Helping You Avoid Life's Financial Mistakes

A Guide To The Complexities of Bankruptcy Chapters and Laws

September 24, 2008 By Leave a Comment

What is Bankruptcy?

Bankruptcy is a legal procedure granted by the Federal Law that allows an individual or organization with excessive debt to pay their creditors in a certain amount of time. The bankruptcy attorney specializes in bankruptcy law which enables them to design a legal plan to assist in resolving this debt. There are several types of bankruptcy proceedings under the Bankruptcy Code. Because bankruptcy law specialists are fully in tune with the most recent changes in the laws, they are best qualified to file the appropriate documents to eliminate debt.

There are several reasons that an individual or organization may consider filing for bankruptcy. Consumers or organizations that are under

  •  the threat of wage garnishments
  • foreclosures,
  • liens,
  • lawsuits or
  • repossessions

can potentially benefit from filing bankruptcy. However, in order to properly regain total control over finances, it would require professional knowledge and expertise. Consequently, recent changes in bankruptcy laws as directed by the Bankruptcy Abuse Prevention and Consumer Protection Act indicates stringent guidelines in regards to chapter 7 and chapter 13 bankruptcy proceedings. These laws have made it extremely difficult for individuals or organizations to implement these procedures without the assistance of a bankruptcy attorney.

Types of Bankruptcy and there challenges

The chapter 7 bankruptcy procedure is the basic liquidation for consumers and businesses. The chapter 13 procedure is the rehabilitation with a payment plan for the individual with a regular source of income. The chapter 7 and 13 proceedings are the most common types of personal bankruptcy.

The chapter 7 or chapter 11 procedures are generally used by a business or cooperation. Due to the recent adjustments of bankruptcy laws, it is quite challenging to file bankruptcy. Specifically, filing bankruptcy is not as simple as liquidating assets or your debt. The new laws actually encourage and enforce chapter 13; consumers must find a way to incorporate a payment plan to repay the debt.

As many individuals and organizations enter the process alone, the bankruptcy attorneys are available to provide valuable information that could have a significant impact on the outcome. The bankruptcy law experts are able to offer an initial evaluation to determine if you are a prominent candidate for bankruptcy proceedings. Furthermore, the attorney can also determine which proceeding is best given your personal circumstances.

One of the basic proceedings that a bankruptcy attorney practices is the chapter 7, liquidation. The attorney also practices the debtor rehabilitation procedure that involves a court- approved payment or reorganization of the debts. The debts are settled over an allotted period of time by using the future earnings of chapters 9, 11, 12 and 13.

  • Chapter 9 bankruptcy is the municipal bankruptcy that is only available to cities, towns, counties, municipal utilities, taxing and school districts.
  •  The chapter 11 proceedings is simply a court- approved reorganization. It is generally practiced for business/commercial enterprises which allows them to continue operation while repaying creditors.
  • Chapter 12 and 13 indicates an “Adjustment of Debts of a Family Farmer with Regular Annual Income” and an “Adjustment of Debt of an Individual with Regular Annual Income.”

A bankruptcy attorney is available to find the best legal option for an individual or business to get out of debt. The bankruptcy lawyer will assist with solving credit problems and provide a stable financial status.

The bankruptcy proceedings that are regulated by the United States Bankruptcy Code determines the chapter a debtor can file, what bills can be dismissed, how long payments may be extended or what possessions should be liquidated. Ideally, the bankruptcy attorneys are extremely knowledgeable of the most recent bankruptcy laws thereby providing the individual and business with reliable representation during this process.

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

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The Pros And Cons Of Going Through Bankruptcy.

September 9, 2008 By 1 Comment


Are you considering bankruptcy?

With all the issues with so many people in debt bankruptcy may be one of the toughest ones to get through.  If you have ever been through this situation you know what I’m talking about, and that’s not even the worst of it. 

Once you get through bankruptcy it starts a whole new battle.  From the date of your discharge it usually will take up to 10 years to get that off of your record.  So it should be said bankruptcy takes some time to get through. 

In this article I am going to discuss some of the advantages doing bankruptcy and some disadvantages.

Advantages

1.  Protects some assets.  With bankruptcy you can save some of your assets.  However only if the asset is exempt will it stay untouched.  It will also vary according to whether you have filed a Chapter 7 or Chapter 13. 

Chapter 7 involves liquidating all assets that are not exempt.  Things you may be able to exempt are house holds items needed on a daily basis, things you may need for your job, and your vehicle. 

Chapter 13 is the preferred route because it is consider a less pressured structure.  This allows people to make partial discharges on some of there debt and also lets the individual to make a monthly payment off the rest.

2.  Under Chapter 7 you start over debt free.  Yes the debt and misery are gone.  However I must inform you that this is the toughest route to go and is not for the faint of heart.  In fact I urge most people not to go this route unless it is the only option left that you haven’t tried. 

In most cases you can avoid bankruptcy all together.  I urge anyone reading this article do not pick bankruptcy because it sounds like the easy way to get debt free.  It’s not.

Disadvantages

1.  New laws for bankruptcy.  The laws have changed and it is now much harder to discharge debt.  In order to do a Chapter 7 bankruptcy an individual must pass what is called a means test.  This test is the only way to qualify.  More on this to come in future articles.

2.  Damages your credit.  As one of the most severe ways to damage your credit it will take up to 10 years to get off your credit report.  This means it will be nearly impossible to get a loan of any kind.  Not to mention kill your credit score.

3.  Affects your business.  If you own a business it will destroy almost any possibilities of you getting any business loans, if you haven’t already lost your business.

4.  Affects your reputation.  Bankruptcy is not usually a personal event.  It tends to be public knowledge.  Sometimes listed in news papers and even on the internet.  This can have a lot of negative implications.  Especially if your are trying to get a new job, or run for public office.

If you are considering this option take some time to think about these advantages and disadvantages.  You also may want to talk to a lawyer about this option as well.  One word of advice though.   Don’t let the lawyer tell you bankruptcy is the only way to solve your problem.  Just because he’s a lawyer doesn’t mean he is always right.  Get a few opinions on what you are trying to do.

I once knew an individual that was going through bankruptcy and it didn’t matter what I told her the lawyer had her convinced bankruptcy was the only way out.  Don’t fall into this trap. 

Finally, have you ever been through bankruptcy or even thinking about it?  What is your take on it?  Did it help you or did it hurt you?  Do you think people should or should not go through bankruptcy?

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