The Bankruptcy Option- The Pros And Cons Of Chapter 7 Bankruptcy
Author: Clyde Archer
Chapter 7 is the most common type of bankruptcy, and is sometimes referred to as liquidation bankruptcy or straight bankruptcy. Chapter 7 is generally the simplest and quickest form of bankruptcy and is available to individuals, married couples, corporations and partnerships. Chapter 7 is one way for you to begin reestablishing your credit by eliminating the bulk, if not all, of your unsecured debt dramatically reducing your debt to income ratio.
Creditworthiness and the likelihood of receiving a Chapter 7 discharge are only a few of many issues to be considered in determining whether to file bankruptcy. Chapter 7 is used most often by people who are unemployed or very deeply in debt due to medical expenses or unexpected financial circumstances.
The process for a Chapter 7 bankruptcy is relatively easy. After a meeting with a bankruptcy attorney to discuss your financial situation, a bankruptcy filing may be recommended. In the case of a Chapter 7 filing, you will need to attend a creditors meeting, which generally takes place 30 days after the filing of the bankruptcy petition.
Creditors, who you have debt with, may appear and ask questions regarding the debtor's financial affairs and property, but creditors rarely attend. Creditors, by law, are no longer permitted to initiate or continue their lawsuits, wage garnishments, attachments or other collection activity. This activity includes telephone calls from collection agencies demanding payment. Attorney's fees for Chapter7 filings vary depending upon the complexity of the case, but generally hover around the 0 to 0 range.
In determining what debts will be discharged, or forgiven, by the courts there are certain types that can not be waived in a Chapter 7 bankruptcy filing. Debts for most taxes are not cancelled. Debts for educational benefits andstudent loans are not discharged unless a court finds that not discharging the debt would impose an undue hardship on the debtor and his or her dependents. Debts or obligations under a divorce or support decree are not usually cancelled, and debts due to fraud, dishonesty or misconduct are not cancelled.
Debts that you incurred a result of an intentional or even negligent misrepresentation on your part are not dischargeable in Chapter 7. Certain debts that the courts deem questionable may also be outside the scope of debt discharged. Debts owed to a single creditor totaling more than 0 for luxury goods will not be discharged if acquired up to 90 days prior to filing. Cash advances of 0 acquired within 70 days will also not be discharged.
Property is one of the biggest areas of concern for those considering bankruptcy. Consulting your attorney will make it clear whether or not your property is at risk when you file Chapter 7 bankruptcy. Sometimes property can be taken by the bankruptcy official (trustee) and sold to pay on your debts. Property or asset exemptions are determined based upon your situation, income and the laws of your state.
Chapter 7 is a complete and total liquidation of a debtor's assets in order to pay off their creditors. Chapter 7 is designed as an orderly, court-supervised procedure by which a trustee collects the assets of the debtor's estate, reduces them to cash, and makes distributions to creditors, subject to the debtor's right to retain certain exempt property and the rights of secured creditors, such as mortgage companies and auto lenders.
Chapter 7 may be your best option however, if you are not eligible for Chapter 7 bankruptcy or if Chapter 7 will not meet your specific needs and goals, Chapter 13 bankruptcy is a useful alternative. Chapter 7 may not be available to debtors who have enough income exceeding their basic living expenses. For those who are deemed to have an excess of disposable income, the court will determine that they can afford to repay a portion of their debts through a Chapter 13 payment plan.
Article Source: http://www.articlesbase.com/debt-consolidation-articles/the-bankruptcy-option-the-pros-and-cons-of-chapter-7-bankruptcy-2784733.html
About the Author
www.BestDebtElimination.com is a matchmaker in the debt settlement industry. They have paired up thousands of consumers up with debt settlement companies who are most likely to get consumers the best deal.
http://www.BestDebtElimination.com
Contact us for free debt advice = 8886916918
what document is filed with circuit clerk office to dismiss lawsuit collecting discharged bankruptcy debt?
When a bankruptcy discharged debts should a bank send a IRS 1099 as debt forgiven and show it as income?
My company filed for and was discharged in bankruptcy in Aug 2006. Bank of America sent an IRS 1099 showing they forgave the debt in Aug of 2007. They showed an amount of over $8,000.00 as income due to the “forgiveness”. I called them and they refused to correct the 1099 and said it was my problem not their’s and advised that I just throw it away since the company no longer exists and I will NOT be filing a return on it. The Company was an “S Corp” so when it existed the money flowed through to me personally. Should B of A have sent this a year late? Should I just throw it away (doen’t sound smart to me)? Is there an IRS form that I can fill out to correct the error if there was one. Didn’t bankruptcy discharge and eliminate this debt without them forgiving it? By the way B of A continued to send collection notices many times after the discharge, so this seems to be a stabdard with them.
Can a foreclosure happen after bankruptcy discharged the debt?
I filed Chapter 7 bankruptcy and included my mortgage in the bankruptcy. The bankruptcy was discharged and I moved out of my property. Then I find out that the mortgage company has placed “Foreclosure Proceedings Started” on my credit report. These proceedings started after the debt had been discharged and I had moved out. Is this correct or is there a way to force the mortgage company to remove this from my credit report? Lenders are treating this like a foreclosure now instead of a bankruptcy.
Discharged debt resurfacing after bankruptcy?
I filed for bankruptcy in Feb. It has been discharged. I recently moved into my own place, and turned the public service on. My first bill was over 800.00. Can they put that debt back on me when it was on my bankruptcy?
Will my debt be discharged in bankruptcy if it’s been turned over to a collection agency?
I am working on paperwork to filing bankruptcy. My attorney wants me to list all my creditors. Thing is, most of them were charged off three years ago and now belong to collection agencies. If I list my original creditors in the bankruptcy, will the collection agencies still have the debt, and will they be able to harass me? That is to say, will the debt really be gone?
If you mortgage was included in your bankruptcy and the debt was discharged your credit report should read “Included in bankruptcy” and show a $0 balance.
You can either dispute this account with the credit bureaus or have your lawyer fire off a strongly worded letter to your ex mortgage company.
You must list the collection agencies, they own the debt now, and if they are not notified on the bankruptcy filing, they can continue to try to collect the debt as they will not be included in the automatic stay. Order your credit report, answer the phone anytime a collector calls and get their information, address, the account they are collecting, account numbers, amount of debt, etc. Do everything you can to list every debt you have.
The bank was correct in sending you a 1099-C. They cancelled the debt and you were the person not paying it back.
The bank was incorrect in telling you to throw the 1099-C away. When you file your tax return, you will postpone the 1099-C cancellation of debt income by filing a form 982. If you have remaining assets the form has you write them down in value. When you sell these at a later date, you may have taxable ordinary income then.
If you total your remaining assets (not only business, but all personal ones as well) by their book value and compare that to your total liabilities, you only reduce the book value to the point it equals the liabilities. Any further COD is permanently eliminated.
That could be a violation of the bankruptcy stay, bring the bill to your bankruptcy attorney and file for stay violation and contempt. You might get some money out of it
Suggestion of Bankruptcy. That form will stay the case (meaning that it will not proceed until the bankruptcy is over & done).