bankruptcy questions

Archive for November, 2009

The US Congress passed a law that established a set of uniform laws to govern how bankruptcy was handled. These laws were situated under a system called the bankruptcy code. In this code there are chapters that refer to various issues in bankruptcy. One such chapter deals with allowing the debtor to start a new life whilst they pay off their future debts. This bankruptcy chapter 13 is one of the popular bankruptcy laws.

In bankruptcy you by and large need to find some way of surviving while at the same time you pay your creditors what you owe to them. This sounds like a civilized way of dealing with this matter but the truth is otherwise.

In most cases creditors will try to force you to give them the assorted amounts that you owe. This form of force payment can range from a simple letter to torment via phone calls and even visits from your creditors. With bankruptcy chapter 13 you have the best way of stopping this force payment and you are given a way to live again.

When you file for a chapter 13 bankruptcy you actually have protection against the creditors. Once a payment plan is setup and both parties agree, then there is nothing more the creditor can ask of you. They cannot change their mind and ask for more money. Again they may try, but you are now covered by the law and your agreed upon payment amount.

With a bankruptcy chapter 13 filing, for the person who has gotten into a debt which seems to be eating up their life’s earnings, this law allows the person to find a fair way of paying off their debts.

The terms of repayment will need to be discussed with your creditors in your lawyer’s presence. This way the terms of payment will be in conformity with a court sanctioned payment scheme. With this payment scheme your debts can be paid off with an amount of money that you can afford to spare from your monthly living expenses.

Make sure you take the time to understand and know what your monthly expenses are. Don’t put yourself in a payment plan that you can’t afford. Give yourself enough room to cover all your debts.

Once you have filed for bankruptcy chapter 13 your creditors are no longer suppose to talk to you directly about your credit claims. There is a ceiling period of five years for you to pay off any outstanding debts that you have. This is not set in stone so understand your state laws and ask the questions.

During the period of your bankruptcy chapter 13 gives the court the right to oversee how the repayment is progressing. Your interests for this entire time period will be looked after by your lawyer. There are other benefits that you can find with this bankruptcy chapter 13 law. So, be sure to ask your lawyer and the court system the questions you need answered.

In this law you will be able to get a full discharge option for your bankruptcy claim if you have managed to pay off of all of the outstanding debts. The other great advantage of bankruptcy chapter13 law is that anyone can file for bankruptcy chapter 13 as long as they have a steady income with which they can pay off their debts.

Don’t be afraid or embarrassed about gathering information on bankruptcy or even filing. Just make sure that you handle it with care. Meaning get all your questions answered and if you file, pay your debt back promptly. And remember, it is a new start with the discharge option.

Bowe Packer
http://www.articlesbase.com/non-fiction-articles/understanding-the-basics-of-bankruptcy-chapter-13-113495.html

A lot of people end up looking at bankruptcy chapter 13 when they get into financial difficulties out of which they simple can’t find a way out. Most of them choose to file a bankruptcy chapter 13 where the court will take your entire claimed debts and find you a plan for repayment that matches with what you can actually afford. If you are on the verge of bankruptcy, you should first explore the various bankruptcy alternatives available.

For those people who have at least some money to spend on creditors every month but not as much as what the creditors expect them to pay the bankruptcy chapter 13 is the right option. This kind of bankruptcy permits a person to come clean and pay all that he owes but then there will be a bad mark on his credit report for having gone through such a process. Today, if you are looking for bankruptcy alternatives you do not even have to leave the comfort of your home. Just go on the Net and you will find several bankruptcy alternatives to choose from.

Although the bankruptcy chapter 13 leaves a bad marking on your credit report, it is still worth it for people who cannot afford to pay what they owe their creditors any other way. When you reach this point at some time you should keep in mind that there is also a chapter 7 besides the chapter 13. In chapter 7, the court decides whether the person filing really does not possess the means to pay back the debt through bankruptcy chapter 13. Each case will be different and the reasons could be varied. But in contrast to chapter 13, the judge might discharge all of the person’s debt so that he doesn’t owe anything at all in case of chapter 7.

Although the chapter 7 may seem more attractive than the bankruptcy chapter 13, it is fully dependent on what the judge decides. Which chapter you file does not depend on you or on your lawyer. The exact chapter you will eventually file will be based on the decision that the judge makes using the information and case presented by your lawyer. Hence it is extremely important that you hire a lawyer who knows what he is doing.

Try to use the services of a lawyer who has a lot of experience with bankruptcy chapter 13 and chapter 7 as he will know how to present your financial details in order to achieve the desired results. Still, you cannot be sure that you will be approved for the bankruptcy chapter that you attempt to file for but at least you will have made an effort to increase your chances. You can also check other bankruptcy alternatives as you can file the bankruptcy chapter 13 and the chapter 7 only once each every seven years.

John Penn
http://www.articlesbase.com/finance-articles/filing-for-bankruptcy-chapter-13-1260946.html

You are in a position of needing to consider bankruptcy based on your current financial situation. Hopefully you have learned some lessons along the way in getting to this point, like about how do strike deals, when to get statements in writing from partners or customers, how to plan more carefully for the needs of your company so that you do not grow too fast. Whatever the reason, you got to this point and are now considering filing for bankruptcy.

You need to be fully aware that filing bankruptcy should be your absolute LAST course of action, and only taken after you have thoroughly exhausted all other alternatives. There are probably more excellent reasons to NOT file bankruptcy than there are good ones. While bankruptcy may be your only viable option, you need to ensure that you have exhausted all other viable options first.

Be aware that filing bankruptcy is going to be a huge red flag on your credit report for the next 7 to 10 years. There is nothing you can do about it, and that red flag is going to cause you to be turned down for loans and financing, or if you do get approved, the interest rate that the lender will quote you because he is “taking a chance” on you is going to be astronomically high. That means that it is going to take you longer and will also cost you more to get back on your feet, so consider your options carefully.

One of your options would be a debt consolidation loan. Many people like to live on a champagne lifestyle even though they only have a beer budget, and sooner or later that decision is going to catch up with them. A debt consolidation loan can help. You need to take all your outstanding accounts, add them all up, and then determine how much you need to borrow to get them all paid off. Do NOT borrow more than you need, because that can potentially get you into an even deeper hole than the one you are in now. This approach has the advantage of just paying ONE loan payment at the end of the month, and although the interest rate on that loan may be higher than what you would like to see, it is probably less overall interest than if you were to pay each creditor separately, so you are actually saving money, as well as keeping your creditors happy.

The other positive aspect of a debt consolidation loan is that the total amount you are paying per month is probably going to be significantly less than if you made separate payments to each of your creditors every month. For example, say you are paying out $3000 if you paid each of your creditors individually, but after a debt consolidation loan, your total payment is now only $2000. That extra $1000 every month may give you enough breathing room to where you can hold on until things start to turn around for you, without filing for bankruptcy.

If you are having trouble managing credit, you should make an appointment with a credit counselor. These are usually non-profit organizations whose job it is to help you make better decisions about credit and to help you see a way out of your current situation. These organizations have helped thousands of people get on the right path, and they can help you also.

If you feel that you have exhausted all possibilities and bankruptcy is the only one left staring you in the face, be sure to do it the right way. At our site is a free form you can complete to get more information about bankruptcy from a bankruptcy lawyer who is local to you, and who knows your state’s laws concerning bankruptcy. This is a huge step with a lot of complications, so it is not something you should want to do on your own without legal assistance.

Jon Arnold
http://www.articlesbase.com/finance-articles/why-bankruptcy-may-not-be-your-best-option-116476.html

We begin with the creation of the automatic stay. The stay is automatically created at the time of bankruptcy filing.

The automatic stay is actually a unique feature. If a creditor attempts to collect from the debtor in any way after the bankruptcy was filed and the automatic stay was enacted, the court can undo creditor’s actions. For example, if a car was repossessed without bringing a motion to lift stay, that car, can be requested to be returned to the debtor. So let’s say you filed your case, your case has been filed, and all of the sudden one of the creditors that has security on your car, purchased money security interest, comes in and repossesses your car. Well that means you can go and ask the court to make the creditor return the car back to you, because what the creditor did was actually illegal, and the creditor can actually be punished for that. So, the automatic stay has some benefits and one of the actual benefits is that it allows you to stay in a house you are surrendering for almost a year.

Taxes and Bankruptcy

Now, let’s talk about taxes, taxes owed to the government that were accumulated within three years prior to the bankruptcy won’t be discharged. However, if you file your taxes then you can actually get your taxes discharged that were accrued prior to three years of filing. So, let’s say its 2008 right now. Taxes that you were supposed to pay in 2004, 2003, 2002, 2001…. as long as you filed them, can actually be discharged.

Not paying your taxes can have a significant consequence. For example, the interest rate can amplify the amount you owe significantly. In a couple of years you can go to actually doubling your debt. Now, once bankruptcy is filed the interest on the debt stops.

Personal Guarantees on Businesses

There are different kinds of bankruptcies there is the business and personal bankruptcy. A lot of people have small little businesses that went downhill and are actually bringing owners along for the bankruptcy. Of course if you have an S corporation it’s a different kind of entity and it’s not totally connected to the owner. Let’s say a debtor has an S corporation, a body shop or a restaurant, whatever it is, in order to actually discharge the business debt, some of the liens that are from that S corporation, some of the credit cards that are on that S corporation, you actually have to file bankruptcy for the S corporation itself. However, most S corporations and other businesses have loans that are also secured by the debtors themselves, by the owners of the S corporations and not only by the S corporation itself. These loans cause the owners of the S corporation and the S corporation to have to file bankruptcy together.

Most of the time lenders won’t give you a loan just for the S corporation knowing that you can easily just file bankruptcy under the S corporations without being liable for the rest of the loan. Therefore most of the loans are secured by personal guarantees and by the corporations themselves. In this scenario both the owner of the S corporation and the S corporation has to file bankruptcy and that’s the only way you’re going to get discharged from that debt completely.

David Siegel
http://www.articlesbase.com/law-articles/bankruptcy-issues-621957.html