Filing Bankruptcy

Becoming Debt-Free in Today's Economy

2012-02-15T20:27:00.000-08:00

Today, when most people think of America's debt problem, they think of it on a national level and think about the federal and state governments. Sure the government has some severe spending issues and needs to get itself out of debt, but that is only part of the story. Over the last 10 years, Americans have become enslaved to creditors to the point of no return. When you rob Peter to pay Paul every month, it's pretty hard to ever consider becoming debt-free. Currently, in America the median household income is continuing to decline every year while people's debt continues to rise. In fact, consumer debt in the US since 1971 has increased by 1700%. I don't know about you, but this is craziness. The overall credit card debt of the entire US is $798 billion as of 2011. I think it's time that people should start considering filing bankruptcy. This amount of debt is unfathomable and never will be able to be paid off.

Americans need to get back to their roots and start paying cash for things. One way to do this is to file for bankruptcy and the individual will basically have no choice at least for a year or so. They will remember what they were told by their parents and grandparents of not spending what you don't have. With this kind of debt the idea of being debt-free is impossible. One of the side benefits of filing Chapter 7 bankruptcy for the individual that has a large amount of credit card debt is becoming debt-free or close to it. If a person doesn't have a car payment and all they have his medical bills and credit card debt, filing Chapter 7 bankruptcy will virtually eliminate all their debt with the outcome of being debt-free. This is probably the quickest and easiest way out of debt. If someone has $30,000 in credit card debt, outside of winning the lottery, the debt will probably never be paid off. Credit cards are making Americans slaves to the credit card companies that continue to accept only minimum payments while making huge profits on interest only.

Don't Wait Until It's Too Late For Bankruptcy Filing

2012-02-08T05:42:00.000-08:00

While no one really wants to file for bankruptcy, sometimes there is no other feasible way out. Sure there is debt settlement and trying to continue kicking the can down the road, but at some point in time, filing bankruptcy might be necessary. It was reported in 2011 that the average American has over $16,000 in credit card debt. Although this number doesn't seem that bad, when including the average income of Americans to be around $35,000 a year, all of a sudden this number gets very large. The interest alone will keep this average person in bondage to the creditors for the rest of their life unless they do something drastic. Filing Chapter 7 bankruptcy by most is considered taking drastic actions. But when considering what it will do for these individuals it can truly be a blessing to get these ailing Americans out of debt quickly.

The first step to see if a bankruptcy filing is in your future is to add up all of your credit card debt and then budget the amount of money you can set aside to pay the bill down monthly without charging any more. If you can pay the credit cards off in 4 to 5 years, then technically you have a feasible solution to eliminate debt. It might be painful for this time, but it is doable. If there is no way you can pay these credit card bills off, then the only real solution is filing Chapter 7 bankruptcy. The only other option would be using debt settlement. Typically, debt settlement only works on balances lower than $10,000. The debtor has to come up with a lump sum for the creditor to negotiate their balance down. This is why it's a much better idea to spend your money hiring a bankruptcy attorney to file for bankruptcy. Filing Chapter 7 bankruptcy only takes about 4 to 6 months from start to finish and in the end many debtors exit being virtually debt-free.

What Happens To A Co-signer When You File Chapter 7 Bankruptcy?

2012-02-01T23:03:00.000-08:00

Many people that are in financial trouble are very stressed emotionally. Making the decision to file Chapter 7 bankruptcy can still be difficult for the overwhelmed debtor. Getting advice from an experienced financial professional or a bankruptcy attorney can be critical to determine the best course of action. Once the decision has been made to proceed with filing Chapter 7 bankruptcy the individual usually experiences a huge sense of relief knowing that here is hope for a second chance for a stable financial future. However, what happens if the debtor has debts that are guaranteed by a co-signer?

Many lenders, whether car finance companies, mortgage lenders, credit card lenders, or any other kind of credit grantor, are in the business of calculating and managing risk. If an individual’s credit history has been poor for some time, the individual may be asked by the credit grantor to find a co-signer or guarantor.

A co-signer refers to another individual who is equally responsible financially with the other person for their debt. The co-signer has signed an agreement on the account or loan, which is referred to a “joint account”, and is therefore just as responsible for the debt. A guarantor refers to an individual who has agreed to take responsibility for payment on a debt in the event that the original debtor defaults on their financial obligation. A guarantor’s liability is considered a contingent liability meaning that the guarantor is only obligated to pay on the debt if the person has defaulted on their payments. The bottom line is, if the individual’s debts have been co-signed or guaranteed by another person, such as a friend or relative, then filing Chapter 7 bankruptcy could damage the friend or relatives credit. This is why it is imperative that the debtor seek financial advice from a bankruptcy attorney to discuss their circumstances and see what options are available. Many times the bankruptcy attorney can help the individual and their families avoid serious repercussions and/or minimize the financial consequences to all parties involved. In a nutshell, filing Chapter 7 bankruptcy can have many advantages for a financially overwhelmed individual, but they must weigh out all of their options carefully with the help of a professional.

Will Everyone Know I'm Filing for Bankruptcy?

2012-01-31T01:39:00.000-08:00

In the past, filing for bankruptcy carried a stigma of failure or giving up. Because of the past stigmas, many people are embarrassed about people finding out of them filing for bankruptcy. This in fact is one reason why many tried to avoid the bankruptcy filing process. Their pride gets in the way and doesn't allow them to make a wise decision and get out from under the crushing debt. Instead, they continue making minimum payments to their creditors while their balances continue to stay the same. If only they would just go talk to a bankruptcy attorney they can find out how untrue their beliefs are.

While it is true that filing for bankruptcy is a legal resolution making it public record, there is no reason for anyone to find out unless you tell them. The only people that will be notified of the bankruptcy filing are the creditors and unless any of your employers, neighbors, family members and friends is listed as creditors they will not be notified of the pending bankruptcy. If a person has the situation of a family member being a co-signor on a auto loan or mortgage, it would be a good idea to discuss the idea of filing bankruptcy with that person so they don't get a call from a lender about the debt.

Basically, if the individual doesn't tell anyone, most likely no one will ever know about the bankruptcy filing. Using the reason of not to file bankruptcy because of what other people will think is foolish when a person has no way out of crushing debt. What's funny is, people have short memories when it comes to gossip like this, even if someone did find out and the further behind it gets the less people remember. Removing the stress of unmanageable debt is much more important than other people's opinions. In many cases, removing the stress by filing for bankruptcy will improve relationships with family and friends anyways. When someone becomes worried about being unable to pay the family bills, they should consult a bankruptcy lawyer to see if personal bankruptcy could help them.

What Does a Bankruptcy Lawyer Do?

2012-01-30T23:22:00.000-08:00

With a large number of Americans filing bankruptcy, people in financial trouble are always looking for value when hiring a bankruptcy lawyer. With the introduction of the Internet, have come many do-it-yourself services some of which are good and others that are just scams. Before hiring a bankruptcy lawyer many people scour the web looking for a smoking deal for filing bankruptcy. As a rule of thumb, you get what you pay for. Although, this is not always true when hiring a bankruptcy lawyer. There are many attorneys that are very good at what they do and yet offer quite a value for the service they perform. When someone is filing Chapter 7 bankruptcy, many of them will see if it's easy enough to do it themselves. After downloading the bankruptcy petition online and muddling through the questions, they realize it's not as easy as it seems. Since the bankruptcy code change, filing bankruptcy has taken on a new complexity and really should not be attempted without the help of a bankruptcy lawyer.

There are many bankruptcy paralegals that work at a law office during the day and moonlight at night that offers services at a reduced rate. The only problem with these is they cannot give any kind of legal advice or recommend how to fill out the bankruptcy petition. Technically, all they are allowed to do is prepare the bankruptcy petition, after the individual submits all their income, financial and property information. Many times at the meeting of creditors or the 341 meeting, the bankruptcy trustee will ask the individual filing for bankruptcy how they selected their bankruptcy exemptions. If they get that deer in the headlights look from the individual, they will immediately turn their questions to who prepared the bankruptcy petition and did they offer any legal advice.

This is why, when filing for bankruptcy hiring a bankruptcy lawyer can be worth their weight in gold. When you consider the amount of debt that most people wiped out in a Chapter 7 bankruptcy, paying a bankruptcy lawyer a couple thousand dollars is really quite a value. The lawyer and their staff will be there to answer questions and make sure that the assets of their client are protected to the maximum amount. This knowledge comes with experience and that's what the individual is paying for.

Is Debt Settlement Better Than A Bankruptcy Filing?

2012-01-17T02:04:00.000-08:00

With a large number of Americans in debt, many people lookfor shortcuts for a way to avoid a bankruptcy filing. Many of these same peoplewill try and use debt settlement as a way to fix their debt problems. If theads on TV are correct, they should be able to eliminate their debt for 50% ofthe balance. Don't get me wrong, debt settlement has its benefits when used forthe proper situation. If a debtor has $30,000 in credit card debt, to have adebt settlement company negotiate the debt down 50% would leave the debtorowing $15,000 plus a fee to the debt settlement company. If someone is havingproblems making their payments on the $30,000 in credit card bills, how wouldthey ever come up with about $18,000 to pay this off? Where debt settlement isgood is for an individual that has a low income and has about $5000 in credit card debt and doesn't have the ability to pay it. They might be able to affordto pay off half of this not the whole thing. In this case, debt settlementwould be the best form of debt elimination for this person.

It's very common for a bankruptcy attorney to have peoplewalk in that were failed customers of one of these companies and were unable toever come up with the amount asked for. Typically, it goes bad quickly forthese debt settlement clients. When someone is using this to eliminate theirdebt, the creditor has no obligation to abide by any of the rules. In fact,they even have the ability to cancel the program midstream making the debtoronce again liable for the entire balance. This is why for large amounts ofunsecured debt; filing bankruptcy is the only way to go. Filing Chapter 7 bankruptcygives the debtor the power of the U.S. Bankruptcy Court to protect them oncethe bankruptcy petition is filed. They also will have a bankruptcy attorney tostand front and center to block the flaming arrows from the creditors. Whiledebt settlement has its place in debt elimination programs, before using one anindividual should first consult a bankruptcy attorney to see which is best.

The Liberating Power of Filing Bankruptcy For The New Year

2012-01-02T22:02:00.000-08:00

A Chapter 7 bankruptcy filing works to help individuals withmountains of credit card and other unsecured debts wipe their financial slateclean so to speak, by discharging the debts through the bankruptcy. The beautyof filing bankruptcy is that an individual can experience this immediate andabsolute financial freedom from their seemingly insurmountable debts. Thisshows the true power of filing Chapter 7 bankruptcy. Plus, when a debtor filesbankruptcy, the automatic stay takes effect immediately upon filing. Theautomatic stay is a court order prohibiting any contact with the debtor fromthe creditors. This puts a stop to any actions to collect on a debt, includingharassing phone calls, foreclosure, repossessions, wage garnishments,judgments, and utility shut offs.

When an individual is caught in the middle of overwhelmingdebt struggles, it can sometimes feel like they are all alone. However, recentstatistics have shown that the annual personal bankruptcy filings havecontinued to climb over the 1.5 million mark. Factors that contribute to theseincreasing numbers of bankruptcy filings include job loss, creditover extension, divorce, illness, and unforeseen financial disasters. Peoplestruggling with burdensome debt should not worry, but should consider theprotection that a bankruptcy filing can give them. Bankruptcy is a person’sConstitutional legal right and is even mentioned in the Bible. It no longercarries the stigma of failure as it once did. Filing bankruptcy gives anindividual a second chance at getting their finances under control and givesthem their life back. When it is all said and done, an individual can emergefrom a bankruptcy filing stress free and maybe even debt free.

Since the changes to the bankruptcy code back in 2005,filing bankruptcy has become a little more complicated, so it is alwaysrecommended to speak with an experienced bankruptcy attorney. A localbankruptcy attorney can determine if a person qualifies to file bankruptcy, ifit is right for them, and can use the bankruptcy laws to the fullest extent toprotect the debtor’s personal property.

Filing Bankruptcy Is Not As Taboo As Yesteryear

2011-12-13T23:45:00.000-08:00

In the past, the subject of bankruptcy was taboo. Thesubject of financial problems is something that people just don't want to talkabout. It's probably a pride thing because financial problems make people feellike a failure. With what's happened to the economy over the last five years inthe US, there is nothing to be embarrassed about filing bankruptcy. Last yearalone, there were over 1.5 million Americans that had to file for bankruptcy.Those people have good reasons of why they have to file. Back in 2005, Congressamended the bankruptcy code because they felt too many people were abusing thebankruptcy system. No longer is this a case, people just don't have the money.Unemployment has been hovering right at about 9% for three years now. Thisnumber really doesn't show where the economy is. Many people have maybe goneback to work, but not at their regular job, instead they might be deliveringpizzas so technically they are working. If their lifestyle was used to making$80,000 a year in their household and now they're cut back to making about$30,000 it's next to impossible to survive especially if they are buried undercredit card debt. This is why filing Chapter 7 bankruptcy is the best exitstrategy to alleviate this problem. It's nothing to be embarrassed about, infact it would be better if people would discuss this more openly.

Trying to keep on paying the minimum payment on credit cardbills will only dig a deeper hole for the individual. The interest rates oncredit cards are astronomical and continued to mount when paying a small amounteach month. Filing Chapter 7 bankruptcy will eliminate all unsecured bills. Thelist includes, credit cards, medical bills, payday loans and personal loans. Itjust about covers everything. Facing the problem head-on by filing bankruptcywill stop further damage and allow the debtor to breathe freely and live again.Many people tell their bankruptcy attorney of the feeling of freedom after theyget their bankruptcy discharge. Filing for bankruptcy is not for everyone asevery case is completely different and that's why it's important to seek thehelp from a bankruptcy attorney to evaluate the debtor's individualcircumstances.

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Top bankruptcy filing myths

2011-12-13T04:42:00.000-08:00

Since the launch of the Internet, there has been a wealth of information posted about filing bankruptcy. There are our blog websites, lawyer websites, bankruptcy court websites and general “how to” information websites. With all this information to sort through, someone filing for bankruptcy needs to be able to decipher between what's true and what's a myth. The best way to make sure the information you are getting is correct, is to cross reference it with different content of reliable sources. After gathering answers to all your bankruptcy questions, make a list and take these with you and talk with a bankruptcy attorney. Sometimes the information might be true, but not be applicable to the individual’s bankruptcy situation.

Many of the bankruptcy myths that are swirling around deter people from filing bankruptcy. This makes you wonder if these myths were created and put out there by the credit industry. They are the only ones that benefit from people staying away from a bankruptcy filing. The credit industry would like the debtors to believe that if they file for bankruptcy the court will come with a big truck and load up all of their belongings to sell them at an auction, leaving them penniless and homeless. This is probably the biggest myth out there. In fact, it's completely the opposite. When an individual enters into a bankruptcy filing, their bankruptcy attorney will select exemption laws to protect as much property as possible. In most Chapter 7 bankruptcy filing, rarely does the debtor lose any property at all. Typically, the property that's given up in a bankruptcy filing is voluntary. Most of that property is secured property like an automobile or a home, where the debtor can no longer afford to keep making the payments and want to surrender it back to the creditor.

File Bankruptcy And Keep Your Stuff

2011-11-13T22:06:00.001-08:00

When someone is considering filing for bankruptcy one of thefirst questions they have is “Can I keep my stuff”? This is an importantquestion that must be discussed with the expertise of their bankruptcy attorneysince this can vary from state to state depending on the exemption laws thatapply. Exemptions are basically provisions in federal bankruptcy laws as wellas state regulations that allow a debtor to protect assets from being includedin their Chapter 7 bankruptcy filing. Assets that can be protected includeproperty such as their home, their car, tools of the trade required for one’sbusiness, and their 401(k). In addition, veteran’s benefits, unemploymentcompensation, worker’s compensation, group life policies, and accident ordisability benefits may also be exempt.

The bankruptcy laws can be complicated but an experiencedbankruptcy attorney in your area will know the state’s exemption laws as wellas federal exemption allowances and be able to choose accordingly to allow thedebtor to keep the maximum amount of property and possessions. If the debtorhas a lien on their property and they are current on the payments and canafford to continue to make the payments, then during the bankruptcy theattorney can have the debtor reaffirm the debt and they will be able to retainthe property. In our current economy, the last thing a trustee wants to do istake someone’s property if it cannot be liquidated easily. Many times the costand time of selling the property will outweigh the amount of money they wouldget to divide among the creditors.

The bankruptcy court trustee’s job is to make sure that the creditorsreceive as much money as possible from the bankruptcy. However, a bankruptcyattorney’s job is to make sure that the debtor keeps as much of their assets aspossible. This is why it is imperative to seek the advice of an experiencedbankruptcy attorney. Many people have realized that filing for bankruptcy maybe the most responsible way to alleviate debt without losing everything theyown.

Can I Qualify To File Chapter 7 Bankruptcy?

2011-11-13T21:53:00.001-08:00

Since the bankruptcy code change back in 2005 it become morecomplicated to qualify to file Chapter 7 bankruptcy. In the past, when someonethought of filing bankruptcy they thought of Chapter 7. Now it's not that easy.People that are buried under a pile of credit card bills may not qualify tofile Chapter 7 bankruptcy unlike before. Prior to 2005, Congress felt that toomany Americans were abusing the bankruptcy system and they needed to makechanges to fix that. When you hear the other side of the coin, it was moreabout the lobbying going on from the credit industry to make the changes to thebankruptcy code and not abusive bankruptcy filings.

Now, if a person wants to file for bankruptcy under Chapter 7 they will have to pass a means test. Basically, the means test uses theindividual’s income, expenses and compares it to the median income chart forthe individual state. How it works is the debtor is required to show the lastsix months income for their household, then divide it by six and multiply thatby 12. The look back period that the court uses is the month prior to filingfor bankruptcy and back six months. This will give the average income for theyear for the debtor. Next, the debtor will compare their average householdincome against the median income chart for the individual's state. If the individualfiling for bankruptcy falls under this number they have passed the first stepof the means test. This still doesn't mean they qualified. Now the debtor willbe required to fill out a monthly household expense report. After adding up allthe bills for the month they need to deduct this amount from the averagemonthly income. If the debtor has more than $170 left over at the end of themonth they will not qualify to file Chapter 7 bankruptcy.

Why Do I Need A Bankruptcy Attorney To File Chapter 7?

2011-11-01T02:24:00.000-07:00

It was no surprise in 2010 to hear that over 1.5 millionAmericans had to file for bankruptcy to eliminate their debt. This year thenumber of those filing for bankruptcy has dropped a few points even though theeconomy has not rebounded. Many bankruptcy attorneys were starting to believethat it might be a money thing where the individuals are so broke they can'teven file for bankruptcy. Over the last 10 years there has been a huge growthacross the nation of the do-it-yourself business industry. The idea of savingmoney instead of hiring a professional entices many, especially the ones thatare financially strapped. The bankruptcy industry is no different as manyInternet companies have popped up advertising do-it-yourself bankruptcy. Thetypical ad will say why spend the money on hiring a bankruptcy attorney, whenyou can file a do-it-yourself bankruptcy. It is true that all Americans have alegal right to represent themselves in a court of law. What most people don'tunderstand is there are many landminesfor the do-it-yourselves filing bankruptcy. They weren't put there with theintent of making it harder on a person filing for bankruptcy representingthemselves, but were added back in 2005 by Congress to prevent abusivebankruptcy filing.

First of all, the individual filing for bankruptcy will haveto decide on which chapter they are filing. If an individual hires a paralegalto help them or a do-it-yourself service, even though they might have thatknowledge they won't be able to share it with the debtor as that is practicinglaw. Next, the individual will be required to qualify to file Chapter 7bankruptcy under a means test. The means test seems simple, but any mistakecould send the debtor into an unnecessary Chapter 13 bankruptcy. A bankruptcyattorney will know how to navigate the complexities of the different issuesthat the individual filing for bankruptcy might run into. When consideringweighing the benefits between saving a few thousand dollars and possibly losinga lot more in property versus having the peace of mind by having an expertbankruptcy attorney defending you. All the debtor needs to do is look at theamount of debt they are trying to discharge and compare that to the price theywould pay a bankruptcy attorney, it will suddenly all makes sense as they seethe value.

Living Like A Celebrity Can End Up In Bankruptcy

2011-11-01T02:04:00.000-07:00

Americans these days are fascinated with the lives ofcelebrities and rock stars. They spend their lives trying to imitate theselifestyles even though they can't afford them. Today in the US most Americansare living way beyond their means with the use of credit cards. Having a creditcard with an available balance on it has allowed people to buy stuff they don'tneed just because a celebrity is using or wearing it. The ad guys on MadisonAve. have done their job selling the products at the expense of forcing manyAmericans into filing bankruptcy.

When watching the ads it seems these actors have perfectlives. Who wouldn't want that? The credit and the ad industry make peoplebelieve that this lifestyle is affordable and anyone can do it even on theirsalary. The terrible news is the salary of a housekeeper isn't enough money toput food on the table for their family and by a designer purse. Not everyonecan afford a Hawaiian vacation, but you can if you use your Visa card. Anyways,that's what they want you to believe. At some point in time, the creditor willwant their money and depending on how far in debt these families get, willdecide on whether or not they can pay it back or if they will have to file forbankruptcy.

Before filing bankruptcy most Americans will try to continuepaying down the American dream. The typical person in today's society doesn'tlike the idea of losing their charging privileges. Even though they should beconsidering filing for bankruptcy, the creditors talk them in to sending offanother minimum payment to keep that credit card open. The credit card industrywants consumers to believe that if they file for bankruptcy, they will neversee another credit card again. In reality, this is not such a bad thing, eventhough it's still not true. Usually, shortly after a debtor wipes out theirdebt in a Chapter 7 bankruptcy they start getting the bombardment of creditcard offers. Creditors know after a person exits bankruptcy, many are virtuallydebt-free and as long as they are employed they could be a good risk.

Filing bankruptcy to stop an eviction

2011-10-07T04:42:00.000-07:00

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In the past, when the family got behind on their rent and was facing an eviction many times they would file for bankruptcy to buy themselves some time so they didn't end up on the street. Many landlords used to call these people professional tenants, using whatever means possible to not pay rent. With the changes to the bankruptcy code in 2005, this is no longer a problem for the landlords that are trying to evict a tenant. Now, if a tenant decides to file for bankruptcy to avoid eviction, as long as the landlord had begun the process to evict the tenant, they will be able to continue on with the eviction as planned. Not even a bankruptcy attorney will be able to stop it by trying to file some fancy motion. Anti-creditor groups feel that this is one of the harshest changes to the bankruptcy code that involves consumers.

This blocks the group of individuals that use a bankruptcy filing as a way to stop collection or eviction efforts. This does not stop an individual that is down on their luck and is filing for bankruptcy and can't afford to pay their rent during the process. If a tenant is already in the process of filing bankruptcy when the landlord begins the eviction process, the automatic stay will block the landlord's efforts. If the landlord wants to continue on with the eviction, they will have to file a motion for relief of stay with the bankruptcy court to allow them to kick the tenant out of their property. This will take a little bit of time to go through the whole process. Any time an individual is filing bankruptcy, they are protected by the automatic stay stopping all collection and legal action against the debtor. With the economy we are in now this law will probably be used extensively as many are having trouble making ends meet in paying their rent. Experts are predicting that the slowdown in 2011 is the calm before the storm. Many feel that 2012 will ramp up and be another record year for those filing bankruptcy.