Elijah Marks asked:




Bankruptcy often carries a negative stigma. However many people today would benefit from filing a bankruptcy petition. I am not a lawyer so please verify any information you read here and consult a licensed attorney if you need legal advice. I have filed for bankruptcy before however that was way before the bankruptcy reform act of 2005 which changed everything.

Bankruptcy before 2005 was often a means for which the not so honest person was able to run up a bunch of debts and then easily kiss them goodbye forever. Of course not everyone who filed before 2005 was dishonest. I am not saying that. But today it is more difficult to have your chapter 7 bankruptcy discharged. Chapter 7 bankruptcy is where you pay back no one. Today the more popular bankruptcy is the chapter 13 where you can get as long as 5 years to repay your creditors, usually 100% of what you owe them. But this can be helpful as it will lower your payments and give you time to repay what you legitimately owe.

As a mortgage broker I found many people with bankruptcies that were still able to get home loans and lenders were willing to do loans for them because once you file and your debts are discharged, it frees up your money. But as of late, loan underwriting has become very stringent and it is harder to get a home loan even if you have not filed for bankruptcy.

Bankruptcy is nothing to be ashamed of and often is a consumers best option when buried in debt and unable to get someone to bail them out with a big fat loan like the government gave to the irresponsible banks. So by all means if you are getting harassed by creditors and are honestly unable to pay or unemployed for an extended period of time and just can’t make ends meet, just do it, your credit score will actually be better off sooner by not putting off the inevitable.

I have consulted a local bankruptcy attorney in Richmond Virginia and am unfortunately myself considering that bankruptcy may be my best option. The government duped me into the spend spend spend mentality and then very poor economic conditions set in and I blew through my savings, renters quit paying rent, loans quit coming in. I cannot find a decent high paying job and boom. I am up to my ears in debt with little money coming in.

I consulted a surprisingly kind lawyer who surprised me with their kindness and concern. My general feelings towards lawyers are not all that good as a rule. Experience tells me that lawyers don’t do anything for free but there are actually some attorneys who will take the time to listen and understand your situation, answer any questions you have, reveal their fees up front, and offer genuine caring advice. Some even offer payment plans. I didn’t think I could afford to file as it isn’t cheap. And yes I think I am still putting off the inevitable and have not filed yet. But I keep telling myself something has to break, but so far it hasn’t.

The U.S. Bankruptcy court has a nice basics page loaded with info at:

http://www.uscourts.gov/bankruptcycourts.html I found a bunch of info there, but it was easier to talk to a professional for free. I couldn’t beat the price. So for me I think bankruptcy will be good, at least for my credit. And if I choose the chapter 13 option, it will allow me to pay everyone 100% of what I owe them on a payment plan I can afford!

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Jon Arnold asked:




When a consumer is considering bankruptcy, the usual way to file it is to use Chapter 7 bankruptcy but in some cases it makes more sense for the consumer to file under Chapter 13 bankruptcy law. All bankruptcies, regardless of which chapter is filed, are done under the jurisdiction and supervision of the federal bankruptcy court.

The consumer who files under Chapter 13 bankruptcy protection is shielded and protected from creditors who might otherwise file a separate lawsuit against the consumer to collect the outstanding debt owed. When a consumer files Chapter 13 bankruptcy, the debt from all creditors is consolidated into one debt, it drastically reduces and sometimes even eliminates interest payments, and in almost all cases, it lowers the total amount of money that the consumer needs to lay out each month.

One of the beautiful parts about this is that after you have notified the creditors that you have filed bankruptcy, Chapter 13 or any other chapter, they can no longer call you or send you threatening letters, which only serves to increase your stress level anyway. You are recommended to keep a notebook near your phone and note which creditors you told about your bankruptcy, noting date, time, creditor and the name of the person you talked with. If they persist in calling after being notified that you have filed bankruptcy, they are in violation of federal law and you may have the option at that point of bringing a countersuit against them for that violation. Believe me, they are well aware of that and do not want to risk it.

Now by looking at this explanation, if you have been doing research into your bankruptcy options, you may have noticed that Chapter 13 bankruptcy sounds very similar to the process of using a debt consolidation service. You are right, but there are some very distinct advantages and disadvantages of each. For example, a debt consolidation service charges a small fee for their services, where the total amount of that fee would probably be a bit more than you would pay for your Chapter 13 bankruptcy filings and legal fees. But then again, with a debt consolidation service, your credit score is maintained and the fact that you are using a debt consolidation service is frequently not even visible on your credit reports, whereas a bankruptcy filing is a huge neon sign on your credit reports for the next 7 to 10 years. Although everyone’s situation is different, it would seem that a debt consolidation service, even though costing a bit more, would have much fewer long term negatives. You should really compare both options with a good bankruptcy lawyer so you can make an informed decision about what is best for your circumstances.

So the bottom line is that a chapter 13 bankruptcy gives the consumer the opportunity to pay off their financial obligations in a timely manner. The amount that the consumer will pay each month is determined by the bankruptcy court and will be an amount determined by a close examination of the consumer’s sources of income. A trustee is appointed by the court and the consumer’s check each month is given to that trustee. In most cases, this must be a certified check or cashier’s check, so it is going to be a bit more hassle to get that kind of check each month and get it to the trustee.

If you are considering bankruptcy as a consumer, you can either file Chapter 7 or Chapter 13. But especially with the recent changes in the bankruptcy laws, filing bankruptcy is no longer a “do it yourself” process unless you are willing to get very familiar with the bankruptcy laws. Making a mistake in the complex procedures that have been established could easily end up costing you more than a bankruptcy lawyer’s fees.

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Benjamin Robert Ehinger asked:




If you simply cannot fulfill your obligations to your creditors, then you have the option to file for either chapter 7 bankruptcy or chapter 13 bankruptcy.

There is a voluntary bankruptcy, which is when you file for bankruptcy yourself, and there is an involuntary bankruptcy that is when your creditors are the ones that initiate the process of filing bankruptcy.

When it comes to voluntary bankruptcy there are two options. You can file for chapter 7 bankruptcy or you can file for chapter 13 bankruptcy. These are your options so you should know what you are doing before you file for bankruptcy.

When you file for chapter 7 bankruptcy and it is granted to you, then you will have to surrender your properties, or at least the ones that were not exempted by the law. These will be surrendered to the trustee who will liquidate them and use the money to help pay off your creditors. It does not matter if you own enough property to pay off the debts in full, they will still take the property and use as much as they can to help pay your creditors. After this process the debts will be discharged and you will not have to pay on them again.

On the other hand when you file for chapter 13 bankruptcy, it works the same except for one difference. You will have to satisfy some of the unsecured loans and other debts before they will be discharged. This will all depend on what the court decides and they will take into consideration your financial abilities in the future.

Depending on your situation and your debts will depend on whether you file for chapter 7 bankruptcy or for chapter 13 bankruptcy. Either one can be very helpful when you are so far in debt that any other option will not help.

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Dean Shainin asked:




With the proper information in regards to the new bankruptcy laws you can avoid the hassles many people have to deal with because they did not take the time to do some research. Only you can decide what is best for your debt burden with the current bankruptcy law.

Types of Bankruptcy

You may have heard of someone filing for Chapter 11 or Chapter 7. What do they mean by this?

These are actually the types of bankruptcy, so-named after the title of the Chapter of the Federal Bankruptcy Act in which they appear. There are three common types of bankruptcy available. Here is a quick rundown of each one:

Chapter 7

This is also known as liquidation. In a Chapter 7 bankruptcy case, all the assets and nonexempt properties, if any exists, of the debtor must be turned over to a trustee for the purpose of converting them into cash to pay the debtor’s creditors.

In return, the debtor receives a Chapter 7 discharge in the form of a court order, releasing the debtor from all of his or her dischargeable debts. This order also has the effect of preventing creditors from attempting to collect these dischargeable debts from the debtor.

Note that there are some debts which cannot be discharged with a Chapter 7 bankruptcy.

Chapter 11

This type of bankruptcy is typically used for business bankruptcies and restructuring. As such, this is not an option for individual consumers. Besides being far more complex, it is also more expensive to pursue.

A Chapter 11 bankruptcy gives businesses the opportunity to reorganize themselves, restructure debt, and get out from under certain burdensome leases and contracts. “Business” here may include a corporation, sole proprietorship, or partnership.

When a corporation files for a Chapter 11 bankruptcy, the stockholders’ personal assets are not at risk. Since a corporation exists separate and apart from its owners, the stockholders, the only asset the latter stands to lose are the value of their investment in the company’s stock.

Chapter 13

This is sometimes referred to as a “mini Chapter 11″ because it allows small proprietary business owners and certain qualified individuals to file for it in order to repay their creditors but still retain your property.

So how is this different from a Chapter 7 bankruptcy, which likewise allows you to retain certain exempt properties and assets? Chapter 13 is different in that it enables a debtor to retain the assets that would otherwise be liquidated by a Chapter 7 trustee.

In most cases, you can keep your home and your car under either Chapter 7 or Chapter 13. However, there are certain instances under Chapter where you would not be able to keep your rental properties, antique gun collections, etc. Whereas, if you file for a Chapter 13 bankruptcy, you may be able to keep these “luxurious items” and submit yourself to a Plan where you can make repayments.

The goal of a Chapter 7 bankruptcy is to discharge your existing debts so you can get a “fresh start” on your finances. A Chapter 13, on the other hand, obliges you to repay most or all of your debts before your slate is wiped clean. It is because of this – you repay your debts – that you gain a certain advantage over a Chapter 7.

Make no mistake that bankruptcy is a complex process. There are many intricate details involved in this legal process that should be taken into consideration before making any decisions involving bankruptcy. The information above is only basic. There are still many important questions that may arise and only your bankruptcy lawyer who knows more about your particular situation can authoritatively answer your questions.

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Marcus Peterson asked:




Bankruptcy is a legally declared inability of an individual or organization to pay creditors. During the course of a bankruptcy, a debtor may ask a court to dismiss the case. If the court finds that dismissal will not harm the creditors, ordinarily a court will grant a petition to dismiss a Chapter 7 or a Chapter 13 bankruptcy.

There are several reasons a debtor may prefer to file a Chapter 13 bankruptcy petition. The reasons include the debtor wishes to resolve certain debts that may not be discharged in a Chapter 7 bankruptcy. The debtor may also wish to protect certain cosigners on personal loans from being pursued by creditors for repayment or feels obligated to repay certain debts. The debtor may believe that future creditors will look more favorably on Chapter 13 reorganization than a Chapter 7 discharge. A debtor may be required to file a Chapter 13 bankruptcy if he or she has received a Chapter 7 bankruptcy discharge within the prior six years, or obtained a Chapter 13 bankruptcy discharge within the prior six years and has not paid off at least 70% of the unsecured debts and was subject to the discharge of a prior Chapter 7 or Chapter 13 bankruptcy filing within the prior 180 days, because the debtor violated a court order, or requested dismissal after a creditor sought relief from the automatic stay.

After filing a Chapter 7 bankruptcy petition, some debtors discover that they are better served by pursuing relief under Chapter 13. By filing an appropriate motion with the bankruptcy court, the debtor has an absolute right to convert the petition to a Chapter 13 filing, if the debtor has not previously converted a Chapter 7 bankruptcy to a Chapter 13 bankruptcy, and the debtor’s estate qualifies for Chapter 13 relief.

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Michael A. Goldstein asked:




Individuals who have amassed large debts have many options. However, if an individual finds that non-bankruptcy alternatives are not feasible, a decision then must be then made between filing a Chapter 7 liquidation proceeding or a debt adjustment proceeding under A Chapter 7 bankruptcy filing is best described as obtaining a discharge from debts (with some exceptions) while retaining some assets such as a home, household goods and an automobile as long as they do not exceed certain values determined by the U.S. Bankruptcy Code. Chapter 7 is consider a “liquidation” decision however if filed correctly and using the Bankruptcy Code to the best of your ability some assets can be retained while crushing debt is removed.

To be eligible to file a Chapter 7 bankruptcy the filer has to reside or be domiciled in the United States. In addition, they can not have been a debtor in a bankruptcy case in the 180 day period prior to filing the current bankruptcy case; they must receive counseling from an approved nonprofit budget and credit counseling agency prior to the filing and pass the “median family income” test. In order to receive a discharge in a Chapter 7 an individual may not have received a Chapter 7 bankruptcy discharge in the previous eight years or a Chapter 13 discharge in the previous six years.

The element which will fully determine if you can file a Chapter 7, is the “median family income” level. The individual or couple must review income made within the previous six months and average it out. If when the average income is measured against the “median family income” as stated in 11 U.S.C.

The Difference Between Chapter 7 and Chapter 13 of the Bankruptcy Code is a post from: Chapter 13 Bankruptcy Rules

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Josh Riverside asked:




By and large, one would notice that when someone files for Chapter 7 bankruptcy they would make a payment of about $450 in attorney fees, where people who file Chapter 13 have to pay more. These cases are in general more costly, the attorney’s fee begins at $750 for representation through completion of the plan.

These amounts represent attorney fees only and people are still responsible for paying filing fees and other expenses. People should also be aware that any complications in the case will raise the attorney fees rather quickly.

People could alternatively choose form preparation services instead of legal representation. A few debtors have a preference to do this and only be in attendance through hearings alone. Other alternatives include using a number of software programs that are now available. Pricewise, these programs cost about the same as form preparation services.

If the debtor wants to avoid that cost, they can download the form online. There are various website that provide this service. People can later fill the details on the forms with some form of assistance.

Preparation is vital to successfully filing under both Chapter 7 and Chapter 13. People should make sure all the proper documentation is in order and have all their financial documents up-to-date. Forms are required to be prepared in strict compliance with federal and local rules. In addition, every debtor has a large variety of alternatives accessible that may perhaps enhance, diminish, or prevent relief granted by the court.

A high-quality attorney should be able to guide their clients through the filing process. Debtors should rest assured that a very small number of people who file Chapter 7 are required to give up property for liquidation. There is nothing that can undermine the advantage of the technical edge that the legal compliance can provide in a case and every debtor who has followed this path can swear by it.

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Simon Volkov asked:




Chapter 13 payments are arranged through the reorganization of debt at the time when bankruptcy is filed. The debtor is required to make regular payments directly to an assigned Trustee who oversees the case. When Chapter 13 payments are received, the Trustee disperses payments to creditors until accounts are paid in full.

In some instances, Chapter 13 payments can be made through payroll deductions if approved by the bankruptcy court. Upon acceptance of the bankruptcy repayment plan, chapter 13 payments are setup to repay creditors and tax liens, if applicable.

If the debtor owns a home, filing Chapter 13 bankruptcy can halt the foreclosure process. However, if the debtor fails out of bankruptcy, the lender has the authority to initiate foreclosure proceedings. Additionally, the court may require the debtor to liquidate their assets under Chapter 7 Bankruptcy Code. If this occurs, the debtor must relinquish their property to a Trustee who will sell the assets and repay creditors.

Chapter 13 bankruptcy is available to all U.S. citizens. This chapter allows individuals to reorganize their debt and make payments over an extended period of time. However, certain eligibility requirements must be met and include outstanding unsecured debts must be less than $307,675 and secured debts must be less than $922,975. Additionally, the debtor is required to undergo credit counseling within 180 days prior to filing.

When an individual files Chapter 13 bankruptcy they must provide a certificate of credit counseling, proposed repayment plan, proof of income, detailed list of expenses, and a recent year tax return.

Collection actions against the debtor cease when the debtor files Chapter 13. However, it does not dismiss outstanding balances. As long as payments are made to the Trustee and disbursed in a timely fashion, no further action will be taken against the debtor. If the debtor is unable to make payments according to their chapter 13 agreement, the creditors can move forward with collection actions.

If circumstances arise that cause the debtor to become unable to make chapter 13 payments, the Trustee must immediately be contacted. If the financial setback is temporary, the Trustee may agree to reducing payment amounts or extending the repayment period.

In cases where financial setbacks are long-term, the court may modify chapter 13 payments, discharge the debts on the basis of hardship, convert to Chapter 7 liquidation, dismiss the Chapter 13 case, or temporarily suspend payments.

Chapter 13 bankruptcy provides individuals with the opportunity to retain their property and make a fresh start. When creating the repayment plan it’s crucial to arrange chapter 13 payments that are reasonable so the debtor can consistently make payments in a timely fashion. Otherwise the effort will be fruitless and cause the debtor to fail out of bankruptcy and lose their home, automobile and other valuable assets.

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Arijit Roul asked:




The bad form of bankruptcy

If you find yourself in a situation whereby a chapter 13 bankruptcy is not working, then you might want to hire a bankruptcy lawyer or attorney to help you. They will probably advise you that the next step is to consider chapter 7 bankruptcy. Many people fear chapter 7 bankruptcy because it has the ability to ruin your credit rating for a minimum of ten years. The role of the bankruptcy lawyer or attorney will be crucial in this type of bankruptcy because of the implications that it can have for your life and those of the people around you. Chapter 7 is not a selfish decision to be taken lightly but one which you have to agree with your closest family members.

I once again have to emphasize that you should not be too ashamed of yourself just because you have had to resort to bankruptcy to deal with your immediate problems. Many people in the community may be in similar situations but they might not inform the general public. I am sure if the internet was allowed to publish all the credit histories of your neighbors, you would find some very interesting reading. I would advise that you accept your situation and visit the bankruptcy lawyer or attorney at the earliest opportunity so that they can give you detailed advice.

What happens under chapter 7?

The basic mechanics of chapter 7 is that you simply take your assets and liquidate them to try and pay off what you owe. Specific state laws may dictate that certain assets cannot be attached but again these are very restrictive. The upshot is that you will be in a lot of trouble. Your bankruptcy lawyer or attorney will be able to advise you on the jurisdiction within which you lie and any exemptions that you might be able to make. Under no circumstances should you consider going on your own. Remember that the creditors are not out to protect your interests. All they want is your money.

Chapter 7 bankruptcy is usually associated with individual couples who may not be able to meet their obligations. Therefore it is imperative that your spouse is aware of what you are doing. Your bankruptcy lawyer or attorney might remind you of this requirement if he thinks you are deliberately keeping the other party in the dark. The worst thing that can happen to a relationship is that you lose your assets as well as your love over bankruptcy.

http://chapter13bankruptcynow35.blogspot.com/2009/04/using-chapter-thirteen-bankruptcy-to.html

Joseph Stutzman asked:




Filing bankruptcy has become even more prevalent today than in the past. In 2009, during what some would argue was the biggest financial crisis this country has ever faced, more than 1 million Americans filed personal bankruptcy. Bankruptcy can stop foreclosure proceedings, stop those harassing calls from debt collectors, enable you to keep your car and give you a fresh financial start. Many people would not even have considered bankruptcy an option, but it is much preferable to being out on the street, which is what many Americans faced during this bleak time.

Having a bankruptcy lawyer is critical. Yes, you can file your bankruptcy by yourself, but when you are dealing with so many creditors and constantly changing laws, it makes much more sense to hire an attorney. Most bankruptcy lawyers will not charge you for the first consultation, charge lower rates than other attorneys and will often work on a payment system for you, seeing as how you will be much freer to pay your bills upon completion of your bankruptcy.

A bankruptcy lawyer can advise you on whether to file Chapter 7, Chapter 11 or Chapter 13 bankruptcy. Chapter 7 bankruptcy is a complete liquidation of assets which includes the sale of a debtor’s nonexempt property, the distribution of the proceeds going to his creditors. Chapter 11 bankruptcy is for a business wishing to stay in business and involves extending time to repay debts, adjustment of the debt amount and reorganization. This avoids total liquidation and is often preferable to Chapter 7. Chapter 13 is for the home owner and is often put in place when a Chapter 7 claim is found to be abusive of the chapter 7, 11 U.S.C. § 707(b).Chapter 13 allows homeowners to reaffirm with their mortgage companies and automobile creditors in order to keep a roof over their head and have a vehicle by which to gain or continue gainful employment.

Eligibility for each of these bankruptcy filings is complicated, and best guided by a bankruptcy lawyer. It is also best to seek out a lawyer that specializes in bankruptcies. They have the knowledge and the experience to get it done quickly and without error, getting you back on the road to a fresh start that much quicker. No, bankruptcy should not be considered an easy fix or your first choice for debt relief. It stays on your financial record for 7 to 10 years and if you start accepting all those credit card offers that come in after you file, then you will be right back where you started with no relief in sight for another 10 years-you cannot file again before that time. So, along with filing bankruptcy, you should make a conscious decision to do things differently after the bankruptcy is discharged.

The first step is to seek the advice of a reputable bankruptcy lawyer.

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