Bankruptcy and Related Ability to Purchase Home

Author: Ravisankar

Bankruptcy and related ability to Purchase home

Bankruptcy, the dreaded word, can pull you down very badly at times. It not only drains you financially but even creates emotional and social blockades that some find difficult to breach. Having a home to shelter you in such times is very comforting. It soothes your frayed nerves. But what if you do not have one? Can you still apply for a loan to buy one? It is considered quite difficult for bankrupt individuals to get a home loan sanctioned in such times of crisis. Not anymore.

There are options that are available for individuals in such a state to still get a home loan. All it takes is some good planning and a disciplined approach to managing your credit. Many lenders think twice before sanctioning a loan for property to people who have filed for bankruptcy. It all depends on how you are able to convince the lending institution about your ability to repay the loan back. A few steps to help you are detailed below:

First, you need to decide on the type of bankruptcy filing that needs to be adopted. There are basically two types of filing; Chapter 7 and chapter 13.

Chapter 7 involves liquidation of all assets where as chapter 13 is a safer route. This entails re-organization of the financial portfolio, assets and liabilities and even the budget. This is considered a safer option as it provides a security for the debtors about the repayment of loans sanctioned. Taxes to be paid are also put on the back burner till such time as the individual gets back on track, financially.

Secondly, it is advisable to wait for atleast a couple of years after filing, to apply for a mortgage loan. Also all information related to the bankruptcy has to be declared upfront, before the same is unearthed by the institution. This gives a sense of transparency and clarity to the entire procedure.

Most importantly, you need to prove that you have a steady income to support you as well as enough additional income that can help you repay the loan in future times. This creates a sense of security for the lending institution which helps in convincing them about your repayment capability. The records have to be submitted to prove the same.

You can start with a smaller amount and later ask for an additional top-up amount as times pass by and you become more financially strong.

Credit worthiness is an important aspect of such transactions and hence ensure that you do not default at any times, as any such action can adversely affect your reputation.

It is always advised that a bankruptcy attorney be entrusted with the work of putting your finances back on track, as such professionals are experienced in all the legal aspects that can get crucial reprieve from authorities and absolve you of complicated liabilities, if any.

Article Source: http://www.articlesbase.com/real-estate-articles/bankruptcy-and-related-ability-to-purchase-home-953113.html

About the Author

Beautiful homes for sale at Arizona City Real Estate , Avondale AZ Homes for Sale and Buckeye Realty.

A Primer on Bankruptcy Strategy

Author: Dave D. Clark

When creditors are knocking, it is time to reconsider your priorities. Slipping behind on your payments—occasionally—is not a cause for concern. You know you can stretch your bills a month or two and catch up, paying only a few late fees. Chronic lateness however is an entirely different matter.

If you lose ground every month, added late fees alone can destroy your financial health. You are on a slow-motion roller coaster heading down. If realize you are in this position, worrying will not help. You have options. Take charge of your future.

No one wants to file bankruptcy. Perhaps you intend to try a debt management plan or a debt settlement plan. These tactics are worthy of your consideration. The trick, if you use them, is not compromising your bankruptcy alternatives. You would not marry the first person who smiles. Take your time, and keep your options open until you understand the ripple effect of your choices. Then decide what you must do.

Bankruptcy is a full strength solution that is available to almost everyone. Success claiming maximum benefits in one chapter or two chapters successively is somewhat more difficult. You must choose a far-reaching and complementary strategy to enhance your unique personal situation. Debt management and settlements are but two available tactics. Chapter 7 is an option to consider later, if necessary. Chapter 13 provides the power to defeat even IRS super-priorities. You should know when to convert Chapter 7 to Chapter 13 and then back. All tactics should work together in harmony to serve your ultimate goal: your strategy for long-term financial security.

Before committing to any course of action, review your qualification and the availability of a wide range of choices. Consider your overall strategy and how your options may complement each other. It is not difficult to keep your options open, profitably, and insure you receive the greatest benefits each step of the way. If filing bankruptcy becomes necessary, you should keep all assets you now own and discharge all debts quickly. You can plan your strategy yourself or with the assistance of an attorney. But, there is always a catch. You must be the first to act. In the meantime, do not waste another cent on needless payments once filing becomes imminent.

Article Source: http://www.articlesbase.com/bankruptcy-articles/a-primer-on-bankruptcy-strategy-1432645.html

About the Author

Dave Clark is an attorney and enjoys writing consumer legal articles. He began his practice in 1984. His focus is on consumer legal rights, bankruptcy, and workout situations. Contact him through his website, Bankruptcy Strategies U.S, if you have questions.

Filing Bankruptcy Again – Strategies to Avoid Chapter 13

Author: Dave D. Clark

The basic qualifications to file bankruptcy again remain the same. U.S. citizens, army personnel serving over seas, and any person who owns property or does business within the U.S. may file bankruptcy. Chapter 7 imposes additional restrictions based on a previous case. You cannot re-file Chapter 7 within eight years of a prior Chapter 7 discharge, or within six years of a prior Chapter 13 discharge (unless unsecured creditors received at least 70% of their total debt), or if a prior case was dismissed with prejudice within the last 180 days.

The means test poses the greatest hurdle if filing Chapter 7 again, and determines the amount of the monthly payment owed to a Chapter 13 trustee.

The means test became effective in late 2005. Since that time, all people who file bankruptcy under either Chapter 7 or Chapter 13 must take the test. In theory, the test measures monthly disposable income for each debtor. The calculation starts with total income, subtracts expenses, to find disposable income (Accountants call this discretionary income). If filing jointly with a spouse, total household income, less allowed monthly expenses, determines disposable income.

Importantly, disposable income is a far different measure under the U.S. Code than the common understanding of discretionary income. In the later case, expenses include all basic necessities based the current cost of goods. This basic concept is absent in the U.S. Code definition of disposable income.

The test imposes national standard allowances and local standard allowances for the majority of allowed expenses used in the test. Debtors may not deduct any expense unless specifically authorized. Further, as a rule, necessities, the actual cost of living, actual cost of goods, and historical expenses of each debtor are irrelevant.

In a few important expense categories however, the test does permits debtors to deduct actual expenses. Additionally, debtors may also petition the court for a 5% increase in a few standard allowances for good cause shown.

The test uses monthly disposable in a three-pronged test. First, if the debtor(s) earns more than their state median income, Chapter 7 is not available unless qualifying under two exceptions. These exceptions apply in limited circumstances when the means test measure of disposable income is less than 0.

Taking the test the first time is frustrating for most people. The mandatory allowed budget is not adequate in many situations. Yet many opportunities exist to change results, and even improve results substantially over time.

The test relies on income and expenses over last full six months. Each month, test results change. The oldest month disappears and latest month becomes part the test. Over six months, the test result is entirely new.

Small changes in lifestyle may qualify a debtor to file Chapter 7. Debtors who become acquainted with the test and a few advanced bankruptcy strategies may swing the test result dramatically. To swing the test in your favor, you must know how to calculate income, the expenses used in the test, and the expenses that remain irrelevant. When taking the test, time and knowledge combine into the power to exert great influence over next five years of your life.

If you pass the test, you may discharge all debt in as little as four months and receive a final order closing the case. If you fail the test, you must repay at least a portion of all debts and live on a mandatory budget under court supervision for the next five years.

Article Source: http://www.articlesbase.com/bankruptcy-articles/filing-bankruptcy-again-strategies-to-avoid-chapter-13-1453188.html

About the Author

Dave Clark is a lawyer who enjoys bankruptcy strategies questions. This article is for a client who asked, “Can I file for Chapter 7 a second time?” & does “Bankruptcy eliminate judgements?” Contact him through this website. Contact him at http://www.bankruptcystrategiesus.com/contact-us.html

Filing Bankruptcy - The Downside to Filing Bankruptcy

Author: Corey Landis

Depending on your current financial situation, bankruptcy might seem like the only answer. While in many cases this may be true, there are other solutions which might prove to be the better choice.

The biggest downside to bankruptcy is the fact that it remains on your credit report for up to 10 years. During this time it will be much more difficult for you to establish a positive credit history. Many credit applications ask if you've ever filed bankruptcy, so even if the 10 years have passed and it's not on your official credit report, you have to answer yes.

While your credit report will drop the bankruptcy after 10 years, the federal court has it on record forever. Those records are open to the public.

Your credit report can be checked when you apply for employment so a bankruptcy can affect your ability to get a job in some industries. Car insurance companies look at your credit score as a measure of reliability. A bankruptcy is looked at unfavorably and can result in denial of insurance, or insurance only provided at very high rates. When moving, it can even be the deciding factor in whether or not you live in the residence of your choosing. Many apartment leasing companies won't approve a lease to a person with a history of bankruptcy, even if they have the financial ability to now make the lease payments.

Another downside to bankruptcy is the cost. Recent changes in bankruptcy laws have initiated a huge increase in filing fees. While it's possible to file a bankruptcy without an attorney it's not recommended in complicated cases. Certain debts such as student loans and back child support can not be erased. Add the filing fees to the cost of retaining a bankruptcy attorney and you are talking about fees probably in excess of 00.

If you have equity in your home you may not be able to retain it but be forced to sell the home to pay off debts. While your debts may be high, if you have substantial assets it may be financially advisable to not declare bankruptcy.

One of the conditions of the 2005 changes in bankruptcy law now requires individuals to seek credit counseling prior to filing. If at all possible, you should consider using a credit counseling agency or even a debt consolidation service before deciding to go bankrupt. The credit counseling service must be government approved to satisfy this requirement.

Other changes require that if you can pay at least 0 per month towards debt payment you must file Chapter 13 instead of Chapter 7. Chapter 7 means all your debts (with the exception of back child support, taxes, and a few others) are forgiven and you come away with a clean slate. Chapter 13 requires that you come up with a strict repayment schedule based on your income and assets to pay off as much of your debts as possible within a 5 year period.

You will find yourself on the road to good credit much sooner, if you can utilize a method other than bankruptcy to help you get out of debt.

Article Source: http://www.articlesbase.com/finance-articles/filing-bankruptcy-the-downside-to-filing-bankruptcy-576361.html

About the Author
Corey Landis contributes to several websites including Credit Card and Debt Management and Loans as well as Ways to Find Money

Filing for bankruptcy often brings with it mixed emotions

]]> http://www.realbankruptcyinfo.com/1110/filing-a-bankruptcy/feed/ 0 http://www.realbankruptcyinfo.com/1102/the-two-main-requirements-for-filing-bankruptcy-in-delaware/ http://www.realbankruptcyinfo.com/1102/the-two-main-requirements-for-filing-bankruptcy-in-delaware/#comments Wed, 17 Mar 2010 23:33:01 +0000 admin http://www.realbankruptcyinfo.com/1102/the-two-main-requirements-for-filing-bankruptcy-in-delaware/

The main goal when filing bankruptcy is to allow honest individuals who have had unfortunate events occur which have lead to severe debt, to have these debts discharged, thus relieving the debtor from their previous debts. This allows the debtor to pursue a fresh financial start. This was the decision of the Supreme Court in 1934. If you are a resident of Delaware who is facing severe debt and you are considering filing bankruptcy, you can find the debt relief that you so desperately need. In order to do so there are two main requirements, which are necessary to complete when, filing bankruptcy in the state of Delaware.

Credit Counseling

The Bankruptcy Act of 2005 requires that all persons filing bankruptcy after the date of October 17, 2005, must receive credit counseling 6 months prior to filing bankruptcy. They must also complete a financial management course after the file of bankruptcy.

Means Test

This same act of 2005 requires an individual's average income and expenses from the previous six months to be compared to the median income of the state. If your income level falls below the median you are able to choose to file Chapter 7. If your income level exceeds the median, your income will be further reviewed for a decision between Chapter 7 and Chapter 13.

Once these areas are completed the bankruptcy judge will make the decision on any of the matters connected to your bankruptcy. They have the final word on which chapter you are eligible to file and which debts will be discharged. The process is mainly administrative and processed outside of the court. Contact your local courthouse for details on who to contact as well as any other bankruptcy details you may need.

There are four typical reasons that you may need to speak with an attorney who specializes in bankruptcy. These four reasons include wage garnishment, foreclosure, repossession and debt collection harassment. These four reasons can lead anyone to consider bankruptcy.

Garnishment

When wages are garnished for child support or alimony, a person can easily become further into debt. If a jobs wages care for that person and their personal lifestyle and garnishment affects the persons ability to make utility payments versus buying food then a bankruptcy attorney is needed.

Foreclosure

If mortgage payments are behind and your home is in danger of foreclosure you should speak to a bankruptcy attorney. There is a bankruptcy chapter that will allow you to retain your home and regain control over your payments.

Repossession

If you have not been able to make payments for your vehicle and it is being threatened by repossession, contact a bankruptcy attorney to help you keep your vehicle and regain financial control and to make payments properly again.

Debt Collection Harassment

Though bill collectors do not legally have the right to call and hassle you over payments, too often you will receive several threatening calls over the period of a single day concerning past due billing. Bankruptcy can quiet these harassing calls quickly and peacefully.

Each of these areas adds unneeded stress into your life. Making payments can be complicated due to various reasons. Speaking with a bankruptcy attorney can be a way to get you back on financial track and to resolve all of the above issues

JC Law Group specializes in helping individuals and families in the Bay Area with filing for Bankruptcy and debt relief. Their areas of practice focus on Chapter 7 and Chapter 13 bankruptcy. If you are burdened by debt and want to explore filing bankruptcy as an option for relief, they can help you very well.

Filing for bankruptcy is not a reflection on you as a person. Perhaps you owe more on your home than what it is worth and you are struggling to make the payments, you are going through a life changing experience such as a serious illness, loss of employment, divorce or death in the family. You do not have to go on living with the constant calls from the creditors or mounting debts. Bankruptcy laws allow people who are overwhelmed by debt to get a fresh start easily.

According to the American Bankruptcy Institute "household debt is at a record high relative to disposable income." The Administrative Office of the U.S. Courts reported that the number of filings for the year ended March 31, 2003 "exceeded 1.6 million for the first time in any 12 month period," a 15.1 percent increase from the previous year.

There are two types of personal bankruptcy: Chapter 7 and Chapter 13. Chapter 7 Bankruptcy and Chapter 13 are legal proceedings that are available to a person to cope with the financial crisis. Personal bankruptcy must be filed in a federal bankruptcy court. You will have to pay about $160.00 in court fees. Attorney fees will be additional.

Chapter 7 of bankruptcy involves the liquidation of all your assets that are not exempt from the bankruptcy settlement. Exempt property can include automobiles, some household furnishings, and property needed for work-related use; for example if you were a mechanic the tools you use to perform your work would be exempt from the bankruptcy settlement. Exemption amounts vary from state to state.

A Chapter 13 bankruptcy allows you to keep property, like a mortgaged house or car, as long as you have a steady income. Chapter 13 bankruptcy is a court-ordered and approved repayment plan to your creditors. This allows you to use your future income to pay back your debts over a 3-to-5 year period without surrendering any property. Once you complete the payments under the plan, your debts are discharged by the court.

Both types of bankruptcy may get rid of unsecured debts and stop foreclosures, repossessions, utility shut-offs, and debt collection activities. Both provide exemptions that allow people to keep certain assets, although exemption amounts vary.

The sweeping changes to the laws in 2005 made filing bankruptcy more complex, and often inaccessible to most people, particularly those with low incomes. Attorney

When you decide to file a Chapter 13 bankruptcy, the legal process grinds into gear. The petition, the document asking the court to bring you relief under chapter 13 of the United States Bankruptcy Code, is a simple two page form, signed by all debtors and the attorney. Once this form has been filed and the filing fee paid, you are given a docket number. From then on, all actions by creditors are under stay, except for those that are allowed by motion, in the bankruptcy court. Creditors can not demand money, take you to court over debt or foreclose or repossess your property.

A few days after this filing, you are required to submit a list of all your creditors and their addresses to the court. This document, the Matrix, must be followed within a week by the rest of the required paperwork, including schedules of assets and liabilities, income and expenses, your financial history and your plan for how you wish to reorganize all that under chapter 13, as well as the evidence that you will be able to complete the plan. After this process of initial submission of the Chapter 13 reorganization plan, you have the option of filing amendments to add creditors or modify the schedules or plans. Amendments may, however, involve the payment of additional fees to your lawyer, as well as extra fees to the bankruptcy court.

Unless your case has some contested issues which need to be heard before a judge, you will probably never have to appear in person. Instead, you will meet with a Chapter 13 Trustee, only one to three months after the initial filing of the petition. This is known as a 341 creditors meeting and everyone who is owed money will be invited to attend. At the meeting, the creditors will ask you questions about your financial situation. However, in most cases, few creditors ever attend and the guests are more likely to include only the big creditors and mortgage holders.

Your attorney will have to be at this meeting, to represent you and the person actually asking all the questions and coordinating the meeting will be the Chapter 13 Trustee. After this meeting, if there are no objections against it, all you have to do is to make sure you remit all the payments according to your plan and in a timely manner. Duration of time for making payments will depend upon your income and the size of your debt. By statute, all the reorganization plans must be between 36 and 60 months long. If you have enough income, the Trustee might demand that the plan be 36 months long and a larger portion of the available funds paid to unsecured creditors.

In general, if you have a little extra money one month, save it, rather than trying to pay a larger amount. If you miss a payment at a later date, you will not be given credit for any early payments made previously. However, if your income changes substantially, for a longer time, you need to inform the court and adjust your payments. Always make sure to pay on time. If you do not, one or more creditors or the Trustee will object and your case can be dismissed or converted to Chapter 7 and they may still foreclose with the permission of the court. Since you are already in a bankruptcy, one failed or late payment will leave you no recourse against losing your home. You will lose the protection of the court.