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 [...]
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 [...]
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 [...]
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 [...]
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. [...]
Being unemployed puts a severe strain on a family’s income. So much so that the majority of bankruptcy petitions are made under the protection of a Chapter 7. This liquidates any eligible assets then discharges any remaining eligible debt. What if you’re about to start work – can you still file for bankruptcy? The answer [...]
There are times when individuals and small businesses avoid bankruptcy like it was the plague. They often go to extraordinary lengths to avoid bankruptcy, including taking on more debt in order to clear old debt. This is a cycle that can often only be broken by an enforced bankruptcy petition – known legally as an [...]
While bankruptcy for businesses is often thought of as a death knell for that business, it can often be the first step to that business’s survival. A Chapter 7 bankruptcy for business will result in the business’s closure and the sale of all assets. However, a Chapter 11 or Chapter 13 bankruptcy petition allows a [...]
If you own a business and that business starts to have financial difficulties, you have the choice between a Chapter 7 or Chapter 11 petition for bankruptcy. Under the Chapter 11 petition, the business is allowed to continue trading while a reorganization plan is put in place. This plan has to be approved by the [...]
In simple terms, there are two types of bankruptcy that affect most people – a liquidation bankruptcy (or Chapter 7 bankruptcy) and a reorganization bankruptcy (or Chapter 11 and Chapter 13 Bankruptcy). The terms really are more appropriate to business bankruptcy, however, the terminology is also used for personal bankruptcy. In a way, the names [...]
There are times when the need for bankruptcy is such that filing for any Chapter is better than nothing at all. This is often the situation when a debtor requires the protection of the stay that comes into place once a bankruptcy petition has been filed. This prevents creditors from taking any further action and [...]
While bankruptcy provides a lot of protection for debtors, it provides very little protection for any co-signers, unless of course they file for bankruptcy as well. Under the provisions for a Chapter 7 bankruptcy, the automatic stay doesn’t even protect co-signers. A creditor is free to chase debts from that co-signer the moment a Chapter [...]
There is often an argument that those who have received a significant inheritance should not be in a position to require the protection of a bankruptcy petition. As we know, in life, not everything is black and white, and an inheritance is certainly not going to preclude you from filing for bankruptcy. However, inheritances themselves [...]
Can you file for bankruptcy again if you find yourself in trouble once more? There is no limit to the number of times you can file for bankruptcy. However, there is a limit to the relief you may receive following second or subsequent bankruptcy filings. In some cases, you will gain no relief at all [...]
When filing for a Chapter 13 bankruptcy a debtor must include a payment plan that they are willing to commit to for at least three years. This payment plan must equate to what the court would estimate as their ‘disposable’ income. This is determined by calculating the debtor’s total income then subtracting a range of [...]
Sounds like an easy situation. You file for bankruptcy, your circumstances change so you ask the court to dismiss your petition so you can get on with your life. No problems, right? Wrong – it can create big problems depending on which Chapter you have filed under. Perhaps “big problems” is the wrong phrase, however, [...]
Filing for bankruptcy is meant to protect debtors who are struggling with too much debt by allowing them to discharge those debts and effectively start their lives all over. From some debtors, a home mortgage can be a huge burden that is made worse by the fact the home’s value is now much less than [...]
Bankruptcy laws are double edged – they are designed to protect creditors and debtors. Some experts claim that these laws lean to heavily towards debtors while others claim those same laws lean to much towards creditors. Either way, both groups have rights under bankruptcy laws, and those rights are strictly enforced by the bankruptcy court. [...]
There are times in business when you know that liquidation (Chapter 7 Bankruptcy) is the only way out. However, there are other situations where a reconstruction (Chapter 11 Bankruptcy) may be an option but in reality the business is better off folding. This is certainly true in small one person businesses where the business centers [...]
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 [...]
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 [...]
Bankruptcy – the word sends shudders down the spines of many people. It shouldn’t. While filing for bankruptcy may have had bad wraps on it in the past, the process itself is really fairly straightforward and for those sinking in debt, the relief can be felt from day one. One of the biggest problems that [...]
One of the biggest barriers to filing for bankruptcy for many people is doubt. There is a general feeling in the community that bankruptcy punishes the debtor and gives all the power to creditors. While the opposite is certainly not true, the bankruptcy acts have been framed to provide protection to both debtors and creditors. [...]
Debts in a Chapter 13 bankruptcy are handled differently than a Chapter 7 bankruptcy. Under the Chapter 7 petition, a debtor’s non-exempt assets are seized and sold and the funds used to pay off creditors. Unsecured debts are then discharged (wiped away) and the debtor then discharged ready to rebuild their lives. Under a Chapter [...]
There are no minimum or maximum income levels when it comes to filing for bankruptcy. However, your income levels will determine which Chapter you may file under. Bankruptcy petitioners must complete a means test that is based on the median income for their state. If their income falls below these levels, then they will qualify [...]
One myth that often does the rounds suggests that bankruptcy is only for the poor. Having a job or any form of regular income is then thought to preclude bankruptcy. This is a complete myth. In fact, the Chapter 13 bankruptcy option is often referred to as the worker’s bankruptcy petition. Under a Chapter 13 [...]
Starting the bankruptcy process can be easy, or it can be difficult. It really does depend on your approach. Consulting a bankruptcy lawyer is the smartest move anyone can take. While legal assistance through the bankruptcy process is not exactly cheap, the amount your lawyer can save you when it comes to stress, time, and [...]
