Chapter 7 Bankruptcy Information: A New Start

January 26, 2010 – 1:47 pm

From the beginning of America’s recent recession through the present day, there has been a lot of talk about debt and bankruptcy. Since it is perhaps the clearest way for debtors to get a clean slate and get on with their lives, there is a lot of Chapter 7 bankruptcy information that is helpful to know. Anyone in serious financial trouble, however, should definitely consider seeing a lawyer that specializes in bankruptcy law. That being said, what does Chapter 7 bankruptcy mean for debtors and who can apply for it?

A Chapter 7 bankruptcy is one way of getting clear of insurmountable debts. With a Chapter 7 filing, all property not exempted under federal or state law is subject to liquidation. Those assets are sold to reimburse creditors, and then the remainder of the debts is erased. Under Chapter 7, debtors do not have to repay their creditors under a repayment plan beyond what occurs in the liquidation phase.

As for eligibility, any individual or business entity (including partnerships, corporations, and others) can apply for Chapter 7. Anyone filing for Chapter 7 must have applied for credit counseling at an approved agency (check with a lawyer or the agency itself) up to 180 days before filing. Also, if the debtor has failed to appear at their scheduled bankruptcy hearing or otherwise irked the court 180 days before filing for Chapter 7, they are disqualified. The amount owed to creditors isn’t taken into consideration by the courts, nor does the ability of the individual or business to pay debts at all factor inherently limit filing for this type of bankruptcy.

The government does have ways of determining whether or not people are filing what is called an abusive Chapter 7 claim and actually has the means of paying their debts, but refuses to. This system is called a means test.

The first part of the means test checks to see whether a debtor’s monthly income is above the median for their state of residence. The second part involves a concept called unsecured debt, which means the type of debt that isn’t secured by the creditor with debtors’ assets. Mostly, this applies to credit card debt. If your expenses exceeds 25% of their unsecured debt, then the court presumes that the case is abusive and will probably dismiss it or convert it to a Chapter 13 bankruptcy filing.

A Chapter 13 claim is very different from a chapter 7 claim. Under Chapter 13, a debtor is placed under a five-year repayment plan to his creditors. The amount left over after that period is dismissed under Chapter 7, and no property is liquidated.

However, Chapter 7 is not right for everyone considering filing for bankruptcy. If a debtor wants to keep their collateral or the object of their debt, whether it be their house, car, or business, the safest way to do so is to pursue routes without liquidation. One alternative besides Chapter 13 bankruptcy settling with creditors without the court system.

Whatever a debtor ultimately decides to do, with the Chapter 7 bankruptcy information that is evident, their finances are going to be critiqued heavily. The court system, including Chapter 7 filings, is only meant to benefit trustworthy debtors who want a fresh start.

Anyone in serious financial trouble should definitely consider seeing a lawyer that specializes in bankruptcy law. That being said, what does Chapter 7 Bankruptcy Information and Chapter 13 Bankruptcy Rules mean for debtors and who can apply for it?

By Jane C. Smith | Posted in Bankruptcy | Tagged , , , , , , , , , | Comments (0)

2009 Bankrutpcy Filing Increases

January 17, 2010 – 10:46 am

Personal bankruptcy filings sky-rocketed in 2009. In fact, some have reported that bankruptcies filed by individuals have risen by over 30%. With the current economic climate, it should not be a surprise as more Americans face serious financial hardships. With unemployment on the rise and home foreclosures continuing to climb, it is expected that more people will make the difficult decision to file bankruptcy.

Last year saw bankruptcy filings climb over the one point four million mark. This is more filings in a year than has been seen since 2005. That was the year that the United States Congress overhauled the bankruptcy law system in an effort to decrease filings. This is also over twice as many filings as the country saw in 2007.

Filings allowing debtors to liquidate assets to pay some debt and erase portions of debt, also known as Chapter 7 bankruptcies, increased by over forty percent by November. This is the latest data for such filings.

Like Chapter 7 filings, Chapter 13 filings also saw an increase. However, these filings did not rise as high as those under Chapter 7. While Chapter 7 filings saw huge increases, Chapter 13 filings were up by only a little over ten percent. These filings still represent less than a third of the overall filing numbers.

While bankruptcy filings nationally were up, they were not evenly distributed across the states. Arizona, which saw increases of around eighty percent, had the highest number of increased filings. On the other hand, states like Nebraska and Alaska saw very limited increases, around twelve to fifteen percent.

As the national rate of unemployment continues to loom over ten percent, many citizens that had been financially secure are now in a position that bankruptcy makes more sense. Coupled with the decreased housing market, it is no surprise that many individuals are now strongly taking filing bankruptcy into consideration.

More and more families are taking a hard look at their options when it comes to filing bankruptcy. For these individuals, it is important to get good information. Government websites are a good place to start. However, in order to properly explore one’s options, it is usually best to discuss the situation with an experienced bankruptcy attorney.

If you are facing creditor harassment, wage garnishment, or foreclosure, learning your choices needs to be your first priority. People often feel helpless If they find themselves in financial situations like these. Get a free bankruptcy consultation fromMassachusetts Bankruptcy Attorney Matt Desrochers. Debt issues are not something to take lightly, but it is not as scary as you might think.

By Jeff Berman | Posted in Bankruptcy | Tagged , , , , , , | Comments (0)

5 Of The Most Common Myths About Bankruptcy

January 17, 2010 – 9:48 am

Misconceptions about bankruptcy and what it means to file are prevalent. Many times this can prevent people from filing for personal bankruptcy, even when it might benefit them to do so. Here are 5 of the most common myths about bankruptcy.

1. If I file for bankruptcy, everyone is going to know about it. Most often the only people that will know about it are the ones you decide to tell and your creditors. Even though bankruptcy is a public proceeding, there are so many people and companies that file for bankruptcy, unless you are prominent, no one will run a press release about it.

2. Everything I have will be gone. This is often the deal breaker for people who could really benefit from filing from actually doing it. Every state has exemptions, although they vary from state to state, that protect certain assets, such as your house, clothes, retirement savings, and your car (up to a certain value). If you have a mortgage or a car loan, you can keep those as long as you keep making the payments.

3. You will never be able to get credit again. This isn’t the case. You will be able to get credit again. Although interest rates will be higher than before. However, if you are going to make a larger purchase, such as a house or car, it might be a good idea to do this before you file. Loans for those items will be tougher to get and will include higher interest rates.

4. Filing for bankruptcy is going to be a long and arduous journey. Not so. Bankruptcy lawyers in Michigan can help with your filing and make the process easier for you to go through.

5. I must be a deadbeat if I have to file for bankruptcy. The truth is that lots of people file for bankruptcy and most of the time it’s because of a big, life-changing event. Things like divorce, losing their job, getting sick are often to blame. Bills stack up and they get further and further behind.

Filing for bankruptcy isn’t a process you should take lightly. It is a good idea to consult with bankruptcy lawyers in Michigan to make sure you are handling all aspects of the process correctly.

When you are facing the prospect of filing for bankruptcy a good idea is to connect with bankruptcy lawyers in michigan. Ardelean & Dunne are experienced bankruptcy lawyers in michigan. They can help to resolve your bankruptcy issue and get you on the right track again.

By Seth Furman | Posted in Bankruptcy, bankruptcy alternatives | Tagged , , , , , , | Comments (0)

Want A Free Credit Report?

October 15, 2009 – 6:31 pm

Whenever you want to locate a copy of your credit report, and you see tons of ads for Free Credit Report here and there, but every time you click on a link, you are asked to pay $8.99, or $15.99 or $29.99 or even more! How the heck can you spend that kind of money?

The fact is, by Federal U.S. law, you can get for free and once per year, a free copy of your credit report from each of the three credit bureaus. These are Experian, TRW, and Equifax. Where do you get it? Simply go to http://www.annualcreditreport.com, where you will be able to order online.

Now, what does your free credit report NOT include?

When you get this report, it does NOT include you credit scores. Getting a credit score is usually what we’re all looking for isn’t it anyway? The services do offer credit scores for a fee, and they are allowed to charge for that. But before you go spending money for your credit score, get the annual free credit report, and then check for any mistakes. Get ALL mistakes corrected, wait for 30-60 days, and then get a copy of your credit score. Because if anything was making your score low in error, that will have been fixed.

Good luck with getting your credit report, and use it to clean pu your credit and eliminate your debt! And certainly consider getting your credit score if you really think you need to.

By Janet Caskey | Posted in Bad Credit, credit repair, credit report, credit score | Tagged , , , , , , , , , | Comments (0)

Get The Best Bankruptcy Help From These Sources

September 26, 2009 – 10:53 am

Thinking about bankruptcy but not sure? You need to know where to turn for bankruptcy help to make the right decision for yourself and your family. Help can come from friends, professionals, websites and books, but how do you know which is the right information?

There are plenty of excellent sources of information on bankruptcy that can help you. There are many books for example written by lawyers which explain in detail the process of filing for bankruptcy and everything you need to think about before filing.

You can also find books to explain how to file bankruptcy on your own, which while it’s not recommended, is possible if you cross all the t’s and dot all your i’s.

You can also find plenty of websites, like this one, with information telling you your different choices and options when it comes to bankruptcy. They can also explain more about how bankruptcy works, what you can do to avoid filing for bankruptcy, and what might happen afterward, depending on your situation.

Still, the more information out there, the more confusing and difficult it can be to decide what exactly you should be doing. Making things even more confusing is that each person, each family, will have a different financial situation, different income capacity, and different debts and obligations, so there is no one size fits all solution.

So where do you begin to get the bankruptcy help you need?

Start out by making a detailed list of all of your income, all of your monthly necessary expenses, and your debts – how much you owe in total, and how much you are supposed to pay each month. You’ll need this to decide where to cut your budget, which bills must be paid, and how many bills you just can’t get above water on.

Next, it’s probably best to rely on professionals and not ask friends or family for advice or information. Also, don’t be afraid to take the time to read and review many sites and books, mainly everything you can get you hands on.

You can set up appointments to talk to lawyers, usually for an initial meeting at a low cost or for free. Find out which one you feel most comfortable with, and also don’t let anyone railroad you into automatically filing. Bankruptcy isn’t necessarily the right step for everyone in financial trouble, so think hard about the advice you get.

There are also nonprofit credit help companies to help you walk through debt management. You will have to meet with one before filing bankruptcy anyway, so maybe it’s a good idea to try this before you decide whether or not to file.

You can also find out what alternatives you have to filing. You can get information about that here on this blog, or from any good book on the subject. For example, if you have mostly student loan debt, bankruptcy won’t help you, because that’s one debt among other that can’t be discharged.

Finding good bankruptcy help is actually all around you. Don’t panic, take your time and read through many resources, and meet with professionals. You will definitely find an answer toy our financial woes that works for you.

By Janet Caskey | Posted in Bankruptcy, Chapter 7, Credit Counseling, bankruptcy alternatives, chapter 13 | Tagged , , , , , | Comments (0)

Why You Need A Chapter 7 Lawyer

September 25, 2009 – 5:00 pm

If you find yourself as one of millions of Americans who are today thinking of filing for bankruptcy, picking a good chapter 7 lawyer could be very important to your case. The fact is that while hiring a lawyer could be expensive, it is the kind of process that requires a high attention to detail and also a knowledge of court practices and significant paperwork, so the right lawyer can make all the difference.



Usually, you might find a chapter 7 lawyer through asking other people you know. This can be hard since declaring bankruptcy still has something of a stigma attached to it, and it can feel very embarrassing to admit to someone that you are in need of a bankruptcy lawyer. But keep in mind that many people are just a couple paychecks away from bankruptcy themselves these days, so it’s likely that more people than you know have already talked to lawyer or considered bankruptcy themselves.


Getting a recommendation is one way. Another way is to contact your local bar association which his the professional organization of lawyers in your town or state. Most lawyers are members and you might think twice about hiring someone who isn’t a member! Also these groups usually have specialty groups for different practice areas like bankruptcy, so see if you can find the name of lawyers who are members of that subgroup.



When you talk to the bar association, find out if they have a referral service. Usually lawyers also join the referral service so that when consumers call, their names are on the list. Lawyers on these lists also sometimes provide free or low cast initial consultation through these services.



You can always find a chapter 7 lawyer through the yellow pages or by checking online. But if you choose this method, it is more like throwing a dart. BE sure to check what organizations the lawyers list on their website, how long they’ve been practicing bankruptcy law. sometimes these lawyers will publish articles too, and gain recognition in their area of practice.




Once you find a few names that sound good, set up an appointment with each lawyer. If they don’t offer a free initial consultation, then skip to the next lawyer. In bankruptcy, getting a half hour free up front is fairly standard in most areas of the country. When you meet them, determine who you feel most comfortable with, the lawyer that gives you the most thorough information, and listens to your personal, individual situation. It’s a lot like choosing a doctor. You don’t want a lawyer who just tells you to file without going over options, or who seems to think in cookie-cutter mode. Every person’s financial situation is different, and considering what you’ll be paying this person, you deserve personal attention.




As for the cost of bankruptcy, regardless of what chapter you file under, it’s likely that you’ll pay at least $2,000 plus the court’s fees. You may also pay for copying, FedEx or other costs. if you have a complicated financial picture the costs could go higher. This fee may vary around the country, but if you’re meeting with a few lawyers, you’ll see right away what the going rate is in your region. Any good bankruptcy attorney will also tell you right up front what they estimate your total costs will be.




Hiring a Chapter 7 lawyer is an important step, so be sure to ask around, meet with a few different people, and find the person that is the right fit for you.

By Janet Caskey | Posted in Uncategorized | Tagged , , , | Comments (0)

Painlessly Rebuilding Your Credit After Bankruptcy

September 25, 2009 – 9:57 am

After you file for bankruptcy, and your case is discharged, it’s time to start rebuilding your credit. It’s not an easy task, since your bankruptcy will stay on your credit report for ten years, and even if you pay everything on time, that bankruptcy item will stick out like a sore thumb for some lenders. Not all lenders will refuse credit, but you can expect that for at least two or three years, getting new credit will be an uphill battle.

Patience and time will be on your side. Take your time over then ext couple years to get your financial house in order. Learn to live within a budget, and start to regularly put money in savings in any amount. What other steps are there to rebuilding credit after bankruptcy?

First, you may still have some debts that were not discharged. For example, any student loan debt cannot be discharged in bankruptcy, and that will continue to show up on your credit report. It is extremely important that you pay any back amounts due, and get these debts current as fast as you can. For student loan servicers, there are also many options for someone with a financial hardship to take a forbearance, or temporarily suspend payments, or work out a more affordable payment plan. You probably have already spoken to your lender as part of the bankruptcy process, so now just take every step to make these payments current. This will be one of the items that will show up on your credit report as being paid on time.

If you are still in your home, your mortgage payments will also show up on time. In Chapter 13, and sometimes Chapter 7, debtors will keep their home and continue to make payments. Be sure, again, that all of these payments are current. These items will be additional good credit history on your report going forward.

A tougher one is getting unsecured credit. In this financial environment, lenders are not as willing to provide credit cards to high risk customers. Many customers even with good credit are having their interest rates raised and their balances cut. While there are some products on the market such as a bankruptcy credit card to use for rebuilding your credit, the fees and costs can be higher than other borrowers pay, so make sure you’re calculating the cost and benefit of using these products to help your credit.

Some banks will work with you to set up a secured loan for rebuilding credit. For example, you would open a CD or savings account for a certain amount, say $1,000, then get a loan secured by that savings account. You make payments on the loan regularly, the payments appear on your credit report, and this helps create good credit history as well. Not all banks will offer this, and some will only work with you a year or two after bankruptcy, but it’s definitely a way to build your credit back up without incurring ridiculous fees and charges. best of all, you get your deposit back once the loan is paid off!

Consider avoiding getting new credit at this time of your financial life. Start trying to live only with a debit card. Cut back on your spending: reduce costs on some bills, like switching your phone service or finding affordable auto insurance, and limit your unnecessary spending. Then, put the money into a bank account that you once would have spent on things you couldn’t afford – plus interest. You’re now in a unique position to make a fresh start, and using credit wisely at this point is the key to rebuilding your credit.

By Janet Caskey | Posted in Bad Credit, Bankruptcy, Credit Counseling | Tagged , , , | Comments (0)