While bankruptcy is designed to help people escape serious debt problems, the situation becomes interesting when it comes to credit accounts with zero balances. These are typically credit card debts, either through credit card companies or those issued by individual businesses. When filing for bankruptcy, debtors only need to include actual debts, so in theory, [...]
When filing for bankruptcy, the bankruptcy court, and more particularly the appointed trustee, needs to know what assets you own and what their value are. This enables the trustee to place a value on the bankruptcy estate and to determine how to proceed with the bankruptcy petition. It is important to list every asset that [...]
Most people know that bankruptcy is a process that eventually cancels monies owed to creditors. In legal terms, the canceling of a debt is referred to as a discharge of that debt. There is always some confusion about which debts can and cannot be discharged. As a rough guide, consumer debts that have not been [...]
Business owners are often advised to set up a limited liability company (LLC) in order to protect themselves should the business fail and require bankruptcy protection. In most cases, a business owners liability is then limited to the value of the shares they have in the company, not the debts themselves. An LLC is a [...]
There is one area of an individual’s finances that really peeves bankruptcy lawyers, and that’s their taxation returns. You can only file for a Chapter 7 petition for bankruptcy if your tax returns are all up to date. It’s not unusual for a bankruptcy attorney to send a client to the local tax office as [...]
When filing for bankruptcy, one of the tests that is applied by a trustee is whether or not your petition and its components have been filed in ‘good faith’. In a Chapter 13 petition, for example, the trustee will look at how much you are proposing to pay in your monthly plan, and whether or [...]
There are a lot of debtors using services designed to bring all of their debts together into a single payment. The problem with these services is the cost – you are often extending the period of all monies owed, and paying a higher interest rate. Sure, the monthly payment plan is lower, but the final [...]
We have frequently mentioned the need to challenge credit card companies when they file a suit to recover the debt owed. Credit card companies rely on one factor when filing for a judgement on a debt, and that’s the habit of most debtors to ignore the matter altogether. When the suit is not defended, the [...]
When filing a Chapter 7 petition for bankruptcy, you can include reaffirmations of secured loans. These would typically involve your home and your motor vehicle. Reaffirmation is a process that advises the court that you are maintaining full responsibility for the loan, and that it isn’t to be included in the bankruptcy process. There are some [...]
There’s a saying we hear a lot in law – “what a difference a day makes.” In law, this is very true. If you file for bankruptcy on a Thursday, you may be ineligible for a Chapter 7 – submit that same petition on the Friday, and you could be eligible. It all comes to [...]
Farmers and fishermen have one advantage over other people when it comes to filing for bankruptcy. They can modify their mortgage through the bankruptcy process. One theme that you will often read when looking through our pages is that bankruptcy is not the best solution for distressed mortgages. Under a Chapter 7 petition, filing will [...]
Bankruptcy is a very complex piece of legislation made more complex by the fact that some states have enacted their own versions of what is, essentially, a federal act. Despite having state bankruptcy laws in place, bankruptcy is still petitioned through the Federal Bankruptcy Court system. While it is fairly rare, it is technically possible [...]
While filing for bankruptcy is a legal process that involved the Bankruptcy Court, few petitioners ever get to see a bankruptcy judge. Once you have filed your bankruptcy petition, the paperwork makes its way to a bankruptcy trustee. It is their job to manage the bankruptcy process all the way though to its conclusion. While [...]
When people are pushed, their emotions take over and they often do rash things. Being hopelessly behind in debts such as a mortgage often triggers this response, especially if threatened with court actions or foreclosures. Here are four actions that some people often take when threatened with bankruptcy – and they generally lead to more [...]
Not being able to pay bills is one thing, but filing for bankruptcy is another. Many people find it difficult to file for bankruptcy, even though they are up to their eye-balls in debt. Some debtors hide from creditors, some even reaching a point where they are too afraid to open a door or answer [...]
In what many would consider an absurdity, the cost of filing for bankruptcy is set to rise. It’s not a huge rise, but when you’re broke, any additional costs hurt. What is important for anyone who is considering bankruptcy is that the cost of filing for bankruptcy is charged every time you lodge a petition. [...]
Bankruptcy is a tool that is designed to help people who are underwater with debt gain a fresh start. While that is sound in principle, there is one group in our society who don’t really need a fresh start, they just need a clean end, and that’s the elderly. We have a rapidly growing senior [...]
People are often wary about filing for bankruptcy, often based on stories they have heard about the process. In most cases, those stories are nothing more than myths and once the air is cleared, they find that bankruptcy is not only not scary, it was the best thing they ever did. Here are ten bankruptcy [...]
Personal bankruptcy is often seen as a low point in people’s lives. It shouldn’t be. The low point should be the event that has forced you into considering bankruptcy, for example, illness or job loss. Bankruptcy itself should be viewed as an opportunity for a fresh start – after all, that is the real reason [...]
A bankruptcy creditors meeting is known by its technical name – a 341a meeting. This is a meeting that is called by the court-appointed trustee and includes all of your listed creditors, your lawyer (if you have engaged one), and both yourself and your partner (if you have filed a joint petition). While the event [...]
The leading cause for bankruptcy in the U.S. is credit card debt. Yet filing for bankruptcy to resolve this debt is not always the best option. However, there is certainly one practice that every citizen should avoid, and that’s ignoring a court summons for a default judgement. In fact, credit card companies are relying on [...]
Mention the term bankruptcy and most people think it’s escape from debt responsibilities. This is not always the case. While most debtors do have some or all of their debt discharged (wiped) through bankruptcy, some debtors use the bankruptcy process to control their debt repayments and to pay off all of their debt. This is [...]
There are some sectors of our society that have become so reliant on payday loans, it’s almost like addiction. It’s arguable as to whether or not payday loans provide a useful service. They are high interest loans taken over short periods of time and they tend to place more pressure on finances rather than relieving [...]
Under a Chapter 13 bankruptcy plan, you set aside an agreed amount each month which is used to pay down some of your debts. The trustee’s role is to pay debts in a specific order: priority debts, secured debts, unsecured debts. However, the trustee doesn’t do this for free – they charge 10% as a [...]
When a husband and wife are both working, credit can be easy to manage. However, if just one of that couple loses their job, that credit can suddenly get out of control. There are some bankruptcy proponents who suggest filing for bankruptcy as soon as you lose your job rather than waiting for your debt [...]
A Chapter 13 bankruptcy petition lasts for a minimum of three years (maximum five years) and given the turbulence we have seen in the economy in recent years, anything can happen in that three year period. The prime factor behind a Chapter 13 petition for bankruptcy is the payment plan that debtors enter in to. [...]
Whether a person is buying a car, filing tax reports, renting an apartment or running for political office, the establishment of their net worth is essential. Businesses must calculate net worth each time a financial report is filed. In order to arrive at an accurate estimate of net worth a person must know two basic [...]
Wisconsin residents have a legal option, known as a Chapter 128, that can be used to help reduce their debts. Although referred to as a Chapter 128, it is not really bankruptcy. Rather, it’s more like a forced debt consolidation plan. Is it a good idea, and should Wisconsin residents use it? Better yet, would [...]
Getting behind in debts can result in a number of outcomes. When it comes to a mortgage, your lender can foreclose and sell the home. For credit cards, the most common action is a wage garnishment while cars are generally repossessed and sold. In all three cases, timely intervention using a petition for bankruptcy can [...]
Bankruptcy is an insolvency solution that will have a serious impact on your finances. It’s designed to help people with unmanageable debts who simply can’t afford to repay them within a realistic amount of time – and is basically considered a suitable approach only once all other potential solutions have been considered. However, if bankruptcy [...]
