies specialising in bankruptcies will wave in front of someone in serious financial difficulty, but what they don't tell you are the consequences of going bankrupt.

These include losing your home, your car, your business if you have one and most if not all of your personal assets. Further getting any type of loan or credit card becomes virtually impossible given the destructive effects of bankruptcy on your credit rating.

It may well be that it was credit card debt that got you into trouble in the first place and you therefore may feel that you never want another credit card again. However, if used properly, credit cards can be a very valuable tool. Are you really sure you can manage without them?

Similarly with loans, are you certain you are never going to need to borrow money again either now or in the future? Sure, your credit rating can be restored, but the only way to restore your credit rating is by demonstrating that you can handle money responsibly. Borrowing and repaying debt is a good way to improve your credit rating.

The bottom line is that whilst bankruptcy may seem an excellent way to remove your debt, life after bankruptcy can be as equally stressful and difficult. Bankruptcy may even affect your employment prospects.

To everything you can to avoid bankruptcy. Sell the car, sell anything, working out a budget and pay only the absolute essentials that you need to live and cut everything else out. See if you can rearrange your payment schedules with your creditors, seek debt counselling, consult with your bank and do anything you can to get a third party involves who can look dispassionately at your financial position and perhaps work out an alternative.

Preparing for Bankruptcy Court

When you decide to declare bankruptcy, you will have to face trial in a bankruptcy court. Like other courts, you will have to present your case to a judge in the bankruptcy court. At the end, your request will be granted or denied, and you will be told how to proceed.

Attending your hearing can be a nerve wracking experience if you do not know what to expect. Being prepared for your trial is vital, and your bankruptcy lawyer will do his or her best to brief you on what to expect. Still, having a basic understanding of what to expect before you meet with your lawyer is helpful.

One of the most important things to remember about courts, whether they are for bankruptcy, criminal cases, or civil disputes, is that appearance is very, very important. Many of the first impressions the judge will form about you will come from your appearance. As such, you need to be sure to groom properly before entering court. Additionally, you should dress professionally. In most cases, a suit is the best option for both men and women.

During the trial, your lawyer will do most of the talking for you. This is not to say, however, that you will stay completely silent during the trial. You may have to answer questions. Because it is illegal to lie, it is important to be completely open and honest when answering questions. Individuals should thoroughly discuss their cases with their lawyers to ensure that they are on the same page. As with any court case, preparedness is absolutely vital to the strength of your case.