If you file for bankruptcy, you will be assigned a trustee. Their role is to act as an impartial representative of the court, however, they are not employees of the court. They are independent specialists, often private lawyers who are engaged to manage specific bankruptcy petitions. As part of that management, the trustee may want [...]
A Chapter 7 bankruptcy is not as generous as a Chapter 13 when it comes to the range of debts that can be discharged. However, there are still a wide range of unsecured debts that can be discharged. One of the most common debts is that of credit cards, and they are typically the major [...]
Bankruptcy legislation is a double-edged sword that tries to walk a fine line between creditors and debtors. The legislation is designed to give debtors relief from their debts while ensuring creditors get every cent possible from a debtor. To achieve this, the bankruptcy court doesn’t just look at your current finances. They also look back [...]
One of the problems associated with a Chapter 13 petition for bankruptcy is that of time. A petitioner must commit to a repayment plan that is scheduled for at least three years, and three years can be a long time when it comes to the world of finance – just look at our economy over [...]
Bankruptcy is an extremely convoluted act, so much so that some petitions are dismissed, or later reopened, simply because the petitioner failed to include child support or alimony payments received. For the purpose of bankruptcy, they are considered income. However, child support and alimony payments are treated differently in each of the available Chapters. Under [...]
The term involuntary bankruptcy refers to the process where an individual is forced into bankruptcy by a creditor. If there are less than twelve creditors owed money by an individual debtor, then it only requires the action of one creditor to force an involuntary bankruptcy. If there are more than 12 creditors, then three must [...]
If you are in a situation where bankruptcy appears to be your only relief, you have a number of options. You can do all the preparation work yourself, engage a bankruptcy attorney, or engage a bankruptcy petition preparer. If you do the work yourself, you will save money in the short term, however, bankruptcy law [...]
Once you file your petition for bankruptcy, the court will appoint a trustee. It is their role to manage the bankruptcy petition through the bankruptcy process. In that process, they will also manage the affairs of the debtor. This means that creditors should no longer engage in any communications with the debtor. Instead, the creditors [...]
Bankruptcy is a legal process designed to help debtors recover from too much debt. While the bankruptcy process is designed in such a way that any excess assets (including cash) is diverted to creditors, there is one area where bankrupts do get a special advantage. That area is related to retirement funds. If a bankrupt [...]
Bankruptcy is a useful tool that can help those in serious financial difficulty to clear many of their debts and then make a fresh start. There are several myths that surround bankruptcy, one of which is the thought that all debts are wiped away. This is far from truth in reality – in fact, for [...]
If you intend petitioning for bankruptcy at any time soon, then you need to get up to speed on some of the requirements for a successful bankruptcy petition. One requirement is the attendance at a bankruptcy counseling course. Not only are you required to attend, you must include with your petition a certificate verifying your attendance. [...]
If you file for bankruptcy under a Chapter 7 petition, then the court-appointed trustee is required to assess all of your assets with a view to seizing and selling them to help pay off your debts. If you have a mortgage on your home, then that is generally protected from seizure and sale. However, this [...]
If you file for bankruptcy under the provisions of a Chapter 11, then you will most likely be running a business and trying to trade your way out of financial difficulty. In most cases where small businesses are involved, the court-appointed trustee will place the running of the business into the debtor;s hands for day-to-day [...]
We are somewhat fortunate in our society that marriages are not always treated like businesses. While we may marry, the marriage itself is not really a legal entity, so each partner in the marriage remains autonomous in that respect. This then flows through to bankruptcy. It is not the marriage that files for bankruptcy. It [...]
Under bankruptcy law, once a debtor files a petition for bankruptcy, creditors must immediately cease all collection activities. This is known as a ‘stay’ and affects every creditor whether secured or unsecured. It has often been used as a tactic to prevent foreclosure on a home mortgage or repossession of a motor vehicle. However, there [...]
Disposable income can be determined in many different ways depending on your reasons. If you apply for a mortgage, they will use a simple income minus debt formula. When it comes to bankruptcy, you can use a simple approach or a more detailed and deeper formula depending on which bankruptcy chapter you wish to file [...]
There are certain debts that cannot normally be discharged through the bankruptcy process. A common debt that concerns many people is that of student loans. Under normal bankruptcy law, a student loan cannot be discharged – it is a debt that must be repaid in full. Like all laws, there are exceptions, and for student [...]
Bankruptcy deals quite effectively with unsecured debts. Under a Chapter 7 petition, the debtor’s non-exempt assets are seized and sold while the funds used to pay off some of the outstanding debt. Once these funds have been dispersed, and the court appointed trustee is satisfied there are no other funds available, the outstanding debts are [...]
Bankruptcy is a legal process that is undertaken through the court system. Every document that is submitted as part of the bankruptcy process requires your signature – and that signature is verification that the contents of those documents are accurate and true. Creditors are under the same obligation – when they submit documents they must [...]
If you own a business and you are considering filing a bankruptcy petition, you have two choices – a Chapter 7 petition, also known as a liquidation bankruptcy, or a Chapter 11 petition, also known as a reorganization bankruptcy. There is a legal term known as a ‘legal entity’ and this can have a huge [...]
That may sound like a trick question, but it’s not. In fact, there are many situations where you may want to buy an ‘asset’ while still going through the bankruptcy processes. A simple example is where your wide screen plasma television is seized and sold during the Chapter 7 bankruptcy process. Can you then buy [...]
There are two terms that are often used when it comes to individuals or businesses not being able to pay their debts – insolvency and bankruptcy. Are they the same thing? Technically speaking, they are not the same even though general language interchanges the two. Insolvency is a situation, generally used in business, that describes [...]
There is a lot of misunderstanding about the role of a trustee when it comes to bankruptcy. The simplest explanation is often the easiest and in bankruptcy it can’t get much simpler. Financially, a bankruptcy trustee becomes you! This means that all financial transactions are carried out by the trustee, not by you. Money coming [...]
Under Federal law, health savings plans are not protected during the bankruptcy process. In most states, if you have a health savings plan and you file a Chapter 7 petition for bankruptcy, then you will have to hand those savings over to the trustee. The trustee will then include those funds with any other property [...]
Deficiency judgments are relatively rare these days, but they do occur from time to time, and they do leave debtors in a great deal of distress and financial hardship. One reason for claiming a deficiency judgment is when a creditor feels that a debtor is in a position to pay – this can often be [...]
There are times when people confuse the words “reject” and “object” when it comes to dealings with the bankruptcy court. Under a Chapter 13 bankruptcy petition, the debtor must include a repayment proposal that has a value equal to their disposable income after normal living expenses. Creditors can object to this repayment plan. They cannot [...]
Bankruptcy law is designed to allow debtors relief from burdensome debts, especially when that debt has become burdensome through no fault of the debtor. Sudden and unexpected unemployment, illness, and marital separations are common areas that create problems for debtors. Bankruptcy law is also designed to provide creditors with as much protection as possible. For [...]
Bankruptcy law allows a debtor to exclude debts from the bankruptcy process. This means that while all other debts are discharged, the excluded debt remains in force and the petitioner must continue to repay this debt. The process of excluding a debt is a lot more involved than simply leaving the debt of the schedule. [...]
While bankruptcy is covered under federal law, each state has their own versions. State versions cannot undermine the federal law, however, they can add to it and one of the important additions is that of a homestead exemption in Chapter 7 bankruptcies. Under a Chapter 7 petition, the debtor must list all of their assets, [...]
Sometimes it’s easy to forget what a bankruptcy petition is and what the bankruptcy process is. To a casual observer, the whole process may seem like an administrative matter. An individual files for bankruptcy and courthouse officials process the paperwork until all the bankruptcy provisions have been completed. Bankruptcy is not an administrative process – [...]
