What Happens After A Bankruptcy Dismissal?

Many people seek debt relief through bankruptcy, which can provide more protection against asset liquidation than other forms of debt settlement. Bankruptcy can stop collection calls, wage garnishments and foreclosure proceedings.

Generally, a person filing for bankruptcy can benefit in many ways. However, many people are concerned about what happens during and after the bankruptcy process. If the case is discharged, the person is left with a clean slate to begin rebuilding their financial futures; but if the case is dismissed, they may face more challenges than before the bankruptcy was filed.

What About My House?

In many cases, people that enter bankruptcy protection have already had the foreclosure process initiated on their property. Once a foreclosure is already underway, stopping the proceedings are often difficult. If a person has filed for bankruptcy, and their case was dismissed, the home will no longer be protected from foreclosure. In a sense, the fate of the home will return to its pre-bankruptcy status.

After a dismissal, the lender is free to resume the foreclosure proceedings and collection efforts on the home as they deem necessary. However, not all hope is lost; the lender may still be willing to negotiate with the borrower in efforts to keep the home out of foreclosure. Lenders are also put at risk through foreclosure, as they stand to lose more money than if they approve a modification to the mortgage or a repayment plan. There are only two ways to keep a house out of foreclosure after a dismissal (1) negotiate a repayment plan with the lender directly or (2) re-file for bankruptcy and hope to have the case discharged.

What About My Credit?

In general, the bulk of damage done to a person's has been done long before they filed for bankruptcy. Having a delinquent credit account with unpaid debts is the fastest way to ruin a credit standing. In many cases, bankruptcy can provide a clean slate from delinquent account statuses and allow for a debtor to begin rebuilding their credit right away. When debts are discharged, the debtor is relieved of liability for the debts and their accounts are essentially marked as current, or non-delinquent.

If a case is dismissed, the credit standing will continue to suffer the effects of being marked as delinquent. Like mortgage lenders, many creditors are often willing to negotiate repayment plans with borrowers outside of bankruptcy. Similar to preventing foreclosure, the only way to protect your credit after a dismissal is to (1) negotiate a repayment plan with the creditor directly or (2) re-file for bankruptcy protection.

Moving Forward After Dismissal

Depending on the reason for the dismissal many people will be able to re-file their case immediately after a dismissal. If a case was dismissed due to failure to complete the necessary paperwork, debtor education course requirement or pay court fees, the court may grant permission to file again as soon as the steps are completed. However, if the court dismissed a case due to withholding information, concealing assets or suspected fraud, the debtor may be required to wait 180 days or more before filing again.

Anyone considering filing a second time should consult a professional bankruptcy attorney. An attorney is best able to advise whether the case is likely to be accepted a second time or whether filing for Chapter 13, rather than a second attempt at obtaining a Chapter 7 discharge, would be best.

What Every Consumer Should Know About Debt Forgiveness

Late night television is packed full of advertisements for debt settlement companies. Many people seeking debt relief options may be persuaded into using such services, some of which are not legitimate. In such cases many financially strapped people end up in worse financial condition.

The question is: is debt forgiveness legitimate? The short answer is: it depends.

Debt Forgiveness

The biggest problem to answering whether debt forgiveness or debt settlement is a legitimate process comes from the lack of definition. The industry lacks regulations that require a clear definition, which leaves room for companies to offer different types of services under its name. With so many different companies offering to settle your debts for "pennies on the dollar" or "erase debt overnight", it is hard to know whether these options will provide the financial relief you are looking for in a way that is best for your situation.

However, there are a few things to know when considering debt elimination options. First of all, bankruptcy is not the only way to financial freedom. Although it can be a valuable tool, bankruptcy is reserved for those that cannot afford to repay their debts or maintain their monthly payments. Secondly, debt settlement is possible, but finding the right company can be challenging.

Third Party Negotiations

A good rule of thumb when seeking debt relief options is to contact your creditor directly. Often, you can negotiation a debt settlement plan with your creditor directly. In many cases, negotiations involve changing the terms and conditions of the existing account, which means a new contract must be formed. Problems in debt settlement are often the result of using a third party mediator and not being able to ensure the new contract of modified conditions was approved by the creditor.

Many companies will offer to negotiate on your behalf in order to save you time and money. This problem is twofold (1) they will always charge you fees for their services and (2) it is difficult to know what you are agreeing to as they settlement contract may not present all of the fine print. Because debt forgiveness means that creditor is willing to absolve you of your debt liabilities, the arrangement should be clearly defined.

The Right Company

If you decide to use a debt settlement company, be sure you found a legitimate one by looking for the following:

The company has been in business for several years; or is rated by the Better Business Bureau.

They do not charge up-front fees for the services; or offers to rebate your money if no settlement is reached.

They offer a variety of services, such a credit counseling or debtor education courses.

They provide you an open line of communication with your creditor; and provide a copy of a negotiated settlement.

How To Qualify For A Loan After A Bankruptcy

If you have filed for bankruptcy you may already be wondering how you are going to start rebuilding your credit. The challenge is that after a bankruptcy you will have to find a company who is willing to give you a second chance to prove yourself.

The first thing you should do is to think about other components within your financial profile that would be attractive to a lender. You will want to emphasize these points in your credit application. There are 5 things that most lenders look for when considering an applicant for credit. These are character, capital, collateral, consideration and credit.

If you have good job stability, income and some assets, you are a better candidate for credit. So what are the most popular forms of credit that someone who has filed for bankruptcy could qualify for? A secured credit card, a small personal loan from a finance company or a secured loan against a vehicle are some options if you need to rebuild your credit.

Do a lot of research and shop around. Don't confuse payday loans as a credit product that will rebuild your credit. Payday loans do not report to the credit report. Neither do pre-paid master cards.

If you have filed for bankruptcy, the faster you begin re-building your credit the better. There are some loan companies who will start helping you re-establish your credit as soon as the day after you have filed for bankruptcy. All you have to do is research your options!

Keeping Your College Student Out Of Debt

As a new school year approaches, many young adults are heading off to college for the first time. Armed with many new responsibilities, these young adults have much to learn about their futures.

Sadly, it has been reported that financial literacy is declining with each generation. This suggests that as our children grow up and go off to college, they haven't been adequately trained on good money management skills.

Many college students fall into the trap of credit card debt before the end of their first year. Along with student loans, credit cards are quickly becoming the largest source of debt among Americans under the age of 25. Fortunately, there are a few ways to protect your college student's credit while allowing them to learn how to responsibly manage a line of credit.

Teaching Tools

There are numerous tools available to help your son or daughter learn to use credit wisely. Before allowing your them to apply for a loan have them participate in a credit counseling course. These courses are a required part of the bankruptcy process, but have highly valuable information for people in all financial situations. A credit counseling course overs how to create a budget, money management strategies and how to use credit responsibly. Typically, a credit counseling course is offer for around $30-$60 and last around 90 minutes. That is 90 minutes of information that can change the financial future of your son or daughter.

With the advances in technology, comes smarter ways to manage your money. There are many online tools available to help anyone create and manage a budget, which even sends alerts when they approach their budget limit. Many new smartphones have applications that can be purchased or downloaded from their banks software as an additional tool for keeping track of their money. Knowing when their money is low can prevent the misuse of a credit card on non-essential items.

Setting Rules

As a parent, you may have to co-sign on a credit card for your son or daughter. Taking on such a great responsibility requires your participation in the entire process. Don't just give your child a credit card and say "good luck", instead make the credit card a source of monthly discussion. Before your college student applies for the card, sit down and make a list of spending rules for the card. List what items or activities are acceptable for purchase with a credit card, and which are not. For example, items such as gas, groceries and school supplies may be acceptable purchases; whereas, clothing, restaurants and parties would not.

Make sure you both receive monthly copies of the statements and discuss the statement in detail. Let your child know you are proud of them for maintaining a low balance, paying on time, etc. The fiscal behaviors you instill in your son or daughter at an early age are likely to stick with them a lifetime.

The Perfect Bankruptcy Is the One You Never Have Because There Are Better Alternatives

You're now ready to enjoy the perfect bankruptcy lifestyle because you've had all you can handle of the banks and debt collectors ringing your phone constantly. No more phone calls and you won't be afraid to go to the mailbox for fear of another collection notice jumping out to bite you.

An attorney is going to fix everything for you so the judge can make all your decisions about money for you. Your paycheck goes to the court and the court trustee will send you a small allowance for food and maybe enough extra for some nice toilet paper with the remainder going to creditors. Life is just perfect again! The only thing that could make life better would be that "bankrupt" tattoo across your forehead!

Not exactly what most people would want for the new definition of the American dream is it? Suppose for just a moment that back in the late 1950s and 60s banks and the new credit card companies got Congress so upset with their shenanigans Congress decided to outlaw credit cards. Well it almost happened but lawmakers decided to give them a chance. They made a law so if you didn't want to pay unsecured debts you didn't have to!

If you want to save putting that tattoo on your forehead maybe you should check out how this strange law came into being. Use the search term "Frontline - the Chicago debacle" to see how the banks upset Congress big time by throwing money at total strangers!

Banks don't loan money or extend credit for unsecured loans, it is created out of thin air and if the so-called debt becomes uncollectible the account vanishes back into thin air where it came from plus an amount nine times the amount of the account is removed from the banks assets. It gets them upset but either way the bank doesn't lose any money whatsoever.

This war between government and banks has been going on for centuries. If you wish to watch a video chronicle then use the search term "the gig is up - money, the Federal Reserve and you" to see how the banks are winning. This Google video was presented at the University Of Colorado School Of Law in 2008 and it has dramatic life changing information.

The bank does not care about the money because they lose nothing and they have no power to take your money except through lawsuits. The cost of a lawsuit today is around $94,000 which usually exceeds the amount supposedly owed. Instead they sell the account information to collectors that will try to do the dirty work and this is where bankruptcy is easily avoidable and could even bring in some serious money if you follow the letter of the law.

Those angry congressional members wrote the Fair Debt Collection Practices Act back in 1966 making it virtually impossible for collectors to carry on the banks scheme and dooming the banks legal efforts to failure in undertaking a lawsuit because neither can ever show proof of debt. When no money is lost, the bank cannot prove damages. A letter demanding either to show damages will put an end to their claim.

Collectors are nothing more than telemarketers and here's where the Debt Collection Act gets really serious. Use the search term "FTC debt video" to see your rights over the phone. Record those calls because each violation is worth $1000 minimum and should a collector slander you in any way it could be worth a lot of money. Read how one man took his answering machine to court using the search term "man wins 1.5 million from collector" and other amounts exceeding $8 million have been awarded.

In a perfect bankruptcy you can expect to have everything taken from you with no chance whatsoever of actually making money from those creditors causing your problems. The new bankruptcy act of 2005 was bought and paid for by the banking industry while the 1966 law was written by angry congressional members. Either way you use the legal process to dissolve debt so you be the judge and maybe save that tattoo on your forehead!

Mortgage Application Pitfalls

It is true that they say that not all mortgage lenders are equal, as the same goes for applicants. The truth is, the mortgage lending market is competitive and if you want to get the best deal, you need to set yourself apart from other applicants. When applying for a mortgage many people make very common mistakes that may put them in a bad light. However, getting to know some of these common traps can help you avoid making a costly mistake.

Credit

Obviously, one of the most important aspects of applying for a loan is your credit history. Having a negative mark or delinquent account on your credit history can greatly impact the type of loan that you are able to obtain. If you have a bankruptcy on your credit report, many lenders may be hesitant to lend you money. However, this does not mean that a bankruptcy will prevent you from obtaining a loan.

After bankruptcy, make sure your credit report is accurate and reflects your debts have been satisfied. It is also a good idea to get a letter from your creditors stating that you have no outstanding debts. If you completed a Chapter 13 bankruptcy plan, be sure to provide the lender a copy of your debt repayment plan, proving you repaid your debts. In many cases, a lender will not mark you as a risky borrower if you have paid your debts in full. This also applies to any current or delinquent debts; arrange a repayment plan with the creditor and obtain documentation to show that are currently paying these debts on time.

Employment

Many mortgage lenders prefer to see a stable employment history. Any changes to employment may flag you as a risky borrower, leaving you with a sub-par or no loan at all. The lender wants to see that there is no potential for financial hardships down the road. In the event you have changed jobs before applying for a mortgage loan, you need to prove your stability in other ways. For example, demonstrate that you changed to a higher paying job, or job with more work hours. If you signed an employment contract with your employer, provide a copy to the lender along with your loan application.

Relationships

Mortgage lenders cannot discriminate between single, married or divorced applicants based on their relationship status alone. However, your status may greatly affect your total income potential; which may influence the type or amount of a loan you are able to qualify for. Because your loan eligibility will be based on the proportion of your income to expenses ratio, keep in mind that you may not qualify for a higher loan amount if you are single or divorced. If you are required to pay child support payments, provide documentation to demonstrate your ability to make timely payments. Although these payments are considered an expense, the lender always appreciates a pattern of timely payments.

Purchases

Many people fall into the trap of making too many large purchases at once. If you are applying for a mortgage loan, do not buy any other large purchases or apply for additional lines of credit. Remember that the amount of loan you will be able to obtain, and the interest rate on that loan, are directly influenced by the amount of debt you have and the amount of cash in the back. Wait until after the loan is secured before buying any new furniture or materials for renovations.

Can I Be Fired For Filing Bankruptcy?

The bankruptcy process is often scary enough for people experiencing financial hardships. Many people fear the stigma associated with bankruptcy and worry that their family and friends will find out about the bankruptcy. In fact, no one will find out about a bankruptcy unless you tell them, or they have legal reasons to pursue this information with the local government.

It is these fears, along with a lack of understanding about the bankruptcy process that prevents many people from experiencing the benefits bankruptcy has to offer. Bankruptcy is a valuable resource that is designed to help people, not hurt them.

Isn't My Case Public Record?

Although a bankruptcy filing does become public record, the information is not listed in the paper or printed on a billboard. The "public record" aspect refers to the information being publicly available through a local government agency. However, this does not mean that anyone off the street can walk in and find your information. The information is "public" only in the sense that creditors, and the like, have access to the information.

Are there Any Laws To Protect Me?

In fact there are, the bankruptcy code prohibits certain discriminatory actions against anyone on the sole basis of their bankruptcy filing. Bankruptcy Code 11 U.S.C. section 535(b) states:

"No private employer may terminate the employment of, or discriminate with respect to employment against, an individual who is or has been a debtor under this title... solely because such debtor... is or has been a debtor under this title...."

This law is intended to prevent the discrimination of those who seek protection through bankruptcy. One important caveat of this law is that it only extends to the basis of discriminating against someone for having filed bankruptcy; and does not protect anyone with additional employment related problems.

A Flaw In The System?

Recently, a woman has filed a lawsuit against her former employer on the grounds she was wrongfully terminated as the result of a bankruptcy filing. The woman maintained a position as the manager of the store, which was stripped of her only seven days after filing a bankruptcy petition. The woman claims the store had no real basis or grounds for the firing and is pursuing damages in court.

Does she even have a case?

For the woman in this example the burden of proof is on her to demonstrate she was terminated solely for the reason of having been associated with a bankruptcy filing. It is more likely that she was terminated for a legitimate reason that happen, by accident, to coincide with the bankruptcy filing.

Will You Lose Your Home in a Chapter 7 Bankruptcy?

Chapter 7 Bankruptcy

Under Chapter 7 bankruptcy, a homeowner will be able to keep their home if they have no equity in the house, because a trustee would have no money to distribute to creditors after selling the house. Also, a homeowner can keep their home if the equity that they do have in the house is exempt under the homestead exception. However, if a homeowner files for Chapter 7 bankruptcy, they will need to keep making mortgage payments on their house or else they will lose their home.

Exemptions

What is an exemption? Under Bankruptcy law, an exemption is an asset or value of the asset that a debtor gets to keep after filing bankruptcy. Usually, bankruptcy is a federal issue, but exemptions are an area of bankruptcy that differs from state to state. Each state has chosen whether to maintain the exemptions in the federal Bankruptcy Code or to create its own exemptions for its citizens. California has chosen to create its own set of exemptions. For example, the two systems of exemptions a debtor can choose from in California are The California Code of Civil Procedure 704 or The California Code of Civil Procedure 703. When filing for bankruptcy in California, a debtor can only choose one system and cannot pick and choose exemptions or utilize both systems of exemptions at the same time.

Equity and the Homestead Exemption

Equity is the value of a home that exceeds all the encumbrances on the home. Equity is determined by subtracting the total value of all liens and encumbrances on the home from the market value of the house. Equity in a home is not stagnate and can change. If the value of your home rises then your equity will increase. However, a more likely situation in today's poor market and economy is that the value of your home has fallen therefore your equity will also decrease.

A homestead exemption is an exemption that protects a certain dollar amount of equity in a home from creditors. Each state has its own rules for homestead exemptions and you should seek the advice of a qualified attorney to determine the homestead for your particular situation. For example, in Florida there generally is no homestead exemption limit, whereas in states like Pennsylvania there generally is no state homestead exemption. Below is brief look at the California Homestead exemptions, but a complete explanation of all the homestead provisions is beyond this article.

California Code of Civil Procedure 704

Under this system, a homeowner who is single and not disabled is given a homestead exemption of $75,000. A family is given a homestead exemption of $100,000 if no other member of the family has a homestead. If a homeowner is 65 years old or older or if the homeowner is physically or mentally disabled, then the homeowner is given a homestead exemption of $175,000. What do all these number mean? Here is an example to help clarify:

You are married and have a family (no other member of your family has a homestead). You own a home worth $300,000, but you owe $200,000. This means your equity in the home is $100,000. If a creditor files a judgment lien on your home and succeeds on a forced sale, then you will typically get the $75,000 homestead exemption and the remaining $25,000 will go to the creditor. In this example, a creditor was able to force sell the home, however with the aid of a qualified attorney, a person can review all of their options and could possibly save their home.

California Code of Civil Procedure 703

Under this system, any unused portion of the homestead exemption may be applied to any property of the homeowner, totaling up to $20,725. This system is generally used by people who do not have a large amount of equity in their homes. Here is an example of a situation where you might want to use this system as opposed to section 704:

You are single and own a house worth $300,000, but you owe $295,000 on the home. This means your equity in the home is only $5,000. However, you have some cash or other property that would not ordinarily be exempt under bankruptcy proceedings. You can use this system to have that property or cash become exempt, which means you get to keep it.

Equity and the Homestead Exemption Summary

If a homeowner has a significant amount of equity in their home, which is not exempt from the homestead exception, a homeowner might lose their home, even if mortgage payments are current and up to date. However, under the homestead exception, a homeowner can keep some equity in their home without the threat of losing their home. The particular exemptions that are applicable to an individual and how much each exemption amounts to depends on numerous factors. It is best to consult with an experienced attorney to find out which exemptions are applicable to a particular individual.

Foreclosures

During a bankruptcy proceeding, even if a homeowner's house is protected from being sold to pay creditors, a homeowner can still lose their house to foreclosure, if proper measures are not taken. A foreclosure is a process that is outside the normal bankruptcy proceedings and occurs when a homeowner is behind on mortgage payments. As a result, Chapter 7 bankruptcy is limited in its means to get out of a foreclosure and save your home. However, it is possible to save your home under a Chapter 7 bankruptcy when facing a foreclosure, but ordinarily a Chapter 13 bankruptcy is more practical.

Chapter 7: Automatic Stay and Foreclosures

Once a Chapter 7 bankruptcy petition is filed, all collections and foreclosure proceedings will temporarily stop under automatic stay,. This stoppage usually lasts for 2-6 months, but because the poor economy has resulted in so many foreclosures, it can be much longer. During this time, you can continue to live in your home. A lender will then make a motion to the court for relief of automatic say. If the court grants the motion, the foreclosure proceedings will begin again. However, a lot can happen during the automatic stay period and if a homeowner can show that he is current on his mortgage and can make the payments, the foreclosure will likely not go forward.

You Should Seek a Qualified Attorney

The risk of losing your home is serious. Failing to properly protect your home might result in you losing your home. There is no cookie cutter solution and every situation is different. If you are considering filing for bankruptcy or are currently in the process of a bankruptcy, you should immediately seek the advice and assistance of a qualified attorney.

Credit During and After Bankruptcy

Debtors are well aware that bankruptcy wreaks havoc on one's credit. Besides a sizable drop in your credit score, the bankruptcy itself appears on your report for about seven years afterwards. Both Chapter 7 and Chapter 13 bankruptcy have this effect, although in different degrees. But that doesn't mean you're banned from credit altogether-it just means you'll have less room to work with. Read on to find out what happens to your credit during and after the bankruptcy process, and how you can cope with the change.

Cause of Bankruptcy

In most cases, a debtor's credit will already have suffered by the time they file for Chapter 7 or Chapter 13 bankruptcy. They may have missed credit card payments, gotten court judgments, or defaulted on their mortgage. So your credit score at the time of your filing depends on how much debt you had to begin with, and how far behind you were. If you don't owe that much, ask yourself whether the resulting credit damage is worth it when you can simply settle the debt on your own.

Debt Discharge

The amount of debt written off also affects how much your credit score will fall after a bankruptcy. If you have a lot of unsecured debt-the kind most commonly written off in both Chapter 7 and Chapter 13-more of it tends to be discharged, and the credit effect may be more drastic. There is usually more debt discharged in a Chapter 7 bankruptcy, which is why people often choose Chapter 13 when they want to save their credit.

Duration of Bankruptcy

In most states, the bankruptcy record stays on your credit report for about seven years. In the case of Chapter 13 bankruptcy, this includes the time you're making the payments. So if you're on a three-year repayment plan, the bankruptcy will still be on your record for four years after you've made your last payment. But if you've stayed current for the entire plan, your credit score can significantly improve after the discharge.

Credit Options

Bankruptcy courts strongly advise against taking out new credit during a bankruptcy filing. Not many lenders will extend credit to someone just coming off a Chapter 7 bankruptcy, and the terms are seldom very attractive to someone handling Chapter 13 payments. You may be able to take out small personal loans from banks specializing in bad credit lending, but make sure you're dealing with legitimate companies, and read your bankruptcy terms to make sure you're not breaking any rules.

Chapter 13 Bankruptcy Outcomes

Filing for Chapter 13 bankruptcy can provide you with many advantages over a Chapter 7 bankruptcy. Repaying your debts through a Chapter 13 plan can eliminate your debt, while protecting your credit and assets more so than in a Chapter 7 case. However, not everyone gets to benefit from repaying their debts through Chapter 13 plan.

There are cases in which change needs to be made after the bankruptcy petition has been filed. For example, if you were unable to satisfy the original Chapter 13 plan, your case may be handled one of four ways.

Modification of the Plan

When seeking bankruptcy protection, the court will always prefer to find a solution that allows the debts to be repaid. If you cannot afford to repay the debts as originally outlined in your Chapter 13 plan, a plan modification may be approved by the court. Modifications to the plan may include changes to the amount of time allotted for debt repayment or how much is required to be repaid. In other words, the court may grant you more than the 3-5 year standard time frame or agree to settle for less than is actually owed. The court may also reduce the monthly payment requirement of the Chapter 13 plan in order to increase the likelihood of you repaying the debt in full over time.

Conversion to Chapter 7

If you can no longer make your payments as originally outlined in the plan, and there were no modifications that would improve your ability to repay the debts, the court may agree to convert your case into a Chapter 7 case. It is not uncommon for the court to require that some of your assets be liquidated in order to satisfy the debt owed. However, many of your assets are exempt from liquidation under bankruptcy exemption laws. These laws vary by state, but usually protect your home from foreclosure during a liquidation proceeding. In order to have your case converted into a Chapter 7 case, you must be able to prove that you can no longer afford to make the payments as outlined in the original Chapter 13 plan.

Hardship Discharge

If you experience an extreme financial hardship, the bankruptcy court may grant a hardship discharge of your case. A hardship discharge is reserved for unavoidable financial hardships that cannot be predicted or controlled by you. Common examples are if you can no longer able to repay your debts through the Chapter 13 plan due to an accident, illness or injury that prevents you from working or obtaining the income necessary for debt repayment.

Dismissal

Your Chapter 13 case may be dismissed by the court either (a) voluntarily, as requested by you or (b) involuntarily, as ordered by the court. You may request to have your case dismissed if you feel you can repay the debts outside of bankruptcy. Your case may be dismissed by the court of the you fail to provide accurate information in the petition, fail to complete the bankruptcy filing process or commit an act of fraud.

Once I Am Bankrupt What Happens at the Meeting With the Official Receiver?

If you are preparing to declare yourself bankrupt the process can seem less intimidating if you know what to expect. We consider what will happen when you meet with the official receiver.

Once you have been declared bankrupt at the Court the next stage of the process is a meeting with the Official Receiver (OR).

The OR is very important as it is they who will decide how long your bankruptcy will last and what will happen to any assets such as your house and car and whether you will be expected to make any monthly payment towards your debts.

Your meeting with the official receiver will normally not take place on the same day as you are declared bankrupt. The Court will usually give you the details of the OR's office and ask you to contact them and make an appointment.

Telephone Meeting

Your meeting with the official receiver will typically take place on the telephone. You will not be expected to travel to visit the OR in person unless you specifically want to do so.

You may speak to the OR themselves or a member of their office staff.

The primary objective of the OR will be to go through the statement of affairs document that you submitted to the court to make sure they understand everything you have written.

You should therefore make sure you have a copy of your document to hand when you have your meeting.

The OR will form a large part of their decision about how you will be treated based on the info in your statement of affairs.

This is why it is so important to complete this document correctly before you submit it to the court on the day of your bankruptcy.

Deciding on your assets and monthly payment order

It is the official receiver's job to decide what will happen to any of your assets and whether you should make a monthly payment towards your debts.

If you are a home owner it is particularly important to discuss this with the official receiver so that you understand their intentions towards your property.

If you believe that there is little or no equity in the property or it is in negative equity and you want to make an offer to the OR to buy back the title of the home immediately you should discuss this with the OR at the meeting.

If you believe that your income or expenditure have changed since you were declared bankrupt at court or there are any errors in the information you provided, it is vital that you inform the OR at the meeting.

They will decide whether you should make payments towards your debts for the next three years based on what you have written in your statement of affairs and your discussion with them so it is really important to make sure that the information they have is correct.

You can ask questions too

Another important thing about your meeting with the official receiver is that it is your opportunity to ask any questions you have.

Don't be scared to ask anything. Generally speaking the OR will be very approachable and easy to speak to.

You can also tell the OR about any creditors who are still being particularly unhelpful and continuing to collect money from you. The OR will write to all of your creditors in due course but they can contact creditors specifically to instruct them to stop contacting you directly.

Do not put the phone down at the end of the meeting if you have any unanswered questions.

However if later on you do think of anything else that you forgot to ask, you should feel free to call the OR at any time and ask more questions or give further information if you need to.

The golden rule is if you are worried about something even if it seems insignificant of a bit silly, pick up the phone and ask. The OR will be happy to help you.

Cooperate with the official receiver

The official receiver and their staff are generally very friendly as long as you cooperate fully with them.

The decision about how long your bankruptcy will last ultimately rests with the OR. Normally this will be 12 months however if you are uncooperative the OR could extend the term of your bankruptcy using a bankruptcy restriction undertaking (BRU).

It is the OR's job to ensure that you return as much as you can to your creditors. As such, if in their view you can afford to make a monthly payment towards your debt, they will ask you to do so.

In the same way, if you have a car which is worth more than £2000 you may well be asked to downgrade or sell the vehicle all together if you do not need it.

This is why it is so important to complete your bankruptcy statement of affairs document correctly and understand in advance all of the implications of the information you provide.

Living Like A Rock Star Might Force You Into Filing Bankruptcy

Living beyond your means is becoming the norm rather than the exception for people living in the US today. America has become addicted to stuff. Everyone wants to be famous and have all the things that famous people have. This is becoming a serious problem as many young people will do anything and I mean anything to have fame. This is one reason for the success of YouTube. Individuals do stupid stuff and post it on YouTube with hopes of millions viewing it and all this is done without acknowledging the side effects to their behavior. Another phenomenon is the popularity of reality shows. I don't understand why anyone would act like a New York City Housewife. Many people emulating this behavior put themselves in danger of filing bankruptcy because they are spending like a rock star. When you don't make that kind of money, just because you see it on TV doesn't mean you can afford it. Nowadays, with the average American family having $20,000 per household in credit card debt, it's no wonder that the number of those filing bankruptcy continues to increase.

In the past, when people watch TV they knew it wasn't real. When Magnum PI was popular on TV, everyone didn't go out and over extend themselves by buying a new Ferrari. In today's unrealistic society, it probably would have been impossible to even buy one because of the long waiting list.

When watching all the reality shows, the women appear to have perfect lives. They wear only designer clothes and drive luxury automobiles. What the media is portraying is not reality. What the media is portraying is an unsustainable lifestyle by a bunch of phonies. These lifestyles, unless you're Bill Gates, will only lead to a bankruptcy filing. If you read the blogs about the real story behind the scenes on the Real Housewives series you will see financial struggles, divorce, foreclosure and even bankruptcy. If you ask me, that doesn't sound much like a perfect life and it's not one that I want for myself and my family.

The true reality in life is if you spend more money than you make you will end up filing bankruptcy. Trying to finance a lifestyle of individuals you see on TV will leave you empty and broke. If this is the path you have started down, before it's too late, consult a bankruptcy attorney and break the cycle. Filing bankruptcy is not a fix all, but it will stop the creditors from hunting you down to be paid. Living inside your means can be very freeing. Talk with a bankruptcy attorney today and get on the road to becoming debt-free.

Dealing With Creditors After A Bankruptcy Dismissal

Being in debt is an overwhelming experience for anyone. Many people end up over their heads in debt through no fault of their own, and may find themselves unable to repay their debts. Often, we feel like we are caught in the middle of our lives and our creditors. We may want to repay our debts, but lack the income necessary to do so.

Creditors are notorious for their aggressive collection attempts. Repeated phone calls and threatening letters leave us feeling like we have no recourse to protect ourselves.

Fortunately, bankruptcy can provide protection against the collection effort of creditors while we work towards a debt resolution. Once you file for bankruptcy, an automatic stay is an order issued. This order ceases all collection efforts and prohibits creditor from contacting you. Sounds too good to be true, right?

There are cases in which a bankruptcy case is dismissed; which leaves the debtor subject to the collection efforts of creditors. A bankruptcy case may be dismissed for a number of reasons. Your case may be dismisses if the information provided in the bankruptcy petition was inaccurate or incomplete. A case may also be dismissed if the debtor failed to complete the necessary steps in the filing process, such as complete a debtor education course or pay the necessary fees. Additionally, a case can be dismissed if the court feels any acts of fraud were committed.

Luckily, there are ways to deal with your creditors if your case is dismissed.

Contact A Bankruptcy Attorney

This is the most important aspect of protecting yourself from creditors when you are pursuing bankruptcy or had your case dismissed. Having an experienced bankruptcy attorney can make the filing process much easier and provide you with alternatives to bankruptcy in the event you decide not to pursue bankruptcy as a debt resolution option.

Your bankruptcy attorney can help you request to have your case reinstated with the court. They can expedite the process of reinstatement if your case was dismissed due to lack of paperwork or the completion of filing requirements. Your attorney can also provide you with alternatives when requesting to have your case reinstated, such as filing for Chapter 13 bankruptcy rather than Chapter 7.

Negotiate With Creditors

If your bankruptcy case is dismissed, your creditors will be notified by the court of this decision. After a bankruptcy dismissal, the automatic stay order is lifted; leaving your creditors free to resume collection efforts. What many people don't know is that you have the right to contact your creditors to request payment options. Creditors are usually willing to negotiate repayment terms rather than risk losing the chance for full repayment through a Chapter 7 bankruptcy.

Negotiating with the borrower benefits the credit card company by increasingly the likelihood the debt gets repaid, even partially. In most cases, you can obtain a repayment plan that suits your budget. In order to get the best deal in a credit card negotiation, it is important that you demonstrate intent for full repayment. If you are experiencing an extended financial hardship it is best to be honest with your creditor, letting them know the extent of your situation and what you can realistically afford to pay. You just might be surprised by the end result.

Don't Procrastinate, Hire A Bankruptcy Attorney To Avoid An Emergency Filing

Many people have idiosyncrasies and personality flaws, one of the worst ones to have is procrastination. It's easy to procrastinate on going to the store or calling someone back, but when it comes to financial matters like paying bills, it is not a good idea to put it off. When people procrastinate about paying their bills, they usually wait until the ninth hour to file for bankruptcy. Filing bankruptcy and procrastination usually go hand-in-hand in the lives of people that are having financial difficulties. Being buried in debt can be scary and making the move to file for bankruptcy can even seem scarier. In the beginning stages of financial trouble, filing for bankruptcy seems like an option that can be resolved with a loan modification, getting help from your family or getting the creditors to waive some payments so you can get caught up. Many times, the fear of the unknown of jumping into a bankruptcy filing can paralyze an individual with fear until something big happens that forces the debtor's hand.

It's normal for many people to put off filing bankruptcy as long as they can. In many cases, they feel like something good might happen that will bail them out of their trouble. In reality, as long as the debtor isn't taking money out of their 401(k) or borrowing more to pay down debts, there won't be any irreparable damage. There are some things that can happen that will complicate the individual's bankruptcy filing. Basically, it will give a bankruptcy attorney more damage control to do.

When a debtor defaults on their debt, the first thing a creditor will do is file a lawsuit against the debtor for the balance owed. If the debtor doesn't respond, the creditor will get a judgment against the debtor. Once the creditor gets the judgment they can file a wage garnishment and start garnishing the debtor's wages. If this is done prior to filing bankruptcy, a bankruptcy attorney will have to send the agency that serves the wage garnishment and the employer that the debtor is filing for bankruptcy to stop the wage garnishment. If the debtor knows they are being sued, they shed contact a bankruptcy attorney immediately and possibly avoid the loss of wages and the hassle incurred to remove the wage garnishment.

It seems many people wait right up until the eve of the foreclosure sale date of their house and then call the bankruptcy attorney to see if they can do an emergency bankruptcy filing to stop the foreclosure sale. Don't get me wrong, it can be done, but it might be hard to find a bankruptcy attorney that would have the time and the patience to jump at last minute and file for the procrastinating client. If the debtor waits too long and the foreclosure sale happens, this sale is final and it's next to impossible to reverse it. It takes time to prepare a bankruptcy petition and most of the time, a bankruptcy attorney doesn't want to be rushed unless the client is willing to pay a premium.

When it comes to filing bankruptcy it's much better to be proactive instead of procrastinating. The individual can avoid a lot of headaches and even save some money on the legal fees a bankruptcy attorney would charge them. The more involved the bankruptcy filing, the more the cost. Before your financial situation gets out of control, consult a bankruptcy attorney to avoid any additional cost and damage.

Commonly Asked Questions About Chapter 13 Bankruptcy

On this page we will answer some of the most commonly asked questions about chapter 13 bankruptcy.

Yes, it is possible to file bankruptcy without legal representation, though, unless you are a legal expert yourself, it is not to be advised. Filing chapter 13 bankruptcy is an extremely complex process and if you make any mistake or omission, you risk serious financial and legal repercussions.

You may have to liquidate some assets in order to pay off part of your debts, but for the most part, your debt will be paid off over time by means of your monthly repayment plan.

Yes, it is true that there are types of debts that will survive your bankruptcy. These are mainly tax debts, government fines, child support and student loans.

Yes, once the court notifies your creditors of your bankruptcy, an automatic stay goes into effect that prohibits creditors from any further collection actions against a debtor. This includes lawsuits, wage garnishing and harassing phone calls. Creditors are allowed to object to your chapter 13 bankruptcy in the court-supervised Meeting of Trustees.

No, in most cases, retirement savings and IRAs are considered exempt from your bankruptcy filing. Because the exact exemptions differ from state to state, you are best advised to ask your bankruptcy lawyer if your retirement savings will be protected.

This depends on which chapter you filed before, whether you received a discharge in the previous case, and how long ago this happened. Contact your bankruptcy lawyer to examine what your options are.

Doing Your Part In Boosting The Economy

Many of our congressional leaders are running around trying to calm the public before wide-spread panic sets in. The recent scares on Wall Street and ominous predictions of economists have many people looking for the best way to protect their money.

What can be done about this failing economy? To the surprise of many, quite a lot.

Tortoise And The Hare

The old story about the tortoise and the hare can teach us much about how to get through a wavering economy. It's true that the stock market has been anything but predictable, but that doesn't mean everyone should cash out their money and run.

In fact, when the stock market experiences such great highs and lows from one day to the next, a sudden surge of liquidation can force the stock market to plummet for longer periods of time. The further the slump in the market, the harder it is for the economy to regain control.

Patience is key when it comes to stock market investing. In fact, the overall percentage of loss in the stock market following the S&P's credit downgrade was minimal compared to the day to day gain and loss pattern. When people become panicked, they may quick decisions to liquidate their investments and buy up solid commodities such as gold. Despite the fact that gold maintains its value well over time, it certainly does nothing for the economy as whole.

All The Eggs In One Basket

When economic times are uncertain, the best strategy is to stay the course. The likelihood that anyone "loses everything" in the stock market has very little to do with variability in the market itself. Instead, losing everything is the result of a poorly planned investment portfolio. We have always heard not to put all of your eggs in one basket, and the same is true for investments. Having your money spread around many types of investments is the best way to fair a turbulent economy. Investing money in bonds, stocks, money market accounts, gold and keeping some in cash will prevent any investor from losing everything when one of these investments takes a dive.

Keep Your Head Up

Consumer confidence plays a large role in the health of the economy. Historically, each economic recession was preceded by a drop in consumer confidence. Negative attitudes about the economy result in less consumer spending and an increase in panic-stricken decisions that could backfire. Consumer spending is good when attitudes towards the economy are good, which pumps money into the economy and can lead to more jobs for the unemployed.

Homebuying Becoming Easier For First-Timers

Many streets are occupied by seasoned homeowners that settled into homeownership long ago. Until recently, first time homebuyers had a rough go of obtaining funding for their mortgage loan. These days, more moving vans are pulling into the driveway carrying the belongings of that recent college graduate or young couple just starting a family. Regardless of their position in life, more first time homebuyers have begun to take that leap into home ownership.

The turbulent economy has brought wrath on the housing market and personal wallets of many Americans. Foreclosures hit an all-time high a while back and property values began to suffer. More people were finding themselves overwhelmed by debt and seeking the debt relief protection bankruptcy can offer.

Homeownership Looking Good

After all of the ominous news about the economy, many potential homeowners were left feeling doubtful about their chance at successful home ownership. The good news is that recent reports point towards an increase in the number of first time homebuyers. In fact, the number of first time homebuyers has continued to increase for the tenth straight month. In June, an increase of nearly 24 percent was seen, hitting its highest since August of last year.

What is the reason? Many lenders are beginning to loosen up their lending qualifications and open doors to those who, a few years ago, would have been denied a loan at the door.

Sign On The Line

So what has really changed in the mortgage lending industry? For starters, the minimum down payment requirement has been lowered. Most first time homebuyers lack the funds for a large down payment, which had previously flagged them as a risky borrower. Since the standards have been relaxed a bit, many first time homeowners that are otherwise qualified are getting a break in the down payment requirement.

In the past, many lender posed down payment requirements that were stricter than the minimum set by the government. With more lenders offering greater flexibility in lending, first time home buyers are finding it easier to get the chance of a lifetime. Even better is the fact that interest rates continue to hover near their lowest point in over 50 years. The reduction in home prices, low interest rates and lesser down payment requirements, have all contributed to the influx of first time home buyers.

Getting The Best Deal

The only downside to first time homeownership is the lack of knowledge about the process. Seasoned homeowners know how to shop around for the best loan and to review the fine print. With increases in new mortgage trends, first time home buyers may be unaware they aren't getting a fair deal. The biggest mistake new home buyers make is failure to calculate their total monthly expenses associated with homeownership. First time home buyers should consider the following:

Will there be an increase in the rate down the line? If so, how will this affect the monthly payment? Are there any additional costs associated with the loan? For example, mortgage insurance, fees for refinancing down the road etc. What are the exact terms and conditions of the loan? For example, the duration of the loan, payment intervals etc. What is the interest rate based on? For example, the national prime rate, subprime rate etc.

Filing Chapter 7 Bankruptcy - Things To Consider

The bankruptcy law in the USA is designed to assist people who simply cannot pay their debts any more. It does so by decreasing or discharging the outstanding balances. Bankruptcy could be the decision of the individual or, in some cases, creditors can apply to a court to force an individual to file. It is a legitimate means to and end of financial problems for those who are in over their head and for whom, even significant changes to their spending habits would not permit them to be able to pay back the outstanding debt within 5 years.

There are two types of bankruptcy available to individuals or consumers in the United States. These are chapter 13 bankruptcy and chapter 7 bankruptcy. In terms of how often you can file for either of these, chapter 7 is every 8 years and chapter 13 every 6 years.

Filing chapter 7 bankruptcy is what most people consider to be 'bankruptcy' and is the bankruptcy in which much of your debt is discharged altogether. Chapter 13 is where you are set up with a payment plan lasting three years, by which you will repay debt owed.

Under changes made to legislation by Congress in 2005, if you are considering filing chapter 7 bankruptcy, you must first have completed a credit counseling program allocated through a US Trustee's office. You will have to prove your completion of this and it must have taken place within 6 months of the date you file.

Then, of course, you need to know if you even qualify. This has been tested, since 2005, through something known as the Means Test. If you earn more than the median income for the state in which you are filing, then you will be required to undergo this means test to decide whether or not you really need to file bankruptcy or not.

Exposing Bankruptcy Myths

For most Americans the decision to file for bankruptcy is a last resort. Between unemployment, underemployment and uninsured medical costs, people are turning towards bankruptcy for much needed relief. Before anyone ventures down the road to bankruptcy they will need to have common bankruptcy myths exposed.

Myth: I won't qualify because I have a good job.

All filers are required to take the "means test." The means test will compare your income for a household of your size to the median income of your state. If your income is too high - you will be diverted to filing a Chapter 13 bankruptcy as opposed to a Chapter 7.

Myth: If I file a Chapter 13 I will have to pay off all my debt.

This is not necessarily true. Every Chapter 13 repayment plan is different; they can range from paying unsecured creditors virtually nothing to paying up to 100%. It all depends on a variety of factors including your total debt load, your non-exempt assets and your disposable income.

Myth: I will lose everything that I own if I file bankruptcy.

The vast majority of bankruptcies are "no asset" cases where the debtor gets to keep everything they own. This is because the exemptions allow debtors to keep a significant amount of personal property including IRA's and pensions - which are inaccessible to the trustee and creditors.

Myth: I can include alimony and child support in bankruptcy.

You cannot include spousal support/alimony, child support, student loans, court-ordered fines or victim restitution in bankruptcy. However, most unsecured debt can be discharged through a Chapter 7 bankruptcy.

Myth: My credit will be ruined if I file bankruptcy.

Most people who file bankruptcy do so as a last resort. By the time most people file - their credit is usually already in pretty bad shape. When bankruptcy is compared to letting your debt continue to spiral out of control, you could very well have better credit after filing bankruptcy than if you never filed at all.

Myth: I will never qualify for another credit card.

Not true at all! In fact, many people start receiving credit card offers in the mail shortly after their bankruptcy is discharged. They will not have the most attractive interest rates, or the highest credit limits. If you, however, maintain a low balance and pay your payments on time you should be able to increase your credit score and receive more appealing credit card offers down the road.

There is a wealth of information available about how to improve your credit after bankruptcy. If you are contemplating filing for bankruptcy - an experienced bankruptcy attorney can provide you with priceless insight into the entire process. They can answer all of your questions relating to both bankruptcy and any alternatives available to you. They can also assist you in developing a winning strategy for rebuilding your credit and your life after bankruptcy.

Why Do Most Bankruptcy Plans Fail?

Sadly, most bankruptcy plans fail because new bankruptcy laws require debtors to contribute a large percentage of income toward repayment of debt. Payment plans are financially constrictive and usually extend for 2 to 3 years; making compliance nearly impossible if emergencies arise.

Most bankruptcy plans fail during the first year, leaving debtors at the mercy of creditors. When debtors fail out of bankruptcy, the court no longer provides protection; allowing creditors to repossess items, initiate collections, or garnish wages.

The Bankruptcy Abuse Prevention and Consumer Protection Act severely limited debt relief options. Prior to BAPCPA, debtors often sought protection through Chapter 7. This bankruptcy chapter lets debtors liquidate assets to repay debts. Remaining balances are discharged and debtors are given a clean financial slate.

BAPCPA requires debtors to repay a portion of outstanding debts by establishing payment plans under Chapter 13. The amount of payments are established through the 'means' test. Debtors earned income is compared to their states' median income. When income is higher, debtors must file Chapter 13. If income is less, debtors may be allowed to file Chapter 7.

The rules and regulations of BAPCPA are complicated, so debtors should retain the services of a bankruptcy attorney. BAPCPA requires lawyers to submit a letter of certification stating everything presented in the petition is accurate.

Attorneys must conduct thorough research to ensure debtors have accurately reported personal finances. Otherwise, they could place their self at risk for violating the law. Added research results in higher legal fees. Debtors are also responsible for court costs and required credit counseling.

The new bankruptcy laws require debtors to obtain credit counseling before the court will approve their petition. Counseling must be obtained through specific agencies approved by the court.

Once the Chapter 13 payments are approved, debtors make payments to their assigned bankruptcy Trustee. Payments are tracked and distributed through the court until debts are fully repaid. Debtors should keep accurate records of all bankruptcy payments and check statements provided by the court.

It is crucial for individuals who filed bankruptcy to stop foreclosure to stay on track with their payment plan. When mortgage debt is reorganized and debtors later fail out of bankruptcy, efforts to save their home will be in vain. Banks can commence with foreclosure proceedings at the point they stopped prior to bankruptcy. If they were going to foreclose in 10 days, they can foreclose in 10 days after bankruptcy failure.

Filing bankruptcy has far-reaching effects. Primarily, your credit will be destroyed for several years. BAPCPA prohibits debtors from incurring new debt until the payment plan obligation is fulfilled. Those who fail out of bankruptcy won't qualify for credit for at least 2 or 3 years. When they can obtain credit, they will pay much higher interest rates.

The blemish of bankruptcy can affect automobile, renters and homeowner's insurance policies. It may also affect employment opportunities and limit housing options.

It is smart to research bankruptcy alternatives to determine if solutions exist that can provide similar results without the severe consequences. Common alternatives include: credit counseling, debt consolidation, mortgage refinance, home equity loans, and debt settlement.

Sometimes, bankruptcy is the only viable option. If so, talk to your lawyer about leaving sufficient breathing room in your payment plan offer. Unexpected expenses are often the root of why most bankruptcy plans fail.

Bankruptcy Defined and Its Various Chapters (7, 9, 11, 12, 13, 15)

Bankruptcy is when a person or organization cannot repay its debts to its creditors. When a debtor cannot pay its creditors, bankruptcy provides a statutory procedure by which a debtor obtains financial relief. When a debtor files for bankruptcy, the debtor's assets are either reorganized or liquidated, depending on under what chapter the debtor files for relief, for the benefit of the creditors. Bankruptcy can be initiated by a debtor, voluntary bankruptcy, or by a creditor, involuntary bankruptcy.

There are six types of bankruptcy; chapter 7, chapter 9, chapter 11, chapter 12, chapter 13 and chapter 15.

Chapter 7 is the liquidation of debt. This is a court supervised procedure in which a trustee takes over the assets of the debtor's estate and reduces any nonexempt property to cash to pay creditors. There is usually no property in the estate that can be reduced to cash and this is known as a no-asset case. Secured creditors are paid first followed by unsecured creditors if there are any funds left. Unsecured creditors can only receive distributions from the estate if the creditor files proof of their claim in bankruptcy court. Chapter 7 debtors receive a discharge of their debt almost immediately unless there are objections to the discharge. A debtor can only qualify for chapter 7 under a means test but if the individual's income is in excess of a certain threshold then debtor cannot qualify for chapter 7 discharge.

Chapter 9, named the "Adjustment of Debts of a Municipality" allows municipalities (i.e. cities, towns, villages, counties, school districts, etc.) to continue operating while paying creditors through a court-approved reorganization plan.

Chapter 11, entitled "Reorganization", is used most frequently by commercial enterprises who wish to continue operating their business. Like Chapter 9, Chapter 11 allows the debtor to continue to function, maintain ownership of all assets, and work out a reorganization plan to pay off creditors. Under the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, the debtor has a 120-day timeframe in which to submit a reorganization/payment plan. If the debtor fails to submit a plan within this period, creditors may submit their own plans. Under Chapter 11, a debtor typically goes through a period of consolidation and comes out with a reduced debt and restructured business.

Chapter 12 is the adjustment of debts of a family farmer or a family fisherman with regular income. This type of bankruptcy is similar to chapter 13 in which the debtor proposes a plan to repay their debts over a period of time (usually 3-5 years). It also includes aspects of chapter 11 in which the family farmer or fisherman can continue to operate their business while their plan is being carried out.

Chapter 13 is the adjustment of debt for individuals with regular income. This is generally preferable to chapter 7 because the debtor is allowed to keep all valuable assets. The debtor proposes a plan to repay his or her creditors over a period of time (usually 3-5 years). Chapter 13 is also the only option for individuals who do not qualify for chapter 7 under the means test. The plan is based on the debtor's anticipated income over the life of the plan. The debtors debts are discharged once the payments have been competed under the plan. When the plan is in effect, the debtor is protected from lawsuits, garnishments and any other creditor action. Also, more debts are eliminated under chapter 13 than under chapter 7.

Chapter 15 covers ancillary and cross border cases. This chapter applies to debtors or property subject to the laws of the US and 1 or more foreign country.

There are also acts protecting different types of individuals. There is the securities investor protection act that covers failing brokerage firms. The purpose is to return investors securities and cash left with failed brokerages. Another act is the service members civil relief act. This act provides protection to members of the military. It gives the court the ability to stay proceedings against military debtors.

Rebuilding Your Credit After Filing for Bankruptcy

Contrary to popular belief, people can rebuild their credit within a few short years after filing bankruptcy - if they follow the appropriate steps. In fact, often times, post-bankruptcy debtors are more attractive borrowers than people who are drowning in debt.

In the case of a Chapter 7 bankruptcy, the debtor's unsecured debts would have been discharged. This frees up a lot of income for the potential borrower to borrow money in the future. For example, if the debtor previously had $30,000 of credit card debt, after bankruptcy, they would have none. A potential lender might prefer to loan money to that person now that they have a very low debt-to-income ratio compared to what they had before.

The first step in rebuilding your credit after bankruptcy is to determine what conditions, situations or bad habits got you into the situation in the first place. Once you have determined what led you to financial turmoil, you want to adopt firm policy that can help you avoid it in the future.

The next step is to make a list of all your living expenses. You want to include your mortgage or rent, utilities, groceries, gasoline, insurance and any other monthly payments that you might have. In addition to monthly expenses, it's important to take into consideration what a reasonable amount of money would be to set aside for miscellaneous expenses such as clothing, dining out, diapers and other expenditures.

Once you have calculated where your money is going, you want to factor in what money is coming in. If you are earning more than you are spending, then great! If you are spending more than is going out, you will have to make adjustments in your budget. Some people have to curb their dining out expenses, or spend less on brand name items by buying generic instead.

If you can, it is very important to set aside some type of savings every month. This way, if there ever was an emergency, you wouldn't have to borrow against credit cards or have to use the rent money to pay an emergency veterinarian bill. An excellent start would be to save 10% of what you take home each pay check. This also gives you a nice cushion to save for a rainy day or towards your retirement.

Developing a solid budget and sticking to it is your first plan of defense when rebuilding your credit. After bankruptcy, it's also very important to make sure that you keep and maintain a steady job or source of income. Potential creditors like to see steady employment and a steady residence.

If you can stay in your home, it will make you more appealing to potential creditors in the future. Anything that promotes stability works towards your advantage. Now that you have a firm budget, and a steady job, you want to go out and apply for credit.

The first thing a lot of people want to do after filing bankruptcy is "wipe their hands clean" of credit. This however, is the wrong thing to do. Creditors are interested in your "recent" good credit. If they don't see any good credit on your credit report after bankruptcy, they will have nothing to rely on for a good credit reference. By establishing good credit, your credit score will begin to increase. When creditors look at your credit report, they will see that you are trying to amend your bad ways, by building good credit after your bankruptcy.

You can apply for a secured credit card, which is a type of credit card where you give the bank a deposit. Whatever your deposit amount is, will be your credit line. For example, if you give the bank a $500 deposit, your credit line will be $500. The bank will return your deposit after a specified amount of time, once you have proved that you can make timely payments.

You can also get a regular credit card. Be aware that you will not receive the lowest interest rates or the highest credit limit at first, but with regular use and a good payment record, your limits will most likely be increased over time and your eligibility for lower rates will improve. Keep in mind that it's very important that you pay off the balance every month and use the card at least every other month. It is also best to keep the balance low when you use the card so that it doesn't look like you are maxing out your credit cards every month. Be sure to shop out the rates, so you get the best offer available to you.

As long as you develop a strict budget and stick to it, put a little money away in savings each month and pay all of your bills on-time, you are well on your way to rebuilding your credit. It is always important to remember to live well within your means. If this means curbing spending or finding free activities to do with your children, your efforts will certainly help rebuild your credit standing! To learn more about rebuilding your credit after bankruptcy, you should consult with an experienced bankruptcy attorney who can help you tailor a plan, to fit your unique situation!

Bankruptcy Advice Tips You Need To Know

Bankruptcy is technically a legal term used in describing the court process through which a person or company declares his or their ability to meet financial obligations and clear off debts. With a comprehensive Bankruptcy advice, once can easily locate useful pieces of information that can help a lot in managing finances.

The bankruptcy process always has a very unique purpose. It helps in freeing someone or a business from oppressive debts. It gives the debtor an opportunity for a fresh start in life without having to worry much about the pressure of preexisting debts.

If you're struggling with debt, a bankruptcy help is all you need to have some breathing spaces. The piece of advice you'll get is sure to help you discover what to do in order to handle your debts and finances.

It's important to recognize the fact that anyone or business can go bankrupt. When this happens, you can either have a petition made against you for bankruptcy or you can equally apply to declare yourself bankrupt. It's very important you consider all other alternatives before you declare yourself bankrupt. You have to realize that bankruptcy is just one of the various ways to deal with debt issues. The major advantage of bankruptcy is that it gives you room to make a fresh start with your finances.

There's need for you to know the implications and cost of bankruptcy before you engage in the process. You're likely to give up any valuable possession or interest you may have on your home. If you're running a business, it may be necessary to close the business and even get your employees dismissed.

It's important for you to know that bankruptcy should be the last resort you have to consider after very other alternative has failed. It's important to explore every other alternative before finally deciding to use the bankruptcy process.

Meanwhile, there are key points you need to know about bankruptcy. In the first place, the process normally lasts for a year. At the end of the period, most of the debts are likely to be discharged depending on the restrictions and processes engaged. In most cases, an official receiver is appointed to protect your assets and also investigate the very cause of your bankruptcy. If you're declared bankrupt, you're no longer liable for any outstanding debt documented in the proceedings. You can actually have rest of mind through the process. Your asset might be shared between you and the creditor so you can have a fresh start.

In all, bankruptcy advice offers you the best kind of help you need. Just make sure you rely on the professional services you'll get through the means.

Why Your Bankruptcy Estate Is Considered Important

When your bankruptcy filing is approved, your entire bankruptcy estate is considered as the bankruptcy trustee makes the decision as to which of your items are to be liquidated to pay back creditors. So what exactly is your bankruptcy estate?

Your bankruptcy estate is basically everything that you own. It is not necessary that you have physical possession of the item. It is simply required that you own the rights to it.

This means that out of state property and land are considered part of your estate. It also means that any and all banking and checking accounts, all transportation vehicles you may own, stocks, bonds, and other financial instruments. It even applies to the things that you own inside of your home such as furniture, kitchen appliances, and so on. The bankruptcy is empowered to liquidate any and all of these items to repay the creditors.

Things that are not considered part of your bankruptcy are items that you merely have in your possession. For example, if a member of your family has loaned you the use of his car for a while, the car is not owned by you and therefore not considered part of your estate.

If you happen to live in a community property state, the situation is a bit stickier. In this instance, all property that is owned jointly by you and your spouse is considered part of your bankruptcy estate and therefore subject to being liquidated. Any items that your spouse owns individually from you, however, is not considered part of your bankruptcy estate and therefore, not subject to liquidation.

Properties that you don't yet have, but are entitled to receive are also considered part of your bankruptcy estate. For example, if you are a recording artist and have earned royalties of $10,000 that you have not received, that $10,000 is considered part of your bankruptcy estate, even though you haven't received it yet.

The same is true for salesmen who have racked up sales, but received no commission yet. And for salaried employees who have worked for a number of weeks but have not yet received their paycheck. In other words, any monies or properties that are due to you are part of your bankruptcy estate and can be subject to being liquidated.

Anyone not completely sure of what his assets are as he enters into bankruptcy should contact a bankruptcy attorney to help him sort out the details.

Is Bankruptcy Your Best Option?

When you are facing the prospect of losing everything and struggling to determine how you might be able to resurrect yourself from beneath the mountains of debt you've amassed, it may be time to contact a bankruptcy attorney. Debt relief through bankruptcy should always be the last resort. However, when the phone doesn't stop ringing with collection calls and you're barely scraping by on your monthly budget, it's probably time to investigate the bankruptcy process. Be mindful at the very onset that a bankruptcy will remain on your credit report for seven to ten years, depending upon the chapter of bankruptcy for which you file. A Chapter 7 Liquidation bankruptcy will remain on your credit report for ten years, while a Chapter 13 Reorganization or Payment Plan bankruptcy will show for only seven. The chapter of bankruptcy you choose as your debt relief solution will be dependent upon your financial situation and the value of your assets.

For consumers who own little to no real property, Chapter 7 Liquidation bankruptcy is the usual route. Individuals who qualify for Chapter 7 surrender most assets to an agent of the courts, who then arranges for the items to be sold for cash. The proceeds from the sale are utilized to pay off debts claimed by creditors. This, however, will not include debts such as student loans, child support and/or alimony, judgments of personal injury liability and loans guaranteed by a branch or body of government. For a comprehensive list debts not included under bankruptcy, contact a legal professional or your local bankruptcy court.

A Chapter 13 Reorganization or Payment Plan bankruptcy is ideal for individuals who have considerable investments in properties and earn a regular pay check. They may be struggling to make ends meet, but their debt relief needs may be better served by reorganizing their debts. Consumers who petition for a Chapter 13 bankruptcy agree to participate in a payment plan that lasts between three to five years. The payment plan is structured to allow debtors to make a single monthly payment, which is then distributed to creditors. And, following the three to five-year period of re-payment, the remaining debts are discharged.

Bankruptcy should always be the last resort. However, when you are left feeling as though there is no other alternative to your financial despair, a bankruptcy attorney can help you determine the best route to help get you back on the road to financial recovery.

Chapter 7 Is Much Harder To File Since 2005

Back in 2005, Congress put the bankruptcy code through some big changes trying to make it harder for people to file for Chapter 7 bankruptcy. The intent was to put a crimp in the bankruptcy plans of those who have been abusing the system. Since the changes in the 2005 bankruptcy code, people need to pass a means test to qualify for Chapter 7. The new bankruptcy law was added with the intent of forcing more people into Chapter 13 bankruptcy. With the tougher law, Congress felt that it would stop dishonest people from working the system by wiping out all of their unsecured debts with the benefit of becoming debt-free. There are many honest people that suffer from financial hardships that could not be stopped and these people still should be able to benefit from Chapter 7 bankruptcy.

Under the current bankruptcy code, everyone filing for bankruptcy must now complete the means test. The means test is first based on the individual's current monthly income, with the amount you make being regulated by the median income for the state in which the bankruptcy filer resides. This was added to the qualifications, with the purpose of requiring debtors who might have the ability to pay back some of their unsecured debts, by making them switch to chapter 13 bankruptcy. This will require the debtor to pay back some of the unsecured debt through a 3 to 5 year payment plan. The means test was created to scrutinize any debtor that has income higher than the median income of their state. If the debtor earns more than the median income for the state, after including necessary expenses, and has more than $150 disposable income, the court will assume that the debtor doesn't qualify for Chapter 7 and should be forced into Chapter 13 bankruptcy.

Prior to the changes in the law, some debtors filing for bankruptcy would move across state lines to benefit from the exemption laws of another state. Since the change to the law, a debtor can no longer do that. When a debtor files for bankruptcy, they must reside in the state to which they've moved for six months before being able to use exemption laws of that state. If someone has to move, because of work or other reasons, they can still file in the state they moved to, but will have to use exemption laws from the previous state they lived in. This stops people from filing bankruptcy in the state that has the best exemption laws for their financial situation.

Another change that was added to the law in 2005, is the addition of credit counseling. All individuals filing for bankruptcy are required to take a pre-bankruptcy credit counseling course that must be submitted when the petition is turned into the court. Also required is a post 341 meeting financial management course which is required to be completed and turned in prior to the discharge. Failure to complete either of these courses will result in the dismissal of the bankruptcy with no discharge. The new laws have added quite a bit more work required of the debtor to be successful in bankruptcy. When considering bankruptcy it's a good idea to get an initial consultation with a local bankruptcy attorney to discuss your financial situation.

Chapter 13 Vs Chapter 7 Bankruptcy

Bankruptcy is a complex area of the law that concerns debts that are owed by a consumer or a business. The process of bankruptcy allows a debtor to eliminate or reschedule most debts. There are two forms of bankruptcy available to individuals, Chapter 7 and Chapter 13. Chapter 7 is called liquidation bankruptcy, and under Chapter 7 a debtor's assets are liquidated to provide for payment of debts. Most debts that cannot be repaid are discharged or eliminated and are not repaid by the debtor. In fact, in most cases there is no actual liquidation of a debtor's assets because most things people own are considered exempt from creditors, meaning that creditors cannot claim any interest in them. Also, not all debts can be discharged in Chapter 7. Certain debts are not dischargeable.

The other type of bankruptcy for individuals is Chapter 13 bankruptcy. Chapter 13 is different from Chapter 7 in several ways. In Chapter 13 bankruptcy, debtors form a Plan for repayment of debts, and make a monthly payment which is proportionately paid to creditors according to this Plan. Not all debts are included in the Plan, as most unsecured debts, i.e., debts not secured to the creditor by any interest in property, are not repaid. Debts that are paid under the Plan are primarily secured debts such as mortgages and car loans, but also so-called priority debts, including domestic support obligations, taxes, and fines. Payments under the Plan will continue for up to fives years and when the Plan is complete, a discharge is entered to eliminate debts not paid. Some debts are not necessarily included in the Plan, but are not discharged and remain due after completion of the Plan. These include student loans.

Chapter 13 also allows debtors to rehabilitate past due amounts on secured debts. Commonly, Chapter 13 is used by debtors to stop a foreclosure proceeding against their home. Under Chapter 13, a debtor who has past due payments owed on a mortgage can provide under the Plan for those past due payments to be paid over the term of the Plan, up to five years. In addition, regular payments on the mortgage continue or are resumed. A bankruptcy filing under any chapter leads to the entry of an order called the Automatic Stay. This is an injunction that prohibits creditors from taking or continuing any action to collect debts or recover property from a debtor. The Automatic Stay goes into effect automatically when bankruptcy is filed, and in enforceable against any creditor. In Chapter 13, this has the effect of interrupting and prohibiting a foreclosure proceeding. The effect is that debtors who are in default on a mortgage are allowed to keep their home while continuing to make regular payments, along with payments on the past due balance under the Plan. Mortgage creditors are obligated by law to accept the Plan and the debtor's ongoing mortgage payments.

Chapter 13 provides broader protections to debtors in various ways other than just a cure of a mortgage default. Some debts remain undischargeable even under Chapter 13, but some debts that are undischargeable under Chapter 7 will actually be dischargeable under Chapter 13. Chapter 13 is the preferred form of bankruptcy under the law, and the filing fee is slightly lower than for Chapter 7. Chapter 13 is far more complex than Chapter 7, with extended proceedings in court. It is unlikely that a debtor can complete a Chapter 13 filing without an attorney.

You Have Filed For Chapter 7 Bankruptcy - Now What?

It's is not always possible to evade bankruptcy. Once you've filed and the process is behind you it's time to start figuring out where you go from here.

If you've filed for chapter 7 bankruptcy then you have the rare opportunity to start all over. This can be a very overwhelming prospect but is also the chance to make necessary changes to your finances and the way you handle your money.

Your first mission should be to get to know Experian, Equifax and Transunion. Those are the three major companies that provide credit reports. Obtain a report from each company and make sure they have the same things on them and that any debts that were discharged through bankruptcy are no longer listed there.

As part of your new financial model you will want to check these reports on a regular basis and make sure that you don't see anything unusual.

Your next steps should involve building up your credit history. You are likely to have some debt that remains after bankruptcy such as student loans and child support. You need to make it your mission to make these payments on time or early every month. A solid payment history is good for credit.

You should also open a new bank account and work towards obtaining a credit card. In the event that you still have an existing credit card you should ask the credit card company to re-age your accounts. This means that they take a new look at your payment history and remove any past discretion assuming you've been paying on time for several months. From now on you only want to use 10% of your available credit. This will be more successful at building your credit score back up.

Now that you are working to rebuild your credit standing you want to put together a financial plan. Consider what happened that got you so far in debt in the first place and determine what you can do to keep that from happening again.