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Bankruptcy May not be the Right Answer for you

February 12, 2010 By admin Leave a Comment

Most consumers who are looking at a mountain of overwhelming debt as well as students who have graduated from college and needing to start paying back that huge amount of student loan debt may be considering bankruptcy to wipe the slate clean and start over again. But bankruptcy may not be the right option for you, and you may not even be eligible to file bankruptcy.

The vast majority of consumer bankruptcy filings are done using Chapter 7 bankruptcy law which will wipe out most unsecured financial obligations, which typically includes most credit cards, signature loans and similar lines of credit. One of the most important aspects of Chapter 7 bankruptcy is that it also stops creditors cold in their tracks from calling you, harassing you at all hours of the day and weekends, and also stops any wage garnishment proceedings which may be in progress.

But you need to take a long hard look at the source of your debts since there are multiple types of debts that bankruptcy will not absolve you of. Bankruptcy will not get rid of secured debts where you have put up collateral to get that loan originally. If you have student debt that was federally funded, bankruptcy does not eliminate this type of student loan.

For the consumer, one of the requirements of the recently changed bankruptcy laws is that they attend mandatory credit counseling. To a certain extent, this is foolish, since many bankruptcy filings are not due to financial mismanagement on the part of the consumer but are due to circumstances beyond the control of the consumer, such as huge medical bills, a job layoff, a messy divorce, etc. In this case, credit counseling may be helpful to an extent, but that was not the reason that bankruptcy is being considered. Nonetheless, credit counseling is a requirement and there is no way around that.

Contrary to popular belief, bankruptcy does not mean you will lose everything. The federal bankruptcy courts will make an exemption or allowance for you to keep things that are necessary for basic living, such as your house, your car, etc. But each case is evaluated individually, so if your current house is a beachfront condo in Miami and your current car is a late model Porsche, that may be replaced by order of the court for something a bit more economical.

You need to be aware of the ramifications of filing bankruptcy. It will stay on your credit reports for the next 7 to 10 years, and will be a huge red flag to lenders where you are requesting a new line of credit. With a bit of digging, you can get approved for new credit, but you will almost certainly be paying a higher rate of interest until you can get yourself back on track.

You should thoroughly investigate all your bankruptcy alternatives and options before filing. Make sure you know the law, since with the recently changes, this is no longer something you would want to attempt yourself. A good bankruptcy lawyer can save you more than you would lose and would be worth the investment many times over.

For more insights and additional information about Bankruptcy Law Bankruptcy Alternatives as well as getting a free bankruptcy evaluation from an attorney local to you, please visit our web site at http://www.bankruptcy-data.com

Filed Under: Bankruptcy Medical Tagged With: , ,

Is Bankruptcy The Only Answer?

February 10, 2010 By admin Leave a Comment

When you've lost your job or are staring at high medical bills you can't pay, you may start thinking about a way to end it. For many people, bankruptcy is the only way out. However, it may not be the only answer for you.

Depending on the size of your debt, the amount of your assets and the size of the family, you may not need to file for bankruptcy. Even if you do, all of these things will help determine what type of bankruptcy is best for you. Chapter 7 may look the most appealing but you may gain more by filing for Chapter 13.

Many debtors are willing to work with debtors who approach them and try to work things out. They may offer you a period of time where you don't need to pay, so you can get everything under control. However, most creditors are not as willing to help you without giving you a load of stress.

Sometimes the reality that you need to file for bankruptcy is something you must accept. There is nothing you can do about it. However, if you do want to think about filing, you will benefit most by seeking out a good bankruptcy attorney to help you with the process.

When debt pile up and monthly charges demand more than income, it may be time to consider filing a bankruptcy case before your financial life really gets out of hand. While a person's self-esteem may suffer from filing for court protection under the laws of bankruptcy, there are also circumstances that may force the decision.

Most people live their lives within their means and practice the use of credit responsibly. Occasionally, some life changing experience will alter their intentions to make good on promises to repay their debts such as a job loss or medical problems and before they know it the bills have piled up. Attempting to keep up with the bills can be admirable but when the time comes that it is no longer possible looking into filing a bankruptcy case may alleviate a lot of undue stress.

There may still remain a certain stigma among people that if they file for bankruptcy they are admitting to being a failure at controlling their spending. What many fail to recognize is that sometimes situations beyond their control may place them in a financial dilemma. If it is a problem that continues after filing a bankruptcy case, they will want to take steps to help them treat their credit more responsibly.

One thing to remember is that once a bankruptcy case has been filed it becomes part of the public record. While there are few people who actually look through these records for information, the basics of the case will be available for review.

Although by and large filing for bankruptcy no longer has the social stigma attached to it as perhaps it did in times gone by, there is a curious phenomenon some debtors have found: when filing for bankruptcy, company is plentiful - but not always desirable. Under the heading of "misery loves company," there are those filers who will band together and sympathetically swap stories about how they were made to take this drastic step.

Sometimes this kind of company may be found in well-meaning support group settings while other times it may be a number of friends that come to cheer up the debtor. Do not misunderstand: bankruptcy is an often traumatic event and having friends to be supportive goes a long way to helping you keep your sanity and sense of self worth intact, but there are times when those who are too well meaning with in effect hinder you from moving on.

This of course refers to those who will rob you of the ability to take responsibility for your actions and see the mistakes you made for what they really are: mistakes that must not be repeated. Failure to heed the lessons learned from such a bankruptcy will lead to a repeat or at least to a failure to heal the damaged credit and might once again find you in dire financial straits. Surround yourself with those who will reaffirm your sense of well-being and self esteem, but who will also offer help with working out a budget, sticking to the budget, and will not tempt you with offers of "retail therapy" to make you feel better about yourself.

Filed Under: Bankruptcy Medical Tagged With: , ,

Declaring Bankruptcy- Is Chapter 13 The Answer To Your Problems?

February 7, 2010 By admin Leave a Comment

Chapter 13 is the chapter under the bankruptcy code which allows a person to repay all or a portion of his or her debt under the protection of the bankruptcy court. Chapter 13 is designed for individuals with regular income who desire to pay their debts but are currently unable to do so.


Unlike Chapter 7 which is a complete discharge of the debt, Chapter 13 is a reorganization of the debt owed to creditors. With this reorganization, a payment schedule set up whereby the wage earner makes timely payments to the creditors over a three to five year payment period.


Chapter 13 is often used by individuals who want to catch up past due mortgage or car loan payments and keep their assets. Chapter 13 is usually chosen by those who wish to repay all or part of his or her unsecured debts and has at least some income to do so. This type of bankruptcy is an option used by those who have valuable nonexempt property, like a house or car, which might be lost in a Chapter 7 case.


Chapter 13 is a good option for some debtors who are facing foreclosure or repossession of their assets because of late payments, but wish to keep these items and can now afford to make the regular payments. Some are not eligible for a discharge under Chapter 7 because the debtor has too much income and/or too much property. There are also those who file Chapter 13 bankruptcy because they're simply not eligible for Chapter 7 protection because they have filed for and received a Chapter 7 discharge within the past 8 years.


Debtors who have a regular source of income repay some or all of their debts over a three-to-five year period during which they are free from harassment from their creditors. Debtors in chapter 13 keep all of their property, whether or not it is exempt, but they make regular payments on their debts out of the money that they earn after filing the bankruptcy case.


Chapter13 is a part of the United States Bankruptcy Code that allows individuals to reorganize their debts under the protection of a federal court. Chapter 13 bankruptcy will let you keep those assets which would be liquidated under Chapter 7, such as vehicles or a home. Bankruptcy is a federal court process that places you under the protection of the bankruptcy court while you try to repay your debts.


Creditors may receive all or a portion of their claims, depending primarily on the payments you can afford to make. Creditors are usually paid out of the debtor's income and not from the debtor's property. Creditors are not permitted to file lawsuits or attachments against you during the chapter 13 case, and, if the debtor is granted a chapter 13 discharge, they will be prohibited from attempting to collect any discharged debt from you after the case is closed. Creditors must also refrain from any collection activities for the duration of the plan.


Similar to Chapter 7 bankruptcy, certain debts are not discharged in Chapter 13 as well. Debts not discharged in chapter 13 include certain long term obligations (such as a home mortgage), debts for alimony or child support, certain taxes, debts for most government funded or guaranteed educational loans or benefit overpayments, debts arising from death or personal injury caused by driving while intoxicated or under the influence of drugs, and debts for restitution or a criminal fine included in a sentence on the debtor's conviction of a crime. Debts that are proven to be the result of fraud or breach of a fiduciary duty by the debtor may no longer be discharged in a Chapter 13.


Chapter 13 is an ideal option for anyone who is lagging behind on mortgage and car payments and needs help from someone to keep from losing their home and/or vehicle. Chapter 13 is a repayment plan that helps you to reorganize your bills based on your income. Chapter 13 is often called "the wage earner's plan" because a debtor filing chapter 13 bankruptcy must have income, usually from employment, to contribute to a court approved chapter 13 debt repayment plan. Whether you call it a repayment plan, a reorganization plan or a wage earner's plan, Chapter 13 is a form of bankruptcy and will appear as such on your credit report if you pay all your creditors in full.

BetterCreditSecrets is a resource site for those considering chapter 13 bankruptcy or need information about filing bankruptcy. Visit us or check out our article directory.

Filed Under: Chapter 13 Bankruptcy Tagged With: , , , ,

Small Business Bankruptcy – Small Business Bankruptcy if it is Unavoidable, Chapter 11 is the Answer

February 7, 2010 By admin Leave a Comment

The individuals who seek to start small businesses are independent souls who often are very creative and have a great idea. They want to share their vision and put their ideas and individuality across in the form of the venture they choose. They have a vision and a view of how they can serve the interests of the local community. They are entrepreneurs who have a vision and have taken the time to develop a business plan and have researched this plan, formulated it and, very often, staked it with their own personal savings. When that vision collapses into a quagmire of debt and responsibility, it is a time to seek professional help regarding the forms of financial help that are available, including small business bankruptcy. It is sad to realize that something that one has undertaken is just not attainable at the moment and that a project is just not financially viable. The strain to keep this enterprise is not worth the stress and it just does not justify the intrusion it makes upon ones life. But when the realization comes that the venture has become an unavoidable work commitment that not only does not add to the owner's income, it is also quite a detriment, one needs to seek advice regarding the financial obligations. Finding a solution to financial obligations does not have to mean filing chapter 11 small business bankruptcy and it does not have to mean the end of a personal vision and of a potentially viable venture. The solution may just mean financial reorganization. There is help available for debt reorganization and all forms or methods with which to deal with financial problems. They all offer an alternative to the radical solution of filing a small business bankruptcy petition.

There are many debt consultants listed on the Internet who can offer advice on the forms of help that will give the best advice regarding what form of relief best applies to each individual situation. It is always best to seek the aid of a debt management consultant to avail oneself of their expertise in devising the various forms of aids that are available. Basically debt management is a continuum, that begins with negotiations that revolve around either consolidation of the financial obligations that results in one unified payment or debt settlement, which may result in a reduced payment plan of the total business debt being enacted.

Any and all of these plans should be utilized in preference to the last resort of filing a chapter 11 business bankruptcy settlement which may not give the owner the relief he or she thinks it will afford, and will certainly negatively impact the further continuance of this enterprise. This form of small business bankruptcy is not designed to be a debt absolution plan as many people erroneously think. Chapter 11 small business bankruptcy is actually designed as a quite stringent plan in which a conservator is appointed to take charge of the business assets to apply them to the repayment of all the businesses debts. The protection it offers is relief from creditors attempts to collect. The bottom line with small business bankruptcy is that there are limitless reorganization plans, including debt management, consolidation and settlement that are available if one contacts a debt management consultant. Many of these debt management consultants will describe to the owner the many options that can contain the negative impact that debt can exert upon their business and offer several solutions that may be much preferable to seeking small business bankruptcy protection.

Check these links to learn more:

http://www.curadebt.com/about.asp

http://www.curadebt.com/settlement/business-debt-negotiation/business-debt-settlement-negotiation.asp

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Debbie White is a contributing writer to http://www.curadebt.com and is currently writing some special articles to guide businesses on how to manage debt and avoid bankruptcy. For Business Debt Information and Debt Help Consultation, call toll-free 1-877-850-3328.

Filed Under: Chapter 11 Bankruptcy Tagged With: , , , , ,