Voices in Finance » Bankruptcy

Declare Yourself Bankrupt: Chapter 7 and Chapter 13

J. Hamilton Fraser — Thu, 17 Jun 2010 11:30:02 +0000

Nobody wants to do it and sometimes it is the best thing you can do: declaring bankruptcy. You can declare yourself bankrupt if you find that the debt you currently have you cannot pay. Frequent reasons for filing bankruptcy include sudden loss of a job, divorce, excessive medical bills and excessive credit card debt. In every case bankruptcy is a last resort—though making the decision to file may free you up for future financial success and a slow rebuilding of credit. If you are forced to file due to large insurmountable debts, remember that there are strategies to rebuilding your credit and make the best decision you are able to do. Also keep in mind that there are several types of bankruptcy, for example, chapter 13 bankruptcies for those who are able to make monthly payments. Chapter 13 bankruptcy can be a good way to retain valuable property in cases where the declaring is able to make payments. Filing Chapter 7 bankruptcy, on the other hand, erases most types of debt at the surrender of valuable property still owned by the debtor.

Often times when it comes time to consider filing bankruptcy, the debtor knows the ins and outs of his own situation and has explored numerous routes and alternatives. Let it be stressed that if there is any other option available to the debtor, taking it will greatly and positively effect the debtors future and should be taken. If no other option exists, filing for bankruptcy does have distinct benefits. If you are reading here, you are familiar with the stress, anxiety and sleeplessness that comes with exorbitant debt. The debt collectors call at all hours of the day making threats and trying to force you to pay. You sit hoping you can buy groceries not knowing how you will make even a single payment on any of your existing debts. Bankruptcy can remove that stress and free you from the constant calls.

By filing for chapter 7 or 13 bankruptcy you declare that you are released from personal liability for certain types of debt. That discharge from debt is permanent. Keep in mind however that in the event of a chapter 7 bankruptcy you cannot keep valuable possessions such as a house or car that is still being paid off. Also, in both cases, existing student loans are not forgiven—only under very specific conditions will student loans be relieved from the debtor. You may have many other questions. Researching bankruptcy is advisable; remember, even filing bankruptcy has associated costs: $200 for Chapter 7 and $185 for Chapter 13. If filing bankruptcy is your last option it is the best option.

Choosing Between Foreclosure or Bankruptcy

J. Hamilton Fraser — Fri, 04 Jun 2010 18:14:57 +0000

When an individual hits a rocky patch financially, they are often faced with difficult decisions. In today’s tough economic times, many people are faced with the possible loss of their home. In searching for options to save their home, many people consider bankruptcy. Bankruptcy has a different set of pros and cons than a home foreclosure. For the unlucky people trying to make this difficult choice, there are some real differences to consider first.

With a home foreclosure, a borrower has fallen behind on their monthly mortgage payments, and the lender is threatening to foreclose. In the foreclosure process, a mortgage holder takes the property back from the home owner in repayment, or partial repayment, for the mortgage debt that is unpaid. The home is sold either at sheriff’s sale or at some other courtroom proceeding, in order that the bank be repaid. The most difficult part of a foreclosure is losing ones home. The default on the mortgage debt will remain on a homeowner’s credit report for seven years, and can cause the borrower to be turned down for additional credit. But after a number of years, this default is treated as any other blemish on a credit report. In other words a borrower can eventually rebuild their credit and regain a good credit score. For the homeowner that is unable to afford their home, even if they can work out a plan for the bank, a foreclosure may be difficult but necessary. The short term affects are the same as any other credit default.

In a bankruptcy proceeding, a borrower seeks to either set up a repayment plan or discharge their existing debt. This debt can include any unsecured loans, credit cards, or secured loans on homes and cars. While certain debts cannot be discharged in bankruptcy, it’s also true that recent bankruptcy law changes may force a debtor to repay some or all of their debt. The reason bankruptcy is a difficult choice is because the debtor is defaulting on all of their debts from multiple lenders, not just a single debt as with a home foreclosure. In bankruptcy, even if the debtor repays some of their debt, lenders will look at it suspiciously for years. One of the benefits of bankruptcy is that if you have steady income, you can work out a repayment plan that might allow you to keep your home for example. This is the main reason many borrower seek bankruptcy protection instead of allowing their home to go to foreclosure. If you aren’t able to make payments under a bankruptcy repayment plan however, perhaps because of job loss, your house will still go to foreclosure even in the bankruptcy process. Bankruptcy does not prevent foreclosure, it may only delay it.

So which should you choose, foreclosure or bankruptcy? If you really want to keep your home, and you’re able to make payments on the note if you reorganize your debt, you may elect to go to bankruptcy court. If however you cannot afford the home at all, and if ending your mortgage payments will allow you to bring other debt current, you may have to make the hard choice to allow the bank to foreclose, and avoid bankruptcy which can have worse credit implications.

Hiring A Lawyer When You Declare Bankruptcy

J. Hamilton Fraser — Fri, 04 Jun 2010 00:52:54 +0000

If you are like many Americans, and you are falling deep into debt, you may be considering declaring for personal bankruptcy. Regardless of whether you file as an individual, married couple, partnership, or corporation, this is a long and tedious process, with a lot of paperwork and forms that have to be filed and submitted. Even though it is going cost you additional money just to file, it is recommended that you get a lawyer to represent you throughout this process.

Do your research and ask around, there are many lawyers that specialize in bankruptcy cases. Also many of them offer free consultations, this way you can check out two or more lawyers if you would like before you commit to one. Ask them about their experiences with bankruptcy, and also their prices. Since you are declaring bankruptcy, you obviously are struggling financially. Most lawyers will offer some sort of deferred payment options and will work with you knowing that you can’t pay for everything upfront. If they say that they don’t, find one that will.

Having a lawyer represent you is going to save you a lot of time and confusion. They can advise you in regard to what chapter to file under, and assist you with other aspects of the process. There is so much legal paperwork, and it can be very confusing. You want to make sure that this paperwork is filed and submitted correctly and legally for your personal benefit. You want someone explaining to you and directing you through the United States legal system. When you are interacting with the trustee assigned to your case, you are going to want to have your lawyer present. The cost of a lawyer may save you additional costs and some of your assets in the long run.

Go ahead and sit down and get a free consultation with a lawyer, and take their advice. They may not even recommend that you file for bankruptcy. Make sure you know your rights and the facts before you proceed. With proper representation the bankruptcy process can go quickly and smoothly.

How to File for Bankruptcy Without a Lawyer

J. Hamilton Fraser — Mon, 22 Mar 2010 21:15:08 +0000

If you need to file for bankruptcy, you’re likely hoping to save money on the various fees you’ll need to accrue during the bankruptcy process. You may feel inclined to proceed with the bankruptcy process without the help of a Minneapolis bankruptcy lawyer. Depending on the complexity of your bankruptcy situation, it is possible for you to file without help. It is important to understand that bankruptcy is a process requiring a great deal of effort, time and paperwork. If you’re ready to attempt bankruptcy on your own, here are some tips:

1. Thoroughly understand bankruptcy law in your state. Research different types of bankruptcies and have a general understanding of Minneapolis bankruptcy law. Understand the qualifications for filing and the process regulations to avoid trouble.

2. Fill out the bankruptcy means test. The completion of the bankruptcy means test is required for you to proceed with bankruptcy. The test will also reveal whether you are allowed to file for a Chapter 13 or Chapter 7 bankruptcy. The test involves calculating your household income and comparing it to the household income for a household of the same size in your state—this will require some research. If your monthly income average falls below the household income average in your state, you may file Chapter 7 bankruptcy. If your average is above the comparable median income, calculate and subtract your monthly expenses from that number. The remaining amount is considered ‘disposable income.’ The larger your disposable income, the smaller your chance of being eligible for Chapter 7 bankruptcy.

3. Obtain your credit report. You can request one free copy of your credit report annually. Ensure that this copy includes reports from all three primary credit reporting agencies. Debt not included in your bankruptcy is not eligible for liquidation.

4. Receive credit counseling. Before filing for bankruptcy, you are required to undergo credit counseling and training regarding debt management. This is something you can do online with a few hours and less than $100.00. A certificate of completion is required by the court.

5. Review and submit paperwork. Depending on your location, you can file online or at the courthouse. Either source can provide you with paperwork. Complete the form as instructed, provide information about all debts and assets and most importantly, offer complete honesty. Failure to provide complete and accurate information will lead to a denial of bankruptcy and more fees. You must pay a required filing fee and wait approximately one month. At that time, a creditors meeting will occur. As long as there are no objections, you can expect your case to be finalized in about half a year.

While it is possible to file for bankruptcy on your own, the paperwork can be very intimidating and stressful, especially when added to financial woes. Accuracy is critical. While it may seem difficult to find money to hire a Minneapolis bankruptcy attorney, your attorney can work with you to find the funding and ensure accuracy on all filed paperwork.

Know Your Alternatives to a Bankruptcy Claim

J. Hamilton Fraser — Fri, 19 Feb 2010 06:02:17 +0000

For people that are in serious financial trouble, it can become easy to seek advice from just about any source including friends, family and even shady online “information” sites. What many people don’t understand is that what might have worked for one person may not necessarily work for them. Each case is different and when it comes to filing bankruptcy, the person’s financial history and current standing must be taken into strict consideration. Furthermore, it’s difficult to answer specific questions that borrowers sometimes have, as many of the laws and regulations governing bankruptcy can be somewhat technical and often times confusing for most to understand.

People that are facing a potential bankruptcy claim are in a desperate mindset, and are willing to listen to just about anyone that promises to make their struggles disappear. Many people feel as though they have failed as members of society, and these feelings only intensify as they begin to realize the consequences associated with filing bankruptcy. Although the aftermath of filing for bankruptcy isn’t necessarily glamorous, it’s important that the person receive accurate and honest advice going into the process. Of course, there are alternatives to dealing with financial hardships apart from bankruptcy, and these should be made clear before the borrower pushes ahead with a bankruptcy claim. Some of these options include debt consolidation, a debt workout, a deed in lieu of foreclosure and credit counseling.

Although there are many reputable bankruptcy attorneys available for consultation, borrowers should steer clear of attorneys that aggressively promote bankruptcy as the only option. The simple fact is that bankruptcy isn’t an enjoyable process and it doesn’t make your troubles go away. Even under Chapter 7 bankruptcy, which is often considered the preferred method of filing, a good portion of your debt must be resolved, typically through the sale of your non-exempt assets.

The best thing you can do if you think you might be headed for financial trouble is to seek the council of an experienced and well respected bankruptcy attorney. A good attorney will take the time to explain your options to you, so that you can worry about getting your life back on track.

Getting quotes for Bankruptcy Attorney fees

J. Hamilton Fraser — Thu, 11 Feb 2010 20:20:17 +0000

If you are in process of gathering information for filing bankruptcy you will find it difficult to just get one base quote due the differences from bankruptcy case to bankruptcy case. The problem is exacerbated with the differences of work involved with each chapter of bankruptcy. Generally, Chapter 7 bankruptcy is a fairly simple process. However, filing Chapter 13 is more difficult. Therefore, finding a Michigan bankruptcy attorney willing to give you a base quote will be difficult.

To overcome this you can start by researching your case and coming up with the general qualifications for which chapter of bankruptcy your case will belong to. Some qualification ideas would be to identify what your annual salary is along with what your state considers as the median income for a family of your size. The reason this helps is because when you begin calling attorneys you can tell the office you are looking for basic quotes for a basic bankruptcy. As a matter of example, you would call the first attorney and say; I am looking for a quote on a basic chapter 7 bankruptcy. You continue to explain that you are under the median income for your state and you do not have any equity in my home or additional assets. However, if you call the attorney and tell them you are over the median income for your state and you have assets( home equity) you will have given the attorney enough information where they can ask how far over the median you are and how much do you estimate as having in assets. The attorney can then give you a ball park figure of how much the chapter 13 bankruptcy case will cost, and approximately how much to expect in bankruptcy attorney fees.

Law firms are typically reluctant to give any quotes over the phone. However, if you provide them with the information above while telling them you are fully aware that they are not able to give a specific quote until they have looked at your case you should have more success in achieving your goal of getting a basic quote while learning a little bit more about your situation before you ever meet with an attorney.

Watch Out For The Repo Man

J. Hamilton Fraser — Wed, 03 Feb 2010 02:25:51 +0000

Recovery Agent’s Tricks of the Trade

It is actually very very easy for a repo man to get a hold of your vehicle and drive off with it. After all, chances are that he has done it thousands of times and has consequently gotten very good at it. Generally speaking, it will take him less than half a minute to back up into your driveway, hook up the car to his vehicle and drive off with it.

If you can get a hold of him before he is off with your repo cars then you will not have the sad experience of losing your vehicle but of course it is just not possible to watch your vehicle from the house window all day long. Some recovery agents are also good at standing not right outside your home but nearby enough to be able to tell when you are in a location of your house that would allow them to get ahold of your vehicle without your running out to stop them in time. All told, it is just not realistic to expect that you will be able to count on seeing the recovery agent and running out the door in time to catch him before he hooks up your vehicle and is off with it.

If you have a garage with a locking door then you are pretty much problem free; if not, the trick is to find a way to park your vehicle outside, unprotected, in such a way that it is impossible for a recovery agent to get at it easily. A couple things you can do are either park the car in such a way that another car is right behind it and the sides are hedged in with either buildings, fence, or other cars, or park it in between cars with a building or fence on one side. That makes it a lot more time consuming or even impossible for an RA to quickly hook up your vehicle and tow it away.

One thing you should keep in mind however is that this is not totally full-proof as often RA’s do have what is known as a ‘valet’ key, which will open the car doors and turn off the factory alarm, allowing the RA easy access to your vehicle.

If you want to afford your vehicle maximum protection from an RA, then you will want to have the door lock and ignition changed so that a valet key will not be able to open the car and turn it on. That, combined with parking the vehicle in such a way that it can not be hooked up to another vehicle and towed off, is your best bet if you are trying to avoid having your vehicle taken by a recovery agent. For more great information on protecting your ride and know your rights visit the Repo Cars Guide.

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Trying To Avoid Filing Bankruptcy

J. Hamilton Fraser — Tue, 26 Jan 2010 22:25:36 +0000

Dealing with a credit adviser can be a great way to deal with the process of declaring bankruptcy. If you know people who have in the past, ask who they spoke to and whether they would deal with those people again. If you begin to talk to them in advance of actually declaring that you are bankrupt you may be able to avoid the process altogether either by credit counseling or through a consumer proposal. With credit card bankruptcy options out there I highly recommend them if you can possibly avoid filing chapter 7 or 13.

With a consumer proposal, you can often pay down your debt and avoid the black mark that a declaration of bankruptcy can leave on your credit history. By showing that you are able to pay off your debt you look better in future when you are applying for loans. With a consumer proposal, you meet with the people you owe money to and work out a payment schedule. This usually ends up meaning that after a set time of making regular payments you will end up having the rest of your debt discharged.

This means that while you will still make payments you will be able to get out from under the shadow of your debt without the stigma of bankruptcy. It can make getting back to a more normal life much faster and easier than it can if you have declared that you are bankrupt. This is why for many people this less well-known alternative is actually a much more preferable one.

Whatever your ultimate decision is, help with bankruptcy can mean not only guiding your through the process but also possibly helping you avoid it all together. Taking the time to learn what your options are can be the best way to ensure a brighter future for you and your family.

How Long Does It Take To File Bankruptcy?

Leo Sardina — Fri, 11 Dec 2009 05:38:47 +0000

If your financial situation has deteriorated to the point where you need to file for bankruptcy, the one question that you will most want answered is, “How long will it take for the bankruptcy proceeding to be over?”

The answer to this question depends on which Chapter of bankruptcy you file. While there are numerous chapters of bankruptcy that you can file for, the two most common ones are Chapter 7 and Chapter 13.

Most people are familiar with Chapter 7 bankruptcy. This is where a person declaring bankruptcy simply can’t repay his or her debts. Therefore, the court will usually liquidate the person’s assets and then discharge their debts. Just for clarification purposes, the term ‘liquidate’ in this instance means to sell off. If there is any money left over after all of the assets have been liquidated, the person filing for bankruptcy gets to keep it.

In addition to Chapter 7 bankruptcy, there is also Chapter 13 bankruptcy. In this situation, the person claiming bankruptcy doesn’t have his or her assets liquidated. Instead, a repayment plan is developed (usually over 3 years). If the person who filed bankruptcy can adhere to the 3 year plan, the courts will forgive the remaining debt. As you can imagine, if you are being forced to file for bankruptcy by your creditors, they are going to advocate for Chapter 13 as this gives them the best chance of recovering some money.

Now that we have provided a brief overview of the 2 most common forms of bankruptcy, let’s answer the original question. If you file for Chapter 7 bankruptcy, the proceedings will be over in 4 to 6 months.

If you are forced to file for Chapter 13 bankruptcy, it can take over 3 years for the bankruptcy proceedings to cease. It takes this long because the court is making sure you adhere to the repayment plan.

Obviously, due to the enormous stress of having to go through this process, you will want to choose Chapter 7 as the way to go since it is quicker. Unfortunately, this decision is ultimately not up to you. Hence, you will want to make sure to use a bankruptcy attorney to assist in preparing your case.

If you have any further questions concerning bankruptcy, we highly recommend you visit the Dayton Lawyer Guide.