A state of bankruptcy exists when a business or individual can no longer afford to pay their debts and or employees.

The most popular form of bankruptcy is chapter 7, which accounts for 85% of filings. It is often considered as the most attractive option as it allows the debtor to emerge debt free.

The main drawback to chapter 7 is that, with a few exceptions, all personal assets are sold to provide funds for creditors in full or part payment. However, if an individual is under crushing levels of debt, losing everything and starting again can be an attractive proposition.

However, chapter 7 bankruptcy is not always an option, as a compulsory 2 stage means test has to be completed to ensure that the individual really does have no way of meeting his or her debts.

In effect, if your income, after allowable living expenses are deducted (and these expenses and amounts vary state by state), exceeds the median income of a family of the same size in the same state, over the preceding 5 months before the month bankruptcy was filed, further means test calculations are applied to see if any non secured debt can be repaid. If not, then chapter 7 will be allowed.

So, what are the alternatives to chapter 7?

The first thing to consider is whether claiming bankruptcy can be avoided in the first place. Bankruptcy has a major negative effect on personal credit ratings and makes any future bank accounts, credit cards or loans very difficult to obtain. Bankruptcy should be an absolute last resort.

Before filing any sort of bankruptcy, a debtor should consult with their creditors to see if repayments etc can be renegotiated or delayed, to allow the debtor some “catch up” time.

Seeking a rescheduling of repayments is basically a chapter 13 filing, where the court agrees with creditors a repayment schedule over 3-5 years. However, if you can negotiate this yourself, without formally going bankrupt, so much the better. A debt counselling service can also assist in seeking an adjustment to repayment terms.

Chapter 11 is very similar to chapter 13 and is suitable for business. No assets are sold so the business can carry on, making payment to creditors under a repayment plan, and after the bankruptcy is discharged, can hopefully prosper, having caught up with its debts.

It might be that because of these harsh financial times you might be thinking about declaring yourself bankrupt. If you need more free information about declaring yourself bankrupt, visit www.declaringyourselfbankrupt.net.

What Exactly Is Chapter 7 Bankruptcy?

Chapter 7 bankruptcy, occasionally referred to as a straight bankruptcy, is a liquidation proceeding. The borrower relinquishes all non-exempt property to the bankruptcy trustee who then converts it to money for payment to the lenders. The consumer will get a discharge of all dischargeable financial obligations usually inside of 4 months. In the vast majority of instances the borrower has no assets that he / she would lose so Chapter 7 will provide that him or her a fairly fast “fresh start”.

One of the most important functions of Bankruptcy Law is to offer a person, who is hopelessly mired with debt, a fresh start by clearing out his / her debt.

Individuals who file for chapter 7 bankruptcy will need to agree to enroll in credit counseling. After declaring chapter 7 bankruptcy, it may be challenging to get credit for a few years, and you will not be able to file for personal bankruptcy again for a set amount of time.

It has become more difficult to file for chapter 7 bankruptcy in the US, thanks to laws which significantly stiffened the bankruptcy policies in the early 2000s. It is wise to consult an attorney and an accountant before investing in a personal bankruptcy filing, because although the professional fees for the consultation may be high, there might be an alternative that has not been considered. A professional consultation can additionally smooth the way to move ahead with bankruptcy filings, if a person decides to carry on with bankruptcy proceedings.

What Is Chapter 13 Bankruptcy?

Chapter 13 Bankruptcy is also recognized as a reorganization bankruptcy. Chapter 13 bankruptcy is filed by individuals who want to pay off their financial obligations over a time period of 3 to 5 years. This type of bankruptcy is of interest to individuals who have non-exempt property that they want to keep. It is usually only an option for individuals who have predictable income and whose income is acceptable to pay their reasonable expenses with some amount left over to pay off their debt.

Hiring an experienced Maryland bankruptcy lawyer is an important decision that should not be taken lightly. Make sure to setup a consultation with the Maryland bankruptcy legal professional so that you can better understand your available options.

After surviving the difficult process of a foreclosure, a former homeowner may still face an additional obligation to their mortgage lender. Unmanageable by most, there is a way to clear this sizeable debt by filing bankruptcy.

When a home is sold through a foreclosure action, and sufficient funds are not collected from the sale, the lender can file for a deficiency judgment against the borrower to repay the balance of the debt. The lender, or their collection agency, can ultimately garnish wages and freeze personal bank accounts to collect the funds. The garnishment is often a surprise to the account holder and perpetuates the strain on the household budget.

An example would be if Mr. Smith originally purchased his home for $350,000, and today owes $300,000. Laid off from his job of ten years, Mr. Smith is forced to take a job that pays considerably less. He falls behind on payments, and the mortgage company will not work with him or offer any other options. His home is sold at foreclosure for today’s market value of $250,000. The lender then obtains a deficiency judgment from the court against Mr. Smith for $50,000, which now becomes a new financial obligation.

The laws vary from state to state, but this judgment can often be obtained for no additional cost by combining it with the original foreclosure lawsuit. Lenders are taking advantage of the opportunity in states that allow this process, and are still filing in others if it proves cost effective.

Filing chapter 7 bankruptcy wipes out this additional debt completely, eliminating aggressive actions to collect and preventing the lender from further pursuit. Consumers can move forward, without the burden of past dues, and with a clear picture of their finances.

As stressful as this time in a person’s life is, it is important to be proactive and consult a qualified bankruptcy attorney as soon as the need is determined. There are many options to explore, and the laws are always changing. Hiring an experienced attorney will ensure that the best individual choices are made. Current earnings, assets and debts are carefully examined along with future plans and goals. The best timing for filing for bankruptcy, whether it occurs before or after a possible foreclosure, can only be determined with the help an expert.

By enlisting the assistance of a bankruptcy attorney, consumers can do more than wipe out a deficiency judgment; if they are proactive and contact their attorneys prior to the judgment, they can also stop it before it happens, which will keep it from ever appearing on their credit report.

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When you come right down to it a Chapter 7 bankruptcy gives you relief from nearly all, if not all, of your debt. It ultimately offers you a chance to start over with your finances.

The laws and regulations governing Chapter 7 bankruptcy have changed extensively over the past few years. However, the aim hasn’t changed. It exists to aid citizens who get themselves in a financial situation where they have an overwhelming amount of debt with no prospect of ever being able to completely pay that debt off.

To start a bankruptcy, you must file a bankruptcy petition in Federal bankruptcy court. It is highly recommended that you use an attorney to handle this filing for you. After your attorney files your bankruptcy petition, you get instant protection from any action by your debt collectors. That protection is designated an “automatic stay.” Effectively, the automatic stay of bankruptcy stops all collection action by your debt collectors. In truth, once you file your bankruptcy petition, your debt collectors are prohibited by federal law from contacting you for payment or from filing any form of collection complaint against you.

As part of your bankruptcy proceeding, you will have to attend a hearing at bankruptcy court. The hearing typically takes place in a room with you, the bankruptcy trustee (i.e., the individual assigned by the court to watch over your case) and your lawyer. The whole process usually only takes about fifteen minutes, at some stage in which the trustee will ask you some questions on the subject of your take-home pay and your debts. At the conclusion of the hearing, the trustee makes a recommendation to the bankruptcy court to discharge your debt. A discharge order is subsequently mailed to you. It may possibly take more than a few months for you to actually receive your discharge order.

Be aware that your creditors might appear at your hearing to speak for their benefit and oppose your bankruptcy discharge. However, it is really an exceptional situation where a creditor actually shows up. In most cases, the bankruptcy is fairly easily completed without any protests from lenders.

Bankruptcy may well be your only out if you’re burdened beneath a sizeable sum of debt that you have no means to pay back. Therefore, if you are in debt way over your head and are having difficulty making normal payments, you owe it to yourself to at least seek the advice of a bankruptcy lawyer concerning the prospect of filing a Chapter 7 bankruptcy.

Learn more about Bankruptcy Law. Stop by Harvey L. Cox’s Bankruptcy site where you’ll get Plain English explanations of Chapter 7 Bankruptcy Law.

Filing for bankruptcy can sometimes be a scary process. Although, despite this, knowing a few points about Oklahoma bankruptcy might be extremely helpful to lessen this fear. The following information is a simple overview relating to this extensive legal process.

While it is true the US Bankruptcy Code is the main building block to every state law dealing with this financial legality issue, different aspects to the laws will change between states. There exist certain and pinpointed things that can vary greatly. A few of these concepts deal with the median income rate and which properties individuals own that are exempt from the proceedings. This fact is true for Oklahoma, too.

There are several various types of bankruptcy. The numerous kinds are then differentiated by numbers and chapters. This is fairly simple to grasp, because the chapter and number is in reference to a chapter and number within the Bankruptcy Code. There are a lot of chapters, although the following points just cover two typical ones.

One commonly understood form of bankruptcy is called Chapter Seven. This is also referred to as total liquidation, as well. In Chapter Seven, a court trustee is appointed where all relevant property that is not exempt from the state’s law is collected. The property is then sold and the resulting money is distributed among the different creditors, and the remaining debt is cleared.

A lot of individuals may think this is a bit intimidating, since from its description it seems as though all property is confiscated from those wishing to file this kind of debt relief. However, such is generally not the case. Most states, including Oklahoma, will allow individuals in debt to maintain basic property, such as their house and a vehicle.

One other typical bankruptcy type is called Chapter Thirteen. This chapter will also be called reorganization. Basically in Chapter Thirteen a payment plan is organized and enacted for about five years. The amount repaid per month is typically calculated based on the median yearly income and primary living expenses. Reorganization is specific to singles and families, too, although it excludes fishermen and farmers. These groups of people utilize Chapter Twelve, which is similar to Chapter Thirteen.

For Oklahoma citizens wanting to file, figuring which chapter they are eligible for, as well as meeting with their lawyer, are two important aspects to this legal issue. If a citizen has an income of less than $38,929 they will be eligible for Chapter Seven. If they meet or exceed that income level, they will then qualify for Chapter Thirteen. There are various income levels for different situations, like people that are married and married individuals with children.

There are a lot of detailed issues related to filing bankruptcy. Oklahoma bankruptcy, however, does not have to be an overly scary concept. Knowing the basic fundamentals to this systems allows for a better understanding of this legal issue.

Joseph St. James is not a licensed attorney and therefore cannot provide legal advice. So, if you are considering an Oklahoma bankruptcy contact an Oklahoma bankruptcy attorney. You can call the Debt Line Law Office at (888) Debt-Line.

If you are unable to meet your monthly debt repayments, if your credit card statements are simply getting more and more in arrears and your medical bills remain unpaid for months on end, you might have only one alternative: file for bankruptcy. If you happen to live in Massachusetts, you can make use of one of the many Bankruptcy Lawyers in Massachusetts.

What is bankruptcy? It is a way to get legal protection against your creditors if you are unable to meet your debts for valid reasons. Reasons that can be put forward during the application include large medical expenses, losing your job and the loss of an income earning partner.

It’s highly inadvisable to try to handle the whole application without the help of a lawyer. Unless you want to have many sleepless nights and end up with nothing of course.

When an application for bankruptcy is submitted to the court by your lawyer, the court will let all your creditors know about this. A meeting (’first meeting of creditors’) will then be set up. This normally takes place 30 or 40 days after the application has been filed.

At this meeting you have to provide information about all your assets and liabilities as well as income and expenses to the presiding officer. From there on your lawyer will deal with your creditors. If a creditor should therefore turn up at your front door, you can safely refer him to the lawyer.

If your application is approved, the terms will be made known to everyone involved. Unfortunately all your assets will form part of the now bankrupt estate. You will therefore not be able to keep anything, except those assets which have been exempted by the court.

Bankruptcy Lawyers in Massachusetts are law experts. They know bankruptcy law like few people know the Bible. They are also totally familiar with the whole application process. It’s therefore in your own interest to use one of them to represent you during the application and afterward.

Filing for bankruptcy is an important and serious decision. Speaking with a Arlington Heights Bankruptcy Lawyer can help you to make a sound decision for you and your family. Speaking with a qualified Massachusetts Bankruptcy Lawyer will help you understand your options.

When considering the very difficult option of bankruptcy, one of the first decisions to make is whether to file for Chapter 7 or Chapter 13. Although the rules differ from state to state, the basic differences between the two are the same everywhere, as filing always takes place in Federal Bankruptcy Court.

A little Internet research will give you the basic rules in your state, but in general, there are two major categories of bankruptcy: Chapter 7 and Chapter 13. The former is the more traditional type, usually referred to as “liquid” or “straight” bankruptcy. Filing for this ensures that all debts, except child support, student loans, alimony and taxes are forgiven.

One of the most common reasons for selecting this option is losing long-term employment. In the current economy, someone who has recently lost a job often struggles to obtain a comparable job and turns to credit cards and savings to pay bills - which leaves someone with little to no options. Other instances such as death of the family bread winner, divorce and high medical bills are also common reasons for someone to consider or follow through with Chapter 7. Needless to say, although it’s possible for a layman to deal successfully with the complicated paperwork and legalities involved in the process, consulting with a bankruptcy attorney is highly advisable before filing, if only to ensure not losing more than is absolutely necessary.

Chapter 7 involves the debtor selling their nonexempt assets and utilizing the proceeds from the sales to repay debts. It is important to note that in order to qualify for this option, you must calculate your “current monthly income,” which is actually the applicant’s average income over the last six months. If this number is higher than the median income for a family of your size in your state, you will not be eligible to file.

A Chapter 13 bankruptcy, on the other hand, does not require that you relinquish anything. Instead, you will be expected to repay your debts through use of a structured plan which must be approved at a bankruptcy court hearing, attended by your creditors. This option is advised if you’ve simply fallen behind and your debt has overwhelmed your available funds. This kind of bankruptcy is basically a promise to pay your creditors according to a schedule agreed upon at the hearing.

If you are employed and can depend on a regular income, Chapter 13 is probably the best way to go. In most states, if things take a turn for the worst down the road, you can always resort to Chapter 7 if you have been unable to meet the repayment schedule within five years after filing.

Again, keep in mind that your state may have more or less restrictive laws concerning the details of either type of filing, so although it’s possible to wend your own way through the maze of legalities, you are always much better served by consulting with an attorney rather than trying to do it yourself.

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In the Detroit metro area, if you are considering bankruptcy, call on A Better Way Bankruptcy. With nearly three decades of collective experience in bankruptcy law, their friendly, helpful and compassionate attorneys and professionals can help you obtain relief from debts, stop calls from creditors and get you moving toward a fresh start. Distributed by SEO 2.0 Services

There are many reasons why people may get overwhelmingly behind on their bills with little hope of catching up. Whether due to a mistake somewhere along the way or circumstances beyond the individual or family’s control, sometimes filing for bankruptcy is the best possible choice - but it is not a decision to be taken lightly.

When considering this important issue, keep in mind that there are two different types of filings. Chapter 7 is generally for people who don’t have assets they need to protect, such as a house, or for those who don’t have enough money to pay their current bills. Chapter 13, by contrast, can restructure past due debt to help people keep their house and car. However, it is only appropriate for those who can afford their current bills plus a little extra to get caught up on back payments over time. Only you and your lawyer can decide if either type is right for you, but here are some common reasons for bankruptcy filings.

1. Loss of employment. Those who lose their jobs may find it very difficult, if not impossible, to make ends meet. In the current economic climate, it can be challenging to find another job soon enough to keep all the bills caught up. When things fall hopelessly behind, it may be time to consider this incredibly difficult option.

2. High medical bills. Serious injury or illness can cause huge medical bills that the average family or individual won’t be able to pay. When this happens, filing for Chapter 7 or 13 may be the only option to get relief from burdens of medical debt.

3. Death of wage earner. When one of the primary wage earners in a family passes away, bills that were perfectly manageable can suddenly become much too high for the family’s diminished income. Bankruptcy can give those who are in this difficult situation the fresh financial start that they need.

4. Preventing foreclosure on a home. When a foreclosure is looming and can’t be otherwise avoided, Chapter 13 can stop the process and help families and individuals keep their homes while restructuring debt to make catching up on late payments possible. Likewise, Chapter 13 will stop utilities from getting turned off.

5. Preventing a car or other assets from being repossessed. Chapter 13 bankruptcy also can restructure debt on a car or other possessions by consolidating late payments. This can allow those who are filing to keep their cars and other possessions.

6. Stopping wage garnishments. Wage garnishments can decrease a paycheck to the extent that it is hard to get by. Bankruptcy will halt most wage garnishments, with the exception of garnishments ordered by the court for child support.

It’s important to remember that bankruptcy doesn’t wipe out all debt (student loans, child support, and some taxes are examples of debt that will generally remain). Filing is extremely complicated, and bankruptcy laws vary from state to state. The consequences of a botched or ill-advised filing can haunt you for many years to come, so it’s best to not attempt it by yourself.

Hiring a local lawyer who specializes in this sensitive issue is highly recommended to ensure that the filing is done correctly and that you and your assets are protected to the fullest extent of the law. Fortunately, many lawyers offer free consultations to help you decide whether either chapter 7 or 13 could be the right choice for you. Quite a few will submit your filing for a reasonable flat fee.

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If you need a Portland, Oregon bankruptcy lawyer, call on Aurora Law Office. With a reputation for honesty and integrity and over 25 years experience, they have focused only on divorce and bankruptcy since 1996. They provide a friendly environment, free initial consultations, payment plans and flat-fee charges available for uncontested divorces and bankruptcies. Distributed by SEO 2.0 Services

Under Chapter 7 of the Bankruptcy Code, the bankruptcy trustee gathers and sells the debtor’s nonexempt assets and uses the proceeds of such assets to pay creditors in accordance with the provisions of the Bankruptcy Code. Part of the debtor’s property may be subject to liens and mortgages that pledge the property to other creditors. In addition, the Bankruptcy Code will allow the debtor to keep certain property, which is deemed exempt; but a trustee will liquidate the debtor’s remaining assets. Debtors seeking bankruptcy protection under Chapter 7 should realize that the filing of a petition under Chapter 7 may result in the loss of property. A Chapter 7 bankruptcy case does not involve the filing of a plan of repayment as in a Chapter 13 filing.

In order to qualify for relief under Chapter 7, the debtor may be an individual, a partnership, or a corporation or other business entity. A means test for individual debtors is employed determine the eligibility of the debtor, and if qualified, relief is available under this chapter without regards to the amount of the debtor’s debts or whether the debtor is solvent or insolvent. Under the test, if the debtor’s current monthly income is more than the state median, the Bankruptcy Code requires application of the test to determine whether the Chapter 7 filing is abusive. Abuse is presumed if the debtor’s aggregate current monthly income over 5 years, minus certain allowed expenses, is more than (i) $10,950, or (ii) 25% of the debtor’s nonpriority unsecured debt, as long as that amount is at least $6,575. The debtor may rebut such presumption only by demonstrating special circumstances that justify additional expenses or adjustments of current monthly income. Unless the debtor overcomes the presumption, the case will generally be converted to Chapter 13 with the debtor’s consent or will be dismissed.

No individual may be a debtor under Chapter 7 unless he or she has, within 180 days before filing, received credit counseling from an approved credit counseling agency either in an individual or group briefing. If a debt management plan is developed during required credit counseling, it must be filed with the court.

One of the primary purposes of bankruptcy is to provide the debtor the needed fresh start by discharging certain debts. The debtor in a successful Chapter 7 bankruptcy filing will have no liability for discharged debts. Although an individual Chapter 7 case normally results in a discharge of debts, certain types of debts are not discharged. In addition, a bankruptcy discharge does not extinguish a lien on property. An experienced attorney will guide the debtor through which debts may or may not be discharged.

In order to file a Chapter 7 case, the debtor must file a petition with the bankruptcy court serving the area where the individual resides. Further, the debtor must also file with the court (1) schedules of assets and liabilities; (2) a schedule of current income and expenditures; (3) a statement of financial affairs; and (4) a schedule of executory contracts and unexpired leases. Debtors must also provide the bankruptcy trustee with a copy of the tax return for the most recent tax year as well as tax returns filed during the case including tax returns for prior years that had not been filed when the case began. Individual debtors must also file: a certificate of credit counseling and a copy of any debt repayment plan developed through credit counseling; evidence of payment from employers, if any, received 60 days before filing; a statement of monthly net income and any anticipated increase in income or expenses after filing; and a record of any interest the debtor has in federal or state qualified education or tuition accounts. Again, experienced counsel should guide debtors carefully through the filing process in order to ensure efficiency and accuracy.

The filing fee with the bankruptcy court includes a $245 case filing fee, a $39 miscellaneous administrative fee, and a $15 trustee surcharge. If the debtor’s income is less than 150% of the poverty level (as defined in the Bankruptcy Code), and the debtor is unable to pay the Chapter 7 fees even in installments, the court may waive the requirement that the fees be paid.

Although a Chapter 7 bankruptcy filing may seem daunting, with proper professional assistance, the process can be manageable and drastically improve the stress and financial pressure on debtors choosing to file Chapter 7 protection.

Learn more about Chapter 7 Bankruptcy. Stop by Eric Craig, Esq’s site where you can find out all about Bankruptcy Filing and what it can do for you.

Those among us who have lost their jobs or had their hours cut back face many fears. Many people are struggling to get all their bills paid, and some are on the brink of losing their homes.

Advertisements for “debt elimination” methods are pervasive in today’s media, popping up just about everywhere. Understanding the difference between fact and fiction regarding debt relief and bankruptcy is critical, as the path you choose now can continue to impact your future for a long time.

It’s important to realize that bankruptcy laws are state specific. There are some laws that will be almost the same, and certainly very similar from state to state. But if you are contemplating filing any form of bankruptcy proceedings, it is important to consult with a local attorney. Bankruptcy attorneys are the recognized experts who can help you determine what options are available to you, and which option makes the most sense for your unique situation.

Many people who desperately need debt relief are concerned about the social stigma of debt relief, fearing that the news of their bankruptcy will be widely published. In the case of celebrities and public figures, this is nearly unavoidable and thus a legitimate issue. For the rest of us, though, few people outside the affected creditors ever become aware of the proceedings.

It is important to note that bankruptcy may not eliminate all of your debts. You may meet the current means test for making debt repayments through Chapter 13, a wage earners plan. Alternately, a Chapter 7 filing may be more appropriate. Your attorney will be able to determine which is the best one for your situation. Both Chapter 7 and Chapter 13 have certain debts that are not eliminated. These include child support, criminal restitution, and tax liens.

Another area that is rife with fiction is that you will lose your house. Both Chapter 7 and Chapter 13 forms of bankruptcy often allow you to keep your current home. In fact, a Chapter 13 filing, in some instances, is initiated specifically to help homeowners prevent foreclosure. This is an area where you want an experienced bankruptcy lawyer handling your Chapter 7 and Chapter 13 filings and advising on your case in order to protect your assets to the full extent of the law.

Some people may find it necessary to file bankruptcy in a state other than the one they live in. This sometimes happens when the debt was incurred in another state, or when they recently moved. It is now required for you to be a legal resident of a state for two years before you are eligible to use that state’s exemptions. Consult with an attorney in the state in which your debts were incurred before changing jurisdictions.

No matter what you may have heard to the contrary, debt relief always has a negative impact on credit scores. Credit scores going up as a result of less debt after a bankruptcy is a complete myth. The reverse is true: after a bankruptcy, your score will drop at least some, and in many cases, it will lower significantly. Even if you settle debts with creditors by negotiating the balance down, most of these agencies will show these payoffs as “PAID SETTLED”, which will also lower your score. The credit bureaus maintain records of all your credit transactions, some for 7 years, some for as long as 10 years.

This doesn’t mean that any future credit opportunities are doomed after bankruptcy. It isn’t unusual that shortly after discharging your debts you will receive new offers for credit cards again. You can expect it to be much more difficult, if even possible to qualify for property and automobile purchases. If you do qualify, it is likely your rates and terms will be less favorable.

However, if some form of debt relief or restructuring is a requirement for you, be sure to work with an attorney to help you understand your options. Your credit will improve over time.

Considering bankruptcy in the Detroit, Michigan area? Call on A Better Way Bankruptcy. With nearly three decades of collective experience in bankruptcy law, their friendly, helpful and compassionate attorneys and professionals can help you get debt relief, stop creditors from calling and get you moving towards a fresh start. SEO 2.0 Services