Bankruptcy
Copyright 2005-8 OpportunitiesAplenty.com
All rights reserved.
All rights reserved.
Sometimes bankruptcy may be the only option. However, on April, 20th 2005
President Bush signed the Bankruptcy Reform Act, S 256 into law. This new
bankruptcy reform legislation is now in effect. This act's official title is: "The
Bankruptcy Abuse Prevention and Consumer Protection Act of 2005". The
Bankruptcy Reform Act goes into effect October 17th, 2005. This bankruptcy
reform will make it more difficult to wipe out your debts with a Chapter 7
bankruptcy. It was passed through congress because of pressure from lending
institutions.
The incidence of bankruptcy has increased substantially in the past few years. The
12 month period ending June 30, 2005 saw a record of 1,637,254. This was up less
than 1% from the 12 month period ending in June, 2004, however, the fourth
quarter of fiscal 2005 saw an 11% increase in filings from the same quarter in fiscal
2004. In the 12 month period ending December 31st, 2004, there were just under
1.6 million bankruptcies filed of all types. Of this 1.6 million, the overwhelming
majority, 1.13 million, were chapter 7 bankruptcies. Over 449,000 were chapter 13
bankruptcies.
This trend has prompted congress to try and protect creditors by passing the
tougher statutes. Some have argued that the creditors have brought this increase in
bankruptcies upon themselves by easing credit requirements and increasing fees and
interest rates for credit infractions.
Part of the new federal bankruptcy statute includes a means test to determine
weather or not you will be able to pay some of your debts back. Repayment of some
of the debt is the primary intent of the new federal bankruptcy law. In addition, the
homestead exemption will be limited to only $125,000 on a primary residence
purchased in the previous 1215 days. This exemption has been one of the major
provisions of bankruptcy law that allow filers to shelter some of their assets.
Another shelter that has been used is education funding. Up to $5,000 can be
protected in this fashion, as long as the money was in the fund at least 1 year before
the bankruptcy was filed. Health insurance plans, some retirement plans and tax
deferred annuities can also be exempted. It is a very wise idea to consult a
bankruptcy attorney to determine what can be sheltered and what may be seized.
Different Types of Bankruptcy
A Chapter 7 bankruptcy is also called a straight bankruptcy. This type of
bankruptcy typically allows all, or almost all debts to be wiped away. The debtor's
property is turned over to a bankruptcy trustee for liquidation. It is then sold to
satisfy as much of the accumulated debt as possible.
Some property is exempt from this type of bankruptcy proceeding. Exempt
property varies by state, but can include the primary residence and some other
property such as cars, or work related tools. There is also a federal list of exempt
property. Both state and federal exemptions should be examined thoroughly, with the
aid of competent legal counsel, to determine the most advantageous personal
property exemptions according to your specific situation. Some states allow you to
choose from the state exemption list or the federal list. This process usually takes
about 4 months. Many times the bankruptcy filer has little or no assets to lose
anyway.
Once you file for a Chapter 7 bankruptcy, you cannot do so again until 8 years after
discharge of the initial bankruptcy. It bodes well for debtors to make this decision
carefully and proceed correctly.
A Chapter 13 bankruptcy is a reorganization. This form of bankruptcy requires
some of the debts to be repaid. One of the big effects of the new, federal
bankruptcy statute will be to force more bankruptcy filers to use this form of
bankruptcy protection instead of the chapter 7. If your income exceeds expenses,
you will most likely be required to file this form of bankruptcy. The repayment term
is typically between three and five years. If you have non-exempt property you want
to keep, this is the type of bankruptcy you would want to pursue. This bankruptcy
option allows you to make up missed payments and become current on your existing
debts. It also leaves open the option to file a chapter 7 bankruptcy at some point in
the future if your situation doesn't improve.
A Chapter 11 bankruptcy is a special type of bankruptcy for large businesses or
corporations. It allows them relief from their creditors while they either reorganize
to attempt to continue operations or terminate business activities. To successfully
file a chapter 11 bankruptcy, the business must face overwhelming and
unmanageable debt that has no chance of being repaid. This must be determined by
a bankruptcy court.
Bankruptcy is a daunting task and should not be taken lightly. It can be very
expensive to retain qualified legal representation. This comes at a time when the
bankruptcy filer has little or no money. However, this is often money well spent.
Not surprisingly, many bankruptcy attorneys will not accept credit.
It is possible to download the necessary bankruptcy filing forms from the Internet.
This can save a substantial amount of money, however the filer must still cover all
the necessary details and ensure they are filing the proper type of bankruptcy. It
would be terrible to unnecessarily lose some personal property, like a home or car,
because of a minor error in filing. Even if you don't retain a specialized bankruptcy
attorney it is a good idea to at least get the assistance of a legal aid organization and
do as much research as possible. They can look over the filing and offer general
advice to help avoid catastrophic errors.
NOTE: In the UK there is the Individual Voluntary Arrangement, which allows debts
to be negotiated through a special counselor. The private debtor gets many of the
same advantages of a Chapter 13 bankruptcy in the USA.
It's possible your credit may be salvageable, and you may be able to avoid
bankruptcy altogether. Few people have the time or expertise to effectively pull their
credit back from the brink on their own if it's truly bad, however. If your credit just
has some bumps and bruises, you can do much of the work required to raise your
credit score on your own. On the other hand, if you have really bad credit, some
guidance by true experts will greatly assist you to get your credit back to where you
can get good rates on mortgages, refinances or vehicle loans.
Because this kind of help can save consumers so much money, in addition to
possibly helping them avoid the stigma and long term inconvenience of a
bankruptcy, it has become a rapidly growing industry. With the recent problems in
the sub-prime mortgage market, this trend is sure to accelerate. In light of this, it's
vital that you use a company that has the depth of experience in both the legal and
credit fields that will give you the kind of help you need for the minimum cost. A
good value is essential here. After all, if you have money troubles already, you don't
need higher bills to add to your problems, you need them solved, and fast.
My Credit Croup is one such company. Their name is widely recognized as being a
leader in this field. They're even trusted by the U.S. Marine Corps to help soldiers
restore their credit while they're serving their country. They have the experience to
get your credit back to where you can get a refinance or new mortgage. That's
important, so you won't resort to sifting through today's difficult sub-prime market.
In addition, you'll have a much easier time getting better rates on your credit cards,
which will save you even more money every month. If you are contemplating
bankruptcy, but haven't declared it yet, you need to avoid it if possible, and they
may be able to help. Their help is available here.
President Bush signed the Bankruptcy Reform Act, S 256 into law. This new
bankruptcy reform legislation is now in effect. This act's official title is: "The
Bankruptcy Abuse Prevention and Consumer Protection Act of 2005". The
Bankruptcy Reform Act goes into effect October 17th, 2005. This bankruptcy
reform will make it more difficult to wipe out your debts with a Chapter 7
bankruptcy. It was passed through congress because of pressure from lending
institutions.
The incidence of bankruptcy has increased substantially in the past few years. The
12 month period ending June 30, 2005 saw a record of 1,637,254. This was up less
than 1% from the 12 month period ending in June, 2004, however, the fourth
quarter of fiscal 2005 saw an 11% increase in filings from the same quarter in fiscal
2004. In the 12 month period ending December 31st, 2004, there were just under
1.6 million bankruptcies filed of all types. Of this 1.6 million, the overwhelming
majority, 1.13 million, were chapter 7 bankruptcies. Over 449,000 were chapter 13
bankruptcies.
This trend has prompted congress to try and protect creditors by passing the
tougher statutes. Some have argued that the creditors have brought this increase in
bankruptcies upon themselves by easing credit requirements and increasing fees and
interest rates for credit infractions.
Part of the new federal bankruptcy statute includes a means test to determine
weather or not you will be able to pay some of your debts back. Repayment of some
of the debt is the primary intent of the new federal bankruptcy law. In addition, the
homestead exemption will be limited to only $125,000 on a primary residence
purchased in the previous 1215 days. This exemption has been one of the major
provisions of bankruptcy law that allow filers to shelter some of their assets.
Another shelter that has been used is education funding. Up to $5,000 can be
protected in this fashion, as long as the money was in the fund at least 1 year before
the bankruptcy was filed. Health insurance plans, some retirement plans and tax
deferred annuities can also be exempted. It is a very wise idea to consult a
bankruptcy attorney to determine what can be sheltered and what may be seized.
Different Types of Bankruptcy
A Chapter 7 bankruptcy is also called a straight bankruptcy. This type of
bankruptcy typically allows all, or almost all debts to be wiped away. The debtor's
property is turned over to a bankruptcy trustee for liquidation. It is then sold to
satisfy as much of the accumulated debt as possible.
Some property is exempt from this type of bankruptcy proceeding. Exempt
property varies by state, but can include the primary residence and some other
property such as cars, or work related tools. There is also a federal list of exempt
property. Both state and federal exemptions should be examined thoroughly, with the
aid of competent legal counsel, to determine the most advantageous personal
property exemptions according to your specific situation. Some states allow you to
choose from the state exemption list or the federal list. This process usually takes
about 4 months. Many times the bankruptcy filer has little or no assets to lose
anyway.
Once you file for a Chapter 7 bankruptcy, you cannot do so again until 8 years after
discharge of the initial bankruptcy. It bodes well for debtors to make this decision
carefully and proceed correctly.
A Chapter 13 bankruptcy is a reorganization. This form of bankruptcy requires
some of the debts to be repaid. One of the big effects of the new, federal
bankruptcy statute will be to force more bankruptcy filers to use this form of
bankruptcy protection instead of the chapter 7. If your income exceeds expenses,
you will most likely be required to file this form of bankruptcy. The repayment term
is typically between three and five years. If you have non-exempt property you want
to keep, this is the type of bankruptcy you would want to pursue. This bankruptcy
option allows you to make up missed payments and become current on your existing
debts. It also leaves open the option to file a chapter 7 bankruptcy at some point in
the future if your situation doesn't improve.
A Chapter 11 bankruptcy is a special type of bankruptcy for large businesses or
corporations. It allows them relief from their creditors while they either reorganize
to attempt to continue operations or terminate business activities. To successfully
file a chapter 11 bankruptcy, the business must face overwhelming and
unmanageable debt that has no chance of being repaid. This must be determined by
a bankruptcy court.
Bankruptcy is a daunting task and should not be taken lightly. It can be very
expensive to retain qualified legal representation. This comes at a time when the
bankruptcy filer has little or no money. However, this is often money well spent.
Not surprisingly, many bankruptcy attorneys will not accept credit.
It is possible to download the necessary bankruptcy filing forms from the Internet.
This can save a substantial amount of money, however the filer must still cover all
the necessary details and ensure they are filing the proper type of bankruptcy. It
would be terrible to unnecessarily lose some personal property, like a home or car,
because of a minor error in filing. Even if you don't retain a specialized bankruptcy
attorney it is a good idea to at least get the assistance of a legal aid organization and
do as much research as possible. They can look over the filing and offer general
advice to help avoid catastrophic errors.
NOTE: In the UK there is the Individual Voluntary Arrangement, which allows debts
to be negotiated through a special counselor. The private debtor gets many of the
same advantages of a Chapter 13 bankruptcy in the USA.
It's possible your credit may be salvageable, and you may be able to avoid
bankruptcy altogether. Few people have the time or expertise to effectively pull their
credit back from the brink on their own if it's truly bad, however. If your credit just
has some bumps and bruises, you can do much of the work required to raise your
credit score on your own. On the other hand, if you have really bad credit, some
guidance by true experts will greatly assist you to get your credit back to where you
can get good rates on mortgages, refinances or vehicle loans.
Because this kind of help can save consumers so much money, in addition to
possibly helping them avoid the stigma and long term inconvenience of a
bankruptcy, it has become a rapidly growing industry. With the recent problems in
the sub-prime mortgage market, this trend is sure to accelerate. In light of this, it's
vital that you use a company that has the depth of experience in both the legal and
credit fields that will give you the kind of help you need for the minimum cost. A
good value is essential here. After all, if you have money troubles already, you don't
need higher bills to add to your problems, you need them solved, and fast.
My Credit Croup is one such company. Their name is widely recognized as being a
leader in this field. They're even trusted by the U.S. Marine Corps to help soldiers
restore their credit while they're serving their country. They have the experience to
get your credit back to where you can get a refinance or new mortgage. That's
important, so you won't resort to sifting through today's difficult sub-prime market.
In addition, you'll have a much easier time getting better rates on your credit cards,
which will save you even more money every month. If you are contemplating
bankruptcy, but haven't declared it yet, you need to avoid it if possible, and they
may be able to help. Their help is available here.
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