A Guide To Understanding Bankruptcy

It is just as well to start by looking at what bankruptcy is. In simple terms, an individual or business entity is bankrupt when they can no longer pay their debts. It can take the form of being voluntary or involuntary.

Voluntary bankruptcy occurs when an individual or business declares that they can no longer meet their liabilities. Involuntary bankruptcy is caused by a creditor beginning a legal process to recover all or part of their money. It should be noted that this form of action can only be taken against businesses, and not against individuals not engaged in commercial activity.

The concept of modern bankruptcy is widely held to have its origins back in the sixteenth century. During the reign of England's King Henry VIII, a law was enacted in parliament giving a creditor license to seize the possessions of a trader who could not pay his debts. Additionally, the debtor could be placed in prison until his family had paid of any outstanding sums owed.

With the passing of time, the law became less harsh on the debtors. Early on in the nineteenth century, debtors were often allowed out of jail with their debts being discharged. However, creditors still held the upper hand as many traders continued to have their assets seized, and be imprisoned.

Since those early days, the law has evolved. The complexities of modern life, and business in particular, have necessitated many changes. Nowadays, there is a greater emphasis on the restructuring of businesses than on the elimination of insolvent parties. This is seen to be a good practice, not only in financial and business terms, but also for the well being of society as a whole.

It is probably fair to say that no two countries have exactly the same laws. Each one has developed at its own pace and within its own culture, giving rise to its current legal state. For this reason, it is not a good idea to make generalizations regarding what is and what is not permissible or acceptable when an entity or person falls on hard times. Suffice it to say that each country has its own mechanisms for dealing with such problems.

Nobody becomes bankrupt intentionally. It can happen through negligence, bad decision making, or just plain bad luck due to events outside an individual or entity's control. Furthermore, it can happen to anyone. While the legal penalties may not be as extreme as they were back in the sixteenth century, declaring oneself bankrupt is only something to be done as a last resort.

This is because in most societies bankruptcy carries a huge social stigma as it is publicly advertised. Furthermore, there are usually a great many restrictions placed upon a bankrupt until the bankruptcy has been officially discharged. To begin with, you lose control of your assets, are subject to future credit limitations and may well be barred from holding certain public posts. The strictures vary around the world.

However, on the positive side, a bankrupt person can enjoy a certain peace of mind. This comes about as he is now free from his debts. Furthermore, he can plan to make a new start in life.

Things to Know About Bankruptcy

Bankruptcy is a process for people who can no longer pay their debts that allow them to liquidate their assets to satisfy their debts or to create a repayment plan to satisfy those debts. There are many ways to file bankruptcy and it depends on whether the filer is an individual, business or municipality as to which option they choose.

Chapter 7 Bankruptcy is a case that does not involve filing for a repayment plan. The trustee investigates the debtor's nonexempt assets and uses these assets as a way of repaying the debtor's obligations. It is important to keep in mind that some of the debtor's property may be subject to liens. There are set court fees, miscellaneous administrative fees and a trustee surcharge for all bankruptcy cases. The fee charged by the attorney will vary by state.

Chapter 9 Bankruptcy is reserved only for "municipalities". This includes cities, counties, townships, school districts and public improvement districts. Under Chapter 9 cases; there is no provision for liquidation of assets to satisfy debts. This type of case is settled through by extending debt maturities, reducing the amount of principal or interest on loans or refinancing the debt by getting a new loan.

Chapter 11 Bankruptcy is intended only for businesses, corporations, sole proprietorship or partnerships. The business and the individual owners of the business are two separate entities in this type of case. Chapter 11 is an attempt to reorganize debts to keep the business open and allow them to pay creditors over time.

Chapter 12 Bankruptcy is reserved for "family farmers" or "family fisherman" that have a regular annual income from the business. Under this repayment plan, the family farmers or family fishermen are allowed to repay creditors in installments that span between three and five years.

Chapter 13 Bankruptcy is for individuals or businesses that wish to have their debts restructured and develop a repayment plan that is generally on a three to five year basis. This stops the need for having to sell any property. It also allows individuals to restructure secured debt and possibly lower their monthly payments.

If the time ever comes and you are struggling to make the mortgage payments, credit card payments and still keep food on the table it may be time to consider filing Bankruptcy. For the individual there are two options: Chapter 7 and Chapter 13 bankruptcy. Your attorney will be able to advise you what choice is best in your particular situation.

Is Filing for Bankruptcy the Best Alternative?

The world is suffering financial turmoil at present. While recession rages, price hike becomes extensive. Citizens are more financially hassled-as their expenses escalate so as their financial obligations. You might just be one of them. You're losing control over your finances. Aren't you? How long can you hang on? Are you thinking of filing bankruptcy? Hold on a little longer. Read this article first before you decide.

When you file for bankruptcy, you legally declare your inability to pay your creditors. Apart from the relief that you think you could get from filing bankruptcy, you need to undergo the strenuous filing process. The government had amended the bankruptcy law in 2005. And since then filing for bankruptcy has never been easy.

Collective in the bankruptcy filing process is the appointment of a trustee over your non-exempt assets. The trustee who is appointed by the court itself has the discretion to sell your assets-all of your assets as in Chapter 7. Thus when you file for bankruptcy, you're going to practically lose everything that you own. You have no capacity to decide what to do with your assets. You will have to agree with the decision of the trustee.

Even if the government sees bankruptcy as a chance for people to have a 'fresh start', your filing will still be reflected in your credit record. Needless to say that filing for bankruptcy will injure your credit scores significantly. That's not the end of it yet. Even if you declare bankruptcy you will still have to pay $3,000 to $5,000 for legal and filing fees.

Other than the remedy provided by the law, there are other option which you would like to reconsider. There are companies that offer debt consolidation and credit counseling. They can neither protect your assets when the court has decided on them already, nor can they elucidate your debt to disappear in thin air. But they can sit down with you and discuss what alternatives you have to avoid filing for bankruptcy. On a brighter note, these companies will neither seize nor control ownership over your assets. Contrary to what you might be thinking, these companies' techniques are lawful. So you don't have to worry about doing something illegitimate.

More and more companies are offering these kinds of services today. And only few of them offer the quality of service you totally need to resolve your financial difficulties. You must carefully choose which company to work with. Your decision is the key to either solve or worsen your problem. Weigh your options well and never jeopardize your family's future just because of a wrong alternative.

Considerations To Make Before Opting For Bankruptcy

People file for bankruptcy when they are drowning in debt without a way of getting rid of the financial crisis. This legal status imposed on an insolvent individual means that he/she cannot repay the debts owed to creditors. Insolvency can result from various factors that cause your expenses to be much higher than your income. Chronic illnesses/disability, redundancy, expensive medical bills, among others, are among major factors that leads to your failure to keep up with the balance due.

You must remember that filing for the above legal status is a difficult and complex process. The legal process needs to be carryout with the assistance of a specialized attorney who is vastly experienced in helping insolvent individuals. The professional must have an updated knowledge about the existing law relevant to insolvency. If your only solution is filing for this legal status, make sure you obtain the assistance of a reliable and reputed lawyer who can tactfully present your financial crisis.

A good attorney can also help you find possible alternative solutions to your financial crisis. For this, it is essential to carefully review your financial situation. If you are legally declared that you cannot repay the debts owed to creditors, it can severely affect your credit. Depending on the negative remarks, the legal status can reduce your credit score by as much as 200-250 points.

Apart from affecting your credit score, the negative remarks will stay on your credit report for up to 10 years. That is exactly why filing for bankruptcy is a very tough decision. You should think twice before filing for this legal status and always look for possible alternatives.

Debt consolidation is one such excellent alternative. This helps you reach a settlement that is acceptable for both you and your creditors. In this process, you are given the opportunity to pay the creditors much less than the actual amount you owe. The negotiations are possible through the intervention of an experienced and specialized lawyer. The attorney will hold discussions with your creditors to agree upon a feasible settlement plan.

This alternative solution helps you get out of debt legally without a major affect on your credit. However, your present financial situation or income level has a significant impact on your chances of opting for this type of solution. If your financial crisis is a severe one, filing for might be the only way out. It helps particularly when you are facing the danger of foreclosure of your property.

Your attorney can help you decide upon debt settlement vs. bankruptcy. It is important to determine your extent of indebtedness before deciding upon a solution. For this, you need to have detailed information of your income, expenses and debts. A careful examination of these details can help the attorney to determine possibilities of going for a settlement plan.

You must carefully check your credit report and calculate your total debt. All sources of monthly income such as paycheck, rental income, alimony/child support, bank savings, investment returns, etc., should be considered when calculating your earnings. Your basic financial needs/expenses should be subtracted from the income. The balance will help your decide whether you should go for bankruptcy or an alternative solution.

The Face Of Bankruptcy Is Changing

In the past, many of those seeking bankruptcy protection were underprivileged individuals who suffered a lifetime of difficulty in making ends meet. These days it isn't uncommon for middle class, and even those considered "rich", to file for bankruptcy. The reasons behind bankruptcy filings among different socioeconomic statuses may be different, but one pattern is common among them all: the degree of hesitancy to file.

Myths And Misconceptions

One of the biggest reasons most people hesitate to file for bankruptcy is fear. Fear of the unknown and fear from ideas heard by others. Most people's view of bankruptcy has been tarnished by the myths and misconceptions about the process. People may fear losing all of their assets or that their credit will be forever damaged, both of which simply are not true. Others worry that friends, family or employers will find out about the filing, tarnishing their social reputation. Middle to upper class members are especially sensitive to this myth, as their social standing tends to be more important than other aspects of their life in many cases. Regardless of the myth involved, many people are missing out on the benefits bankruptcy can provide over information that is simply false or misconstrued.

Debts And Assets

As more middle to upper class individuals file for bankruptcy, so are the reasons why. For those in a higher socioeconomic level, assets tend to be of higher value and number. Protecting assets is one of the main advantages in bankruptcy and, therefore, becomes one of the main reasons for people to file.

While assets may run high among these individuals, so can the debt loads. People who make more also tend to spend more, making their overall debt burdens higher than those in lower socioeconomic positions. However, this runs at a disadvantage for those in higher economic standings. Since the qualification standards of a Chapter 7 case are primarily based on income level, it is rare for a person considered middle or upper class to qualify for Chapter 7 bankruptcy. Generally, people in this position will be required to file for Chapter 13, in which they restructure and repay their debts over time.

Filing for Chapter 13 may actually be beneficial to those with more assets, as the risk of having any one asset seized by creditors is very low in a Chapter 13 filing. The assets of someone in a higher economic position is better protected through a Chapter 13 case than in a Chapter 7 case.

Debtor Involvement In Bankruptcy

Bankruptcy is not a passive process. In fact, it requires much participation on the part of the filer. While there isn't much variation in the amount of participation required for a Chapter 7 and Chapter 13 bankruptcy, there are some differences. There are, however, differences in the benefits produced by a Chapter 7 versus Chapter 13 bankruptcy.

Chapter 7

The first step in filing a Chapter 7 case is passing a means test. This test is used to compare the debtor's income level to the median level of the state of residence. In order to qualify for a Chapter 7 bankruptcy, the debtor's income must be less than the median income level of the state in which they are filing. The means test is the most crucial part of the Chapter 7 case because it determines who is eligible to file and who is not. Although it does not require much participation from the filer, the means test does require that income and employment information be provided in order for the test to be completed. The remaining steps involved in a Chapter 7 case are similar to those of a Chapter 13 case.

The benefits of Chapter 7 may vary between cases, but generally follow a similar pattern. Perhaps the most important benefit of a Chapter 7 case is the debt elimination factor, in which one can be completely freed of most of their debts. Not only will debts be eliminated, but the filer may not even be required to pay anything. However, there are cases in which some assets may be given up to satisfy debts. A Chapter 7 case can eliminate nearly 100 percent of unsecured debts and even some secured debts. Chapter 7 can be highly beneficial to those who accumulated debts before a divorce, whose spouse is now deceased or who suffered a medical condition that resulted in a high debt burden.

Chapter 13

Qualifying for Chapter 13 is fairly easy and does not require the passing of a means test. Initiating the process is a simple as completing the bankruptcy petition and filing it with the court, generally the second step after passing a means test for Chapter 7 cases. Another step required in both Chapter 7 and 13 is the completion of a credit counseling course. This course is required by the court to help educate filers about money management, debt resolution options and using credit wisely. Failing to complete the credit counseling requirement is one of the biggest reasons people end up with their case being dismissed by the court. Debtors must also pay the necessary fees in both 7 and 13 cases, yet another reason for case dismissal.

Many people will suggest that Chapter 13 is more beneficial than a Chapter 7 case, but that really depends on the financial situation of the filer. In general, a Chapter 13 case will result in less credit damage since the debts are being repaid rather than eliminated. It can also be more beneficial for those who hold jointly held debts or debts on a co-signed loan, both of which could unnecessarily hurt the credit of the other party in a Chapter 7 case.

Bankruptcy Attorney - What They Do And Why You Need One

Reaching out to a bankruptcy attorney is never a bad choice if you are in a tight spot. Some people think that filing for Chapter 7, 11 or 13 means simply giving up. While the situation is stressful, you don't want to make rash decisions, and these skilled legal professionals can help you out of more problems than you think.

From phone calls day in and day out, to certified letters, creditors have a way of breaking you down until you either pay them or file for financial ruin. The sad part is that it doesn't have to be this way. While it is important to watch out for creditors that are shady, there are some that simply want their money and will work with you on setting up some kind of payment plan. However, if you're in a situation that seems beyond hope, don't give up until you've contacted a bankruptcy attorney. These legal professionals know just what to do to help you straighten out your situation.

Stop creditors from bothering you

One of the biggest issues people complain about when going through a tough financial situation is the fact that their phone seems to ring off the hook. That's because in order to stop the calls, you will need to make a payment. However, if you don't have the money, then you won't be able to stop the calls. Yet, by contacting a bankruptcy attorney, he or she can tell you what you need to do in order to appease creditors as well as stop phone calls and letters. In the end, you will go through a much better experience as opposed to trying to deal with the situation alone.

Make sure your rights aren't violated

Some tactics are okay when creditors are trying to collect a debt and others are not okay. If you think your rights are being violated in any way, it's best to call a lawyer immediately. If you're drowning in debt, yet are afraid to leave your house or feel threatened by creditors then this is illegal and you need legal representation. While you may not know the law, a skilled lawyer does and he or she can protect you and make sure your rights are protected against faulty lawsuits or other tactics that are illegal.

Guide you through steps in the process

The issue of bankruptcy can be a long, confusing road. There are a lot of factors to consider and you may or may not know what you should be doing to yield the best results. There are different types of financial ruin. Some are specific to businesses and their debts, while others are geared toward individuals. To figure out what course of action is right for you, you need to contact a bankruptcy attorney as soon as possible. This skilled professional can help clear up any questions you may have as well as walk you through all the necessary details of the process.

Help you save money

You may think that you should do something drastic in order to pay off debts. However this may mean you spend money you don't have or get loans that you cannot pay back. Instead of going this route, it's best to reach out to a trusted bankruptcy attorney to prevent you from spending money unnecessarily. There are many solutions that don't require you to get a second mortgage or take money from your child's college fund and this type of lawyer can spell out exactly what these options are.

Should You Apply For Bankruptcy? How To Tell When To Apply

Have you ever been stuck in a situation, say for example, a dysfunctional relationship, where every effort in trying to save it had been only gone in vain? And having no other options left, you finally decided to grab your last resort which is to end it? Financial dealings are similar in a way. When bills are mounting up into a hopeless catastrophic heap and creditors are running wild after you like nagging wives, usually the only alternative is to file for bankruptcy.

But when is it really logical to apply for bankruptcy? At what point should a person cling to this option? How does filing for bankruptcy affect one's credit score and future transactions with financial establishments?

If you are one of the unfortunate people whose credit has turned into an ultimate disaster, you better read on and reflect whether it is time to throw the towel into the ring and finally end your agony.

Educate Yourself

Before deciding to apply for bankruptcy, it is a must that a person should weigh its pros and cons; otherwise, one might only be finding himself in a rather more difficult situation. While it is best to consult bankruptcy lawyers regarding your options, they would still cost you money. And in these situations every penny should be spent wisely. So if you cannot afford to spend even a single dime, you better research the facts provided on the internet as well as in other resources. Be informed and read as much as you can.

Don't Go Down Without a Fight

Like in a marriage, a person cannot instantly walk away from it and go for divorce when things go out of hand. It is important to try all possible ways to solve the problem in order to prevent bigger troubles from arising. Applying for bankruptcy or bankruptcy itself causes serious repercussions on your credit record. A bankruptcy listing will hurt your records. It will stay in your records for ten years or more depending on how you are able to cope with it. Not only that, it will also greatly affect your capacity to be granted of loan applications. Financial institutions are more likely to refuse your loans because a bad credit record would also mean bad business to them. So, as much as possible, try to negotiate with your creditors and apply for repayment plans, tighten up your budget, and find another source of income. Filing for bankruptcy should be at the bottom of your list.

When Push Comes to Shove

If at the end of the day, filing for bankruptcy becomes your only choice, you will need to gear up for some major changes in your lifestyle and relationships. You will have to hire a lawyer to prepare the legal paperwork for you, and once it has been filed, the court will determine whether you are fully unable to pay your debts or loans. If they have proven your financial incapacity, they will discharge of your debt but it will not include child-support payments and student loans.

Filing for bankruptcy should never be an option unless other alternatives have already been proven to be useless. Bear in mind that bankruptcy would scar your credit history, so don't be too quick to settle on it.

A Bankruptcy Law Firm Can Help You Dig Yourself Out From These Problems

A bankruptcy law firm may be the place to turn if money problems have piled up. With today's economic unrest, many citizens are discovering that their financial lives have turned upside down. They may feel that they're pedaling as fast as they can and getting nowhere. They are certainly not alone. Here are some reasons many individuals are finding themselves in dire straits:

- Unemployment: Many businesses, both large and small, are going under. In certain industries, job loss has been especially devastating. In a wide range of industries, hiring freezes and layoffs are common occurrences. Retail, restaurants, banking and the automobile sales and manufacturers have been hit hard. The economic downturn has cut down the average person's discretionary spending which has contributed to slump in the business world.

- Burst of the housing bubble: Real estate prices rose sky-high for no good reason. The mortgage industry awarded loans to many individuals who couldn't qualify without a bit of juggling numbers. No cash down, hybrid mortgages and widespread speculation led to home price escalation previously unheard of. Many were jumping on the get-rich-quick-through-real-estate bandwagon by buying up properties and flipping them to make a buck. It seemed to be too good to be true and in the end, it was. When the bubble burst, foreclosures went through the roof. It was a house of cards which toppled into many areas.

- Health care crisis: The cost of health care is astronomical even in the best of situations. Many companies are no longer offering health coverage to their employees and the insurance that is available is often extremely expensive. If any type of illness strikes a family, it is enough to bankrupt them. Sometimes insurance companies even cancel a policy when they find out someone is sick. The government is trying to change that but it is all still in the works.

- Divorce: Many couples' marriages do not stand the test of time. One of the unfortunate side effects of divorce is financial calamity. While two adults in a financial marital partnership can make a go of it, each of them alone may not be able to. Many ex-spouses find themselves looking at red ink every month to the point of bankruptcy.

- Credit cards: There was a time when credit cards didn't exist. Every person paid cash for their goods. With the advent of easy credit, monthly installments and consumer debt, came a wave of advertising by the media that drilled the "I deserve it" mantra into our heads. We thought we all had to drive new cars, dress like supermodels and eat at fine restaurants. We deserved it, right? And the monthly payment is so affordable. Right? Wrong. Credit cards are like a noose that we have hung ourselves with. Albatrosses of thousands of dollars with interest are carried by too many individuals.

A bankruptcy law firm can help clear the slate and bring you valuable peace of mind. Money problems can cause a great deal of stress. Insomnia, health problems and marital conflict may result. Let these individuals give you relief.

Is Bankruptcy For You? Some Simple Answers

Even without the existence of Debtors' Prisons, folks facing the decision to legally renege on their debts--i.e. declare bankruptcy or insolvency--still face a huge, difficult decision--to file or not to file for bankruptcy. Here are a few frequently asked questions and the answers.

WHAT IS BANKRUPTCY?

Bankruptcy is a codified process under law to protect debtors who cannot pay back their debts as they mature from harassment, lawsuits and penalties imposed by creditors. It is a provision allowed by law that allows you to legally freeze your debts and not pay them pending court proceedings under the Bankruptcy Code. By declaring yourself bankrupt, you are testifying to the following:

1. Your debts or liabilities are more than your assets

2. In the foreseeable future, it is impossible for you to pay everyone 100% of what they are owed.

Note that this article only deals with personal bankruptcy, not business bankruptcy.

WHAT SHOULD GO INTO MY DECISION TO DECLARE BANKRPUTCY?

The most prevalent reason that most certainly lead you (correctly, I might add) to declare bankruptcy is: your reasoned belief that you have unpaid liabilities that are in excess of your near term ability to pay them back. Near term is usually defined as 12 to 18 months.

Several reasons may exist for this condition. Most popular are: loss of job, divorce, medical treatments, loss of substantial investment, government or court action freezing your assets.

HOW SHOULD I PREPARE FOR BANKRUPTCY?

Before you hire a lawyer, do some homework. Realistically, list three things for the next 12 months: your income, your assets and your liabilities. Before plunging into bankruptcy, evaluate other alternatives. These include: negotiating reduction in your liabilities, negotiating a longer term pay out from your substantial creditors and disputing major claims. Communicate with your trusted friends and relatives. You don't want them to know from some third source that you are insolvent, because remember, bankruptcy filing is a public, searchable event. Lay out your reason, what it would mean to your lifestyle and the benefits. And, very important--how to exit bankruptcy within a reasonable time. Once you have decided on bankruptcy, and you have a list of the items I mentioned above, hire a lawyer to intercede in your behalf. Don't go to debt counselers unless you believe they can substantially reduce your debt burden or extend time of payment.

WHAT HAPPENS TO MY DEBTS IN BANKRUPTCY?

They are frozen, i.e. you do not need to pay them at least till a Judge hears your case.He may order you to pay, or may suspend payments indefinitely. But remember,

WHAT HAPPENS IN BANKRUPTCY?

There is a hearing before the judge or his clerk. You should be consistent with your side of the case, because there may be challenges from people who think your are hiding wealth.

The judge asks you or your lawyer about plans to operate as an insolvent. A plan is made and you have to follow it till you are discharged. The plan may include request to write off part of the debt.

Remember certain debts do not go away--such as payroll liability to IRS.

Good luck.

Is A Bankruptcy Lawyer Needed In Your Household?

In tough economic climes, talking with a bankruptcy lawyer can prove to be an investment that averts future disaster. The recession has left its mark on most Americans. People who went into the recession with good paying jobs and owned their own homes with good credit have found themselves coming out on the other side of the recession jobless, their homes foreclosed on and their credit destroyed. The biggest impact from the recession can perhaps be seen by the increase in people who have filed for bankruptcy who would never have dreamed they would be drowning in debt.

It's a hard realization for many people to come to when they realize that despite their past ability to pay their debts and their good intentions to continue doing so- reality often has other plans. For some people walking away from debt is the only way to rebuild their credit.

Many people however are unsure about the need to have an attorney help them through the process. The process seems simple enough on the surface and a bankruptcy lawyer is after all another expense you may not be able to afford. Is it really necessary to have a lawyer? The answer is yes. Bankruptcy is filed in a federal court- not a state court and that in its self makes the matter more complex. Federal statues are very complicated, and it is very unusual for the average person to be able to navigate them on their own. It is far better to leave it up to a professional, who can make sure that vital documentation is received and important papers filed on time in order to give your case the best chance of succeeding. If you forget a debt or leave it off the filing and remember it later- well it's too late, and you wont be able to declare it.

A trained attorney is skilled at ferreting out all of your debt to make sure everything goes in the filing. And you will also need your attorney to help guide you through the extensive amount of paperwork required to show both your debt and your assets. If you have enough assists that can be tapped you may be forced to sell them off to pay off your debts. What can and can not be tapped into as well as what can and can not be written off is complex, and a financial attorney is trained and up to date on what qualifies.

Some debts-- child support, alimony, IRS debt and student loans for example-- may be a large part of your debt burden but they are also untouchable to write off. These debts will follow you to the grave and won't be discharged when you file. However your lawyer may be able to find other debt that can be discharged and often they can work out a debt repayment settlement with your creditors for these types of debt to make your ability to pay more feasible.

The process requires a qualified bankruptcy lawyer to ensure the process goes smoothly and in the end it is well worth the expense to ensure you are able to rebuild your credit and have a fresh start to begin again.

Do I Qualify to File for Bankruptcy?

Bankruptcy is not a simple matter to deal with. Until one is forced to grapple with this area of the law, it is not unlikely that you have never given it a second thought. After all, not many people spend their spare time dealing with bankruptcy law. So it is not unlikely that you have considerable confusion about the process that you're facing. There are actually probably a lot of questions that you have, but one of the biggest questions (and one of the first that you will have to answer) is simple: How do I know that I even qualify to bankruptcy at all?

In all honesty, if you are asking this question, you are asking yourself the wrong question. The question is not whether you are able to qualify, but which chapter you will be able to qualify for. So long as it can be proven that you have considerable debt, you will not be turned away from filing for bankruptcy. The qualifying process will, instead, be used to determine which chapter will be best suited to handle your personal case.

Before determining this, however, it is also important that you decide that what you are doing is really going to be the best decision for you. After all, just because you can file for bankruptcy does not necessarily meant that you should. After all, being in debt does not always equate to the need to file for bankruptcy. There are many alternatives that are available that could very well be an every better solution for your situation - it is important that you give each of these the due thought that they deserve.

If, however, after thoroughly examining your situation you determine that you indeed are prepared to file for bankruptcy, the best thing that you can do is to look into the different chapters that are available to you as an individual looking for file for bankruptcy. There are also chapters that are available to businesses who are struggling with debt, but for the purposes of this article we will stick with personal bankruptcy - not business or corporate.

One of the most popular chapters of bankruptcy is that of Chapter 7. This is commonly referred to as a "straight bankruptcy" or a "straight liquidation." By filing this chapter, you will be able to discharge almost all of your debts and will be able to move forward almost immediately into a cleaner financial future. This is done through liquidating your assets and using them to pay off your creditors. Not every assets will be liquidated (there are exemptions that are permitted under state law), but those that are eligible for liquidation will be used. The end result? You're debt free.

It is important to remember that this chapter is not a free-for-all and not everyone who wishes to file will be allowed to. In an effort to separate those that truly need this chapter to get their feet underneath them once more from those who could technically afford to pay off their debts, a means test is required for everyone who wishes to file for Chapter 7. The means test is simple. Essentially, it will compare the average yearly income of you and your family to that of the state's median income for a family of your size. If it is determined that your income is below this average, you will be eligible to file for a Chapter 7. As simple as that. If, however, it is above, you are not without hope - there are ways in which you can show the amount of disposable income that you have compared to the debts in an effort to show whether you reasonable can or cannot pay off the debts that you are currently saddled with.

For those who do not qualify to file for a Chapter 7 bankruptcy, it is almost positive that you will be able to file for a Chapter 13. The requirements for this chapter of bankruptcy are much less stringent. Per federal law, one will be eligible to file for Chapter 12 so long as their debts are under a certain limit. Secured debts must be under $1,081,400 and you must not have more than $360,475 in secured debts.

It is also important to note that the laws regarding bankruptcy qualifications were recently modified in 2005; however, these were minor changes. For the most part, it was determined that those who were previously able to file for Chapter 7 prior to the update in the statute were still able to file for that chapter of the law. If they were unable to file for a Chapter 7, they were almost certainly eligible for file under a Chapter 13 bankruptcy.

Still have questions about bankruptcy qualifications? Talk to an experienced San Antonio bankruptcy lawyer in your area. Bankruptcy law is complex but it does not need to be impossible. To understand your case in more detail and to determine the best course of action, the best thing that you can do it to schedule an appointment so that you talk about your unique situation.

Debt Relief: It Isn't All About Bankruptcy

Studies suggest that the majority of Americans suffering with overwhelming debt know very little about the options available to help. While filing for bankruptcy is a well known option, many people fear it because of the misconceptions that people have heard. In general, bankruptcy can be a great tool to help resolve debt troubles, but it certainly is not the only option available. Before deciding on a plan for debt relief, it is important to review the benefits and risks associated with all of the options available.

Debt Settlement

Most people have heard about debt settlement, which involves negotiating with creditors to obtain a reduction in the overall amount owed on a debt. The first thing to consider about debt settlement is that not everyone is successful in obtaining a settlement agreement. Even using a third party company to mediate the negotiations may not be enough to convince a creditor to reduce the amount owed on the debt.

Debt settlement should be pursued with caution for two main reasons. One is that it often requires a fairly serious level of delinquency before creditors will agree to settle. This means that the debtor is likely to have missed many payments and suffered significant credit damage by the time they enter settlement negotiations. Second, many debtors have been fooled by third party companies that claim to mediate the settlement agreement but failed to follow through, leaving the debtor in worse condition than before. However, a successful debt settlement deal can drastically lower the amount a debtor will be required to repay, saving them lots of money in payments and delinquency fees.

Debt Management

Surprisingly, debt management plans are not as popular as one would think. The biggest reason is that few people are up for the challenge of putting in the time and effort it takes to complete the plan. In general, a debt management plan is one that is developed to outline a strategy for paying off debts. The debtor can develop the plan by themselves or seek help from a qualified financial expert in developing the plan.

The main problem with debt management plans is that most people do not know how to develop or follow through with them. Many more people start out strong, but get distracted and fall away from their plan. Debt management plans take a lot of focus, which can be guided with the help of friends and family. One way to get educated about how to develop and follow a debt management plan is through credit counseling. These companies offer free resources and cheap workshops that can teach anyone how to manage their money more efficiently and get out of debt. The biggest benefit of debt management plan is the satisfaction from completing a debt reduction plan on your own, without the need for damaging one's credit.

What Is the "Automatic Stay" in Bankruptcy?

I have seen my fair share of debtors who file bankruptcy without needing immediate relief. They might be current on all their bills and have not even received a single phone call from a creditor, but are overwhelmed by their debt load and do not see any way out besides bankruptcy. In that situation, their filing date is arbitrary and could possibly have waited for month.

However, often debtors have an immediacy to their situation. They might be facing a foreclosure or a garnishment. Perhaps they have been served and the answer is past due and in default.

The good news is no matter which fact pattern the debtor is facing prior to the filing, the second the debtor files, he/she enjoys the protection of the "automatic stay." The protections of the automatic stay are laid out in 11 USC 362. They prevent creditors from taking the following actions:

* Starting or continuing a garnishment

* Starting or continuing a foreclosure

* Starting or continuing a lawsuit against the debtor

* Calling the debtor

* Sending bills to the debtor

* Repossessing a vehicle

Basically any act to collect money short of a domestic support obligation is going to cease at the filing. This does not mean the debtor does not have to pay to continue to use any of its collateralized items. Rather, it just means until such time as the stay expires- which can happen through the expiration of time or through a creditor action called a "motion to lift stay" - the debtor is protected by the automatic stay.

The automatic stay works differently in chapter 7 versus chapter 13. For instance, the debtor in a chapter 7 proceeding has to file a reaffirmation agreement within 45 days of its court appearance to retain its vehicle or else the stay expires automatically at that point, whereas in a chapter 13 the debtor would pay off the car as part of its plan and the creditor would actually have to file a "motion to lift stay" to repossess the car. (Note: the technicalities of possibly keeping a car without signing a reaffirmation and whether a debtor would pay off a car in a 13 directly to the creditor or through the trustee will vary according to district).

Additionally, in a chapter 7 the automatic stay operates differently as to personal property versus real property. As mentioned above, the stay will expire automatically as to personal property (usually the debtor's car) if the debtor does not file the reaffirmation agreement the debtor listed in its statement of intention within the allotted time. However, as to real property, (the debtor's house) the stay remains in effect until the earliest of the trustee abandoning the property, the case being discharged, the case being closed or the case being dismissed. Therefore, real property stays often last until the end of the case in a chapter 7 or 13 unless the creditor files a "motion to lift stay."

Finally, it is important to note that the debtor loses automatic protection stay if he/she becomes what it known as a "serial filer." If this is the debtor's second filing within a calendar year, the debtor only gets automatic stay protection for 30 days and must file a "motion to extend stay," to keep it in force longer. If this is the debtor's third filing within a calendar year, the debtor gets no stay and must file a "motion to extend stay," to get any stay protection. Without a valid excuse for the repeat filings, the debtor's motion might not be granted.

How A Chapter 7 Bankruptcy Attorney Can Help You See The Light At The End Of The Tunnel

A Chapter 7 bankruptcy attorney specializes in one of the most common types of the procedure, accounting for 65% of all filing types. Chapter 7 allows a filer to discharge most of their debt with some exceptions such as IRS debt, child support, alimony and student loans. If you are considering filing for this form of relief, it is a good idea to discuss the details with a lawyer first so that you fully understand what is involved. This valuable legal practitioner can give you advice on what your next steps should be, making sure that all statutes are followed and all paperwork is filed in a timely manner.

For example, if your debt is all dischargeable debt you may be a good candidate for chapter 7 bankruptcy but you should also be aware that your assists can be sold to repay some debt. Some property such as a second home or second vehicle can be sold by the trustee appointed by the courts to oversee your filing. Other property that can be sold include valuable musical instruments, unless you are a professional musician, family heirlooms, collections of value such as stamp or coin collections, stocks or bonds.

Some property is exempt such as your only car and home (with some equity limitations), clothing, household furnishings, appliances and jewelry up to a certain value. Other things of value such as your social security, unemployment, pensions, and any damage award from a personal injury (up to $17,425) for example are not touchable.

The good news is once you file, an automatic stay on all debt collection efforts is in place and your creditors can not continue to contact you in any way. And once your bankrupt status is granted your debts are erased permanently. The bad news is you can only file every six years and it will stay on your credit report for ten years. So you need to be sure a bankruptcy filing is the best decision for you to make. This is a hard decision, but at the end of it you may be able to start fresh with many opportunities that may have been prevented due to your previously prohibitive credit.

And there are certainly plenty of ways to get snagged up if you file without professional guidance. For example if you forget to include a debt you can't go back and add it on later and it won't be discharged. And if you hide assets your bankruptcy can be denied. This can be done without intent by repaying a large loan to a family member while other debts go unpaid for example or with intent by putting assets into someone else's name.

Because the laws are so complex and the rules of exemption can be confusing along with what can and can not be discharged, it's a good idea to go over your credit with a Chapter 7 bankruptcy attorney and ensure that this is the right decision for you based on the advice of someone who is an expert in the field and can help guide you through the rather complex process, hopefully towards a happy ending.

Credit Debt Bankruptcy - How To Take Advantage Of New Laws To Eliminate Debt

Due to the increased expenditures and improper financial planning, the debts on common man keep on piling. This thing led to many defaults on credit cards because of the difficulties people are facing while repaying debts. But now new debt settlement law introduced by FTC (Federal Trade Commission) has improved the situation and is very useful for a common man facing such financial crises. Debtor can eliminate 50%-60% of his unsecured debts very easily with the help of this law. This law provides the reduction of more than half in your total debt amount. All you need to do is have to select a best settlement company. There are many benefits of using debt settlement option.

First and foremost thing is that you should owe unsecured debts of at least ten thousand US dollars. Only then you can apply for a settlement option. If you fulfill this criterion then next step would be selection of a very reputed and experienced debt settlement company. This company negotiates your debts with creditor on your behalf. They don't charge any upfront payment from you. They simply understand your difficulties and financial situation and after analyzing each and every aspect they give you an idea of how much reduction you can get in your debt. If you feel satisfied with their proposal then you can continue with the same debt settlement company otherwise you can move to other companies also for better settlement option.

Once you are done with the company selection process, the company initiates the negotiations with the creditor and tries to get maximum reduction for you. Debtor can get 50%-60% reduction in total unsecured debt amount. Creditor also feels that a settlement is better option than letting debtor to file bankruptcy because bankruptcy would give nothing to creditor at the end. Whereas in case of debt settlement they are at least getting some of their amount back from debtor. Debt relief companies help you to get reduction in interest rates on your unsettled debt. After the debt settlement you need to pay to the debt relief company. These companies can charge maximum of 15% of settled debt amount. And this fee you can pay in installments.

We can say that the new debt relief law is advantageous to everyone i.e. to debtor, creditor and debt Settlement Company. But you should be very selective and think wisely before opting for a company because your one mistake can put you into many troubles.

Business Debts In Bankruptcy

When people think of bankruptcy they tend to picture a personal bankruptcy in which an individual files for the purposes of managing personal debts. While personal bankruptcies are the most common type of bankruptcy, they are not the only ones. Businesses and cities can also file for bankruptcy protection. When a business loses profitability and experiences problems paying debts to vendors, a bankruptcy may be one way to help resolve their financial troubles.

Business Chapter 7 Bankruptcy

A business Chapter 7 case is similar to that of a personal Chapter 7 case. The idea behind a business Chapter 7 filing is to obtain complete debt elimination. Businesses looking for total debt elimination are typically in deep into debt and are not forecasting a financial solution to return to profitability. Instead, they are aiming to cease operations and resolve debt liabilities with creditors.

A business Chapter 7 is not the best position to be in, as it is expected that the business will no longer be able to remain operative. In ceasing operations, any remaining business assets are liquidated for the purposes of satisfying debts owed to creditors. Business debts include items such as any remaining funds in the company, equipment, stocks or shares and any remaining inventory. All of these items are sold and the profits will be divided among creditors.

A business Chapter 7 can be fairly straightforward for small businesses or sole proprietorships. In businesses like these, the owner(s) can easily relinquish their rights and stake in the company during the bankruptcy process. Business Chapter 7 cases become more complicated for large businesses, or ones with multiple owners, as halting operations can be a lengthy process.

Chapter 11 Bankruptcy

A Chapter 11 bankruptcy is similar to a personal Chapter 13 bankruptcy, in which the main focus is developing a debt repayment plan while holding onto assets. Businesses that enter Chapter 11 are looking to reorganize their finances and resolve some of their debt burdens with creditors. The idea is to restructure the company in a way to alleviate financial pressure and return to profitability. Businesses rarely cease operations in a Chapter 11 case.

Most businesses will attempt to file a Chapter 11 whenever possible. After all, no business would prefer to go out of business unless absolutely necessary. A business that files for Chapter 11 has a better chance of holding onto assets throughout the bankruptcy process. Generally, the debt restructuring plan will include concessions to give creditors first crack at future profits or increase the creditor's stock share. Assets are rarely liquidated in a Chapter 11 case, unless a third party is taking over ownership during the process.

Chapter 11 cases are common among large businesses, corporations or franchises. Many sports teams have resolved their debts through Chapter 11, whereby they sold ownership to a third party in exchange for alleviating some of their debt burden. A Chapter 11 case is better designed to manage the debts and assets of large enterprises where multiple owners and shareholders take part in business operations.

Bankruptcy Trustee, Friend Or Foe

One of the most difficult choices in life that is faced by persons with money problems is the decision to file for bankruptcy. In this legal action, all one's financial assets are placed in the care of a bankruptcy trustee until the case is discharged. It is good for the person who makes the filing to remember that this person assigned your case represents the creditors and not you.

At one time, there was a great social stigma for persons that filed either a Chapter 7 petition or a Chapter 13 petition. However, due to recent hard times when debt settlement has not been an option for unemployed citizens without sufficient income, the stigma of a filing is no longer as evident.

Canadian laws differ from those in the United States where a Chapter 13 filing allows the individual to pay back a portion of the debt owed before it is discharged. In Canada, the debtor may file a Consumer proposal which works in a similar manner.

Even though the large number of people filing petitions in the court has reduced the social stigma of such a financial proceeding, the financial results remain the same. The document remains a part of public record for up to 10 years, so it can affect one's ability to get financing to buy a car or a home. Before filing a petition, the individual may want to consider possible future ramifications.

Filing the petition has several benefits. It can stop collection actions of debtors. This can include wage garnishment as well as most phone calls asking for money. However, the action does not clear such debts as tax liens or student loans. In many cases, the action will free up significant amounts of cash flow that may make it easier for these debts to be paid.

In cases where debt is secured, the property securing the loan may still be reposed by the creditor unless the debt is reaffirmed. This means that it is possible to file a petition and still lose a home or vehicle that would normally be protected. Once again, the reduction of unsecured debt may make it possible to meet the obligations of the secured debt that has been reaffirmed.

Once the filing has been finished, the petitioner may want to take steps to rebuild credit. Many persons exiting a filing will begin with the purchase of a used vehicle. By making payments on time, the person can rebuild credit. In addition, time does help to improve the credit score and in a few years, the filing is a simple black mark that might have less impact than all the negative reports one might face without having made the petition.

In some cases assets belonging to a person may be seized by the court and sold with the proceedings going to the debtors. In other cases, the petitioner may have few assets and they could all be protected by the petition. In the later case, since the debtor has no assets, the petition simply dismisses all the debts included in the case. The bankruptcy trustee makes many of these decisions.

Filing Bankruptcy Online - What You Need To Do Before Filing Bankptcy

If you are one of the unfortunate people who has to make a decision about filing bankruptcy online take the time to make a financial plan that can stop the situation from getting worse. There are ideas that can help to lessen the strain on your finances while you make the important decision whether to file for bankruptcy. Hopefully, implementing these ideas will take some of the financial strain out of your life.

Using credit for purchases

When you realize that your debt situation may lead to a bankruptcy, stop using credit cards if at all possible. Not only will this save money in interest and penalties, but continuing to use credit cards can damage your chances of a successful bankruptcy. It may be interpreted that you were deliberately running up credit cards knowing that you would be unable to pay.

Other income

Consider finding a second job in order to pay cash for the things you need. Think of other ways to save money on things like entertainment, clothing or other things you can do without while you are going through the hardship. If you qualify for government assistance for food or medical supplies, by all means take advantage of this opportunity to get you through this time. All of these ideas will possibly prevent you from getting into more debt by using credit cards. Another way to get extra money is to sell any extra cars you may own and using one car. Carpooling or using public transportation saves money on gas and car maintenance if you are thinking of filing bankruptcy online and want to find a way to get out of debt and save money.

Communicate with creditors.

Make an effort to talk to your creditors. Let them know you are facing financial struggles and ask if there is a way to come to an agreement for repayment. A lot of creditors are willing to negotiate a payment plan if they see you are sincere about wanting to repay. Some will consider lowering interest, waiving late fees or other ways to help you catch up. The worse thing to do is to ignore them as they will take this as you are unwilling to pay.

If you are convinced that you have tried everything you can and are still unable to catch up on your bills then filing bankruptcy online may be your only option. The first step is to contact a bankruptcy attorney who will assess your situation and give you legal advice. You can get free advice online that will give you an idea of whether this process is the right one to get your finances back on track. Get help now before it is too late.

Information About Chapter 7 Bankruptcy for Those Considering Filing

Bankruptcy can be a difficult event for families and individuals to go through for various reasons. The idea that you have to ask for forgiveness for not being able to make ends meet on your own is stressful enough not to mention losing property or other assets, family's problems that may arise and of course choosing which type of bankruptcy can be difficult as well. The good thing about bankruptcy is once you file and all of your legal matters are done you are granted a new start from the government. If you are going through a hard time financially and are considering filing, check out this information about Chapter 7 bankruptcy below.

How Chapter 7 Works:

Chapter 7 is the most common type filed by individuals. Chapter 7 is a straight forward liquidation of equity where the nonexempt assets are given to a trustee and then given to the creditors. The trustee is chosen by the court and most judgment is left up to this person. There job is to turn all assets into cash to pay off the creditors owed.

Chapter 7 Exemptions:

Federal exemption laws are the same nationwide for those who file for all types of bankruptcy. When it comes to State exemptions, this is where they differentiate from each other. The exemptions of course depend on the amount of equity the individual has on each asset or property. Exemptions for bankruptcy are based on a certain dollar amount of equity for certain types of property. If an individual has more equity than is allowed the bankruptcy trustee will probably seek to have the court disperse that equity to creditors.

Who Should File:

When facing bankruptcy, the difficult decision is figuring out what type to file. You should sit down with a bankruptcy attorney and ask for their professional opinion as well as why they think that. Once you explain your situation, they will have a good idea what bankruptcy will be best for your situation. Those individuals whose income is below their state's median family income are eligible for Ch 7. If your income at time of filing is over this mark you can request your income to be looked at over the past six months as well as your expenses to determine if you will qualify or not.

Disclaimer: The information contained in this distribution is intended for informational purposes only. It is not intended as professional advice and should not be construed as such. Do not take legal action based on this content! Always contact a lawyer near you.

Filing Bankruptcy Online - Should You Reaffirm Your Secured Debts in Bankruptcy

Filing bankruptcy online may be the only way some people can get their lives back in order. One issue that raises questions is reaffirmation. Reaffirmation of debt basically means that even though you file for bankruptcy, you agree to repay certain debts and keep the assets. Although the process may seem complicated, bankruptcy attorneys are knowledgeable about the bankruptcy laws in your area. They can address your questions and help to form a plan which will help your situation.

Once you have filed for bankruptcy an automatic stay is put in place. This means a judge will order that your creditors have to cease collection activities such as phone calls, letters and garnishment of wages. This stay is put in place for a few months as the case proceeds. The bankruptcy laws allow debtors to discharge certain unsecured debts and in some cases, keep assets and repay them on an affordable payment plan. Again, each case is determined by the individual's circumstances.

A reaffirmation agreement obligates you to repay the debt in exchange for keeping the assets. Your attorney will help you find out the value of the assets you wish to keep, and whether they are worth less than what you owe on the debt. This is one of the determining factors on whether to reaffirm the debt when filing bankruptcy online.

There is another option of keeping property and paying the debt which is between the debtor and creditor. The creditor basically lets the debtor to continue making payments and retain the assets without a formal written agreement. It is not part of the official bankruptcy so is not covered under the bankruptcy laws which specifically state how the debt will be handled. This option can be discussed in detail with your attorney to see if it is advisable in your situation.

Bankruptcy as it relates to real estate is a matter that is best negotiated with an attorney. Whether you decide to reaffirm mortgage debt depends on the amount of equity in your home and possibly what your future financial situation is likely to be. Usually reaffirming mortgage debt should not be a problem as long as you are able to keep your house payments current. Keep in mind that creditors strictly enforce terms like keeping up insurance and taxes when a debtor has gone through the bankruptcy process. Any default in these terms can lead to consequences such as foreclosure. In addition, collection activities can begin again because you have reaffirmed, or agreed to pay, the debt.

There are many bankruptcy attorneys in your area that offer free consultation and you can get help from when filing bankruptcy online. Get all of your questions answered and make the decision that can get you back on track financially. Get help to guide you through the bankruptcy process and eliminate your debts.

A Bankruptcy Trustee Can Help Solve Your Money Problems

A bankruptcy trustee can help solve your money problems. If you're experiencing cash flow difficulties, you may need to declare bankruptcy. Once you do this, a trustee will be immediately appointed in order to help you settle with your creditors. Whether you file for chapter 7 or 13, someone will be appointed to your case and help with your problems. Whether you need an affordable plan of payment, or require liquidation of your assets, your consumer proposal will be handled with the assistance of a trustee.

Chapter 7 is the most common form of bankruptcy in the U. S. In this form, individuals or businesses realize they need a debt settlement because they can not pay what is owed. In this particular instance of bankruptcy, someone is appointed to be in charge of the estate. He or she is responsible for the auctioning of any assets. These revenues are then applied to the creditor's accounts. The information about these proceedings remains on an individual's credit report for 10 years.

Before chapter 7 can begin, debt settlement issues need to be addressed. The person applying for protection from the court has to work closely with a credit counselor. This helps to ensure that there are no other means available to help the person get out of debt. This is one of the major changes that was enacted with the BACPA, which was passed in 2005.

In 2005, legislation was enacted to help curtail many of the abuses which have been associated with bankruptcy. This legislation is an attempt to prevent consumers from abusing the available laws. They require that before a consumer proposal is issued, the individual undergo credit counselling. This helps to ensure that legal proceedings are a last resort.

A trustee is an important person in these cases. They are court appointed, and it's their job to make sure that the assets are sold, and this money is given to the creditors. These people are immediately appointed in order to make sure that there are no problems with the sale of any assets.

Chapter 13 is the other main form of legal protection which individuals can avail themselves of. This form of protection has to do with the issuance of a payment plan. Instead of selling assets, people try to make payments to all of their creditors. Ownership of assets is retained, and the individual is designated a debtor in possession.

If you are financially insolvent, these are some of the options that are available. Although, it is generally recognized that it is more difficult to undergo these procedures now, they are still possible. Several different ways can be used in order to file the necessary legal documents, whether they are done by yourself or with the aid of an attorney.

A bankruptcy trustee can help solve your Money Problems. These people are appointed by the court to help handle the assets of individuals and businesses who declare chapter 7. They are responsible for the liquidation of assets. The revenues from these sales is then used to pay creditors.

Bankruptcy and the Tough Job of the Trustee

It was recently reported that the forecast for the economy is not good. Many economists are expecting inflation to continue to rise through 2012. This added with higher fuel costs and unemployment, it is expected for bankruptcy filings and foreclosures to increase over the next couple of years. With so many people filing for bankruptcy, courts are overwhelmed with cases. When a bankruptcy petition is filed with the court it is assigned to a bankruptcy trustee to oversee the entire proceeding. An individual filing for bankruptcy will first meet the trustee at the meeting of the creditors, or the 341 meeting. This meeting usually doesn't involve creditors at all unless the creditor has suspected the debtor of wrongdoing or fraud. This meeting usually lasts around 10 minutes and allows the trustee to ask the debtor any questions about their bankruptcy. It is the bankruptcy trustee's duty to see if all the information in the bankruptcy petition is complete and truthful. The trustee reviews the assets to see if there are any that are not protected by an exemption, and decide whether they could be sold for a substantial amount to divide amongst the creditors.

Many times, a trustee has to be tough to do their job right. The bankruptcy trustees aren't appointed to make your life miserable. If you're honest and play by the rules a bankruptcy filing can be relatively painless. Depending how you look at it, many times the bankruptcy trustee actually is representing the individuals filing for bankruptcy. Every day they deal with people that are in the same situation, most of them have lost their job or just got caught overspending. They are people too and know that you wouldn't be there unless you had to.

The reason a bankruptcy court trustee's job is so tough is that they have to be a middleman between the creditors and debtors. Basically, in a Chapter 7 the trustee's duty is to make sure the creditors get paid what they are entitled to and the debtor is being honest. In a Chapter 7 bankruptcy, the bankruptcy trustee only gets paid $60 from the filing fee and if the debtor gets a fee waiver, they get nothing. The only way they get paid any more is to collect money for the creditors. This is what gives the trustee an incentive to look for assets that are unprotected by exemptions and can be liquidated easily. The downside to a trustee's job is if they don't protect the creditor's interests, they can be sued by the creditor. When filing for bankruptcy honesty is the best policy. If you cooperate with the trustee they will usually give you the same respect.

Remember, if they need to take property, they are not being unsympathetic, they are just doing their job. The more property an individual has to protect, the more important it is to consult with local bankruptcy attorney. A bankruptcy attorney from your district has dealt with the bankruptcy trustee many times and knows what is required. This can make your bankruptcy goes smoothly with a discharge coming with no complications.

Are You Ready to Take Help in Filing the Bankruptcy Application?

There were times when businessmen used to go through cumbersome process for filing bankruptcy. The process has become pretty simple, and this could only happen because today there are many bankruptcy service providers available who are ready to provide their guidance and help. The best thing to know is that guidance and help from the bankruptcy service providers can be taken either over the phone or even on the Internet. Another significant thing to find here is that bankruptcy applications have also become very simple and lucid.

Therefore, whether you are considering Chapter 7 Bankruptcy or Chapter 11 Bankruptcy, all the terms and conditions are explained in the form, and prior to making the start you can discuss them over with the Bankruptcy service provider or Bankruptcy attorney as you like. If you are hiring the services of bankruptcy lawyer or attorney, you should check their fee. Discuss the type of fee that they will charge. Is the bankruptcy attorney taking full one time fee or is he/she ready to manage monthly payments. Also make sure in the beginning that you do not hire an expensive bankruptcy lawyer or attorney, though you should hire a professional bankruptcy lawyer or attorney. The choice of filing the bankruptcy rests entirely with and your judgment prevails.

Get ready to hire the services of a professional bankruptcy agency or attorney to file for the bankruptcy. It is pretty easy and you have absolutely nothing to worry about here. Keep in your mind that you discuss the bankruptcy terms and conditions with the attorney or lawyer before filing for bankruptcy as this will give you the advantage to you and place you in the safe mode. Remember, bankruptcy clearly shows that you are in serious financial debacle and therefore, you have to mend your ways to come out of it. If you are in a hurry and make a slip on certain points, it is very likely that your financial condition and credit score may further go down. It is usual to file for bankruptcy, but the key to bankruptcy is that you understand the listed terms and conditions. If you clearly understand those terms and conditions you are just on the advantage side.

Further, business bankruptcy information can also be availed from state and county bar associations. You can have the contact information of the state and county bar associations from the yellow pages or Internet. There are many who also maintain their pro bono programs and lists of bankruptcy help associations. You can check from them.

Bankruptcy Lawyer Can Mean a Fresh Start

Job loss is creating a lot of stress among people. Not only is the loss of income overwhelming, but the loss of health insurance is devastating. Options are available to employees that have been laid off. They have the opportunity to keep their health plan for a certain amount of time, but that opportunity comes at a substantial cost. Unfortunately, most people cannot afford the premium. Once out of work, the bills begin to rack up, medical visits can be expensive and a medical emergency is financially devastating. If you find yourself in this position, it might be time to consult with a bankruptcy lawyer.

Your attorney can take a look at your financial situation and let you know what the best option would be. A Chapter 13 may be recommended if you have sufficient household income to satisfy payments. In this case, a plan is established for you to pay back your overdue debts over a period of time, as set by the trustee. Types of payments that may be included in this plan are mortgage defaults, past due credit cards, medical bills, loan deficiencies and in some cases, even past due taxes. In this type of filing, you must have enough income to take care of both your current bills and the payment plan amount. If this is not possible, then a Chapter 13 is probably not a good option.

In this case, the bankruptcy lawyer might recommend a Chapter 7 filing. This allows you to get rid of all of your bills except for alimony and child support, along with state and government obligations. There are certain criteria that must be satisfied in order to qualify for this type of filing. The criteria will take into account your earnings, if any, all of your liabilities and your assets. Your net worth will be calculated. If you have too many assets, your trustee may sell these items off, or liquidate them. The proceeds then go to the creditors. You are, however, allowed to have a limited amount of assets that you can keep. In addition to your personal belongings such as clothing, furniture, bedding, and the like, you are also allowed property and cash up to a certain value.

Once you have established your intent to file, you will need to take a credit-counseling course either on the phone, online or in person. Once this is finished, your attorney can proceed. After paperwork is filed, a meeting of the creditors will be held. You will need to attend this meeting. Your creditors may or may not appear. In many cases they will not appear. It will be you and the trustee. The trustee will ask you questions to make sure you understand the details of what you are doing, along with the impact it may have on future credit. He might also ask questions pertaining to the cause of your debt. Be honest and briefly explain what lead you to this point. He is not judging you, just merely making sure you did not rack up the bills just to purposely dispose of them.

After that meeting, you will have to partake in an additional course, which deals with financial management and education. When this is complete, you will provide your certificate to your legal consular. Soon after, you will be discharged from the ordeal and be on the road to your fresh start.

Keeping Your Possessions When Filing for Bankruptcy in Illinois

As you know, people can experience life-changing events over which they have no control. A person can lose his or her job, go through a divorce, or become ill. These events can have financially-devastating consequences, and they are just some of the many reasons why people file for bankruptcy. If a person decides that he or she is no longer able to pay bills, then bankruptcy can be a way out from under the burden of debt

But filing for bankruptcy can be a complex and confusing process. There are many factors and issues to consider. For example, people going into bankruptcy often fear that they will lose all or most of their personal possessions. They might have some possessions that they may keep and some that will have to be turned over to creditors.

While every bankruptcy case needs to be individually analyzed, in most cases a debtor will not have to give up all or any of his or her personal property. This is because the law gives each debtor what are called "property exemptions."

During and after a bankruptcy proceeding, exempted property is protected from the reach of creditors. The exemptions permitted by the bankruptcy laws permit you to keep not only the property in your possession but also the equity that you might have in such property. Equity is the dollar difference between the fair market value of exempted property and the amount of debt that is owed on such property. The most common examples of equity involve a debtor's home or automobile. Under federal bankruptcy law, each state's laws determine the amount of the exemption granted to the debtor for various classes of real or personal property. Here is a short list of bankruptcy exemptions in Illinois:

Exemptions that are limited and have a dollarcap:

Homestead (equity in residence) - $15,000 in value (double if married)

Automobile - $2,400 in value in one motor vehicle (double if married)

Tools of the trade - $1,500 in value

Wildcard (for any other personal property except wages) -$4,000 in value

Exemptions that are unlimited and have no dollarcap:

Health aids

Insurance and disability benefits

Pensions, IRAs, ERISA qualified benefits, public employee retirement benefits

Unemployment benefits

Workers compensation payments

Public aid benefits

Social security benefits

Veteran's benefits

Household items such as family pictures, school supplies, clothes, etc.

Alimony and child support

Money deposits in pre-paid tuition trust funds like Bright Start

Going through bankruptcy involves significant legal consequences. A debtor needs to make sure that he or she is doing the right things. Whatever decision a person makes regarding a bankruptcy, that person needs to act on the advice of experienced legal counsel. In order to correctly use the different types of property exemptions for personal possessions, it is important that one seek the counsel and advice of a qualified bankruptcy lawyer.

How The Bankruptcy Trustee Works With Consumer Debt

A bankruptcy trustee is one of the most important people you will work with through a debtors case. Most people have money problems at one point or another in their lives. When this happens, there are several options to consider before moving forward. One option is filing for legal and financial protection through the courts.

The duties of a trustee are dependent upon the type of case set before them. They are often an attorney that is hired or appointed by the courts to handle the administrative functions of liquidation. They will be involved in reviewing your financial information, property records, and making decisions on selling property or exempting it from sale.

The estate is the money and property of the person who is filing. There are cases where more than one person holds the property. In these cases, the trustee is involved in reviewing and dividing assets appropriately. His or her concern is to follow the laws and use available assets to pay creditors as much as the estate will be able to provide.

There are two types of filings available for personal bankruptcy. Chapter seven is total liquidation of assets. Chapter thirteen involves a restructuring of the debt. In the latter filing, the debt may be reduced and restructured so the debtor can reasonably pay the creditors. In both cases, there are exemptions to what is included in the estate. These exemptions are not considered for sale or seizure to pay creditors.

Debt settlement involves working with the creditors to pay the bills. Many people begin by calling and negotiating lower payments, reduced interest, and delays in due dates. This can escalate to a point where a final settlement is proposed. At the early stages, it is important to put all the bills together to get a good idea of where your money is going. This will help you make decisions regarding your ability to continue paying creditors.

The consumer proposal is a final settlement negotiation procedure. This is a legal step taken to help the consumer put together a payment plan that can be met. Often a third party is involved and a single monthly payment is made. This payment is then distributed to the various creditors. Interest and fees may be suspended during this period.

The final step of debt dissolution is bankruptcy. When all other steps have been tried, this one will finalize any outstanding debt. If total liquidation is chosen, the debts are no longer owed after the court has granted the liquidation. Chapter thirteen filings often take years to complete the payment plans. If they cannot be maintained, they can be forced into a chapter seven ruling.

A bankruptcy trustee will become familiar with every aspect of your finances. In order to make the decisions needed before the liquidation or debt restructuring is granted, he or she will need to review all property, money, and income that will be included in the estate to solve your money problems. If Debt Settlement can be obtained through a consumer proposal, the damaging mark of bankruptcy can be avoided.

The Chapter 7 Case Trustee

A case trustee is appointed by the U.S. trustee after a chapter 7 petition has been filed. This person is in charge of the case's administration and liquidation of any assets that have been designated nonexempt.

If a debtor has assets that are all exempt, then no disbursement will be made to the unsecured creditors and the case trustee will usually file a report with the court specifying "no assets."

Beginning the date the claim was filed, governmental units will have 180 days to file a claim but unsecured creditors only have 90 days following the first date set for the creditors' meeting. In most Chapter 7 cases, there will not be any distribution, so creditors usually will not need to file proofs of claim.

What does a trustee do?

The main action the trustee performs in cases involving assets is to liquidate the nonexempt possessions of a debtor to give the greatest return to the debtor's unsecured creditors. The trustee will only sell the property of the debtor that is nonexempt and clear of liens.

Furthermore, if the debtor is a business, not an individual, the trustee could be given the authority to conduct business operations for a restricted amount of time if has been determined that doing so would augment the estate's liquidation and be advantageous to creditors.

In Chapter 7 bankruptcy, the debtor's main priorities should be to keep their property that is exempt from liquidation and acquire a discharge encompassing as many of their debts as possible.