Mistakes In Chapter 7 Cases
The bankruptcy process is not meant to be inherently difficult, but there are several rules and guidelines that must be followed in order for a case to be successful. Debtors should be adequately prepared coming into the process and be aware of certain actions that could influence the outcome of their case. A good rule of thumb before filing for bankruptcy is to be still and wait. Making certain changes could impede the case, preventing a debt discharge.
Debts
A common temptation among bankruptcy filers is to try and pay down debts or boost income before filing for bankruptcy. The total amount of debt is extremely important when filing for bankruptcy because it is a big factor in determining eligibility. Reducing debts prior to filing could potentially disqualify an individual, leaving them without the protection they need. Increasing one's income prior to filing could also impede their chances at qualifying for bankruptcy, especially in a Chapter 7 case.
There are some cases in which people accumulate more debts prior to filing for bankruptcy. These actions could be considered fraudulent and lead to serious consequences. Even if debts are acquired accidentally prior to filing, they may not eligible to be included in the case. Bankruptcy laws prohibit debts $600 acquired within 90 days of filing from being eligible for discharge. Cash advances acquired within 70 days prior to filing that exceed $750 may also be disqualified.
Assets
A debtor's assets are extremely important when evaluating a person's bankruptcy case. The court uses a list of assets to determine eligibility and potential for debt repayment. Fear of losing assets to creditors often motivates people into selling or giving away assets prior to bankruptcy. Not only may these actions be considered fraudulent, they are generally unnecessary.
The reason is that bankruptcy exemption laws protect much of a debtor's assets in a Chapter 7 case. In most cases, a person's house, car, personal property and other assets will be exempt from liquidation by creditors. Although selling assets before bankruptcy is not strictly prohibited, the debtor must follow certain rules. Any asset that is sold prior to bankruptcy must be sold for fair market value and the income received from the sale must be reported to the court on the bankruptcy petition.
Some people choose to liquidate retirement or investment funds prior to bankruptcy, which creates a similar problem as with other assets. Without the reporting of the money in these funds, the court cannot accurately evaluate a debtor's financial situation. Further, these funds are typically protected under bankruptcy exemption laws as well.
Questions and Answers
More debtors are turning to debt consolidation services, which promise on those daytime and late-night television ads to lower your monthly payments into one manageable fee. However, what if your situation is so desperate that these options will not be enough to ease your burden? As Texan debtors and others throughout the United States are deciding, filing for bankruptcy protection may be the best option in these troubling economic times.
There are numerous misconceptions and myths associated with bankruptcy that prevent many people in need from benefiting from the process. Although the process is not inherently difficult, there are many that still find the process to be challenging. In fact, it isn't uncommon for people to file unsuccessfully or have their case dismissed due to a missed step of the process. This makes it all the more important that consumers get educated about the process and understand the requirements before
The bankruptcy laws are confusing and complicated. Fortunately Congress and the US Supreme Court have given us a guidepost by stating that the bankruptcy laws exist to help debtors who are poor and honest. The bankruptcy trustee will investigate your case to determine whether you are both poor and honest.
Due to the economic slump the country has faced over the last several years, many people have found themselves behind on major payments or unable to pay for things in general, even with a steady income. If you find yourself in a tough financial situation due to economic setbacks like job loss, illness or unexpected expenses, filing chapter 13 bankruptcy can often provide relief.
While it is within your rights to file bankruptcy without an attorney, it could be a costly decisions. Mistakes in the filing can result in severe penalties.
Students from both private and public universities all over the country may also provide low cost or free advice. The sessions will only achieve directing clients to the right legal path in filing the right papers. Note that with the new bankruptcy laws taking into effect making the bankruptcy filing process more difficult than usual, an experienced bankruptcy attorney will be worth your money.
Many people who enter the bankruptcy process worry about the fate of their credit. This is actually unnecessary as the bulk of credit damage happens before the bankruptcy process is even initiated. While no one wants the added hassle of rebuilding their credit after resolving debt troubles, doing so can put you leaps ahead of others in the credit game.
Americans are now filing Chapter 7 or 13 Bankruptcy to get their debts under control. Bankruptcy in itself is designed for debt elimination. Chapter 7 bankruptcy functions to cancel out unsecured debt such as utility or medical bills, credit card, etc. Chapter 13 Bankruptcy on the other hand is designed to give individuals more time in repaying all their debts.
Filing for bankruptcy is good news whenever you are struggling with your credit card debt, mortgage or medical bills. Bankruptcy laws help families and individuals in their debt struggles. You have two options on how to deal with your debt problems, Chapter 7 (debt elimination) and Chapter 13 (reorganization). Always remember that you can regain credit again after successfully filing your bankruptcy.
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Many people who enter the bankruptcy process worry about the fate of their credit. This is actually unnecessary as the bulk of credit damage happens before the bankruptcy process is even initiated. While no one wants the added hassle of rebuilding their credit after resolving debt troubles, doing so can put you leaps ahead of others in the credit game.
If you have ever been late on your debt payments or involved in harassing credit collections, then you understand the stress associated with overwhelming debts. While not all creditors engage in pushy techniques to get their money, some can go so far as to send threatening letters or even file a lawsuit against you.
Many people fear the process assuming that getting back on their feet will be difficult. This misconception leads too many people astray from the benefits bankruptcy has to offer. While having your debts discharged is not the end of the road, taking a few simple steps after bankruptcy can ensure you get on the right path.
Despite popular belief, filing for bankruptcy does not damage your credit. Although there are some things to be concerned about credit-wise after bankruptcy, the risk of further credit damage is not one of them. Anyone considering filing, or just exiting, bankruptcy should consider the following points about credit and your future of credit.
While there are some people who overspend and load up their debt accounts, many people have succumbed to bankruptcy over uncontrollable life situations. Loss of a job, spouse or medical condition can all bring about unexpected financial pressure. Regardless of the reason for entering bankruptcy, those who successfully complete the case have an edge of those of us still suffering with high debt burdens.
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