Bankruptcy Filing and Discharging Debt

t is true that the United States is seeing a large spike in bankruptcy filing documents. Many are looking for chapter 7 bankruptcy protection since they are so far in debt, they would not be able to solve their situation without filing for bankruptcy. While most people have a vague notion of what bankruptcy filing entails, unless they have professional experience with bankruptcy law, there are likely many areas in which they are in the proverbial dark on. One such area would be the answer to questions regarding what type of debts are discharged during a bankruptcy filing.
This is not a question that should ever go unanswered. Unless you have a clear idea regarding which debts can or cannot discharged, then you really cannot approach your bankruptcy filing in the appropriate manner.
In general, all unsecured debt can be discharged during a bankruptcy filing. Secured debt, however, cannot be discharged in a bankruptcy unless the collateral has been surrendered. If this is the case, then the debt that remains after the creditor sells off the surrendered collateral, falls under the category of unsecured debt. At this point, the remaining debt can be considered unsecured and can be discharged via bankruptcy. However, if you have signed onto what is called a "reaffirmation agreement," which refers to your agreement to repay your debt, you would not be able to have the debt discharged.
There will be other instances where debt cannot be discharged. For example, any debts that are the result of fraud will not be able to be discharged. Those that have incurred debt via property settlements in the aftermath of a divorce or legal separation will not be able to receive a discharge. The same can be said of any spousal or child support in the aftermath of a divorce.
Debts to the government are a special case. Fines to the government cannot be discharged. Student loans can be discharged if the loans are causing a massive financial hardship. Taxes are generally not able to be discharged but there are instances where personal income tax might possibly be discharged but there is no guarantee this will occur. A common error in judgment that people make is they assume it will be easy to have their tax debt dismissed. They will assume this because there is precedent for discharging tax debt this means a bankruptcy court will automatically rule in their favor. This is assuredly not a given and no judgment with the filing of chapter 7 bankruptcy can ever be assumed to be guaranteed.
This is why it may be best to hire the best legal representation available to you when you make a bankruptcy filing. A qualified bankruptcy attorney may be able to get certain debts discharged that a judge might not initially be inclined to dismiss.

The author started DebtFreeBankruptcyAttorney.Com which is a website that helps individuals with debt problems by putting them in touch with a local bankruptcy attorney that specializes in filing bankruptcy under Chapter 7 and Chapter 13 bankruptcy. Check our website for more answers to bankruptcy questions and ideas on how to have a debt free future.

Bankruptcy - Making The Decision To File

Filing for bankruptcy may not be something you want to think about doing, but nevertheless, you know it's coming. The truth is that you may have no other choice than to file. However, if you do decide to file for bankruptcy, you need to do it with the help of a bankruptcy attorney. With an experienced attorney, you can sail through the entire process without the stress or confusion.
Although you may not feel like smiling when you think about filing for bankruptcy, the truth is that bankruptcy does have its benefits. One of the benefits is the automatic stay, which prevents creditors from collecting anymore debt from you. What this means for you is that all bills and calls come to a halt. During the process of a bankruptcy case, the ultimate goal is to ensure that the slate is wiped clean so that you may start over again fresh.
Unfortunately, one of the downsides of filing for bankruptcy is that most cases will end with some sort of issuance of property in order to pay down debts. Not only are you going to have to pay for a bankruptcy attorney, but you're also going to have to give a few things up. Ultimately, it is up to you to decide whether or not you really want to proceed. It's best to weigh all pros and cons and decide if filing for bankruptcy is really your best option. Most likely if you've reached the point of consideration in relation to filing for bankruptcy, you're ready to proceed.
Another benefit is that you can choose which items you do not want to give up. However, you stand a much better chance of making your selection if you have an attorney. If filing for a chapter 13, you will only qualify if you have enough money to cover a maximized payment plan, which will ultimately make it much easier for you to pay off all monetary dues.
It would be a waste of time to file for a chapter 7 bankruptcy if all you qualify for is a chapter 13, which is why you need a bankruptcy attorney. There is quite a bit of paperwork involved as well as very specific steps involved during the filing process. In a chapter 7, the debtor is discharged within 90 days, whereas in chapter 13, the debtor is discharged once the payment has been made. Depending on your circumstances, you may or may not qualify for either type of bankruptcy.
Perhaps one of the biggest benefits of hiring a bankruptcy attorney is that you get to keep your home. What we often find is that most of the time, people fall so far into debt that they end up having to downsize on practically everything. It often takes a major adjustment in order to get used to life, which is sometimes not so pleasant. Just imagine going from a nice, comfy 3-bedroom home to a not-so-cozy 1-bedroom apartment in an unpleasant neighborhood. For many people, this is a reality.
Once you consult with a bankruptcy attorney and complete the process, you can have faith that you will no longer receive anymore calls from creditors. You will then be free to apply for loans and credit cards in an attempt to build your credit score. It will definitely take some time, especially since it takes 10 years for a bankruptcy filing to be removed from your credit report. However, in the meantime, you can build your credit and breathe a huge sigh of relief because you will no longer have any more debt hanging over your head.

The author started DebtFreeBankruptcyAttorney.Com which is a website that helps individuals with debt problems by putting them in touch with a local bankruptcy attorney that specializes in filing bankruptcy under Chapter 7 and Chapter 13 bankruptcy. Check our website for more answers to bankruptcy questions and ideas on how to have a debt free future.

What Does Bankruptcy Mean For Your Life?

As bills mount and debts become too great to handle in a short time, you may find yourself searching for reasonable solutions to preserve your fiscal solvency. Bankruptcy, to some, sounds like a finality that leaves a black mark on your good name forever, but in reality bankruptcy doesn't have to define who you are and what will happen to you in the future. Often when we watch the news and hear of large corporations filing for bankruptcy, we think that all assets are lost for good and that there is no hope for recovery. To be truthful, filing can help you start fresh.

First, you need to eliminate in the image you've seen in the Monopoly game, that of the old man wearing nothing but a barrel. While it is true that liquidation of your greater assets may be required to satisfy some of your debts, filing for personal bankruptcy won't necessary leave you completely destitute and on the street. When you have the counsel of a reputable attorney, you can work through this financial low point in your life to rebuild your name and credit.

When you meet with a lawyer or counselor, you will determine whether or not filing for bankruptcy is a possibility. This will depend largely on the amount of debt owed, your assets, and your ability to pay off creditors. Once you have the hard numbers, your attorney will then guide you toward filing through the correct program. If approved, bankruptcy can help eliminate your debts and creditors will not be able to hound you.

Will you lose your home? If you have fallen behind on mortgage payments as a result of job loss, illness, or other circumstances, your mortgage company may see fit to foreclose on your property to alleviate your debt. Bear in mind, though, there are ways to protect your home while going through the bankruptcy process. Your lawyer, or a loss mitigation professional, can guide you.

Should you file on your own? Most people will tell you yes...if you are confident in knowing your state's bankruptcy laws. Filing for bankruptcy requires much paperwork and court meetings. You may be concerned with having to pay an attorney on top of dealing with your debts, but if you are unschooled in the law you might find yourself in a worse position than when you started. A professional who knows bankruptcy law may find things to help you that you would normally overlook, and in the long run it's a good investment of time and energy.

Above all else, know that you can move past this rough financial period in your life and rebuild your career and success. Think of bankruptcy as a detour you will eventually come through safely.

Bankruptcy: What Is a 341 Meeting?

In a previous article, I provided a list of questions you'll need to answer at a 341 meeting and since then many of you have asked me to explain more about this meeting.
A 341 meeting, also called a First Meeting of Creditors, must be held in every bankruptcy case. The Bankruptcy Clerk of Court in my jurisdiction will usually schedule a 341 meeting for a chapter 7 bankruptcy about 30 days after the bankruptcy petition is filed. For chapter 13 cases, a 341 meeting will be scheduled for the third Wednesday of the month after the chapter 13 bankruptcy petition is filed unless there is some sort of weird holiday issue. Remember, a chapter 13 bankruptcy is a payment plan to pay back some or all of the debt while a chapter 7 bankruptcy requires no payment and the debt is completely discharged.
Almost all of my clients are nervous when they show up for their 341 meeting. No matter what I say here I will not be able to convince anyone that there is no reason to be nervous. If there is a problem that has arisen or is going to arise your attorney will already know about it and will have discussed it with you. Even though other people will be present at the 341 meeting, normally no one is bothering to listen to other clients' meetings. The 341 meeting is a requirement under the bankruptcy code that makes it a requirement for everyone who is at the meeting be there. Not only do you not want to be there but either does anyone else including myself and the trustee!
The bankruptcy trustee is the person who runs the meeting. For a chapter 7 bankruptcy 341 meeting, the trustee will go over the petition and schedules and confirm the information that is provided is accurate. Sometimes if there is an issue with exemptions (protected assets) the trustee may want to take the opportunity to discuss it with you. If the chapter 7 trustee wants additional information he may request it at the 341 meeting. For a chapter 13 bankruptcy 341 meeting, the trustee's main focus is going to be reviewing the chapter 13 plan to make sure it was prepared correctly and that everyone understands what the plan is directing the debtors to do. The debtor in a chapter 13 should have made his or her first payment to the trustee by the time the chapter 13 341 meeting is held.
The Bankruptcy Clerk of Court normally will schedule ten 341 meetings for each hour. What this means is that each case is allotted 5 minutes to be completed. Because there isn't a lot of time, the trustee normally won't go into much detail and will rely on the information presented in the bankruptcy petition. This is one reason it is important to find an experienced bankruptcy attorney. The better and more complete the job is performed on the front end - the less work the job is on the back end.
In both chapter 13 bankruptcy and chapter 7 bankruptcy cases the trustee will ask questions of the debtor. These questions have usually already been asked by our office and the trustee is merely just reviewing the information to confirm it is correct. Some of the questions that are asked at a 341 meeting include but are not limited to:

1. Please state your name;
2. Do you still live at the same address that you lived at when you filed your petition;
3. Have you ever filed bankruptcy before;
4. Did you list all your assets and all of your debts to the best of your ability;
5. When you filed were you being garnished or had anyone taken any money from you;
6. Did you have more than $1000.00 on hand or in a bank account when you filed;
7. Did you pay any one unsecured creditor more than $600.00 in the 90 days prior to filing;
8. Did you pay back or transfer any property to a family member in the year prior to filing;
9. Did you transfer any property to anyone else in the two years prior to filing;
10. Did you enter into a written fee contract with your bankruptcy attorney;
11. Did your attorney review your bankruptcy petition with you;
12. Did your attorney explain the bankruptcy chapters you may file and the differences between them?

In addition to the above questions the trustee will usually make sure that all real estate that the debtor owns is properly listed. Further, the trustee will go over all retirement accounts and vehicles that are owned by the debtor.
If the debtor owes child support the trustee will ask that a special form be filled out by the debtor before leaving the meeting. I normally fill out the document for my clients because I am faster and I want to get out of there too!
Many clients want to know who will be at the 341 meeting. At the beginning of the hour of the 341 meeting there will be about 10 debtors (and their spouses if the spouse filed with the debtor). Normally everyone has an attorney with them. Some people bring their children (those people get to go first if the kids are misbehaving). We recommend that you do not bring your children to your 341 meeting. Other people will bring their entire family (maybe they do that for support).
Clients want to know if creditors will appear for the 341 meeting. The best way to answer this concern is that creditors normally do not appear. Creditors do have the right to appear and ask questions. They just normally don't because the legal issue of the creditor's debt being discharged isn't really addressed at the 341 meeting. In addition, creditors have to pay someone to appear at the 341 meeting and they don't want to incur the expense of having someone there. Another point to make is that most cases chapter 7 bankruptcies are no asset cases meaning there are no assets or property to be sold and distributed to the creditors and therefore the creditors do not have an interest or care about what happens.
Clients want to know what to wear to their 341 meeting. I recommend wearing what you wear to work. Some people like to dress up and that is fine to. You will find me usually wearing slacks, tie, and jacket at 341 meetings but sometimes I may even dress more casually.
Just to sum up the important information about the 341 meeting:

1. The trustee runs the 341 meeting;
2. Don't be nervous. No one has ever died or been hurt at a 341 meeting;
3. Lots of other people will be there doing the exact same thing that you are doing;
4. Each meeting takes between 3 and 5 minutes;
5. The trustee will ask the same questions of just about everyone;
6. Every client will get a 341 meeting letter. Please read the letter.
7. Come about 15 minutes early;
8. Your best answers are always going to be yes and no.

I hope you find this helpful. If you have more questions or just want to discuss any issues prior to your 341 meeting, be sure to contact your bankruptcy lawyer.

Sam Marks graduated from Drake Law School after completing undergraduate work at the University of Iowa. After passing the bar, he developed a general law practice that included work in criminal, family and juvenile law. As time passed, he began focusing specifically in the areas of bankruptcy and consumer protection. Sam is frequently asked to provide lectures to attorneys, business professionals and the public on the topics of bankruptcy and consumer protection and how these issues affect other aspects of the law. He enjoys these presentations and the opportunity they provide to discuss current events the legal system.

Bankruptcy: Filing Without Your Spouse

Can I File for Bankruptcy Without My Spouse? The short answer to this question is yes. One important thing to remember here is that debt will only be discharged in bankruptcy with respect to the individual who filed bankruptcy! In other words, if one spouse does not wish to file but has joint credit card debt with the filing spouse, the credit card company can and will pursue collecting the debt from the non-filing spouse.
Disclaimer: if you are currently engaged or considering getting married but are also considering bankruptcy, please seek legal advice about bankruptcy qualifications prior to jumping on a plane, flying to Las Vegas, and having Elvis perform a marriage ceremony for you.
During an initial bankruptcy consultation, the first thing we look at to determine whether a client qualifies for a chapter 7 or chapter 13 bankruptcy is household income versus household expenses as it relates to the number of dependents in the household. Household income includes both spouses, even if one spouse does not file bankruptcy.
One of our first considerations when evaluating any bankruptcy case is whether or not the household income is above the "median income" for the family size in the State of Iowa. If the household income is over the median income, the client may only qualify for a chapter 13 bankruptcy but still may qualify for a chapter 7 bankruptcy. Remember, a chapter 13 is a payment plan in which some or all of the debt is repaid. In a chapter 7, there is no payment and the debt is completely discharged.
This is where it gets a little tricky. Again, when determining whether a client qualifies for chapter 7 or chapter 13 bankruptcy, we must consider both spouses income, or household income, to determine if the bankruptcy will be a chapter 7 or chapter 13. If a client qualifies for a chapter 7 based on both spouses income, the process remains relatively simple. The filing spouse has the ability to file a chapter 7 and discharge all of his or her debts. The non-filing spouse is not affected by the bankruptcy and thus the non-filing spouse's credit is not negatively affected.
If, however, after examining the income/expense analysis based on both spouses' incomes the filing spouse only qualifies for a chapter 13 bankruptcy, the circumstances of attempting to file only one spouse can be more difficult. This is where we see a lot of non-filing spouses get upset because part of the non-filing spouse's income may be used to pay the debts of the filing spouse. The reason this can happen is because the amount of the chapter 13 plan payments are determined based on the household income and the household expenses. As such, the intended non-filing spouse's income and finances will be counted towards the household income.
Not all is lost when one spouse decides to file a chapter 13 while the other spouse does not. There can be numerous benefits in this scenario. Actually there are too many to cover here and each scenario is so fact specific that the only way to look at it is to come in and have a bankruptcy attorney go over your situation. Just like chapter 7 bankruptcy, in a chapter 13 if one spouse files while the other spouse does not file, the bankruptcy will not affect the credit report of the non-filing spouse.

Sam Marks graduated from Drake Law School after completing undergraduate work at the University of Iowa. After passing the bar, he developed a general law practice that included work in criminal, family and juvenile law. As time passed, he began focusing specifically in the areas of bankruptcy and consumer protection.
Sam is frequently asked to provide lectures to attorneys, business professionals and the public on the topics of bankruptcy and consumer protection and how these issues affect other aspects of the law. He enjoys these presentations and the opportunity they provide to discuss current events the legal system.

Bankruptcy and Auto Insurance: What Do They Have To Do With Each Other?

The other day I had the opportunity to meet with a client who was considering filing a chapter 7 bankruptcy in the Southern District of Iowa. While discussing his monthly living expenses, I asked the client if he had auto insurance. His answer was no. This reminded me about a married couple who didn't have auto insurance when they filed bankruptcy and didn't bother to carry it after they filed. I want to share their story with you.
In 2003 the couple filed a chapter 7 bankruptcy in Des Moines, Iowa. Everything went smoothly. The couple received their discharge and was relieved from their debts. Shortly after filing bankruptcy both the husband and wife began working at good jobs and started making some decent money. About two years after they filed their chapter 7 bankruptcy the couple were able to obtain financing for a $200,000.00 home. Everything was looking up for the husband and wife - but we know that I wouldn't be writing this if everything remained fine.
In 2007 the wife was involved in an auto accident. Unfortunately, the wife caused the accident. She T-boned a motorcyclist who was not wearing a helmet. I'm not sure the price of the medical care, but the last I checked it was over $300,000.00. Let's be clear -accidents do happen and that is why we have auto insurance. This is where things turned bad for the family.
A lawsuit was filed against the couple for damages from the auto accident. Things got expensive. Eventually, the couple came back to see me for some financial help. I inquired about auto insurance and the husband and wife just sort of looked down and mumbled that they didn't have any insurance when the accident occurred. The clients wanted to know if the bills involved in the auto accident could be discharged in bankruptcy. I told them that I had some good news and some bad news for them.
The good news was that unless the wife intentionally caused the accident (I guess it wouldn't be an accident if she intentionally ran over the motorcyclist), or was under the influence drugs or alcohol when she was in the accident, the bills associated with the auto accident could be discharged in bankruptcy.
The bad news was that the couple couldn't discharge the debt under chapter 7 of the bankruptcy code until 2011. Debtors must wait eight (8) years between filing chapter 7 bankruptcies. This news upset the couple and you could see the worry in their eyes that they would lose everything they had worked so hard to achieve.
That's not the end of the story. There is more good news and more bad news.
The next good news is that this couple may have been the luckiest people I have ever met. It turns out that they were eligible to file for a chapter 13 bankruptcy. Debtors only need to wait four (4) years after they file bankruptcy to file a chapter 13 bankruptcy. Not only were they eligible, they qualified for a chapter 13 bankruptcy because they had disposable income available to pay to their creditors. So it appeared that the bankruptcy court could provide some relief from some of their liability. But...
Remember that I told you there was additional bad news?
This couple was required to pay to the Chapter 13 trustee the sum of $2,294.64 each month for the next 60 months. In addition, they had to turn over all tax refunds received for the next five years.
State laws require all drivers to be insured when they operate a motor vehicle. As a society, we want people to be able to take responsibility when they cause an accident. We don't want people to be punished for having an accident and that is why congress and the courts give individuals who truly had an accident the opportunity for a fresh start under the bankruptcy court.
Just think how much money this couple would be saving each month if they would have just purchased an appropriate amount of coverage. I tell this story to everyone I meet with who doesn't have auto insurance. These clients didn't lose everything - just nearly everything.
Please abide by the law and remember to keep your auto insurance current in order to protect yourself financially. And, of course, if you have any questions about insurance liability and bankruptcy, be sure to contact a qualified bankruptcy attorney in your area.

Sam Marks graduated from Drake Law School after completing undergraduate work at the University of Iowa. After passing the bar, he developed a general law practice that included work in criminal, family and juvenile law. As time passed, he began focusing specifically in the areas of bankruptcy and consumer protection.
Sam is frequently asked to provide lectures to attorneys, business professionals and the public on the topics of bankruptcy and consumer protection and how these issues affect other aspects of the law. He enjoys these presentations and the opportunity they provide to discuss current events the legal system.

Bankruptcy Basics

Bankruptcy should always be considered a last resort after all other efforts to recover from your debt problems have failed. The public record will stay with you for 10 years and beyond. Even a bank account application will ask if you ever filed bankruptcy, which you are legally required to answer. New laws are now place which require you to get involved with a valid credit counseling program before you can file anyway, so keep that in mind.

Bankruptcy laws vary from state to state, and everyone's situation is different. There are no absolute answers as to whether this would be a viable option for you. There are many lawyers who offer free consultation and can tell you how to proceed; the costs and pros and cons.

We can, however, clarify the most basic types of bankruptcy used by individuals. Each of these is known by the title of the Chapter of the Federal Bankruptcy Act in which they appear. The most common of these are Chapter 7 and Chapter 13.

Chapter 7 vs. Chapter 13

Chapter 7 bankruptcy is (or has been until new laws took effect) one of the most common types of bankruptcy used by individuals, but may also be used by businesses. Under Chapter 7, a court-appointed trustee collects the individual's assets. The trustee sells the assets for cash and pays the proceeds to the individual's creditors. Assets that are exempt under federal or state law do not have to be liquidated. Once the Chapter 7 process is final, the filing cannot be repeated for six years.

An example of who might file a Chapter 7 would be someone with little property but unable to meet their monthly payment obligations to creditors.

Unsecured debts, except tax and student load debt are forgiven, though there are extenuating circumstances which may apply to all unsecured debts. Creditors cannot contact you during the process or after the debts are discharged.

To qualify, you need to take a "means test" and complete the required pre-filing session with a credit counselor.

Chapter 13 bankruptcy is designed for an individual debtor with a steady source of income. It is generally more costly than filing Chapter 7, because it considerably more complex. Under the Chapter 13 plan, also called "individual reorganization," the debtor must settle his debts over a three to five year period. The debtor is allowed to keep his property. At a confirmation hearing, the court either approves or disapproves the plan. You are protected from debt collection calls and efforts to impose wage garnishment. Also, debts that were not canceled in a Chapter 7 discharge can be reduced in a Chapter 13 payment. Co-signers are also protected under Chapter 13.

To qualify, unsecured debts must be below $360,475 and secured debts less than $1,081,400.

An example of who might file a Chapter 13 would be someone with considerable equity in their home or property which they wish to keep. They're able to keep up with expenses, but are unable to keep up on the scheduled debt payment.

Here is hoping you can find a debt relief program that will work for you to avoid bankruptcy.

Bankruptcy and Student Loans

Before you make the decision to file personal bankruptcy, you need to realize that certain kinds of debt obligations will not be easy to get rid of. These include criminal fines, child support and alimony, and (in many cases) federal income taxes. Unfortunately, student loans also fall into this category.

It is very difficult to get rid of student loans even if you file bankruptcy. Congress designed the laws in such a way as to encourage banks to make loans to students, and this means that the law has made it difficult to discharge student loans. First of all, what happens if you simply stop making your student loan payments for any reason?

Obviously, the first problem (if you are still a student in college or graduate school), will be that you will have difficulty obtaining future financial aid. You may face lawsuits, but even without a lawsuit the bank may be able to use wage garnishment (up to 15% of your personal income). You may also be forced to pay additional fees in the form of collection costs because of the inconvenience you caused the bank.

So is it impossible to have student loans discharged when you file Chapter 7 bankruptcy? No, it's not impossible, but it is very difficult to persuade a bankruptcy judge to wipe out these debts. You have to prove that you are facing an unusual hardship, a greater financial hardship than most other people filing for bankruptcy!

In addition to proving your hardship, you need to demonstrate your situation is unlikely to improve in the near future. You also have to demonstrate that you have acted in good faith, which means that you have made reasonable efforts to pay back your student loans. You can't declare bankruptcy simply to get rid of your student loans by themselves, so you need to have other financial obligations that have also contributed to your situation.

Ultimately, the bankruptcy judge will have a lot to say when it comes to determining the outcome of the case. This part of the statute is open to interpretation, and the judge will have to look into your situation and make up his own mind.

The judge wants to see that you have tried alternatives to bankruptcy wherever possible, and your personal income and expenses will be examined closely to determine whether you are facing undue hardship. Also remember that it's not just about your current income. If the judge believes that your circumstances could improve in the near future, then your student loan obligations aren't going anywhere.

Bankruptcy and Fraud: How to Avoid Getting in Trouble With the Bankruptcy Court

Despite what many people think about bankruptcy, this process is designed to give honest people a second chance by helping them deal with overwhelming debt. Bankruptcy is not about helping lazy people or deadbeats who simply don't want to pay their bills. If you've ever been in difficult financial circumstances, you know that sometimes you can do your best and still end up in financial disaster.

With this in mind, you would do well to remember that Congress has enacted laws to help people who really need relief from their debts. The purpose of Chapter 7 proceedings is not to help people who have committed fraud or who are just trying to get out of their financial obligations even though they have the means to pay. You have to proceed carefully when declaring bankruptcy in order to make sure that you are not coming across as committing some sort of fraud.

One problem that seems to come up frequently is that people will make large purchases not long before they end up filing for bankruptcy. Think about this for a moment. What is the court supposed to think if you purchase a $1000 plasma television with your credit card and then turn around and file chapter 7 a few weeks later? It stands to reason that you should have known better. This kind of scenario suggests that you were planning to purchase the item and then wipe out your debt obligations a few weeks later.

If you have already made such a transaction, you need to speak with a bankruptcy lawyer to find out what the best option is. Your lawyer may instruct you to simply wait a few months before filing, or there may be some other strategy that you should follow. We just have to make sure to avoid any appearance of fraud.

The idea behind fraud is that you actually never intended to pay the debt. It's like writing a bad check on purpose. If you write a check and it bounces, this could be a simple oversight on your part. However, if you wrote the check when you knew there was no money in the bank, you can actually be prosecuted for fraud. It's really a matter of whether your creditor thinks it is worth pursuing or not.

These kinds of mistakes can determine whether a particular debt is wiped away in an otherwise successful bankruptcy discharge. In the worst-case scenario, your entire petition may fail, and you can even be prosecuted for charges of fraud like we mentioned above.

This is why it is imperative to speak to a lawyer instead of trying to handle everything yourself. There are lots of little things that you can get wrong. For example, you might repay a loan to a family member or try to transfer assets into someone else's name shortly before filing the petition. In these cases, the trustee overseeing the case can actually recover this money from your family members!

How the Bankruptcy Automatic Stay Can Provide Financially

One of the most powerful tools in your bankruptcy arsenal is known as the automatic stay. When you first file a petition with the bankruptcy court, the judge will institute an automatic stay to put all of your financial obligations on hold. What exactly does this mean for your financial future?

Well, at the very least this will provide some temporary relief from your creditors and debt collectors. They are not allowed to contact you or try to collect debts in any way without first getting permission from the bankruptcy court. If they violate this court order, they will have to answer to the federal bankruptcy judge.
The automatic stay can put a lot of your problems on hold. For example, if a state court has not entered a judgment against you, then you can even put evictions on hold. Any kind of bill collecting or repossessions will be put on hold until your case has been resolved.

This does not guarantee a successful outcome, of course. You still have to go through the entire process of filing for Chapter 7 bankruptcy. At the very least the automatic stay will give you some temporary relief, but if all goes well, then you can have most or all of your debts wiped out completely.

Many people wonder whether this process is really worth it. After all, the bankruptcy filing will remain on your credit record for several years, and many people fear that their personal as well as financial reputations will be tarnished. You should probably not be thinking in these terms, however.

What you should be asking yourself is whether you will be able to pay off your debts within the next few years while living a reasonable standard of living. Obviously, we're not talking about living a luxurious lifestyle, but you don't need to get close to starvation in order to pay off your debts either. If you're buried under a mountain of credit card bills, medical bills, or other kinds of obligations, you need to at least give bankruptcy some careful consideration.

Don't worry about what other people think about your financial situation. As long as you have worked honestly and did not intend to ignore your financial obligations beforehand, then you should not feel totally ashamed that you have reached the point of bankruptcy. It is obviously not a proud moment, and you need to learn from this experience and become stronger financially and personally as a result.

However, don't let your embarrassment keep you from at least considering a way out which can give you a fresh financial beginning. Make sure to consider your options carefully with a financial planner and bankruptcy attorney.

Can I Discharge New Debt When Filing Bankruptcy?

The debt included in a person's bankruptcy filing sometimes will be scrutinized by the bankruptcy trustee. With a large number of people filing for bankruptcy over the last few years, creditors have put some debtors under the microscope questioning their charges. Usually, if an individual is represented by a bankruptcy attorney, rarely will the bankruptcy trustee find anything of question unless the debtor is not being truthful to their attorney. After the financial meltdown in 2008, the reasons for people filing for bankruptcy are usually truthful. It's very common to see individuals filing bankruptcy because of a job loss, a family medical emergency or because of the housing bubble many Americans just bit off more than they could chew with their mortgage. All of these factors come into play in American society as this has become the new normal.
Many people wait too long to file for bankruptcy when a disaster strikes. Some people even go as far as taking money out of their 401(k) to pay credit card bills while they are unemployed, not realizing that the 401(k) would be protected by bankruptcy exemption laws. When the writing on the wall becomes clear, there is no reason to give more money to the creditors when filing bankruptcy becomes imminent.
For many Americans it's a tough to make the decision to file for bankruptcy. Most people's pride gets in the way because in their mind they believe that a bankruptcy filing is synonymous with failure. This is far from the truth. Filing bankruptcy was created by Congress with the intent of giving good hard working Americans a fresh start and a new beginning. Having the ability to wipe out one's debt, allows a person to start over and rebuild their life without the worry of retribution from their creditors.
Recently, the Fed reported that credit card debt of Americans has exceeded $2 trillion. This puts the American consumer on very shaky ground and also makes nervous creditors become more aggressive in their tactics to collect on this debt. The average American household generally carries about $20,000 in total unsecured debt. In most cases, the data has not been accumulated on one card so most creditors turn a blind eye to these debtors when they file for bankruptcy. As long as the debt is less than $10,000 per credit card issuer it is usually not worth it for the creditor to spend much time contesting it during a bankruptcy filing. This does not mean that if the individual does not file for bankruptcy that the creditor still won't go after them and sue them for this amount. Creditors these days will go after someone for $1000.
If the individual filing bankruptcy has a credit card with a large balance on it of over $25,000 the creditor will go through it with a fine tooth comb looking for anyway to contest the bankruptcy filing. If there are any discrepancies the creditor will sick their legal staff on the debtor and try to make them responsible for the debt. This makes it very important for someone filing bankruptcy to be totally on us with their bankruptcy attorney about their spending habits and the time frame of when the charges were made. The bankruptcy attorney might ask the client to continue making payments on that account while delaying the bankruptcy filing to allow time to pass from when the charge account was last used.

The author is a professional that formed FilingBankruptcyNow.Com which provides information for debtors considering filing bankruptcy under Chapter 7 and Chapter 13 bankruptcy and helps individuals stop foreclosure and eliminate their debt by putting them in touch with a local bankruptcy attorney.

Bankruptcy and Fraud: How to Avoid Getting in Trouble With the Bankruptcy Court

Despite what many people think about bankruptcy, this process is designed to give honest people a second chance by helping them deal with overwhelming debt. Bankruptcy is not about helping lazy people or deadbeats who simply don't want to pay their bills. If you've ever been in difficult financial circumstances, you know that sometimes you can do your best and still end up in financial disaster.

With this in mind, you would do well to remember that Congress has enacted laws to help people who really need relief from their debts. The purpose of Chapter 7 proceedings is not to help people who have committed fraud or who are just trying to get out of their financial obligations even though they have the means to pay. You have to proceed carefully when declaring bankruptcy in order to make sure that you are not coming across as committing some sort of fraud.

One problem that seems to come up frequently is that people will make large purchases not long before they end up filing for bankruptcy. Think about this for a moment. What is the court supposed to think if you purchase a $1000 plasma television with your credit card and then turn around and file chapter 7 a few weeks later? It stands to reason that you should have known better. This kind of scenario suggests that you were planning to purchase the item and then wipe out your debt obligations a few weeks later.

If you have already made such a transaction, you need to speak with a bankruptcy lawyer to find out what the best option is. Your lawyer may instruct you to simply wait a few months before filing, or there may be some other strategy that you should follow. We just have to make sure to avoid any appearance of fraud.

The idea behind fraud is that you actually never intended to pay the debt. It's like writing a bad check on purpose. If you write a check and it bounces, this could be a simple oversight on your part. However, if you wrote the check when you knew there was no money in the bank, you can actually be prosecuted for fraud. It's really a matter of whether your creditor thinks it is worth pursuing or not.

These kinds of mistakes can determine whether a particular debt is wiped away in an otherwise successful bankruptcy discharge. In the worst-case scenario, your entire petition may fail, and you can even be prosecuted for charges of fraud like we mentioned above.

This is why it is imperative to speak to a lawyer instead of trying to handle everything yourself. There are lots of little things that you can get wrong. For example, you might repay a loan to a family member or try to transfer assets into someone else's name shortly before filing the petition. In these cases, the trustee overseeing the case can actually recover this money from your family members!

Improve Your Sex Life Today: File For Bankruptcy

Yep. You read that right. Filing for bankruptcy will improve your sex life. No blue pills; no magic bullet; and no better way to improve your sex life than to powerfully deal with DEBT by filing for bankruptcy. The reasoning is simple:

The same reason that got you into DEBT is the same reason it's crippling you now, emotionally, and making your sex life miserable or even non-existent; it's your personal identity or EGO!

You got into DEBT to buy things you didn't need with money you did not have in order to look good and be attractive to the opposite sex. You did this in order to get sex. Unfortunately, you failed to plan for a way out of debt and now find yourself stuck in a hole too deep to dig yourself out of. [No pun intended]

This financial burden weighs heavily on your personal identity ("EGO") and your self worth is tied up in your wallet, so much so that you are emotionally drained according to psychotherapist Phil Tyson, Ph.D. who wrote, Do You Understand the Psychology of Debt? I've even written about your emotional ties to money in my white paper entitled, Money is a Matter of the Heart. So, how do I suggest you improve your sex life? Deal powerfully with your DEBT by filing bankruptcy.

Bankruptcy is a powerful tool that will eliminate the stress in your life that will allow you to get that much needed sleep. Getting enough sleep actually helps reduce stress. Less stress means your self-esteem goes up. When stress goes down and self-esteem rises, you will feel better about yourself. When you feel better about yourself, you're happier and want to have sex. Oh, and you're much more attractive to the opposite sex when you're happy. Therefore, filing bankruptcy will improve your SEX LIFE!

Contrary to popular belief, filing bankruptcy will actually improve your credit score too, and it eliminates your legal obligation to pay your debts permanently. It's better than debt settlement because you won't owe any money to the IRS on debts discharged in bankruptcy, like you would if you negotiated a settlement of your debts. In bankruptcy, you can use Exemptions to protect your property from being taken by the trustee and still eliminate your debts. Most bankruptcy lawyers offer FREE consultations. You're worth it to eliminate your debts and your sex life will improve. Now that's just plain sexy.

The Law Office of Christine A. Wilton is a Federal Debt Relief Agency. We help people file for bankruptcy under the Bankruptcy Code. Our practice is limited to bankruptcy practice, Chapter 13 and Chapter 7 bankruptcies at this time.

Coping With Creditors and Collection Agencies Right After Bankruptcy

Filing for bankruptcy is an extremely big decision to make in your life. While it can certainly help you get a clean start on your financial foreseeable future, it also stays on your credit record for a minimum of seven years. Therefore, it can be very tough to obtain personal lines of credit after filing for bankruptcy.
But, if you're bogged down in dealing with creditors it could be your best option. Most often, those who have filed for bankruptcy will start getting letters and phone calls from creditors to remind them of owed money. As soon as you file for bankruptcy and have turned over the names and addresses of your loan companies to the bankruptcy attorney, you don't need any specific long drawn-out details for the credit card companies or collection agency reps. The bankruptcy lawyer can take care of almost everything after you file.
Typically, even before the petition is filed and your creditors have gotten notification, you can just tell the creditor over the telephone about your bankruptcy proceedings. You can provide them the name and contact number of your lawyer, but you do not have to answer any questions they may have. Actually, if you've hired an individual bankruptcy attorney, it is their job to take care of these items for you.
Just remember, debt collectors will tell you all sorts of insane stories hoping to get money from you because they have typically bought the unpaid debt from the lender. Because they now own that debt, if they cannot collect, they lose cash. It is likely they have purchased your debt for about half of what you owe and may possibly make you an offer to settle the debt for less than you earlier owed and if they're successful, you will have that debt removed from bankruptcy, but that is generally not to your advantage.
Keep in mind you are declaring bankruptcy because you can't settle the bills and unsecured debts will likely be written off along the way. Your best bet is to always simply and pleasantly tell them about the bankruptcy and offer the contact name and number of your attorney before effortlessly ending the conversation.
It's also wise to keep track of your contacts with your debt collectors just in case they carry on and call you after being informed of your pending bankruptcy. Once they have this info, they should stop calling. However, if they continue, it could be considered harassment, which can be illegal. Thus, be sure to talk to your attorney if your creditors carry on and call you even after they have your attorney's information for contact purposes.

The Oregon bankruptcy attorneys of Northwest Debt Relief Law Firm are committed to helping people throughout both Oregon and Washington get out of debt, including, where appropriate, filing petitions for relief in the United States Bankruptcy Courts. Whether personal bankruptcy or Chapter 13 is right for you, Northwest Debt Relief Law Firm can help you get a fresh start and get your personal finances back on track.

Life Is Good When You Are Debt-Free

Nothing is better in life then to live without financial worry being debt-free. In today's economy this seems like an impossibility. Americans these days put a high priority on having credit. What's funny is, credit cards are what put people in financial trouble to where they become a slave to their job and their creditors. Credit can be a good thing when it's used to buy a home or necessities of life like a car. When left unchecked, credit can be like a wildfire that burns out of control that ends up in a bankruptcy filing. In today's society, everyone wants it now. Why wait and save for a new computer when you can charge it.
A survey recently reported that the average American household has over $20,000 in credit card debt. It doesn't sound like a lot of money but then when you consider that the average household makes only $40,000 a year in the US it becomes a scary figure. The interest alone on $20,000 in credit card debt will put a debtor in bondage for life. There is some good news. Filing bankruptcy will let the debtor break the chains of this bondage. One reason many people shy away from filing for bankruptcy is because they know they will have to live without credit cards for a while. The crazy thing is, the credit cards are what force them into filing bankruptcy in the first place.
If someone wants to become debt-free they're going to have to make some big choices. Having a large balance on credit cards with no means of paying it off can wear on a person. Making the tough decision to file for Chapter 7 bankruptcy will be the first step on the road to becoming debt-free. Filing Chapter 7 bankruptcy will allow the debtor to wipe out all unsecured debts such as credit cards, payday loans, medical bills and personal loans. This just about covers everything, but if the debtor really wants to become debt-free there are some other tough decisions to make.
If the debtor is filing for bankruptcy and has an automobile loan that is beyond what they can afford, this would be the time to surrender it back to the creditor and buy something cheaper. Getting out from under a car payment at the same time as wiping out all your credit card debts will put an individual close to becoming debt-free. There will always be some debts that a person will have to pay to live and there is nothing we can do about them. A person needs to pay for a mortgage or rent to keep a roof over their heads, but at the time of filing bankruptcy this would be the time to consider whether the individual is living beyond their means.
To become debt-free it takes a lot of discipline and they will have to be totally honest with themselves. It's a good idea to sit down and bounce decisions off of a bankruptcy attorney. This will help the debtor make a wise decision with their future.

The author started DebtFreeBankruptcyAttorney.Com which is a website that helps individuals with debt problems by putting them in touch with a local bankruptcy attorney that specializes in filing bankruptcy under Chapter 7 and Chapter 13 bankruptcy. Check our website for more answers to bankruptcy questions and ideas on how to have a debt free future.

Why Hire A Bankruptcy Attorney If I Can Use Debt Settlement Instead?

With the current economic climate many people are looking into ways to reduce their overwhelming debt. Debt settlement programs offer individuals with a decent income but are having trouble making their monthly payments on credit cards, medical bills, personal or payday loans, and other forms of unsecured debt, a way to decrease the amounts owed. The actual settlements on unsecured debts can vary but a savings of up to 50%-60% is common for many. In a nutshell, the client makes payments to their bank account while the debts are being negotiated. The program's fees are deducted from the account every month until paid in full to the settlement company, but the funds to pay the creditors remain in the account until settlements have successfully been negotiated. This all sounds good to the debtor who is concerned about doing the right thing by paying back some of their debt while keeping their credit scores somewhat intact.
The advertisements you see from these companies urging you into debt settlement to avoid having to file bankruptcy by design give the impression that debt settlement won't damage your credit like a bankruptcy filing. This, however, is not the truth. Many people have unfortunately discovered that working with debt settlement companies usually hurts their credit because they get further behind on their payments, and have larger past due balances while their debt is in negotiations. This ultimately severely affects their credit score even if a deal is reached. A charge off will show up on the credit report which has a huge negative impact. Also, many people working with these settlement companies find out the hard way that they get sued or face a judgment by their creditors. A debt settlement company cannot protect the debtor from this. The creditor will then have to turn to bankruptcy after they have spent thousands of dollars and wasted precious time trying to avoid filing bankruptcy.
Filing Chapter 7 bankruptcy is common for many individuals in financial distress. In a Chapter 7 bankruptcy all of the debtor's unsecured debts are wiped out. Unsecured debts include credit cards, medical bills, payday and personal loans, etc. In most cases, with an experienced bankruptcy attorney, the debtor does not lose any of their possessions. The debtor also can enjoy the peace of mind that comes from the automatic stay. The automatic stay goes into effect the moment the bankruptcy case is filed with the court. This court order literally stops all contact and collection attempts by the creditors. That means no more nasty phone calls, threatening letters, and harassment by aggressive collectors. Any law suits, wage garnishments, and judgments are also stopped by filing bankruptcy. This is a tremendous advantage for the debtor to re-evaluate their situation and plan their financial future.
Getting answers to your questions needs to be a priority before you make any decisions regarding your financial problems. A consultation with a bankruptcy attorney is a great place to start. An attorney will let you know if you qualify to file bankruptcy and if this is the best route for you or if you should look into debt consolidation. Trying to erase your debt can a stressful and humbling experience, however, getting your life back on track being debt free is well worth it.

The author is a professional that formed FilingBankruptcyNow.Com which provides information for debtors who want to file bankruptcy under Chapter 7 and Chapter 13 bankruptcy and helps individuals stop foreclosure and eliminate their debt by putting them in touch with a local bankruptcy attorney.

What Is a Consumer Proposal?

A Consumer Proposal is an alternative to bankruptcy. These proposals are for residents of Canada only. The U.S. version of a consumer proposal is a Chapter 13 Wage Earner Plan.

A Consumer Proposal is a deal that the debtor makes with their creditors. This is a legally binding agreement between the debtor and the creditor. This is a way to avoid going to court and avoiding your wages being garnisheed. These plans are normally set up on a three to five year repayment plan and in some cases the creditor will only make you pay what you owe (minus interest) or a portion of the amount owed. Under this type of agreement; you do not have to worry about the creditors changing their mind later on and demanding more money.

In order to be eligible to file one of these Proposals you must be in a financial state where you are able to pay at least a portion of your debts and the debts must be greater than what you own. A debtor's unsecured debt must not be more than $250,000.

The first step in filing one is to get help from a professional administrator that will help you determine how much you can afford to pay each month and determine how long you would have to make that payment in order to satisfy your debts. He or she will then file this proposal with your creditors. The creditors then have 45 days to vote on the proposal. If 51% of the creditors are willing to accept your offer, then all of the creditors will be bound by that agreement. Those who did not vote have 15 additional days to submit an objection. If there are no objections it is accepted by the court and considered binding from therein. If 25% or more of the creditors vote no, there will be a meeting between you, your trustee and your creditors to try to reach an acceptable agreement.

As soon as the Consumer Proposal is filed, interest on any debts are frozen, any wage garnishments that are already in place are stopped and the creditors can have no communications with you until an agreement is reached.

So, if you are a resident of Canada and you have the ability to pay your bills but you simply need more time and wish to have your monthly payments lowered but do not want to file bankruptcy, why not consider filing a Consumer Proposal?

Destroying Myths For People Filing For Bankruptcy

With huge numbers of Americans filing for bankruptcy, it's no surprise that the Internet has blown up with tons of information regarding bankruptcy. A lot of this information is good, but a lot of it is either outdated or just plain old false. When a person gets to the point where filing for bankruptcy is going to be inevitable they need to have good information so they can plan. It's always good advice to cruise around the Internet and try to answer those plaguing questions that arise about filing bankruptcy. This will prepare the individual filing to be able to ask the bankruptcy attorney the right questions. Having the right questions to ask on the day that you visit the bankruptcy attorney for consultation is important as it might have an effect on whether or not you decide to hire them.
For some reason there are many myths floating around about filing bankruptcy. One that's pretty common is the idea that an individual can protect their property by just giving it to a family member or friend until after the bankruptcy. This is not a good idea. Filing bankruptcy is a legal process and if the bankruptcy trustee finds out the debtor is hiding property it will not end well. Another rumor from the mill is tapping out your credit cards prior to filing bankruptcy because the debt is good to be wiped out anyways. Once again, this is a terrible idea. When the debtor decides to file for bankruptcy they need to stop using their credit cards immediately. If the individual filing doesn't do this, the creditor can contest the bankruptcy filing and ask for the property back or to be paid back out of the bankruptcy. Whatever happens, it makes the individual filing bankruptcy dishonest and there's a good chance that the bankruptcy trustee will evaluate the petition with a fine tooth comb.
After the real estate melt down back in 2008, it's become common to have people think they can file for bankruptcy and stop paying their mortgage while being able to keep their homes. It is true that filing for bankruptcy will stop foreclosure. Since the debt secured by the property, the creditor will immediately file a motion for relief of stay. This will lift the automatic stay on the piece of property and allow the creditor to continue on with the foreclosure. One bankruptcy attorney had words of wisdom that rings true that 'If you don't pay for it you can't keep it." There are ways to negotiate something with the creditor that should be discussed with a bankruptcy attorney. In this area of law, many times a bankruptcy attorney could possibly advise a Chapter 13 bankruptcy.
There is much good information on the World Wide Web but always remember caveat emptor. Let the buyer beware. All information gathered on the web should be cross referenced and discussed with a bankruptcy attorney to make sure it actually fits the debtor's situation.

The author is a professional that formed FilingBankruptcyNow.Com which provides information for debtors considering filing bankruptcy under Chapter 7 and Chapter 13 bankruptcy and helps individuals stop foreclosure and eliminate their debt by putting them in touch with a local bankruptcy attorney.

When Dealing With Personal Bankruptcy

There are two options when an individual has decided to file for a Personal Bankruptcy. These are Chapter 7 and Chapter 13 bankruptcies. Chapter 7 is a liquidation of assets and Chapter 13 is a three to five year repayment plan.

Sometimes things happen in life that we have no control over and they end up putting individuals in circumstances where they have no choice but to file for Personal Bankruptcy in order to get a fresh start. Losing a job, the financial repercussions of divorce, high medical expenses and unsecured credit card debt are some of the most common reasons that may cause a person to have to file bankruptcy.

Chapter 7 bankruptcy releases the debtor from any further personal liability for certain debts. As soon as the Personal Bankruptcy is filed with the United State Bankruptcy court; all communications from the creditors must cease. In this type of case, any assets that can be converted to cash are sold by the court appointed trustee and sold via personal sale or through public auction and distributed among all of the creditors equally. Sometimes an individual does not have any assets that can be turned into cash to settle their debts. This is called "no-asset" cases. If this is the case, the debtor is released from all of their debt although there may be liens placed on any property that the debtor owns for certain types of secured debts.

Chapter 13 bankruptcies are different from Chapter 7 in the respect that it is not a release of debt, rather it is a reorganization of debts where a repayment plan of three to five years is put in place. This is the preferred way to file Personal Bankruptcy for those who have valuable assets that they want to keep. Once the repayment plan requirements are met, the debtor is then discharged from all debt and they are free from any further action from the creditors as long as the payments are made as agreed.

There are alternatives other than filing for Personal Bankruptcy that one should consider before filing. It may be possible to settle out of court with some of your debtors. There are debt counseling services that can help you consolidate your monthly payments and obtain a lower overall payment amount. Debt consolidation loans are another option as well. This is where the individual borrows against the equity in their home to pay off all of their other bills. Using an alternative to bankruptcy may actually hurt in the long run if you do ultimately have to file bankruptcy, so weigh all of your options before making a decision.

Numbers of Americans Filing Bankruptcy Continue To Rise Since 2005 Changes

Back in 2005, Congress believed that too many people were taking advantage of the bankruptcy system and they needed to make changes. They felt that the number of abusive bankruptcy filings was way too high so they introduced the Bankruptcy Abuse Prevention And Consumer Protection Act. The BAPCPA was enacted on October 17, 2005. During the next year real estate values nationwide reached a record high and then began a freefall that hasn't stopped to this day. This phenomenon is pushing many Americans into filing bankruptcy to get away from an upside down property. All these problems didn't happen overnight and have been coming on by regulations imposed by Congress over the last 10 years. The first trigger point that they got mainstream America's attention was the financial crisis in 2008. This perfect storm that has been created threatens the retirement of every American and even the way we live.
The mainstream media refuses to use the term depression and instead keeps saying that the economy might slide back into another recession. Most experts have said that our economy never left that recession. Ever since Congress changed the bankruptcy code back in 2005 the number of Americans filing bankruptcy continues to be on the rise. The only trade that has been benefiting from these changes is that of a bankruptcy attorney.
As the news refuses to accept the economic downturn there are many factors that show a different story. First of all, because of the real estate crisis, home ownership is getting close to historic lows in many regions in the US. Next, the rate of foreclosures in the US continues to rise and has increased 14% in the last quarter alone. It was recently reported that there were 20 million homes in America that were in default or in danger of being in default currently. Another economic factor that should open peoples eyes is the unemployment rate. Unemployment has not dropped below 9% since back in late 2008. Many people believe that this number is not a true number because many Americans have given up on looking for work. One big fact that should wake up many is the rate of Americans filing for bankruptcy. In 2010, there were close to 1.6 million bankruptcies filed in the US. Although, the number of people filing bankruptcy in 2011 is relatively flat, many people are predicting this is the calm before the storm.
Any bankruptcy attorney could point to the changes to the bankruptcy code that began the slide down the slope for the US. Historically, filing for bankruptcy was a safety net for Americans that got caught being overwhelmed with a mountain of debt. They idea behind bankruptcy was to allow small businesses to take risks and have a way out in case they failed. Bankruptcy is the backbone of capitalism because if individuals with ideas were obligated to pay debts back for life or debtor's prison, no one would take the risk. Only time will tell how this mess washes out. The government needs to get out of the way and allow our economy to take the path of least resistance and fix itself.
After all the changes to bankruptcy filing, it still has a lot to offer the American consumer. Now, it is just become a little more complicated and is best served with the help of a bankruptcy attorney to navigate the new bankruptcy code. It's still true that filing bankruptcy was created to give good hard working Americans a second chance by putting them on the road to becoming debt-free.

The author is a professional that formed FilingBankruptcyNow.Com which provides information for debtors considering filing bankruptcy under Chapter 7 and Chapter 13 bankruptcy and helps individuals stop foreclosure and eliminate their debt by putting them in touch with a local bankruptcy attorney.

Be Credit Wise After Filing Bankruptcy

After the changes to the bankruptcy code back in 2005 debtors are now required to complete pre-bankruptcy credit counseling and post-bankruptcy financial management courses when filing a Chapter 7 or a Chapter 13 bankruptcy. These counseling courses were designed to educate individuals on making better financial decisions in the future as well as to improve their credit worthiness.

Post-bankruptcy an individual can put their new found information to use and live on a budget while working to rebuild their credit. A good way to monitor their credit progress is to closely watch their credit scores. Federal law allows one credit report free of charge from each of the three major reporting agencies on an annual basis. The debtor will want to be sure that there are no mistakes on the reports, and if so, they should be reported and corrected as quickly as possible. It is not uncommon these days for a creditor to sell the debt to a collection company and for that company to in turn try to collect on the debt even though it was technically discharged in the bankruptcy. This practice is not legal but many aggressive collectors will harass the debtor and report this discharged debt to the credit agencies and ruin the debtor's credit scores that they are working so hard to rebuild. The individual does have recourse against these collectors and should report them immediately to the Fair Credit Reporting Agency for prosecution. Everyone that has gone through a personal bankruptcy has two priorities: to budget wisely and save money, and to rebuild their credit history. This may seem daunting, however, by keeping careful track of expenses and paying bills on time this can be accomplished.

After an individual's bankruptcy has been discharged they should wait at least six months before applying for home refinancing. Sure the debtor will receive offers for credit in the mail within a few months of their bankruptcy discharge, which can be a great way to establish and build a solid credit history. But when it comes to home refinancing, credit experts suggest waiting a minimum of six months or better yet, two years if at all possible. This will allow the debtor ample time to rebuild credit and show a record of making payments as obligated. When the individual decides the time is right to refinance, they may want to contact their current mortgage lender first. The lender may be able to provide the best overall loan package, especially if the debtor has made all of their scheduled payments on time. The individual should consider shopping around to compare interest rates, lender fees, and closing costs to find a mortgage that will improve their financial situation. The debtor should beware not to get tempted to tap into any equity they may have unless it is absolutely necessary.

The goal of rebuilding credit is to improve one's financial stability and not to increase their debt to unmanageable levels. By learning and implementing budget management, going through the process of rebuilding credit, and patient comparison shopping, a motivated person can obtain financial stability and become debt free after filing bankruptcy.

Allowing Bankruptcy Filing Won't Stop The Student Loan Conundrum

For a couple of months now, the Occupy Wall Street movement has gotten a lot of media attention. While no one really knows what they want as there is a mixed bag of groups that are protesting, one common complaint heard is the cost of a college education. Most people who go to college get student loans to pay for their education that many times doesn't pan out. There are those kids who get a liberal arts degree and have no job skills whatsoever and can't figure out why they can't get a good paying job. Hearing these stories, it's hard to have sympathy for these individuals. Over the last couple years with the increased numbers of people filing for bankruptcy, there are many people that are saddled with huge student loans. In today's economy, there just aren't any jobs, especially for kids getting out of college. Currently, there is more than $1 trillion in student loans debt that is guaranteed by the government. This is quite a big chunk of change. It's no surprise with $1 trillion outstanding that they would allow a student loan debtor to file for bankruptcy and wipe these debts out.

You can ask any bankruptcy attorney and the common answer to discharging student loans is it's next to impossible. With the student loan debt tripping the $1 trillion mark many are wondering if a student loan bubble is being created. What's interesting is, Americans now owe more money on student loans than on credit cards according to the Federal Reserve Bank of New York and the US Department of Education. If young adults getting out of school have no way to get a job and pay these loans back, where is the money going to come from? If Congress changed the bankruptcy code to allow the discharge of student loans in a Chapter 7 bankruptcy, there would be a stampede to the door to file for bankruptcy.

What's interesting is, many of these people with all of this debt, really don't believe they owe it. Especially the ones that have not benefited from the education they owe money on. There is the other side of the coin of the individuals that became doctors and lawyers. Many of these have become very successful and the last place they want to spend their money is paying back those pesky school loans. There have been many government agencies created to track down these deadbeat students.

Over the past 20 years, kids have been sold a bill of goods. They have been told all the way through school that if they want to get a job and not deliver pizzas their whole life, they will have to have a good education. Today, many of these graduates head out into the job market to only find out that there are only entry-level positions available to them. With this kind of income and being saddled with student loans, they will never get out of hotel mom and dad. Education is important, but these days society has put too much of an emphasis on going to top-drawer schools. Many entrepreneurs and wealthy businessmen don't even have a college degree. Their success is attributed to the school of hard knocks with a lot of hard work.

Even if Congress made filing bankruptcy on student loans a possibility, nothing would change and the debt will still never be paid. The amount of debt with the student loan industry will continue to rise as lenders have very little risk because the powers that are given to them to collect from Congress with the main one being that debt can't be discharged in a bankruptcy filing.

The author is a professional that formed FilingBankruptcyNow.Com which provides information for debtors considering filing bankruptcy under Chapter 7 and Chapter 13 bankruptcy and helps individuals stop foreclosure and eliminate their debt by putting them in touch with a local bankruptcy attorney.

Bankruptcy Can Be An Economic Stimulus For Those In Serious Debt

Over the past few years most Americans have heard of all the bailouts that banks are getting. Even going further than that the federal government came up with a stimulus package to supposedly stimulate the economy but all it did was give the money to large corporations for their pet projects without creating any jobs at all. Right now in 2011, the US still has an employment rate of 9.2% nationwide. That doesn't seem like the economic stimulus did anything for the citizens of the United States. Most Americans are buried under a mountain of credit card debt, waiting for a job so they don't have to file for bankruptcy. In most cases, if these individuals wait too long, filing bankruptcy won't even help.

When it comes to debt, the statistics speak for themselves, the average American household has $20,000 in credit card debt. That's a lot of money when you consider that $20,000 is also six months salary of the average American household. Most individuals don't realize that they will probably never be able to pay this debt down. With interest rates up around 21 to 26% for credit cards, people in this situation usually can barely make the minimum payment. This is why filing bankruptcy might be the only economic stimulation that these folks will ever get. This federal government does a lot of talking, but when it comes down to it they're not paying your bills.

It's only common sense to take a look at your finances and see that unless you win the lotto you'll never be able to pay this off. All you have to do is write down all your bills to create a budget and figure out if you never charged on the credit cards ever again how long would it take you to pay them off. If it's over six years, the odds are against you. When you're facing this kind of situation it's time to go speak with a bankruptcy attorney to see if bankruptcy can help your current situation.

There are two main chapters of bankruptcy for individuals. These are Chapter 7 and Chapter 13 bankruptcy. Chapter 7 bankruptcy is the most common and is king for an individual or family that has a large amount of unsecured debts like credit cards, medical bills and payday loans. Filing Chapter 7 bankruptcy will wipe out all of these debts and if the debtor has no secured debts there is a chance that they will come out of bankruptcy being debt free. This sounds like a pretty good stimulus package if you ask me. On the other side of the fence, Chapter 13 bankruptcy is best for people who are trying to protect their property from being lost to foreclosure. In a Chapter 13, the debtor has their bankruptcy attorney create a repayment plan that will last 3 to 5 years. The Chapter 13 payment plan is based on the amount the debtor can afford with secured debts being paid for and all others be paid if something is left over. A Chapter 13 bankruptcy allows the debtor to keep their property while getting caught up on back payments.

The beautiful thing about bankruptcy is once the bankruptcy attorney files a petition with the court, the creditors can no longer bother the debtor's to collect on the amount owed. People that are struggling paycheck to paycheck and in many cases unemployment check to unemployment check to get by, don't need extra pressure from nasty creditors demeaning them. Don't wait for economic stimulus from the government to rescue you, bankruptcy might be the only boost you'll ever get.

The author started FilingBankruptcyNow.Com which is a website that helps individuals with debt problems by putting them in touch with a local bankruptcy attorney that specializes in filing bankruptcy under Chapter 7 and Chapter 13 bankruptcy. Check our website for more answers to bankruptcy questions and ideas on how to have a debt free future.

Chapter 13 Bankruptcy and Foreclosure

The foreclosure rate in the United States has reached a pandemic level. There have been millions of foreclosures over the past few years. The number of these foreclosures has shattered annual records. So high is the number of foreclosures that levels such as this have not been seen since the Great Depression. This certainly leads many to wonder what can be done to forestall an eventual foreclosure if not outright stop it. There are certainly no easy answers or solutions to such a problem. However, it is possible that foreclosure actions may be stopped if you were to file for Chapter 13 Bankruptcy.

What is Chapter 13 Bankruptcy and how does it work as a means of stopping foreclosure?

Chapter 13 bankruptcy is usually the second option for those that wish to file for bankruptcy. Usually, when they are unable to file for Chapter 7 bankruptcy, they will look towards Chapter 13 as the second option. The purpose of Chapter 13 bankruptcy is to reorganize debts and their repayment structure. In particular, the person in debt has the option of being able to make debt repayments over a period of three to five years. However, such a chapter of bankruptcy cannot be ordered by the courts unless the person filing has a steady source of income. Such an income must be present during the entire duration of the designated repayment period.

The reason for this is obvious. If you do not have a steady source of income then you will be unable to make your payments which would turn the whole bankruptcy proceedings into little more than an exercise in futility.

The way Chapter 13 bankruptcy relates to foreclosure is that it is likely the court will order an immediate stay on foreclosure actions at the filing. Actually, the court could order a stay on all collections of secured debt including your car or other such things you may be in arrears on.

This DOES NOT mean your debt to the mortgage holder will be discharged. You will only receive a short stay in which to set up the court ordered payment restructuring plan. The immediate stay will allow for a buffer zone period where the debtor will no longer be in a situation where the stress of meeting massive monthly obligations has to be met. For those whose expenses far exceed what they are earning per month, this additional stay of obligations could prove enormously helpful on many levels.

There will come a time shortly after the stay of foreclosure has been issued where the debtor will have to make new payments. However, the courts and the attorneys will aid in setting up an agreeable payment restructuring plan that may help set the stage for being able to handle all future monthly foreclosure payments.

Ultimately, there is no easy way out of a situation involving foreclosure. However, when you have sought protection under the laws of Chapter 13 Bankruptcy, you can make the process a lot easier than it would be otherwise.

The author started DebtFreeBankruptcyAttorney.Com which is a website that helps individuals with debt problems by putting them in touch with a local bankruptcy attorney that specializes in filing bankruptcy under Chapter 7 and Chapter 13 bankruptcy. Check our website for more answers to bankruptcy questions and ideas on how to have a debt free future.

Many Are Filing Bankruptcy Because Of Credit Card Debt

Over the last few years the topic of foreclosure has gotten a lot of press. What's funny is, there hasn't been much said about large amounts of credit card debt that Americans have today. Credit card debt is probably the number one thing that causes more bankruptcy filings than anything else. Usually, when a debtor gets behind on their house payments and ends up in foreclosure, the underlying reason is a debtor was juggling their credit card bills alongside of their household expenses. In today's society, the idea of having a credit card is not an option. People don't realize that it is possible to live without a credit card.

Once people get addicted to swiping the plastic, it seems like it is impossible to break. The addiction to credit has become a huge problem in this country today. Nowadays, in this world of I want it now and I can't wait, people don't understand how before credit, our parents used to live. In the past, there used to be layaway plans that the individual would go to the store and make payments until it was paid for and at that time they would get to bring it home. Working and saving up for something for a period of time makes you appreciate it all the more once you get it.

Over the last 30 year's credit has become a new way of buying stuff. Corporate America has made it to buy it now and pay for it later. In many cases, by that time the item charged is paid for, it's probably not even used anymore. It's no wonder that last year alone there were 1.6 million individuals filing bankruptcy in the US. It's easy to let credit card debt burn out of control when left unchecked. Lately, with unemployment pushing 10% many people have been forced into living on their credit cards. At some point there will be nothing left on the cards to spend and the debtor will be forced into filing bankruptcy to eliminate the debt.

Many people that are buried under a mountain of bills feel bad about filing bankruptcy on their credit cards. They feel that it is dishonest to not pay the bills that they promised to pay. This is all pretty noble, but when you consider that choice of feeding your family or paying your credit cards, I think feeding your family is more important. Once you stop paying your cards the debtor will see that the creditor is not your friend. They will turn on you like an angry lion. When the creditor starts filing lawsuits garnishing the debtor's wages, they will quickly change to filing bankruptcy on their debts. Just ask any bankruptcy attorney and they will be able to explain the debtor, creditor relationship. If you consider that years of interest that was paid on the account you will understand that they are not your friend.

After making the decision to file for bankruptcy it's important to get the help of a bankruptcy attorney that has experience in your personal situation. Having the help of a bankruptcy attorney to navigate the complexity of the law will eliminate a lot of the stress that filing bankruptcy creates.

The author started FilingBankruptcyNow.Com which is a website that helps individuals with debt problems by putting them in touch with a local bankruptcy attorney that specializes in bankruptcy under Chapter 7 and Chapter 13 bankruptcy. Check our website for more answers to bankruptcy questions and ideas on how to have a debt free future.