You just graduated from law school and are now ready to make money while helping people resolve their legal problems. You decide that you will partake in the bankruptcy niche, since that area of law seems to be in high demand, especially considering all the foreclosures that are happening. You put some ads in the paper and acquire a few clients. But you want to get more without breaking your budget. The best way to do this is to look into buying bankruptcy leads.

What are bankruptcy leads and how do they work? Bankruptcy leads contain information relating to people who are considering bankruptcy or may have already filed bankruptcy. The latter won

Copyright (c) 2009 Kentaro Konika

When a company or individual files for bankruptcy it is usually to be relieved of heavy, unpayable, debts or to get a clean financial slate in order to be able to move on. When a bankruptcy decision has been made by the courts those who filed for bankruptcy are cleared of all outstanding debts beyond those which can be paid through the company’s liquidation. However, the consequence of bankruptcy is to leave those who are bankrupt with a far more limited selection of credit options compared to those who have not gone bankrupt. Most money lenders want to see those who have previously been bankrupt to regain a good credit history before they will offer any loans. As such those who have gone bankrupt usually seek out alternative choices for borrowing money.

A database of bankrupt companies and individuals is kept, known as bankruptcy leads. These contain a variety of information on those who have gone bankrupt, including names. Bankruptcy claims are made through the legal system, and filed by the courts and public records. For companies who make their money by managing credit it is possible to retrieve data from these bankruptcy leads for use in advertising. As well as the name of the individual or company, the leads also contain the address, dates, and other data on the exact amount of debt and income as well as the results of the claim. Debt consolidation companies, and others who offer similar services, seek out those who have failed to make successful bankruptcy claims and so need financial aid in paying off their debts.

If a claim for bankruptcy is dismissed it means that those who attempted to file for bankruptcy are still liable to pay the creditors any money which is owed. The debtors will be expected to pay the creditors as usual, without any legal stipulations that state otherwise. Debt consolidators find a prime target in those who have had bankruptcy claims dismissed. Credit report firms use information from bankruptcy as part of the data that forms your final credit score. As such, the loans you can receive will be dramatically affected by any previous bankruptcy you have experienced.

There are 6 types of bankruptcy under the United States federal law. These are Chapters 7, 9, 11-13, and 15. Those most frequently used by individuals are chapter 7 and 13. Businesses usually file for Chapter 11. Depending on which chapter is filed under a variety of financial services are available to the bankrupt party. A Chapter 7 filing requires a company to liquefy assets in order to pay off as much outstanding debt as possible. Chapter 13 bankruptcy leaves the bankrupt party in ownership of all business assets but they must instead make payments to creditors through financial earnings made in subsequent years.

All information on bankruptcy leads is sourced from the public bankruptcy records. Given that over a million bankruptcy claims were made during 2006 it can be a lengthy procedure to obtain information on bankruptcies, but there are companies specializing in this service.

Can You Guess The Main Causes Of Bankruptcy Filings? There are several common causes leading one to file bankruptcy. These include, but are not limited to the following:

1. Lawsuits/Garnishments

Nobody wants to be sued and brought to judgment. Nobody wants to have 10%-15% of their hard earned wages deducted from their pay. In many cases, the taking of 10%-15% of one’s wages leads to the inability of that person to pay his rent, utilities or auto payment. Just the thought of the employer potentially having to garnish wages leads many to panic. Debtors do not want their employers or co-workers knowing of their financial troubles.

2. Auto Repossessions

Auto lenders will do whatever it takes to get you financed, regardless of whether you are actually capable of affording the car. They realize that if you can’t pay the installment, they can take back their vehicle and re-sell it before it fully depreciates. They do this through the use of auto auctions where the vehicle often sells for substantially less than what is owed. This leads to a deficiency amount which the lender seeks to recover from the debtor.

3. Unpaid Medical Bills

With more and more Americans going without medical insurance (45.8 million, per the U.S. Census Bureau press release dated 8/30/05), they risk losing whatever they have earned throughout their lifetime should a major medical problem occur. Most claim that they can’t afford to carry medical insurance. In reality, they can’t afford not to. The rising cost of health care could significantly deplete one’s savings should a serious illness or injury occur. Even those with co-payment coverages are having a difficult time meeting their burden of the bill.

4. High Interest Loans

There have always been high interest personal loans from many sources. In recent times, the advent of the payday loan has surfaced. These loans have exorbitant interest, which is often carried over and extended further by way of additional loans. People who cannot survive until their next payday are giving up a huge portion of their paycheck to get the money in advance. This dangerous cycle leads to further borrowing with less and less money actually going into the individual’s pocket.

5. Driver’s License Suspensions

Many states have begun to suspend the licenses of drivers who have been involved in auto accidents without insurance. These drivers are typically given three options: Pay the actual damages to the person(s) involved in the accident; work out an installment payment plan to pay the damages to the person(s) involved in the accident; or file bankruptcy and send proof thereof to the motor vehicle licensing department. If the person continues to drive without rectifying the situation, they risk arrest and/or imprisonment for driving on a suspended license.

6. Foreclosures

The pride and joy of being a homeowner can be easily tempered by the hard work and cost of maintaining the home. The mortgage needs to be timely paid no matter what your special circumstance may be. Real estate taxes and homeowner’s insurance are also required to be paid regularly or you face a foreclosure suit. Changes in employment, health, income and marital status can lead to one’s failure to make timely payments. Many take second mortgages or lines of credit which simply create an additional, financial burden on the homeowner. When faced with the reality that they cannot afford the home, debtors can vacate the home and extinguish any mortgage liability through Chapter 7 bankruptcy.

7. Overzealous Lending

How many credit card applications have you received in the mail this year? If you are like many Americans, the applications continue to appear regularly. Have you received convenience checks or offers for additional lines of credit? If so, you may have taken advantage of the use of the credit without any feasible way of repaying the debt. Many people are receiving pre-approved credit applications when they are in fact, not credit worthy. The credit card lenders point fault at the debtors for accepting the credit without the means to repay it. It seems more logical to fault lenders who do not undertake to check the credit worthiness of particular debtors.

8. Consumer Overspending

Many people see what they want, acquire it, and decide later how they will pay for it. People want to possess the latest clothing, jewelry, electronics, etc. Most stores now offer the ability to take the product home through the use of store credit cards or outside financing. You may even get a modest percentage discount off the purchase price if you open or use the store charge card. Many people charge their groceries, restaurant and transportation expenses believing that if they just make the minimum payments everything will be alright.

In the financial world, one thing lingers to be perpetually true- that is filing for bankruptcy should always be considered as the last resort. Bankruptcy has become a common word especially in the financial world where many people strive to make the best out of their money in order to have a good quality of living. The image of bankruptcy has grown over for years as a desperate act and as a sign of weakness especially in terms of financial and management standing.

This fact makes bankruptcy a thing to be avoided by many because of its long term effects on the credit-worth of a person filing for it. It is greatly necessary to examine all things thoroughly before considering bankruptcy for it entails a lot of personal and emotional difficulties in the years thereafter.

This false image of bankruptcy is, however, not true to all situations. Though it still remains that declaring bankruptcy ought to be the last thing to enter one’s mind, the impression of it as a reflection of the person’s financial mismanagement is not always true. There are also situations wherein declaring bankruptcy is the solitary viable option of regaining control over huge amounts of debts and mountains of liabilities.

One inevitable reason which may lead a person to apply for bankruptcy amongst thousands of other applicants is the occurrence of financial difficulties brought about by a divorce situation. Statistics show that thirty percent of all bankruptcy applications root from this case because most often than not, after a divorce challenge, all the liabilities becomes halved between the two petitioners making their financial life a lot harder than their married state. Unpaid bills and credit cards with towering interest rate is a primary cause of the mountainous debt accumulated over the years. When this happens and the person finds no single alternative in remedying the situation, applying for bankruptcy is already a considerable option.

Another compelling situation which one can experience is the rise of bills with regards to an unexpected hospitalization and medical services. Although some have insurances for medical endeavors, there are times when the payments to be made are not covered by insurances or even if covered, the bills have already exceeded the limitations for medical support. This scenario leads to a very saddening and challenging life full of debts and interests due to unpaid bills in hospitalization. In this case, bankruptcy becomes the only way to resolve it.

Also, a common case which covers about ten percent of all bankruptcy applicants is the unpaid credit cards and student loans of those enrolled in college. People who are faced with mounting credit card bills coming from many credit companies will find the situation very daunting. If no extra income source can be found immediately, there is no way out but to declare personal bankruptcy.

Bad business venture, sales flop, new product launching or collection problems can truly damage the cash flow of a business. This has not spared even the biggest multi billion corporations. Such situation can render executives insolvent and thus file for bankruptcy.

Although bankruptcy can become a very hard strife for a person lacking financial resources, there are available services which can offer help for a person to recover and regain control his financial predicament.

Personal bankruptcy as the term implies relates to cases being filed by individual who are self employed or salaried individuals under various chapters of US federal laws applicable uniformly to all the states. Bankruptcy, falls under chapter 7, 9,11,12,13 of bankruptcy code. The bankruptcy law covers chapters on all related issues and how to deal and decide cases effectively. Chapter 7 applies to debtor with no assets to repay, chapter9 applies to govt. municipalities, chapter11 applies to owner or shareholders of companies, chapter12 to farmers and fishermen, chapter13 to persons with regular and stable income or more commonly termed as wage earner bankruptcy, to self employed and salaried individuals or family.

As per Personal bankruptcy law, an individual while filing relief under chapter 7 is allowed certain exemptions which may include home where he is presently living, personal effects, retirement dues, pension, insurance policies etc. limited to the tune of as fixed by the court, This exemption limit doubles in case of a married couple. Filing of case requires furnishing of full details of outstanding debts and assets and you can not sell non exempt assts till the case is decided by the court, which may be used for repayment of debts. Immediately on filing case trustee is appointed by the court to take under his control all the assets for liquidation. However, in certain instances the lender may allow exemption of some property from liquidation by the trustee. However, this exemption limit varies from sate to state. Once the case is filed for bankruptcy in court, there is an automatic stay on both the parties whether debtor or lender to act otherwise, the case being subjudice i.e. your lender cannot collect debt from you directly.

In healthy way of thinking, you can say that, bankruptcy is a legal way for individuals or business firms to clear off their debts under chapter 13 or write off their liabilities under chapter 7.

Personal bankruptcy laws are in no different from Michigan bankruptcy, laws only there is slight variations in exemptions granted under chapter 7. To deal with such cases there are various legal firms/attorneys who provide proper counseling on all aspects relating to bankruptcy laws and can help you in dealing with the situation

Corporate Bankruptcy laws allows a corporation/company, or partnership firm to file under chapter 7 or 11.If you file under chapter 7, the court immediately assigns trustee to sell all assets of the bankruptcy firm and then arrange payment to lenders.