How to Improve Credit Scores After a Bankruptcy

A lot of people are concerned about their credit standing while going for bankruptcy in Tampa. It is true that bankruptcy has a negative impact on credit score and it keeps appearing on credit reports for almost ten years after the bankruptcy. However, if you don't go for bankruptcy, what would be your credit score then? Would you be able to payback all the debts on time? When making a decision you ought to keep the positive effects in mind along with the negative ones. Bankruptcy allows you to make a fresh start by wiping out all outstanding debts.

There are several benefits of bankruptcy that are often forgotten by most people. For instance in the long term your credit rating can improve due to bankruptcy. Also, it takes care of all your liabilities which is a very good thing for your debt to earnings ratio. If you can manage your finances intelligently then the overall result will be favorable.

Here are some tips that you will find very useful for maintaining a good financial position after a bankruptcy in Tampa:

Payback Loans on Time:

It almost goes without saying that you must learn from your past experience and never borrow money when you can't pay back on time. If you find yourself in dire needs of funds then ask your friends or parents for money before borrowing from financial institutions. This may hurt your ego a bit but at least it won't affect your credit score.

Explore your Credit Reports:

After a few months of bankruptcy you must get your credit report and look for any inaccuracies or errors. These errors may make your credit standing suffer. You must ensure that all your debts are reported as "discharged in bankruptcy". If you do find any errors then get them fixed as soon as possible. A free credit report can be obtained from all credit bureaus online.

Use a Secure Credit Card:

A secure credit card is very beneficial for you, in the sense that you can use only the amount which you deposit. In other words the deposited amount becomes your credit limit. Use such a card to make small payments for day to day needs. If you keep returning the money you borrow, your credit score will surely improve over time.

Change Your Financial Habits:

Have a look at your financial habits and try to figure out the ones which resulted in your bankruptcy in the first place. Try to avoid ugly financial scenarios whenever possible.

If you keep trying to improve your credit score by adopting good monetary habits, paying loans on time and eliminating errors and inaccuracies from your credit reports then gradually your credit standing will start to improve. It takes between seven to ten years to get the bankruptcy off the credit reports completely but if you try hard your score will start going up in a few months and you'll be able to take bigger loans and unsecured credit cards.

Filing Chapter 13 Bankruptcy? Who Pays The Bankruptcy Trustee?

When filing for bankruptcy, there is one thing that everyone has in common and that would be a bankruptcy trustee that is assigned to the debtor when the bankruptcy petition is filed. It doesn't matter whether you file Chapter 7 or Chapter 13 bankruptcy, your case will still be overseen by a bankruptcy trustee. When an individual files Chapter 7 bankruptcy the only time the debtor will see the trustee is at the 341 meeting unless there is a problem and they have to reschedule and come back. In a Chapter 13 bankruptcy the debtor will be dealing with the bankruptcy trustee during the entire 3 to 5 year process.

A Chapter 13 bankruptcy is a reorganization bankruptcy that includes a 3 to 5 year repayment plan that is negotiated by the debtor's bankruptcy attorney, the bankruptcy trustee assigned to the debtor's case, and the creditors. During a Chapter 13 bankruptcy the basic duties of the trustee, after setting up a payment plan, is to collect money from the debtor and distribute it to the debtor's creditors.

Most people think that the bankruptcy trustee is paid by the federal government and the courts. This is not true. In a Chapter 13 bankruptcy the trustee gets paid a percentage of what they collect from the debtor and distributes it to the creditors. If there is an overpayment the money will be refunded to the debtor. The bankruptcy trustee is only paid based on what the creditors get paid. The federal bankruptcy court system is made up of districts and the amount the trustee gets paid can vary from district to district with the maximum amount to be paid is 10%. Out of this money that they collect, they have to pay their own expenses to operate their office.

Many districts also have caps on the amount of compensation the bankruptcy trustee can make from a case. Many Chapter 13 bankruptcy cases involve mortgages and the payments are usually made through the bankruptcy trustee. This is why they have a cap. Mortgage payments can be quite expensive and using the 10% rule of everything that's paid out, the bankruptcy trustee stands to gain a substantial amount of money for managing the case if the caps were not in place. Because of this, some districts have it set up where the debtors pay the mortgage company directly. In these districts the commission is usually at the high end of the spectrum. Also, districts that have a large number of bankruptcy filings usually pay a lower percentage due to the high volume.

With all of the ins and outs and intricacies of Chapter 13 bankruptcy, it's important to have an experienced bankruptcy attorney represent you. Hiring a local bankruptcy attorney can be very beneficial as they have usually worked with the bankruptcy trustees for that district. They will know what the trustee wants and expects from a debtor. Going into bankruptcy blind is crazy and any leg up you can get can possibly save you thousands of dollars in the long run. When filing for bankruptcy, remember to always be honest with your bankruptcy attorney and the bankruptcy trustee. They're not out to get you, but to help you through this tough time in your life.

Almost Free Bankruptcy Filing

Bankruptcy Counseling becomes essential when you are debt burdened. Just guess a situation where you are into, and where you have several creditors running after you and your family. Just guess how it seems to appear when your financial resources are not good and have no other option left with you. The situation is really difficult to handle and all you can do is file for your bankruptcy. Now there are different types of bankruptcies for which you have to hire an experienced attorney. After passing of new "reformed" bankruptcy law, which is also known as BAPCPA law, the very question of going for free bankruptcy is simply out of question. A minimum fee has been levied by the federal government under each bankruptcy. Therefore, if you are filing under chapter 7, which used to be $750 to $1,000 before 2005 law is now put at $2,000 to $2,500 since the new law. Similarly for chapter 13, the fee for filing the bankruptcy used to be $1,500 or less, is now put at $3,000 to $4,500. And of course you don't need to forget about the court filing charges, which have gone up drastically by almost 33%. Bankruptcy is a terrible financial condition and with these high filing charges, it becomes extremely difficult to find the ways to file for dirty cheap or low cost bankruptcy.

Get yourself ready and apply for free bankruptcy. It will save you money and give you peace of mind. You don't have to worry about spending your money or pay heavy for the lawyer fee. Low cost bankruptcy is a constitutional right of US citizen and he/she can file the bankruptcy for free provided if the bankrupt individual is aware about the norms and terms and conditions given under the bankruptcy. If you thought that it is difficult to go for filing the bankruptcy, you can read through the Internet based forums where many views have been written on bankruptcy and filing for bankruptcy. Just make sure that you are aware about every subtle bankruptcy issue, only then you'd be able to go for free bankruptcy. Pack your bags now and you will be happy to get yourself low cost or a cheap bankruptcy. You can hire counseling service too

Filing Bankruptcy Online is a good way in which you can always go ahead and make the start. You can also consult the experienced attorney on this account.

Chapter 13 Bankruptcy Is Sometimes Misunderstood

As the smoke is still clearing from the real estate meltdown in 2007, there is still believed to have a second wave of option arms to still hit. No one knows what further damage this will do to the already saddled real estate industry. Many individuals that took out a second on their home and have recently had to face foreclosure on their house are left exposed to having the second trust deed holder come after them for the amount due. If the lender decides to, they can sell the debt to a debt collection company that will sue the debtor and get a judgment against them. Or in the least file a 1099C with the IRS to write off the debt, making the debtor responsible for income taxes on the amount written off.

If someone already lost their home it might be a good idea to file Chapter 7 bankruptcy and eliminate all the liability. To file Chapter 7 bankruptcy you must qualify under the means test which is based on the average income of the state you reside in. If you don't qualify for Chapter 7 you definitely should consider Chapter 13 bankruptcy. Most people when they think of bankruptcy they think of chapter 7. Chapter 7 is the most popular form of bankruptcy because of the short time to get a discharge and total elimination of all unsecured debts.

Chapter 13 bankruptcy is sometimes misunderstood by debtors. The reason many people are afraid of filing Chapter 13 is because of the 3 to 5 year payment plan that scares them away. Chapter 13 has many benefits, especially if you're trying to protect your property. When a debtor files Chapter 13, they can negotiate a plan of reorganization catching up on the arrears of payments included in the payment plan. If the value of the property has dropped a substantial amount, the debtor can try and strip off the second and third deeds and wipe them out as unsecured debt at the end of the payment plan. In a Chapter 13 bankruptcy, secured debts in any court ordered judgment get priority, being paid first and unsecured debts get whatever crumbs are left over. Recently, because of the housing crunch many individuals have been using Chapter 13 as a way to renegotiate their home loan. A lot of these people don't have much unsecured debt and their real problem is the house they are upside down in.

Chapter 13 basically allows the debtor to fight the foreclosure behind the shield of a court order. It forces the mortgage holder to pursue the foreclosure in the bankruptcy court and force the debtor to leave the property. The most the lender can receive is their property back and by looking at the way the current real estate market is going, it just might be in their best interest to negotiate something. For individuals that are considering filing Chapter 13 bankruptcy they will definitely need to hire a bankruptcy attorney to complete the task. It's good to hire an attorney that specializes in Chapter 13 proceedings. The bankruptcy attorney is required to negotiate with the trustee and creditors and you will want someone in your corner that will get you the best deal.

Filing Bankruptcy And How It Can Help You

Overwhelmed with debt and considering filing bankruptcy in Massachusetts? Do your research ahead of time so you know exactly what you need, how to file for bankruptcy and how it will affect you and your future.

Defined under Federal law, Bankruptcy is a legal proceeding where a person is released from paying debts by declaring bankruptcy and turning all non-exempt property over to the court's Trustee. If this sounds complex, it's because Massachusetts bankruptcy laws are complex as well as powerful. Each case is different and a person's right to retain your property and the discharging of debts depends on fact specific circumstances. Your first step should be to find a Massachusetts bankruptcy attorney, preferably one who provides a free consultation and cares about you, your needs and your goals.

Let's consider some of the facts and requirements for bankruptcy court in Massachusetts.

Anyone living in, doing business in or who owns property in this country can file bankruptcy. There are two different types of bankruptcy in MA.

In Chapter 13 you will pay a portion of your non-secured debt and all of your secured and priority debt over a period of 3 to 5 years and are allowed to keep both exempt and non-exempt property. In Chapter 7 you are not required to pay any dischargeable debt and not allowed to keep any non-exempt property. An experienced Massachusetts bankruptcy lawyer can help in your decision on whether to file under Chapter 7 or Chapter 13 as well clarify the legal terminology.

Once you file either type of bankruptcy an "automatic stay" goes into effect which prohibits virtually all creditors from taking any action to collect the debts you owe them. The fact that you filed a bankruptcy can remain on your credit report no longer than 10 years under provisions of the Fair Credit Reporting Act. In Massachusetts, the filing fee is $299.00 for individual, joint or business petitions under Chapter 7 and $274.00 for Chapter 13.

Chapter 7's are usually very fast as court will schedule a creditor's meeting for approximately 30 days after the bankruptcy petition has been filed. This meeting is generally the only "court" appearance you will have to make. In approximately 120 days you will receive your discharge and the final decree a few weeks later. Chapter 13's and 11's take longer. Your attorney can give you a rough estimate of the time involved and fill in the details.

In Massachusetts, if you own your own home and it serves as your principle residence, you may be able to protect it against the claims of creditors and/or a forced sale by filing a Declaration of Homestead. Speak with a qualified bankruptcy attorney in Massachusetts to determine whether this is an option for you should you choose to file bankruptcy.

There are pros and cons as well as many, many complexities that vary case by case. Take the time to consult an experienced, caring bankruptcy lawyer whose office isn't a bankruptcy factory whose clients are processed without regard to their individual needs.

Buying a Car After Filing Bankruptcy

Since the onset of recession, debts have probably been the sole matter of concern for the Americans, but a large number of the consumers could actually get respite from debts by opting for such measures, as a low interest debt consolidation or a free debt consolidation program.. A handful of people could also not find any help to resolve their debts other than filing for bankruptcy. But unlike the common apprehensions of a loan denial after bankruptcy filing etc is not much prevalent. There are a lot of financial lenders who may readily agree to provide loan to you if you have already filed for bankruptcy. But you cannot expect to get a favorable rate of interest, and the same is going to be significantly higher than what the market may provide to a normal consumer. Therefore, the first step to buying a car is to consider the following factors about getting a car loan:

• You can look for those financial institutions that are known to offer loans to those in bankruptcy.

• The next step is to consider the terms of contract which are offered by the money lenders.

• You have to shop around a lot to have a properly negotiated contract and the trick is to consult at least three lenders.

• Thereafter you can compare the rates that are offered and suit the one that you think is apt for you and carry on with the necessary paperwork to wait for the approval.

Once you get an approval for a car loan it is time now that you should consider a few other things as well:

• You can begin with establishing a good credit by paying all you bills in time and you must remember not to make similar mistakes as you have done before filing for a bankruptcy.

• The next thing to do is assess your credit situation in order to make sure that all those accounts that you have included in bankruptcy have been closed out, and try to send a letter to the credit reporting agencies affirming therein the reasons for which you have to consider the option of bankruptcy.

• The amount of down payment should be more in order to get a suitable auto loan.

• You should wisely decide the car that you want to buy by having a proper look at your present financial situation, and make a purchase according to your affordability.

• The last thing that you have to really think off is to refinance your current loan and if you have made all the payments on schedule it is most likely that you will be able to get a reduction on your interest rates and monthly payments.

So buying a car can be a lot easier with a proper sense of planning, and a sound knowledge of the various options that are available after filing bankruptcy.

End Up Filing Bankruptcy Overspending on Charities

As the economy continues to slide into the great abyss, many are having to consider filing for bankruptcy. Last year in 2010, there were 1.5 million bankruptcies filed. Since the real estate meltdown in 2007, bankruptcy rates continue to rise every year, with 2011 expected to be another record year. There are many reasons for the large number of bankruptcy filings that we have seen in the last few years, but as the number of bankruptcies rise there is an increase in unusual reasons also. Ever since the September 11th terrorist attacks, charities have been using different types of marketing to fund raise. Nowadays, just about every charity is accepting credit cards for donations or to sell items to people for profit. By accepting credit the donors feel good about themselves until the credit card bill comes in and they have remorse realizing that they bought unnecessary junk from the charity with the idea of helping someone. Being caught up in the moment, when people charge they tend to spend more and don't realize they might be putting themselves in a precarious situation at the end of the month.

With the ever-growing large number of nonprofits, there is a trend in making consumer purchases a charitable act when bought from one of these nonprofit organizations. Recently, there have been all kinds of marketing campaigns enticing consumers to spend money they don't have. These campaigns usually offer goods to the consumer with the promise of 25% of the profit being given to the charity. Who wouldn't go for that, buy a new pair shoes that you don't need to give the charity a bonus. There are many legitimate charities that are using these marketing techniques for fundraising. What people don't understand is usually it is only a small amount of the profit that ends up in the hands of the people that need it.

With a large number of people filing bankruptcy, bankruptcy lawyers have been seeing many cases of embedded giving by their clients. Schools have been a big one chasing these dollars as their budget continues to tighten because of cutbacks. There isn't a day that goes by that one of the kids doesn't come home with one of these enticing offers. Many people feel obligated because it's for the children so even though they know they can afford it, they just charge it. Using these high-pressure tactics causes people to overspend which ends up in filing bankruptcy. These marketing campaigns go both ways. Even big corporations have jumped on the bandwagon, offering if you buy now they will donate X. amount of dollars to your favorite charity. With the nonprofits now having merchant accounts to accept credit cards, there has been a large change in the way they fundraise. There are now auctions for high dollar items donated by big corporations so they can get that write off and the charity will get the proceeds. The only problem with this scenario is many of these events are high-pressure and people get caught up in the moment and feel they have to help.

The bottom line is if you can't afford it don't buy it. If you have overcharged there is a way out. Depending on the amount of debt, filing bankruptcy is always an option. Consult with a bankruptcy lawyer and discuss your personal situation to see if it would be beneficial for you. If bankruptcy is in your future, learn from your mistakes and don't get caught up in one of these high-pressure situations.

It Is OK to Get Help If You Need Bankruptcy - Chapter 7 VS Chapter 13

Nobody stays on a diet for five years, right? Yet, so many people I talk to about bankruptcy are chomping at the bits to file a Chapter 13 - which is like volunteering for a three-to-five-year diet - when they could file a Chapter 7 (and be finished with the whole case in just over three months.) Why is that?

The "Why", is that we Americans are optimists to a fault when it comes to money. Reluctance to file bankruptcy is hard-wired into us culturally. In America, as a culture, we have for years been addicted to optimism. "Stock prices WILL go higher!", we believe(d?) "Real estate prices are always a sure bet!" "If the economy is in trouble, not to worry: it'll be better soon." Or so we thought.

Plus, Americans are unrealistically moral about money. As a result, when we fall behind on bills even when it's a result of a layoff, we feel guilty, as though we must always be personally responsible for the misfortunes that befall us.

Sixteen years of talking to people in desperate financial straits has convinced me that it is the combination of optimism - sometimes to the point of what Alan Greenspan called "irrational exuberance" - and the desire to live up to the American model of the self-sufficient rugged individual which cause many to stumble. Borrowers keep getting deeper and deeper in trouble, figure it can't get any worse, then it does, then figure it can't get any worse than THIS, and it does, etc.

When the borrower hits that awful place where things MUST get better but the borrower's circumstances just aren't cooperating, the borrower figures if he / she takes just a little emergency withdrawal from retirement funds to tide her over, that will do the trick. Too often, that just compounds the problem in oh, so many ways. It triggers a nasty penalty, taxes on the withdrawal, and becomes a slippery slope.

It's this aversion to accepting help from an unconventional source (or from ANY source, for that matter) combined with a sometimes misguided compulsion to do the "right" thing, I think, that cause people to hesitate to accept ALL the help available to them in bankruptcy. They stop short of complete relief, opting for a Chapter 13 instead of going all out and leaving all their debt behind in a Chapter 7.

It's as if the borrower doesn't feel "entitled" to such radical relief. I think of it in fairly dramatic terms. Debt is like a cancer. Given a choice of life-saving surgery which will quickly and safely remove the dangerous tumor, the borrower who opts for a Chapter 13 instead opts for a lengthy and painful course of radiation and chemotherapy, with a two-out-of-three chance of FAILURE. Fully two thirds of Chapter 13 cases end early and incomplete, useless to the borrower. For those who have a compulsion to repay debt based on moral or religious grounds, I say, go ahead, do it if you can. But at least if the debt is discharged in a Chapter 7 bankruptcy, you can do it on your own terms, instead of worrying about ugly letters and phone call, lawsuits and the like.

When deciding what is the "right" thing to do, consider first that the bankruptcy laws ALLOW most people to keep what they have. And apparently the same people who wrote the bankruptcy code to make it tougher to get relief nevertheless figured it's better to have every citizen able to support himself in retirement, rather than, say, draining the federal coffers. So, bankruptcy filers generally can keep very sizable retirement accounts and still file bankruptcy. Sure, it will feel like a failure at first But only at first. That feeling is replaced by relief and peace. There's light at the end of the tunnel, and hope of a better life.

Learn Exactly How You Life Could Be Impacted If You Choose to Declare Bankruptcy

Bankruptcy is an awful situation and many people understand that. It indicates the end of the line in regard to to too much debt or violated credit contracts. But what happens after it?

Declaring bankruptcy

Declaring yourself bankrupt is 1 option, that many people, get to hard by the credit crisis and then more difficult still by the recession, might consider. For some people bankruptcy is the only realistic alternative and it is there for people who are unable to possibly pay off their debts.

Bankruptcy usually continues around 1 to 3 years. You are categorized as an un-discharged bankrupt throughout that term. That usually means that a few restrictions are applied to your finances. There is an every month sum that you may have to pay to someone connected with your bankruptcy case.

You could be discharged from bankruptcy within 1 year, if you stick to the directives. That means you can go on living like you did before, although you'll probably be a little more cautious with credit! Although installment payments still have to be made by you for 3 years.

If the Official Receiver (OR) who deals with your bankruptcy case believes that you have been fraudulent or irresponsible, then you may have a Bankruptcy Constraints Order put on you. It will restrict you from being financially free for up to 15 years.

Will Your Pensions be Affected?

A number of people think that pensions are affected by being made bankrupt. If your pension is approved by HM Revenue it will be absolutely safe and not classified as part of a person's estate. You could ask the Official Receiver particularly for some support to try, don't include and protect your pension, if your pension is unapproved.If you get payments from a pension at the moment when you are declared bankrupt these will be classified as income and you may have to pay contributions for your debt (to the Official Receiver) out of it.

Employment Repercussions There are given jobs that you'll be exempt from undertaking if you are made bankrupt, for example, a company director or an MP position. There are also other such as Law organisations that will not hire anyone who has filed for bankruptcy. In spite of this, you are able to work in any position that you could before you declared bankruptcy, if you have been released.

Moving on from bankruptcy does not have to be difficult if you change the way you perceive money and understand how to manage it better. That may cause an everlasting change on people because it changes the way that they treat cash and the way they view themselves and others. It is really a challenging experience to endure and it can cause stress and discomfort, but it can also give people a fresh starting point and that can be precious.

Choices In Debt Relief

Finding relief from a large debt load can be a tedious job. There are several options available to help resolve debts and bring financial stability, but knowing which is right isn't always easy. Anyone looking for help should start at the basics, reviewing the options and the different benefits and risks associated with each.

Debt Negotiation

Many people have never even considered negotiating with creditors. Assuming that creditors are too stubborn to negotiate, many people lose out on what debt negotiations have to offer. One advantage to negotiating debts directly with a lender is control. In negotiations, many people are able to successfully lower their payments to a level they can afford without putting assets in jeopardy or causing further credit damage. Working directly with a lender can be both good and bad. While direct negotiations can quickly stop delinquent account standings, they can also be stressful when attempting to negotiate with multiple creditors and several accounts. Further, not all creditors are willing to negotiate at first and may require additional time or effort on the part of the consumer.

Debt Settlement

Settling debts is often an appealing option for those who are unnecessarily afraid of the bankruptcy process. Although debt settlement can provide a lowered debt liability and monthly payments, it tends to come with more risks than benefits. First, debt settlement is rarely successful without the help of a third part company, which can cost the consumer more out of pocket expenses. Also, debt settlement can be further damaging to a consumer's credit. Future creditors may view a consumer as a borrowing risk when debts are "settled" rather than "satisfied" through repayment.

Bankruptcy

Filing for bankruptcy is an option that many people fear due to the many myths and misconceptions associated with the process. In fact, most people who have gone through a bankruptcy end up far better off than those who choose to ignore or resolve their debts through other means. Bankruptcy can provide two ways of debt relief: through a Chapter 7 "settlement" or a Chapter 13 repayment plan. A Chapter 7 bankruptcy is a great way to eliminate debts quickly. However, there are some additional risks of asset liquidation for non-exempt property. A Chapter 13 bankruptcy takes a bit longer to resolve due to the repayment plan, but is far better in the long run when debts are considered "satisfied" rather than "settled". Although both types of bankruptcy are noted on a consumer's credit history many people see an improvement in their standing after the debts are resolved, giving them a unique chance to start fresh.

What Is the Process to Filing For Bankruptcy?

Filing by a debtor is called voluntary bankruptcy while involuntary bankruptcy is declared by the court upon petition by a creditor. Majority of Americans try to pay off their high interest debts, even when filing bankruptcy would be the wiser choice. They will only file when they start receiving annoying calls and notices, from creditors, reaching an unbearable threshold.

Once the bankruptcy case is filed, the collection efforts against the debtor immediately ceases because the debtor protection takes effect automatically. The creditors cannot sue, write to or call the debtor demanding payment and any form of harassment on the debtor ceases. In addition, secured creditors cannot foreclose on their collateral, debt collectors cannot repossess the property through either self-help mechanisms or judicial proceedings, and wages cannot be garnished once the bankruptcy case is filed. During this time, the debtors get a chance to think about the financial problems and contemplate options for resolving the Bankruptcy filing process.

Most people can handle the process on their own but majority prefers to hire a lawyer. Filing bankruptcy is simple because it is just a matter of filling the right information in the right blanks and submitting the papers to the bankruptcy court. You can file more often under Chapter 13 reorganization but you can not have more than one case open at the same time; you can only file for Chapter 7 once every eight years.

The Bankruptcy Code required a debtor's filing bankruptcy to include:

(1) A list of creditors,

(2) A schedule of assets and liabilities,

(3) A financial schedule of current income and expenditures, and

(4) A statement of the debtor's affairs.

Once your voluntary petition is filed at the bankruptcy court, you will be assigned a trustee who will ensure that all the information needed is collected and it is accurate. The next step would be to inform your creditors that you will be filing for bankruptcy so that they will have to stop all actions against you. By law, your creditors are not allowed to contact you and the later procedures will be meeting your creditors and if possible your creditors' lawyers.

How to Recover From Bankruptcy

Bankruptcy is not desirable, but in case you have to file for bankruptcy, you also have to put efforts to make bankruptcy a history. Recovery from bankruptcy is not child's play but a serious and strenuous venture. Any avenue of redemption form bankruptcy involves high rate of interest to be paid.

Live a frugal life within your means and learn to manage your finances wisely to unfetter yourself from bankruptcy. There is no time limit to recover from bankruptcy, but the wiser you are in managing the situation the earlier you come out of the mess.

Way out of bankruptcy and foreclosure

Keep your credit rating high. It is not easy, but put all your energy and efforts towards it. It will speak for you when you are approaching creditors and lenders in the future. It is your credit rating they will look into before extending a loan. So repair your credit and keep it unblemished and improve the rating.

Credit card

This is a good option to recover from bankruptcy. Offer any of your property, a car or a house as collateral and get the credit cards. Pay your bills and debts in time. This will improve your credit rating.

Get advice from credit counseling and debt management services. They will advise you how to manage your finances and come out of bankruptcy.

Goal setting is a soft way to redeem you from the challenging situation. Do a self assessment and manage your expenditure and finances in such a way that they get disciplined. Be timely in repayment.

Patience during the times of crisis will reward you. There are people who will offer you a loan or bankruptcy credit at very high interest rates. But those are traps; do not fall in to it. Put all the options in front of you, asses, analyze and opt for a plan that suits you.

Why Bankruptcy Lawyer Is Necessary for Filing Bankruptcy

Bankruptcy is a bad situation. Ask any bankrupt individual and he/she will tell you what bankruptcy brings along with it. To be on the safe side, it is better that you remain foresighted and carry out your business activities with complete devotion. Though you may take precautions and implement contingency plans to protect your business from aggressively changing world economic conditions, you cannot always protect the business. Do not worry if you are on the brink of losing your business.

Take Advice from experienced attorney in your area. Discuss the conditions under which your business went into state of bankruptcy, and also take his/her help to chart out a well maneuvered contingency plan to come out of the bankruptcy and improve your down credit score. You will get good advice on all aspects of bankruptcy, if you hire the services of bankruptcy law firm. The firm will draft the petition on your behalf and file it in bankruptcy court. A 341 meeting is planned by the firm approximately 30 days after filing for bankruptcy. In this meeting the court will appoint a trustee who will look into all matters related to bankruptcy. After a period of approximately two months from this meeting, a discharge letter is drafted and sent to you. The letter serves as information where it will tell you that you have been discharged from all the debts.

Time is ripe and you should prepare your self for Filing Personal Bankruptcy now. Due to increasing number of people filing under different bankruptcies, it becomes quite important to find which type of bankruptcy is good to avail maximum benefits, and which one is not. You can make better judgment on the federal laws only if you have professional help. Hiring attorney will help you to file for the right type of bankruptcy in the court, and moreover, it will also save your time and money. You will have precise idea on the type of bankruptcy which is meant for you. Keep in your mind that you analyze the experience as well as professionalism of bankruptcy attorney or law firm before you make the deal and choose one for filing your bankruptcy application. Talk with the attorney in as much detail as you can to have good idea on bankruptcy and other relevant concerns.

Lawyer should be your first and best choice when you file for bankruptcy.

What You Should Consider Before Filing the Personal Bankruptcy

How to file for Chapter 7 bankruptcy? Chapter 13 and chapter 7 bankruptcy modes are available for those bankrupt individuals who are willing to go for personal bankruptcy. While you many consider bankruptcy filing as the right means to come out of debts, but you also need to keep in mind that not all types of debts can be included in the settlements. Under the chapter 7 bankruptcy, the trustee is ordered by the court to sell the non exempt assets of the bankrupt individual. When you file under chapter 7 bankruptcy, you may be at risk of losing the home and other expensive personal items.

Hence, if the bankrupt individual is filing under chapter 7, as the means to secure personal bankruptcy, such individuals should have detailed understanding of all the sensitive points beforehand. Personal bankruptcy secured under chapter 7 will clear all your overwhelming debts and you will be in a better position. The chapter 13 option for bankruptcy available to the bankrupt individuals is designed for repaying unsecured debts through an established bankruptcy court. The repayments can be done within period of 36 months to 60 months; and it will depend upon the total debt amount. But again, you have to be very clear as there are many preconditions laid under this type of bankruptcy.

Get serious when you have decided to File Business Bankruptcy. It is for your own good. Whether you are filing for personal bankruptcy or you business bankruptcy, it is very necessary that you hire services for experienced bankruptcy attorney. In this manner, you will be informed and moreover, you will know what to do and how to manage the bankruptcy situation.

Also keep in mind that the terms of filing for personal and business bankruptcy are different. Therefore, you have to be judgmental about the whole scenario. If you show hurry in filing respective bankruptcy, you may not be able to avail the benefits stored in chapter 13 or chapter 7 bankruptcy. Discuss all the pros and cons listed under the bankruptcy application with the lawyer. This will place you on an upper edge. Remember, filing for bankruptcy is an overwhelming way to come out of your debts and start fresh life free of all hindrances and worries.

Filing Personal Bankruptcy, whether under chapter 13 or chapter 7 can be the easy way to settle your debts only for those individuals who know the intricacies involved in it.

Filing for Bankruptcy and Your Bank

With all the current economic difficulties, you can't pick up a newspaper and not read about someone filing for bankruptcy. If you're one of these in this situation, you should know that as a debtor you have rights. Remember, the bankruptcy laws protect the debtor and do not allow the bankruptcy trustee to seize all of their property and liquidate these assets to pay back the creditors. The only assets that can be sold are the non-exempt assets. It can be easily figured out what property can be protected by consulting with a bankruptcy attorney. Most bankruptcy attorneys are well versed in the exemption laws of the local district where the debtor is filing. Although the goal of becoming debt-free is admirable, using bankruptcy as the tool to do this needs to be done with much care.

Most people don't know that the minute they file for bankruptcy all of the money in their bank account becomes property of the bankruptcy estate. The bankruptcy trustee has the legal right to take this money unless it is protected by an exemption in the bankruptcy filing. Sometimes an individual's bank will try to help the bankruptcy trustee preserve the state by freezing the bank account. Even though it might be protected by an exemption, the individual filing for bankruptcy will not have access to it. When this happens there is a chance that checks could bounce and raise the actual balance in the account because the checks were never paid. This is one of those the situations where a bankruptcy attorney can be a beneficial asset in the bankruptcy petition.

It's important to plan a bankruptcy filing to work to the best advantage of the debtor. When a person is considering bankruptcy and they have money in the bank, and they have outstanding loans, it's a good idea to open a new account at a bank that's unassociated and move your money. On the bankruptcy petition the debtor is required to disclose all transactions and transfers. This will give the individual filing for bankruptcy a chance to keep some or all of their money left in the bank account based on the state exemptions. If the transfer was more than 90 days from the bankruptcy filing the bankruptcy trustee would probably decide that this was not an asset to go after. When filing for bankruptcy, the time frame many times can be beneficial to the debtor. Sometimes it is beneficial to wait because your income is too high based on the six month look back period.

Nowadays, most people have all of their finances handled at one bank. This might include a checking and savings account, credit cards, auto loans, home loans and even personal and business loans. This can create a very bad situation when this individual decides to file for bankruptcy. Creditors have the right to offset their debts when an individual has money in the bank where the credit was taken out. When a bankruptcy is filed by an individual, the bank is notified and they can take the money out of the account and apply it towards the debt. Not all banks do this without permission from the bankruptcy court, but it doesn't mean they can't. If you're considering bankruptcy and don't have a full grasp of the ins and outs of the complex financial world, it's a good idea to consult with a bankruptcy attorney in your area to make sure that there are no landmines in your future.

Best Credit Card Practices Before Filing Bankruptcy

Credit cards are a creature of convenience. Unfortunately, they are also a creature that can eat away at your finances if left untamed and can easily force hardworking families into bankruptcy. While many families survive on the short-term credit lines offered by these scavengers immediately prior to filing bankruptcy, section 523 of the Bankruptcy Code provides a mechanism for creditors to object to their debts being discharged in bankruptcy if the debtor charged $500 or more of luxury goods or services within 90 days of filing. The debt is considered fraudulent under the theory that the debtor charged an item on the credit card without an actual intent to repay the charge. If you plan to file either Chapter 7 or Chapter 13 (or an individual Chapter 11) bankruptcy case in the near future, here is a list of actions NOT to take:

1. Do Not Use Credit Cards for 90 Days Prior to Filing.

The best method to ensure that a creditor will not red-flag your account is to simply not use credit cards during the 90 day period preceding your bankruptcy filing date. If you do, please make sure that you are only charging basic household expenses and not jewelry for the girlfriend/wife or Mediterranean Cruises!

2. Do Not Take Cash Advances.

Taking a cash advance from your account within 90 days of filing is a sure-fire way to receive an objection. The bankruptcy code provides that all cash advances for more than $750 within 90 days of filing will be presumed nondischargeable, which means that the debt will survive your bankruptcy, and the credit card company may sue you and garnish your wages despite your bankruptcy filing. Surprising to some, DO NOT transfer balances from one account to another during this time period either. Balance transfers are essentially cash advances, so any amount transferred will be presumed nondischargeable.

3. If you want to keep a credit card, pay down the balance to zero, but before 90 days of filing.

If you file Chapter 7 bankruptcy without paying down the entire balance on your card, the issuer is technically not a creditor and will not have to be listed on the bankruptcy schedules. Be wary of this practice, however, as any charges you make beginning the day of filing will not be wiped out in bankruptcy since the will be post-petition debt. If you must use a credit card post-petition, please only charge budgeted items and basic household expenses. Any only charge what you can afford to pay-off in full at the end of every month.

Numerous Benefits of Filing for Bankruptcy

Bankruptcy is quite common these days and it may happen either to a person or a firm. You would be able to come across numerous bankruptcy lawyers in the market, however, it is always recommended to do some research before choosing the right attorney to fight your case. Numerous US citizens, residing in some of the major cities like Henderson (NV) and Pahrump (NV), who have been through financial crisis before, would always advice to take your time before you decide upon a bankruptcy law firm.

Although filing for one may seem embarrassing and can also be stressful, there are numerous benefits which are associated with filing for bankruptcy. Some of them are:

You won't have to run from your creditors: Filing for bankruptcy would give you the benefit to get an automatic stay from all your creditors. In other words, you will no longer have to fear regular harassments from your creditors and there is no need to screen your phone calls.

Consult an experienced lawyer: Consulting with experienced lawyers from any reputed bankruptcy law firm would give you ideas on how to tackle the problem. The attorney would also be able to provide you other options apart from filing for bankruptcy. Most US citizens, from a number of cities like Henderson (NV) and Paradise (NV), would say that attorneys normally suggest other routes to follow apart from filing in the court of law.

It can be beneficial to surrender your house and car: Even if you surrender your property, like car and house, it won't harm your credit more than keeping them in your possession. Filing for bankruptcy can help you avoid any deficiency claims that you would incur if your property had been repossessed before filing.

No need to pay most of your debts: Filing for bankruptcy can help you lower the total amount of debts that you owe. For example, filing for chapter 7 can help you avoid most of your unsecured loans like personal debts and medical debts.

If you are looking for a reputed and reliable bankruptcy law firm - Henderson (NV) and Las Vegas (NV) are some of the cities in US where you can take the help of experienced lawyers from Kupperlin Law. They deal with both straightforward and complex cases and have helped their clients eliminate a total of $100 million in debts. Visit kupperlin-law.com, where you can assess further information about their services.

Eligible Debts For Discharge

Many people seek bankruptcy protection for their debts, but few people know the difference between their debts. Not all debts are the same and their differences are important to the bankruptcy process. Understanding types of debt and how they are managed in bankruptcy is very important to the success of failure of the case.

Secured Debts

Secured debts are those that have an asset or collateral "secured" against the loan. Common examples of secured debts are mortgages, car loans and title loans. In the event of default, secured debt creditors are granted repossession rights over the asset. These repossession rights make managing secured debts in bankruptcy a bit more tricky than unsecured debts. In general, secured debts are better managed through a Chapter 13 case so that the debtor can develop a repayment plan to satisfy the debt owed. Repayment of the debt is generally required in secured debts in order to prevent any liquidation or repossession of assets.

Unsecured Debts

Debts that do not hold any asset or collateral against the loan are called unsecured debts. Common examples include credit cards, medical bills, utility bills and some personal loans. These are the most common type of debt brought into bankruptcy and are easily managed by either a Chapter 13 or Chapter 7 filing. The reason is that unsecured debts do not grant automatic repossession or liquidation rights to creditors, giving the debtor more flexibility in finding a resolution. While many of these are easily managed in bankruptcy, there are some that are not eligible for discharge in bankruptcy.

Ineligible Debts

Some debts are not eligible for bankruptcy protection under any circumstance. Unpaid child or domestic support payments, unpaid court fees and criminal restitution payments are never eligible to become part of a bankruptcy filing. These payments are considered one's civil responsibility and are not eligible for payment assistance. In general, tax and student loan debts are also not eligible for bankruptcy protection, but there are some exceptions. Income tax debts may qualify if they are at least three years old, have a current tax return on file and were not considered part of a fraud case. Student loan payments may be allowed into a bankruptcy filing under certain circumstances. However, the debtor must be able to prove they are not federal loans, had made good faith efforts to repay the loan, are suffering a financial hardship. Further, student loans are typically only admissible into Chapter 13 cases when they are accepted into a filing.

What Is Bankruptcy? - Important Points You Need to Understand

Bankruptcy is often associated with failure and poverty, and it is something that everybody hopes to avoid. However, sometimes, things are beyond your control, and you may find yourself having to decide whether you should file for bankruptcy or not. Bankruptcy can happen because of misfortune or misconduct, and you can go bankrupt due to no fault of your own. In itself, bankruptcy is not a bad thing, because it provides a way for you to get rid of your debts. It is actually a solution to financial problems that already exist, and it is not the cause of those problems. In fact, considering the dire financial situation that you may be facing, things can get much worse if you do not declare bankruptcy.

Bankruptcy is a legal option that is available to individuals and businesses that are unable to pay off their outstanding debts. After you file for bankruptcy, you are required to meet with a judge, who may order for most or all of your debts to be discharged or give you a new payment schedule. Businesses that declare bankruptcy may be ordered to discontinue operation or make reduced payments to their creditors. Bankruptcy can be filed by almost anyone, and it can be voluntary or involuntary. Voluntary bankruptcy is filed by the debtor, while involuntary bankruptcy is initiated by the creditor.

While filing for bankruptcy can free you from your financial obligations and give you a fresh start, it comes with unfavorable consequences as well. Usually, you will lose control of your assets after you declare bankruptcy, and your assets will be used for settling your debts. Depending on which state you file for bankruptcy in, you may be allowed to keep your principal residence only, or several assets that are needed for starting over, which include your principal residence, vehicle, and others. Additionally, you will also lose the privilege of getting credit, unless the lender specifically agrees to it. It may also be more difficult for you to find employment after you have declared bankruptcy. If you are filing for bankruptcy for the first time, the discharge period is usually less than one year, but this can vary greatly from one case to another.

The process of going bankrupt involves substantial paperwork and legal procedures. First of all, you are required to file a petition with your local bankruptcy court. The purpose of this petition is to declare that you are no longer able to meet your financial obligations. To complete the petition process, you have to fill out a bankruptcy petition form and pay filing and administrative fees. Other than filing a petition, you are also required to declare the state of your affairs. To do so, you need to submit a complete list of your assets, debts, and creditors to the court. The list should include the names and addresses of all your creditors, as well as the amounts that are being claimed. Along with the state of affairs, you have to provide a declaration stating that you will take an oath before a certified court officer.

Regaining Your Financial Future Through Chapter 7 Bankruptcy

Life changes all the time. One minute you are high on life, planning a wedding, buying a new home, furnishing it and racking up credit debt like no tomorrow. You are on top of the world. You are working in a position that gives you freedom and an unlimited expense account with an impressive salary. Your beautiful wife has put her career on hold as she is expecting baby number two. This is it you are living the ultimate dream in life. What happens next is unforeseeable and devastating.

The big boss is in from out of state. He is very sorry but the company is looking to merge and with the merge many positions are going to be eliminated, yours being one of them. You have three week severance coming and a small amount of money in savings. It is possible you might be okay if you are able to find another position paying around the same amount.

Three weeks later you are still scouring leads to find a position. You know it will be impossible to live off of less than you were previously making, several places have offered however you know that with your current debt that is not a feasible option at the moment.

After months of looking for a new position, getting further and further behind in on you payments you are left with few options. You decide to take a position making less money and are incredibly nervous about making your mortgage, paying school loans, making minimum payments on your credit cards let alone having any money left over for groceries or necessities for your family. This is when you realize that meeting with a bankruptcy attorney might be the best option for you and your family in the current circumstance that you are in.

Life changes it happens so fast that often there is little to know time to prepare. We are not taught to live with these thoughts in our heads. Few people do. Chapter 7 bankruptcies are a legitimate way to regain balance in your financial life and to move forward. Primarily chapter 7 bankruptcies are seen as a straight forward, simple and inexpensive way to clear unwanted debt and get a fresh start.

If you find yourself in a situation that is close to what I described above it is wise to seek out bankruptcy information. You might find that it is exactly the help you need to get through this patch of time in your life that is overwhelming. Individuals, after going through the chapter 7 bankruptcy process share stories of a weight being lifted off their shoulders as the trustees dismiss the financial burden of credit card debt, over extended mortgages and home loans. Bankruptcy attorneys do not judge. They work for you to come up with a feasible solution regarding the overwhelming debt you have accumulated. The best option in a time of uncertainty is to gather information and resources to help alleviate your worry and improve your family's situation.

Top Bankruptcy Myths Debunked

There is a lot of bad information circulating about bankruptcy. Almost every client I meet with will say something like, "My friend told me that if I file for bankruptcy I will lose all of my belongings." Such misinformation keeps individuals in difficult financial situations from obtaining the relief they desperately need. Below are 7 popular myths about the consequences of filing for bankruptcy.

People who file bankruptcy can't get credit for 10 years.

This is completely false. A bankruptcy filing will show up on your credit report for 7 to 10 years, but it will not prevent you from obtaining credit. In fact, you will very likely start receiving credit solicitations in the mail as soon as your case is discharged. The interest rate and other terms will not be as favorable as what is offered to those with perfect credit, but the offers will still make their way to your mailbox. Obtaining credit and making timely monthly payments is the best way to rebuild your credit score after a bankruptcy filing.

If I file bankruptcy I will lose some or all of my property.

This is not the case for the vast majority of filers. When filing for bankruptcy, you are allowed to protect certain types of property with exemptions. For example, in the state of Missouri, a debtor is allowed to have up to $15,000.00 of equity in their home and $3000.00 of equity in their vehicle. Exemptions protect equity in assets and prevents the Trustee from liquidating the property. An experienced bankruptcy attorney will be able to advise you regarding this issue prior to your case being filed. However, in a majority of Chapter 7 cases, debtors do not have assets valued in excess of their available exemptions and are able to keep all of their property.

My creditors can still harass me, even after filing for bankruptcy.

This is incorrect. Bankruptcy law provides for 'automatic stay' protection, which means that as soon as the case is filed creditors must cease any attempt to collect their debt. If a creditor does not follow the rules, the debtor may have a cause of action against the creditor for 'punitive damages,' whereby a bankruptcy judge could actually punish a creditor with fines and penalties for not following the procedures set out in the bankruptcy code.

I will lose my job if my employer finds out I filed for bankruptcy.

This is false, and also illegal. Federal law prohibits an employer from discriminating against an individual for filing bankruptcy. (See 11 U.S.C. 525)

Filing bankruptcy causes marital problems.

One of the biggest causes of divorce is financial stress within the marriage. Filing for bankruptcy eliminates debt and should be a stress reliever. Removing that stress from the equation should strengthen the relationship.

Everyone will know I filed for bankruptcy.

It is true that bankruptcy is a matter of public record. However, how many people do you know with access to the bankruptcy court's online records? In most cases, the only people who will know you filed are your attorney, your Trustee, your creditors, and anyone that you may decide to tell.

Filing for bankruptcy makes me a bad person.

Not True. There is a reason that over one million people file for bankruptcy each year and it is not because they are bad people. Bad things happen to good people all the time, and instead of being ashamed of filing for bankruptcy relief, you should consider it a smart financial decision.

Bankruptcy is a powerful tool that, when used properly, can give you a fresh start in life. Don't let bad information keep you from getting the relief you deserve. Bankruptcy can provide a clean financial slate. An experienced bankruptcy attorney can provide the guidance you need to determine whether filing for bankruptcy is right for you.

The Top Five Reasons to Choose Chapter 13 Bankruptcy

Most people I meet with come in saying that they want to file a Chapter 7 bankruptcy. This is because Chapter 7 bankruptcies are much shorter than Chapter 13 bankruptcies, averaging about four months before the debtor receives his or her discharge. Chapter 13 bankruptcies last from three to five years and require monthly plan payments to a bankruptcy Trustee. So why would anyone want to file a Chapter 13 bankruptcy? Below are the top five reasons to choose Chapter 13 bankruptcy.

Cram Down

In some cases, a vehicle or other secured loan can be reduced to the value of the collateral. This means that if the loan qualifies, the debtor can pay reduced fees and interest. The catch here is that the vehicle had to be purchased more than 910 days prior to the filing of the bankruptcy case in order to qualify, and you have to actually finish the case and receive a discharge in order for the cram down to be effective.

Protect Non-exempt Property from Liquidation

Sometimes debtors own property with equity that cannot be protected with the available exemptions. For example, let's say debtor owns a car worth $10,000.00 with no lien. Let's say that the debtor has a vehicle exemption he can apply towards that equity in the amount of $3,000.00. This leaves $7,000.00 of unprotected equity. In a Chapter 7 bankruptcy, the Trustee would ask the debtor to pay the $7,000.00 in order to retain the car, or in the alternative, would sell the vehicle to obtain money to pay creditors. In Chapter 13 bankruptcy, the debtor is allowed to retain the vehicle, but will pay that $7,000.00 to general unsecured creditors over a period of three to five years.

Repayment Plan under Court Protection

Creditors are often unwilling to work out a payment arrangement, and would rather obtain a judgment against you and garnish your wages. A Chapter 13 bankruptcy allows a debtor to propose a repayment plan over a three to five year period of time, with payments based upon your ability to pay. During this time creditors are not allowed to take any collection action without permission of the bankruptcy court.

Stop Foreclosure and Cure Mortgage Arrearages

Individuals who have fallen behind in mortgage payments and are facing foreclosure should consider a Chapter 13 bankruptcy. Filing Chapter 13 bankruptcy will stop a foreclosure sale and allow the debtor to catch up on past due mortgage payments over a period of time.

Lien Stripping

A lot of individuals have more than one mortgage against their home. These second and third mortgages can potentially be stripped in a Chapter 13 bankruptcy. Liens can be stripped when they are wholly unsecured, meaning there is no value to secure them. Here is an example: You own a home and have a first and second mortgage. The first mortgage is for $200,000.00. The second mortgage is for $50,000.00. The value of the real estate is $190,000.00. In this scenario, the second mortgage would be eligible to be stripped because there is no remaining value in the collateral securing the loan.

Choosing between Chapter 7 and Chapter 13 requires careful deliberation. An experienced bankruptcy attorney can help you determine which Chapter is right for you.

How Many Times Can You File For Bankruptcy?

The Bankruptcy Code does not limit how many times or how often a debtor can file for bankruptcy relief. However the Code does limit how often a debtor can discharge debt in a bankruptcy case. Whether or not this limitation applies to a specific debtor depends on under which chapter the first and second cases were filed.

Debtors who receive a discharge under Chapter 7 of the Bankruptcy Code cannot receive this same relief for eight years in a subsequent Chapter 7 case and for four years in a subsequent Chapter 13 case. Debtors who receive a discharge under Chapter 13 of the Bankruptcy Code cannot discharge debt for six years in a subsequent Chapter 7 case and for two years in a subsequent Chapter 13 case. The time is calculated from the file date of the first case until the file date of the second case.

The time limitation prevents a debtor from obtaining a discharge but does not affect the ability to file bankruptcy. This is an important distinction because discharging debt is not the only reason to file bankruptcy. Chapter 13 cases can be used to stop repossession or foreclosure of secured property allowing the debtor an opportunity to protect their property and cure arrears in a reorganization plan. Chapter 13 cases can also prevent wage garnishment of income taxes or child support arrears. These types of debts can also be paid in the reorganization plan, possibly under better terms than if the debt was paid through garnishing the debtor's wages.

Fighting Bankruptcy Claims Fraud and Protecting Assets of Debtors

Recent recession has shown a spurt in bankruptcy suit filings. It may have risen due to several factors in these circumstances. Due to global financial crisis several American firms tried to cut cost by either closing down or reducing the number of staff. Several individuals filed this as they saw medical bills exceeded their current income. Some had no income at all after job loss. However, good times are showing up. There are signs of economic recovery in the USA and firms have again started recruiting.

The question may arise to a novice about the actual meaning of the term bankruptcy. Legally it means to declare inability or impairment of a person or an organization to payback money to creditors. Creditors may also file a petition called 'bankruptcy petition' to recover a portion of the loan amount. This happens in case of involuntary filings.

There is no special parameter based on which you can always determine the right time and situation for filing. There are certain conditions for which you can't escape payment even after filing. These payments include:

Alimony Child support Most of the student loans Fraudulent debts

There are several other repayment types which you can't avoid while filing. There are fraudsters too who try to take the advantage. This can be done by concealing assets. This type of frauds is commonly associated with chapter -7 filings.

Apart from concealment there is false information provided to the Entity supervising the liquidation process. This is another way of fraud. These fraudsters, in an attempt to confuse creditors, etc, intentionally file multiple filings in different courts and in different states. A fraud brings the important persons in his favor by bribing.

As a result the government was forced to pass Bankruptcy Abuse Prevention and Consumer Protection Act (2005). The law limits easy approaching to the US bankruptcy courts. The new bans include the following:

Restrictions on the use of chapter-7 Promoting chapter-13 payments New presumptions against debtors

Under Maryland legislation, a bankrupt can withhold the below mentioned assets:

Burial plots Crypts Health aids Health and disability benefits Life insurance or other types of contract proceeds 75% of disposable wages Average interest in real and personal property to the amount of $5000

In case a Maryland resident wants to file under this type, he should get in touch with a Maryland bankruptcy attorney. There are several aspects that need to be evaluated.

Exempt and Non-Exempt Assets in Chapter 7 Bankruptcy

In any Chapter 7 bankruptcy case, the person in debt has to give up some belongings to his or her designated trustee to let he or she can sell the property or belongings and use the proceeds to settle financial obligations. Property within the bankruptcy estate is roughly stated in Section 541 in the Bankruptcy Code. The estate is technically the legitimate manager of all of the debtor's possessions and consists of all legal and interests that the individual has in property at the beginning of a bankruptcy. Income that a person brings in subsequent to the filing of the documents are not contained in the estate.

Those bogged down by debt, regardless of whether they're organizations or an individual, usually are naturally anxious about what they'll be allowed to retain and what they have to hand over. An experienced bankruptcy attorney can answer these and various other concerns, allay anxieties and keep your procedure moving forward as easily as is possible.

A consumer will need to file an inventory of exempt assets to the court. Exempt assets are items that the debtor may protect from being sold. The Bankruptcy Code empowers every state to adopt its own exemption guidelines, which the debtor can choose instead of the federal exceptions. It's very helpful to consult with a lawyer who can clarify the exemptions provided under your area's laws and regulations and how they match up to the range of federal exemptions.

Items which the individual usually has to lose include things like costly instruments, unless the individual is a professional music performer; heirloom collections of stamps, antique coins and other valuable objects; antique family treasures; cash, bank accounts, stocks and shares and other investments; an extra car or truck; and a second home or vacation home.

Certain types of property are exempt, meaning that the debtor can keep that property. Exempt property may include autos (up to a specified value); essential apparel and fundamental goods and furniture; household appliances; pieces of jewelry, up to a certain value; retirement benefits; part of the equity in the debtor's home; equipment for the debtor's trade or profession, again to a certain value; some of unpaid but generated salary; government benefits including welfare, social security and unemployment compensation, accumulated in a bank account; and compensation accorded caused by prior accidental injuries.

Which Type of Bankruptcy Is Best?

Individuals typically file chapter 7 or chapter 13. The type of bankruptcy filed is determined by the particular relief you are seeking. Each type provides the individual debtor with differing types of benefits. While some of the benefits of Chapter 7 and Chapter 13 are different, they both provide the debtor with the opportunity for a fresh start, and when a debtor files for either Chapter 7 or Chapter 13, his creditors are prohibited by law from attempting to collect debts from him. This is called the automatic stay. Many people assume that Chapter 7 is better than Chapter 13 because Chapter 13 may require debtors to repay a portion of debt, whereas Chapter 7 wipes out most debts. But this is not always the case.

In the usual Chapter 7 all of a debtor's unsecured debt-debt without collateral or security-is discharged, or wiped out. This primarily consists of credit card debt, lines of credit, medical bills, payday loans, utility bills, and personal signature loans. Most secured debt is not affected by the filing. In most cases of Chapter 7, all property is exempt, and debtors can keep possession of all their property. These bankruptcy cases are called no-asset cases. Another benefit of a Chapter 7 bankruptcy is that you can obtain relief from your debts in a shorter period of time. The typical Chapter 7 case lasts only three to four months from the date you file your Chapter 7 case with the court until you receive your discharge.

A Chapter 13 bankruptcy is frequently used by individuals who want to catch up on past due home mortgages or car loan payments and keep their home or car. Other individuals use Chapter 13 to pay off debt to the IRS on favorable terms. Chapter 13 will also protect non-filing co-debtors from abusive debt collection activities. In Chapter 13 a debtor proposes a plan to pay all or part of the debts over a three to five year period. If the debtor makes these required payments, he will be able to keep his home or car and discharge his unsecured debts.

The other primary benefit of a Chapter 13 Bankruptcy is the 100% protection of your valuable assets from seizure by your creditors. Although Chapter 7 Bankruptcy provides for protection of your assets through either federal or state created exemptions, not all of your property may be completely shielded from seizure. If you own non-exempt assets that are paid in full or have significant equity, a Chapter 13 Bankruptcy will allow you to reap the benefits of the discharge, provide for the elimination of most unsecured debt, and allow you to keep all your hard earned assets.

Chapter 7 Bankruptcy: Reaffirming a Secured Loan

The purpose of filing Chapter 7 bankruptcy is to discharge debt, which permanently protects the filer from collection activities by creditors. But sometimes debtors may not want to discharge specific debts. I'm not referring to a credit card that offers frequent flyer miles or a bill from a favorite doctor. All unsecured debt, with the exception of student loans, is discharged in a Chapter 7 bankruptcy case, even if the debtor would like to exclude the creditor from the process. However, secured loans such as mortgages and car loans can be waived from the effects of the discharge order through a document called a reaffirmation agreement.

Reaffirmation means that the debtor waives the right to discharge the debt. In return for reaffirming the loan, the debtor gets to keep the collateral. Reaffirmation agreements must be signed by both the debtor and the creditor. They are completely voluntary and a debtor cannot force a creditor to sign a reaffirmation agreement. If a creditor refuses to sign, in most cases they will not take steps to repossess the vehicle or foreclose on the home if the debtor contains to make payments under the original contract. There are other requirements such as paying property taxes so that the lender's lien doesn't become subordinate and maintaining insurance so that the property is adequately protected.

Reaffirmation agreements must be approved by the court. Each agreement is submitted to the bankruptcy court for review before it becomes binding on the parties. The court considers the agreement and determines if the debtor can afford the payments based upon the income and budget filed with the schedules. In most cases the court will not allow the debtor to reaffirm a debt that they clearly cannot afford based upon the information in the schedules. If the court denies the reaffirmation agreement the debt is discharged, but the debtor can usually keep their property by containing to make payments under the original contract.

How to Claim Bankruptcy

Bankruptcy is a procedure through legal means that allows people who are lost in debts to start all over again financially. When a person is declared bankrupt or is bankrupt, it is advisable to claim bankruptcy through the set rules and regulations. However, precaution should be taken before claiming bankruptcy since not all situations call for the claim and once you declare and claim your situation, it stays in your credit report for a long time which could be damaging.

The very first thing you should do when the need to claim bankruptcy arises is to get a good lawyer. The lawyer is responsible for advising you on the path to take and educating you on which bankruptcy best suits your situation. He is also the one who will find a good rate for your file and take care of the proceedings.

After choosing the right file for your case, you then need to get enough funds to pay your attorney as well as the court fees. This could be a bit costly; hence the reason why you should be absolutely sure that the claim is necessary. It is good to remember that the case could turn against you, especially in cases where the court feels you can comfortably pay your debts depending on your income. You and your lawyer should then come up with a list of all your liabilities and assets. If you run a business, you will be required to include all your business affairs before the list is given to the court together with your paperwork.

A petition is then filed with the bankruptcy court and the court's decision on your case is awaited. The waiting period differs from place to place with some taking as long as 6 weeks so you should be prepared. When you claim bankruptcy, your creditors will be stopped from collecting their debts from you till the court decides the next way forward. This is a great way of helping you rebuild your financial life.

Although a bankruptcy claim could ruin your credit report, it is much better than having to face the embarrassment that comes with letters, calls as well as lawsuits and harassing calls from your creditors. It is a way of helping debtors start all over again by repaying what they can manage when they can manage.