Important Bankruptcy Considerations

The bankruptcy process is designed to be a tool for debt relief for those struggling with financial hardship. While the process is often the only saving grace for debt relief, it is important that you carefully consider your financial situation. Even if you are under the pressure of foreclosure threat, no good can come from jumping into bankruptcy without due consideration.

Deciding On Debt Relief

Filing for bankruptcy is a big decision, one that often comes with many questions. The reason you don’t want to rush into bankruptcy is simple; you can’t afford to make any mistakes. Even outside of bankruptcy rushing into a debt relief strategy can be detrimental to your success.

First, have you sat down and really examined your financial situation? It is important to gain an understanding of exactly how much you owe, what your disposable income level is like and whether you are at risk of losing assets due to delinquent payments. The answers to these questions will better help you identify the right debt relief strategy. If you have adequate disposable income, owe less than $10,000 or have no assets at risk of repossession, you may find an alternative to bankruptcy feasible. However, only a qualified bankruptcy attorney can help you determine if your situation is best served with the help of bankruptcy.

Second, choosing bankruptcy is not an option to take lightly. In other words, you will be required to participate in the process. You are responsible for gathering the necessary documentation, reporting the details of your financial affairs thoroughly and accurately, and completing a debtor’s education course. Misinformation in your filing petition, misrepresentations of your financial affairs like income or assets, or failing to complete the necessary requirements can lead to case dismissal. It is important that you take the time to prepare for your case before submitting your petition to the court.

Last, are you ready to get to work after your debts are discharged? Many people assume that once their debts are discharged their works is done. In reality, having your debts discharged in bankruptcy leaves you with a clean slate, but you are still going to need to work towards repairing the damage done to your credit from missed payments and delinquent account statuses. It is a good idea to have a credit repair game plan upon exiting bankruptcy. Know what you can afford to carry in a balance, keep your balances below 30 percent of the spending limit and make timely payments. Remember that the road to credit recovery takes time and effort. Only you hold the power in writing a new history of responsible credit use.

Student Loans and Bankruptcy

Student loan debt has become a serious problem in the United States. According to the Federal Reserve Bank of New York, approximately $85 billion in educational debt is past due. With so many in default on their loans, borrowers are looking for ways to repay or discharge their debt, and many are looking to bankruptcy as a solution.

The general rule is that student loans cannot be discharged in bankruptcy. However, there are exceptions to this rule. The Bankruptcy Code states that educational loans that are federally backed or where the funds originated from a non-profit agency are not discharged in bankruptcy. Private loans can be discharged but these types of loans are a small percentage of the educational loans given each year.

Debtors can discharge educational loans in Chapter 7 bankruptcy cases by claiming undue hardship in a separate lawsuit filed in the bankruptcy court. These lawsuits are called adversary proceedings. The definition of undue hardship is slightly different depending upon where the bankruptcy case is filed. Many courts follow the Brunner Test.

The Brunner Test is a three-part test for determining dischargability of this type of debt. First, the debtor must prove that repayment of his school loans would be an undue hardship on himself and his dependents. This means showing that the debtor cannot maintain a minimal standard of living while repaying any portion of the educational loans. Second, the debtor must prove that the circumstances that created the undue hardship are permanent and unlikely to change. Third, the debtor must show that he has made a good faith effort to repay the loans. Courts also consider whether the circumstances that created the undue hardship were present at the time the money was borrowed. Very few debtors meet the criteria necessary for discharging student loan debt in bankruptcy.

If student loans cannot be discharged then they have to be paid. Treatment of these claims is different depending upon whether the case is filed under Chapter 7 or Chapter 13. In Chapter 7 cases repayment of student loans is deferred during the bankruptcy case. Once the case is closed the lenders are free to begin collecting from the debtor. In Chapter 13 cases student loan creditors are treated as unsecured creditors. They receive payment only if the debtor's confirmed plan provides payment to the unsecured creditors as a class. However, if the student loans are not paid in the bankruptcy case then payment is simply deferred until the case is closed. During the case the debt continues to accrue interest, so the balance can be substantially larger when repayment begins after the bankruptcy case.

Finding the Right Lawyer for Bankruptcy Settlements

If you find yourself unable to pay your bills and have long over-due payments that are needed, you may have to file for bankruptcy. While bankruptcy can be humiliating (for instance, when your name is declared in the newspaper associated with it), you can overcome the stigma of it.

If you have been ravished and your life has come unhinged by the looming eclipse of bankruptcy, you can contact a lawyer to help you work out your case. The lawyer will take your case and will work with you on a plan about how to get your finances back in order and ultimately, get your life back.

Bankruptcy may also mean that you have to turn your title deeds to your house or car over to the government. In the case of this, you can talk to your lawyer and figure out how to work to keep your title deeds. You should never become homeless simply because you cannot pay your bills.

When you work together with a bankruptcy firm, they will figure out a way that you can keep your deeds and keep your dignity during this horrendous time in your life. They will also attempt to find ways so that you can reverse the file that you had to make for bankruptcy.

Law firms that specialize in this have been doing this specific work for a long time and know the ins and outs of managing your finances. They will work for you so that you do not lose everything. Their number goal is that you get out of the rut and that you will be able to start fresh. They do not want the stigma of this to become apart of your life.

So, if you find that you are losing your finances and have to file; you should begin to research which law firms are best for you. Research each law firm online, ask friends and family members, and call to schedule appointments with them. If a lawyer jives with you, then, begin to open up to them what is going on. Once you find the one that can help, you can begin to attempt to get your life back to normal. However, there are no guarantees but it is worth the shot.

Your life should not stop simply because you couldn't pay your bills any longer. By contacting a lawyer, you can take back your life. You will be able to attempt to get your title deeds back and be able to work out a way to make payments. Isn't it time to get your life back?

Bankruptcy - Legal Implications

In the present complex world of Finance and Industry, bankruptcy is one of the most commonplace terms that are closely associated with insolvent companies. The term "Bankruptcy" is essentially used for large corporate houses, small business ventures or even individuals having outstanding loans accruing over a period of time including an equally very high interest that are legitimately to be paid to creditors over a stipulated period. Bankruptcy can easily be depicted as a legal proceeding in a court of law where the assets of the debtor are liquidated in order to provide a relief to the debtor from any further liability to their creditors and to arrange payment of debts from the limited resources of the debtor.

Causes of Bankruptcy

There are a large number of companies picking up huge loans at higher rates of interest from companies offering loans, creditors or financial institutions with a view to expand their business potential. In the present day scenario, it is a normal practice that it is not only the companies that take up loans, rather individuals also approach financial institutions for personal loans. The inability of these large companies to repay their loans results in the company becoming bankruptcy or insolvent. One of the major factors that often result in bankruptcy is the grim economic situation of the country and the impending recession.

Bankruptcy Laws

The repercussions of these laws on the company or an individual are extremely strenuous. Once the creditors become aware about the insolvency of the company, they file a legal suit against the debtor claiming repayment of their loans by the debtor. One of the first steps of the laws of bankruptcy is that the assets of the debtor are liquidated to pay off the creditors.

Professional Assistance

In a normal situation, a company files for bankruptcy prior to declaring themselves bankrupt due to insurmountable loan amounts that have accrued along with the interest. It is always in the interest of the debtor that he consults a legal practitioner and seeks his assistance on the prevalent laws of bankruptcy or obtains appropriate credit counseling from an organization approved by the government at least six months prior to applying for filing for a bankruptcy protection in a designated court of law.

There is no dearth of solicitors and lawyers around the country who offer their professional services to help a bankrupt company to tide over their financial crisis. These professional attorneys assist their clients in working out their loans and helping them with the settlement of their outstanding debts in an orderly manner, thereby securing their clients' financial future and consolidating their financial resources. However, it would be prudent for people who are plagued with debts to check on the credentials and reliability of the attorneys filing their petition before entrusting them with the assignment since this work involves a lot of secrecy and confidential information being handed over the attorneys.

Get the Facts Before You File Chapter 7 Bankruptcy

There are two most common forms; Chapter 7 and Chapter 13. Each has its own set of advantages and disadvantages. In this article you'll learn what Chapter 7 bankruptcy is and find out if filing for one is your best course of action.

What Chapter 7 of the U.S. Bankruptcy Code Covers

Chapter 7 or "straight bankruptcy" is generally what people mean when they think about bankruptcy. Put simply, Chapter 7 reduces your debt if you, the debtor, surrender a part of your property. During the proceedings, all assets not protected against creditors will be liquidated. There's no repayment plan involved since you'll no longer be responsible for any remaining debt not covered by the sale your assets. Your debt is "wiped clean," which means you'll have to start your life from scratch after losing possessions.

What happens in practice, though, is far different from what the law intends. About 96 percent of personal bankruptcies are no-asset cases. No property is liquidated is taken away from a debtor either because it's exempted or low-value.

Who Can Qualify for a Chapter 7

Debtors who file for this type of bankruptcy should first consult with a Chapter 7 bankruptcy lawyer. That's because you have prove you're earning more than the state-specific median income in order to qualify. A lot of debtors have passed the new Means Test. The hardest part, however, is in gathering the information required to qualify. Working with a Chapter 7 lawyer can definitely speed up the process.

Those deep in debt may want to try qualifying. An article at CNN Money describes this form of personal bankruptcy as "the best option for consumers saddled with insurmountable debt."

What to Watch Out for When Filing

Filing for bankruptcy is one of the biggest decisions that can either revive or ruin your finances. Credit counseling agencies and lawyers that can financially benefit from your position may slow down the process or may put you at a disadvantage. Talking to someone who has gone through this can give you a glimpse of the process.

Learn from their experience and talk it through with your partner and anyone who may be affected by the bankruptcy filing.

As always, consulting with a Chapter 7 bankruptcy lawyer can save you from unexpected legal consequences. A good lawyer can even point you to alternative solutions or actions to take before filing for a bankruptcy.

Tips for Finding the Perfect Bankruptcy Attorney

Filing for bankruptcy can be a daunting process, but it doesn't have to be one that you face alone. Trusting the expertise of a bankruptcy attorney can help you navigate legal complications and avoid common pitfalls. By allowing an attorney to guide you through the process, you're making your filing for bankruptcy efforts easier and more likely to succeed. Regardless of whether you apply for a Chapter 7 or Chapter 13 bankruptcy, it's usually in your best interest to seek advice from an attorney.

The Right Choice

However, there are many options available and it can be difficult to find the perfect bankruptcy attorney for your situation. Finding one that meshes with you personally and has the experience needed to successfully guide the case can be a challenge. Since a bankruptcy attorney can come with considerable fees, it's crucial to find one that you like and trust before hiring him.

To find the perfect bankruptcy lawyer, consider:

•Asking friends and family members. Yes, Google exists - and for good reason! But the referrals and recommendations from your family and friends should be trusted and can offer good connections that can help you in your case.

•Seeking a specialist. Don't just seek any lawyer. Bankruptcy attorneys have proven expertise in the bankruptcy process and law. They can help you as you're filing for bankruptcy and can also give you advice as you recover financially.

•Contacting your state bar association. If your family, friends, and internet searches don't leave you with any stand-out leads, consider contacting your state bar association to ask for lawyer referral services. You can find reviews and complaints about attorneys.

•Taking advantage of the free consultation. Most bankruptcy attorneys offer free consultation to talk about your case. Instead of completing this over the phone, try to see the attorney in-person. You'll be able to feel the personal connection as well as determine whether or not you trust him. This also gives you a glimpse of what it will be like to work with this particular lawyer, and you can compare him to other bankruptcy attorneys that you've visited and considered.

•Referrals from other lawyers, bankruptcy court. If you've used a lawyer for anything else, feel free to contact him for a bankruptcy attorney referral. Most professionals are well connected within their industry and can give you insight as to whom to trust. A bankruptcy court could be a great place to seek information as well.

Once you consider all of these tips to find a good bankruptcy attorney for your case, filing for bankruptcy will be easier than you thought possible! A bankruptcy attorney will help you complete all of the necessary paperwork as you're filing for bankruptcy as well as represent your case with specialized skills.

Benefits of Filing for Chapter 7 Bankruptcy

For individuals in the bankruptcy process, it comes down to two choices: Chapter 7 or Chapter 13. While both have their own benefits that are alluring to various situations, Chapter 7 is the most common form of bankruptcy in the United States - and for good reason! The advantages of bankruptcy are both immediate and long-term, making people happier despite their difficult financial situations.

Advantages of Filing for Chapter 7

Chapter 7 bankruptcies are known for canceling more individual debts. They give individuals the opportunity for a fresh financial start without having to worry about how they'll payback creditors. The process to apply and discharge debts usually takes 3-4 months and can be done with the help of a bankruptcy attorney. While we often hear negative things about filing for bankruptcy, opting for 7 has been known to provide many benefits including

1. Convenience. Because filing for a Chapter 7 bankruptcy only takes a few months, it is a fraction of the time that it takes to file for a Chapter 13. In fact, some 13 cases have lasted as long as five years! This shorter process is a convenience that allows you to get back on track much more quickly.

2. Protecting future income. Under 7, your future income is protected and isn't part of the bankruptcy process. However, because debts and repayments are restructured under Chapter 13, your future earnings are still going to be used to pay the bills. Your disposable isn't yours anymore.

3. Cost-efficiency. Filing for bankruptcy with Chapter 7 is much cheaper than a Chapter 13 filing. Even when using a bankruptcy attorney, the legal fees for Chapter 7 are noticeably less.

4. A faster fresh start. While all bankruptcies are designed to give you a fresh start, a Chapter 7 filing has more immediate benefits. Some individuals see their credit scores improving in as little as a year since their debts were discharged under 7. Furthermore, you can qualify for a home loan within 2 years. Yes, both Chapters hurt your credit, but the consequences for Chapter 13 don't evaporate as quickly.

5. Protected assets. Most people are worried about their assets when filing for bankruptcy. In a Chapter 13, you will retain possession of your assets. In Chapter 7, that isn't a guarantee, which worries many individuals. However, statistics show than many people do not lose anything - or anything significant - as a result of Chapter 7.

6. Freedom. After filing for bankruptcy, you face both emotional and financial freedom. Once the debts are discharged, you no longer have to worry about harassing phone calls and the emotional stress of what's next. Instead, you can focus your energies on rebuilding your financial health.

7. Eliminated repossession and foreclosure debts. A Chapter 7 can wipe out these loan decencies and other unsecured debt that qualify.

Important Ohio Bankruptcy Exemptions

Anyone thinking about filing for bankruptcy is bombarded by many questions of the unknown. What will happen to my credit? Will I ever get a loan again? Are my assets going to be seized? While all of these are commonly associated with misconceptions about bankruptcy, the good news is that your future after bankruptcy is brighter than before it.

What Is An Exemption

The purpose behind bankruptcy is to eliminate your debt troubles by satisfying debt obligations to creditors. However, there are many instances in which you simply cannot afford to repay what you owe. While some of your debts may be resolved through the sale of personal property, the bankruptcy process is not designed to leave you with nothing. Bankruptcy exemption laws were created to protect much of your essential assets and personal property. There are two types of exemptions, federal and state; each offering a different range of asset protection.

Ohio Exemptions

Each state offers a different level of asset exemption for the value of property. In 2009, the state of Ohio made some important changes to their exemption laws to accommodate for the inflated cost of living. Previously one of the state's lacking much in the way of asset protection, Ohio's laws now are one of the states with exemption laws stronger than the federal exemption protection.

One of the most important exemptions sought after is the homestead exemption, which can protect the equity in your home. This year, Ohio's homestead exemption value increased to $132,900. Compared to the $22,975 offered under the federal exemption, Ohio residents now have a better footing for defending foreclosure in bankruptcy.

Personal property protection was increased to $12,250, matching the current federal exemption value. The motor vehicle value allowance also matches the federal exemption level at $3,675, which was brought up from $3,225 in 2009. Many more of the current Ohio exemptions match or slightly exceed the federal level, a huge leap from years prior where Ohio's values were well below the federal level. These include items such as tools of the trade, cash allowance, and the wildcard item. As usual items such as retirement, veteran, Social Security, insurance or other benefits funds are untouchable in bankruptcy.

Using Exemptions

The specific nature of the bankruptcy process, including exemption laws, is one reason why it is encouraged to seek guidance from a bankruptcy attorney. Only a professional can help you ensure your road to debt relief is a smooth process with minimal impact on your property or hard earned assets.

What to Look for When Hiring a Bankruptcy Attorney

Being financially distraught and filing bankruptcy can be a very stressful and emotional time in one's life. This is why it is necessary to hire a bankruptcy attorney that will make the process still a lot smoother. The last thing you need is paying someone for the little bit of money you have left and having the goofball never returning your calls.

When it comes to finding the proper bankruptcy attorney, remember that filing bankruptcy is a group project. To be successful, everyone needs to be on the same page and work together well. This includes the staff that works at the law firm. Nothing is worse than losing confidence in your bankruptcy attorney because you feel that you are not getting your questions answered and no one is paying attention to your concerns.

Before choosing an attorney, one should get themselves a basic education on bankruptcy filing. The easiest way to do this is spend a little bit of time online searching different websites that have information that you feel is applicable to your case. Make sure the information is current and local to the area in which you reside and will be filing in.

Now it's time to interview a few bankruptcy attorneys. It is not totally necessary to interview more than one if you're comfortable with the first one you meet. If there is any kind of tension or there are bad dynamics going on in the office, it's best to look at a few others before making your decision. You have to remember that this person is in control of your financial destiny and you have to trust them fully. If there is a lack of trust or communication problems, you should probably look for a different bankruptcy attorney. One should feel totally comfortable sharing all their information with their bankruptcy attorney. When someone is intimidated or embarrassed they might decide to hide information from the attorney that might be pertinent to a successful bankruptcy discharge. Remember, you are hiring this person to help you not to impress them. Let the bankruptcy attorney decide what is important and what is not important. Throw all your cards on the table and let them shuffle them.

One thing that is irreplaceable with bankruptcy law is experience. Lately, with a large amount of people filing bankruptcy, many attorneys have added bankruptcy law to their practice. One should be careful because the new bankruptcy code has added complexity making experience a must. Make sure the attorney explains the entire procedure in layman's terms not legalese. Before signing any retainer agreement make sure that you understand the terms and there are no hidden costs. If you feel comfortable discussing personal matters with the bankruptcy attorney, you might have found the one.

When filing bankruptcy timing is everything and the proper attorney will know exactly when to pull the trigger and when to hold off. The only way someone will know if bankruptcy will help them is to get their feet wet by interviewing a few bankruptcy attorneys.

If I File Bankruptcy Will I Lose All My Stuff?

Many individuals avoid filing bankruptcy because they're afraid that they will lose everything they own to the bankruptcy court. This actually would fall under bankruptcy myths and legends found on blogs on the Internet. I don't know where anyone got this idea, but until lately it has been a popular opinion. I believe that this is one of the reasons that people use bankruptcy filing as a last resort to resolve debt issues. This rumor has gone around for years and many experts believe it was probably started by the credit industry. The creditors and debt collectors have told doozies over the years with the idea of scaring people into continuing to pay their debts. Some creditors have gone as far as telling the debtor that if they didn't pay their debts they would be arrested and thrown in jail. The last time I checked, there is still no debtor's prison in the USA. As long as people keep falling for these tactics, I suppose the lies will continue on.

When an individual decides to file bankruptcy and sits down with a bankruptcy attorney, the first question they will ask is, "Will I lose all my stuff?" Typically, the bankruptcy attorney will explain the bankruptcy exemption laws and how they work. The idea of getting a fresh start from filing bankruptcy can't happen if you take everything away from the individual. This is why Congress enacted generous bankruptcy exemption laws to allow an individual to protect a certain amount of property when filing Chapter 7 bankruptcy. On top of that, in today's economy, used personal belongings don't have much value as they did in the past. The last thing a bankruptcy trustee wants to do is load up the truck of used furniture and head on down to the swap meet to liquidate it. The bankruptcy trustees always weigh the time versus the reward for selling nonexempt property. And this is totally only in the case of property that is not protected by an exemption law.

The property that is on the radar of the bankruptcy trustee is valuables like antiques, a car, bank accounts and/ or real estate. Once again, it depends heavily on how easy it is to liquidate the property. If something will take a long amount of time and only recover a small amount of cash, they probably won't waste their time. This is another reason why hiring a bankruptcy attorney can be invaluable. The bankruptcy attorney that practices in that district will know the bankruptcy trustee and know what is allowable and what is expected of the debtor to get a successful bankruptcy discharge. This will make the entire bankruptcy run smoothly from the filing of the bankruptcy petition to the bankruptcy discharge.

Chapter 7 Attorney: Moving Past Bankruptcy

While it can be difficult to make the decision to hire a Chapter 7 attorney and move forward with bankruptcy filings, it is sometimes the only decision to make. What can be even more difficult, of course, is moving back from the brink. There are no two ways about it: filing for bankruptcy is not a great thing for your financial records. The repercussions to your credit report are serious and unavoidable. It will take several years for you to rebuild that credit, but it can be done. Your first steps will involve finding a new outlook on financial responsibility. Here are some of the ways you can move past this unfortunate period and beyond bankruptcy.

Emergency Funds

If you find a Chapter 7 attorney who is willing to provide you with advice on the future as he is helping your through the process, he may recommend starting an emergency fund. One of the easiest ways for an individual to get in trouble with credit cards is when an emergency pops up. The car breaks down, for instance, or medical bills suddenly demand your attention. After bankruptcy, you may not have a credit card to rely on anymore, so you need to make sure you have the money to take care of these incidents as they occur. Vow to put away a certain amount of money each month for just such an eventuality.

Budget

Any Chapter 7 attorney you talk to will tell you that most people have little idea how much they spend in relation to how much they bring in. They probably think they know, but unless you sit down and make a budget, you are walking a tightrope without a net. This is especially true once you have no credit cards on which to rely. Make your budget. Figure out exactly how much income you're bringing in and then write out your expenses. You may realize quickly that you either aren't bringing in enough or you are spending too much. If this becomes apparent, you'll need to fix something on one side of the equation. It's usually easier to cut expenses than it is to increase your income.

Rebuild Your Credit

A lot of people make the mistake of thinking that since bankruptcy is erased from your credit report in seven years, they will be eligible for a loan in exactly that time. That's not always the case. You still have a large gap in your credit history that banks will not look on favorably. Try to close that gap. Apply for a secured credit card and begin rebuilding your credit history in the meantime.

The 5 Stages of Grief When Facing Bankruptcy

In the U.S. approximately 1.5 million total bankruptcy filings were reported in 2011. If you were NOT one of those 1.5 million then congratulations! If you were then you are not alone. With people still struggling financially from a down economy and a 7.8% unemployment rate as of Sept. 2012 it's becoming more evident that we still have a ways to go before we see any signs of relief.

Facing bankruptcy can be a stressful experience for any family or business to go through. The emotions and anxiety can be overwhelming. These are all normal feelings and can be defined. The grief that people encounter can de described in stages. While some may grieve differently, it's safe to say that they will experience some of the stages defined below.

They are:

• Denial
• Anger
• Bargaining
• Depression
• Acceptance

Denial

Denial is usually the first stage of grieving. It helps us to survive the loss. In this stage life seems to make no sense, they are in shock or tell themselves this just can't be happening, especially to me.

Anger

Anger is a way to shift the problem by blaming someone something or the system. It is a necessary stage of the healing process. It's vitally important to control your anger. You will get through this. Remember you have options and there is help out there.

Bargaining

Help me God! This is a desperate shout out for the Lords help. Bargaining with the higher power for help and prayer are usually high at these times of hardships. Telling yourself "what if" or if I just did... "I will never do that again" statements.

Depression

Depression usually follows bargaining with a deeper level of grieving and empty feelings. It is a way of dealing with loss. It's important to talk to your spouse and loved ones for support.

Acceptance

Acceptance is a stage that is the reality that we have a problem. We accept it for what it is, learn to live with it. We may still feel bad about the situation, but we move on and take the next step. What to do about it? How do we fix it?

Well rest assure there is hope out there. Finding a qualified and experienced bankruptcy attorney can relieve a lot of your anxiety and can offer hope. There is legislation in place to help people just like you. You are definitely not alone here. Finding a bankruptcy lawyer who is designated by Congress as a debt relief agency offering bankruptcy relief, and protection will give you a clear picture and an accurate assessment of your situation.

A bankruptcy attorney can provide advice on the benefits of filing for relief under the Bankruptcy Code where most, if not all, of the debt may be discharged in as little as four months.

However, being able to petition for bankruptcy is not automatic. The Bankruptcy Code requires that a person, or a couple, filing for bankruptcy meet certain conditions. It is advisable to have an attorney prescreen your qualifications, and see if you may be eligible to file for bankruptcy.

Do-It-Yourself Bankruptcy Vs A Bankruptcy Attorney

When someone is considering filing bankruptcy there are a lot of things to take into account. First of all what chapter of bankruptcy do they file? Is filing bankruptcy even the right decision for them and their financial situation? Should they file bankruptcy on their own using a document preparation service or hire a bankruptcy attorney? These are all very complicated questions that must be addressed prior to making a final decision.

First of all, you can file a do-it-yourself bankruptcy if you already know the chapter of bankruptcy you need to file. The Internet has a wealth of information regarding bankruptcy and can be a good place to begin. An individual must be cautious to seek information from reputable websites that offer up to date information since bankruptcy laws can change. Bankruptcy laws also vary from state to state so the individual must make sure that they take that into consideration as well. A good place to look is your local bankruptcy court website for accurate information. You can even download for free a bankruptcy petition that you can fill out and submit to the court to file on your own. The problem with this is that filing bankruptcy has become more complicated with the addition of the 2005 bankruptcy code changes. A person must first qualify to file, they must also submit all of the proper financial documentation to the court at the time of filing, as well as submit a copy of the course completion certificate for the credit counseling class that is now required by the court. If any information is not in order or the petition appears to be incomplete the court will not accept the petition. If the bankruptcy petition is filled out incorrectly, the debtor will not be told how to fill it out correctly but sent away to seek legal assistance to correct the problems. If on the other hand, the debtor has a simple Chapter 7 Bankruptcy case with few assets, filing a do-it -yourself bankruptcy can be achieved fairly easily with a little time and research.

An individual can also use a document preparation service to help file bankruptcy. Reputable services can be found online and only charge a fraction of what a bankruptcy attorney would cost. This can be a huge savings for an already cash strapped debtor. The thing to keep in mind about these services is that they only assist in filling out the bankruptcy petition correctly. They cannot give the debtor any legal advice at all regarding which exemption laws to use to protect personal assets. They also cannot file the bankruptcy petition with the court. If the debtor has a pretty straight forward uncomplicated case, a document preparation service can benefit them.

Lastly, you can seek the services of a bankruptcy attorney. This is the most expensive option available, however, when you take into consideration the amount of debt that you will be discharging in the bankruptcy filing then it is really not so bad. A bankruptcy attorney will be available to answer all of your legal questions, and will be there from start to finish to walk you through the process. They file the petition for you at the courthouse as well as represent you at the required meeting of the creditors. They make sure that all of the paperwork is done correctly and that all court requirements are completed by the debtor such as the credit counseling class and financial management course. Sometimes it is worth it to pay a little more for the peace of mind that an experienced bankruptcy attorney can bring.

When it comes to something as important as filing bankruptcy and one's financial future all options must be considered to make the best choice possible for an individual and their family.

The Bankruptcy Filing Numbers Down, Bad News for a Bankruptcy Attorney

Recently, the bankruptcy filing rate came out and it shows that less Americans are filing for bankruptcy to eliminate their debt. According to the bankruptcy filing data, the number of Americans filing bankruptcy dropped from the same period last year ending September 30, 2012. The greatest decrease was those filing Chapter 7 bankruptcy which declined around 15%. The number of Chapter 13 bankruptcy filings also declined 10%. In 2010 the US saw a record number 1.6 million people filing bankruptcy for numerous reasons. In 2011, the decline began dropping the rate to 1.47 million bankruptcies and now it has further declined to 1,261,140. While this sounds like good news for the economy, it seems like bad news for a bankruptcy attorney.

Typically, the majority of people file Chapter 7 bankruptcy over all the other chapters. Because of the bankruptcy code changes back in 2005 and the real estate bubble bursting in 2007, we've seen an increase of Chapter 13 bankruptcy filings. Even though we had a slight decline last year, this is still way more than there has been historically. Many experts are wondering what in the world is going on. Unemployment is now a stated 7.7% which is low compared to the 8 to 9% it's been for the last four years. The Federal Reserve has been quick to respond to the economic woes the US has had since 2007 with QE1, QE2, The Twist, QE3 and now QE4. All of these are nothing more than quantitative easing which in a nutshell is printing money to buy our way out of debt. In September, QE3 was announced with a reported $40 billion a month being printed to buy mortgage backed securities. All quantitative easing programs previously had a timeframe, but this one is to infinity and beyond. When everyone thought this was crazy, last week came QE4 for an additional $45 billion a month for the same reason. Once again there was no endpoint except the statement by Mr. Bernanke where he said that the Federal Reserve would continue the quantitative easing until the unemployment numbers dropped to 6.5% or below.

Historically, quantitative easing has not worked for any country that used it to get out of financial trouble. Did it work for the Weimar Republic when it tried it from 1919 to 1923? Nope, and it won't work here either. These monetary policies are nothing more than kicking the can down the road where at some point in time the taxpayers will end up footing the bill. The scary part is the repayment cost usually comes through hyperinflation and higher taxes, nothing like stabbing a stake through the heart of an already fragile economy. The more money that is printed, the less the currency is worth. Considering all the facts, even though the bankruptcy filing numbers have declined, I think it's a matter of time before new records will be set. I don't think a bankruptcy attorney is really that worried about their career choice. In the next few years, we will probably see an increase in Americans losing their homes to foreclosure and many of them will have to file bankruptcy also. The young adults currently going to law school should consider becoming a bankruptcy attorney because the way the economy looks, their future would look bright.

Chapter 7 Liquidation Bankruptcy Vs Chapter 13 Reorganization Bankruptcy

Chapter 7 Liquidation Bankruptcy

Chapter 7 is named 'Liquidation Bankruptcy' because a trustee is appointed to collect and reduce to money any non-exempt assets for the benefit of priority and unsecured creditors of the estate.

Over 90% of all Consumer Chapter 7 filings are declared 'non-asset cases' because few consumers filing Chapter 7 have assets that exceed any amount that can be protected. Chapter 7 is the simplest, quickest, least expensive and easiest way to discharge 'unsecured' debt.

Debt owed to 'secured creditors' are generally discharged but the secured creditors contractual rights to their 'security' usually remains unaffected. So they must be financially satisfied to prevent them from pursuing their rights to the security after the bankruptcy case is concluded... usually 3 to 5 months after the case was filed.

While Chapter 7 discharges most all General Unsecured obligations, it does not discharge: most tax obligations, debts owed as a result of a Domestic Support Obligation, Student Loans, Fines and some other less common obligations.

It should be understood that in order to receive the benefits of a Chapter 7 bankruptcy the law now requires anyone earning more than their States Median Income to prove they're unable to repay at least 25% of, or $10,000 to, their General Unsecured Creditors over a 5 year period ($167 monthly). However, some skilled bankruptcy attorneys have been able to successfully challenge the 'systems' presumptive position in that regard which has allowed some of their over Median Income clients to still receive the benefits of a Chapter 7 discharge.

You should also understand that it's not unusual for someone to file Chapter 13 and actually pay less per month or even pay less in total to their creditors than what they would have paid had they filed a Chapter 7.

Because Chapter 7 may not be available or because that availability may need to be skillfully challenged and because a Chapter 13 may be more advantageous, it's important to have your financial affairs reviewed by, and for you to be represented by, a consumer bankruptcy specialist highly skilled with Chapter 7 and Chapter 13 matters.

Chapter 13 Reorganization Bankruptcy

Chapter 13 bankruptcy restructures and discharges debt based on a consumers ability to repay over a period of at least 36 months and usually 60 months. Most Chapter 13 Plans primarily call for the repayment of secured and priority creditors and leave little, if anything, available to pay unsecured creditors. It's not unusual for a person filing Chapter 13 to pay less per month and or pay less in total to their creditors than they would have, had they filed a Chapter 7 Liquidation Bankruptcy.

That's because Chapter 7 doesn't have much effect on Secured and Priority creditors while Chapter 13 can restructure those creditors which have a shorter repayment period remaining than the length of the proposed Chapter 13 Plan. This 'restructuring' can modify the rights and status of secured and priority creditors.

As an example the filing of a Chapter 13 can remove a totally unsecured junior (2nd or 3rd) mortgage from their secured position on the real estate and treat it as they truly are... "unsecured". Chapter 13 also can stop foreclosures and design a Plan to cure the mortgage delinquency over the life of the Plan... without allowing future interest on the delinquent amount.

Chapter 13 also stops future interest on outstanding priority tax obligations and can provide up-to 5 years to repay those taxes. It can also reduce interest rates on consumer secured obligations like vehicle contracts when they're in excess of the current prime rate of interest plus 2 or 3 percent.

In some instances, depending on when the debt was made, vehicle contracts and other contracts secured by consumer goods can be treated as partially secured and partially unsecured when the value of the security is worth less than what's owed.

These features are generally not available to someone filing Chapter 7 bankruptcy.

While Chapter 13 can often be more advantageous than a Chapter 7 you must be careful to find and select an attorney willing to file and able to skillfully file, Chapter 13's. Not all bankruptcy attorneys will file them and some of those who do, don't provide the level of expertise needed to take the greatest advantage of the special provisions available.

Bankruptcy Information - Obtain the Facts Before Filing Bankruptcy

Obtaining accurate bankruptcy information is an important aspect of determining if filing bankruptcy is in your best interest. Major changes were made to the United States Bankruptcy Code when Congress enacted the Bankruptcy Abuse Prevention and Consumer Protection Act in 2005.

One of the best sources of bankruptcy information is the U.S. Trustee Program; a division of the U.S. Department of Justice. The Trustee Program website provides comprehensive information about the federal bankruptcy system, along with an entire section devoted to BAPCPA.

BAPCPA requires debtors to undergo the 'means' test to determine if they are financially able to repay a portion of their outstanding debts. This tool measures the debtor's income with their states' median income level. In the past, the majority of people filing for bankruptcy protection elected to file Chapter 7. BAPCPA implemented the 'means' test to prevent consumers from filing bankruptcy to avoid repayment of frivolous spending.

In most instances, debtors are now required to file Chapter 13 bankruptcy. With Chapter 13, debtors must reorganize their debt and submit a repayment plan to the court. Although Chapter 13 allows debtors to retain their assets, a significant amount of their disposable income must be contributed toward the repayment of debts.

Chapter 13 repayment plans typically extend from three to five years. During this time, debtors are unable to incur any new debt without approval from the court Trustee. If debtors are unable to adhere to their repayment plan they must contact their bankruptcy attorney. The lawyer will contact the Trustee or creditors and attempt to work out a plan.

If the Trustee or creditors are unwilling to compromise, they can petition the court and request the bankruptcy be dismissed. This can be exceptionally damaging to individuals who filed bankruptcy to save their home from foreclosure.

Unfortunately, most of the published bankruptcy information does not fully disclose the ramifications of failing out of bankruptcy. When bankruptcy payments are missed, the debtor fails out of bankruptcy and the mortgage lender can move forward with foreclosure proceedings.

Foreclosure status resumes where it left off when the debtor filed for bankruptcy protection. In some instances, foreclosure can commence in as few as three days. Therefore, it is imperative to stay on track. Otherwise, failing out of bankruptcy will cause you to lose your home and all the money invested in it.

Filing bankruptcy is complex and complicated. Although debtors can file for bankruptcy protection on their own, it is advised to retain the services of a bankruptcy lawyer. BAPCPA demands filing specific documents and complying with deadlines. One wrong form or missed deadline can cause a bankruptcy petition to be dismissed. Hiring a qualified lawyer will provide debtors with the best chance of having their bankruptcy petition approved.

There is no guarantee any bankruptcy filing will be granted through the court. Although every citizen of the United States has the right to file for bankruptcy protection, not all petitions are approved. Therefore, it is important to investigate bankruptcy alternatives such as debt consolidation, debt settlement, credit counseling and budgeting.

Learn more about BAPCPA, credit counseling, debtor education programs, the 'means' test and locate nationwide bankruptcy courts and credit counseling offices through the U.S.

Should You File Bankruptcy Or Seek Out Bankruptcy Alternatives?

On any given day, nearly 8,000 people file bankruptcy through the U.S. Courts Federal Judiciary division. In order to obtain approval debtors must adhere to new bankruptcy laws enacted by Congress in 2005. The Bankruptcy Abuse Prevention and Consumer Protection Act made the process of filing difficult and confusing.

Under BAPCPA, individuals can file bankruptcy without legal representation, but business owners and corporate entities must hire a bankruptcy lawyer. Few people can comply with BAPCPA regulations on their own. Therefore, the first step of filing bankruptcy should involve hiring a lawyer who is well-versed in the new bankruptcy laws.

One stipulation of BAPCPA is that debtors must undergo credit counseling through an agency approved by the U.S. Trustee. Credit counseling must be completed no more than 180 days prior to petitioning the court. Once counseling is completed, debtors receive a certificate which must be presented to the bankruptcy judge before final approval is granted.

When filing bankruptcy, debtors must undergo the 'means' test to determine the amount of debt they will be required to repay. The new bankruptcy laws require debtors to repay a portion of debts whenever possible.

The means test is a financial tool that compares debtors' income to their states' median income level. If income is equal to or greater than median income levels, debtors will be required to file Chapter 13 and establish a payment plan. If income is less than median income levels, debtors might be allowed to file Chapter 7.

Chapter 7 is often referred to as liquidation bankruptcy because debtors must liquidate assets in order to satisfy outstanding creditor debts. Any remaining balance is discharged and debtors are given a clean financial slate.

Chapter 13 allows debtors to retain assets through the establishment of a payment plan. Chapter 13 payment plans are presented to the bankruptcy judge who will accept, reject, or modify the plan. Once approved, debtors must submit monthly payments to the U.S. Trustee, who in turn submits payments to creditors.

If debtors are unable to adhere to their chapter 13 payment plan, they fail out of bankruptcy. When this occurs, creditors are allowed to petition the court seeking dismissal. If a bankruptcy petition is dismissed debtors lose protection from the court and creditors can commence with collection actions.

Many homeowners file Chapter 13 to avoid foreclosure. While filing for bankruptcy protection can temporarily halt foreclosure proceedings, it may not be the preferred method for saving the home. If debtors fail out of bankruptcy, mortgage lenders can petition for dismissal.

If approved, lenders can commence with foreclosure proceedings at the point where they left off before the automatic stay went into effect. In some cases, homeowners are forced out of their home in a matter of days.

When possible, debtors should seek out bankruptcy alternatives such as debt consolidation, debt settlement or credit counseling. Bankruptcy remains on credit reports for up to ten years, while alternatives affect credit for up to seven years.

If personal bankruptcy is the only option, seek out a qualified attorney to guide you through the process. One resource for locating bankruptcy attorneys is the American Bar Association at abanet.org. Another option is to ask friends and family for a referral. Chances are you know someone who has undergone the process and can refer a good bankruptcy lawyer.

Filing Bankruptcy - New Bankruptcy Laws Create Confusion For Consumers

Many Americans are filing bankruptcy in hopes of eliminating debts or saving their home from foreclosure. While it is true bankruptcy can offer a fresh financial start, undergoing the process is no easy task. New bankruptcy laws, enacted in 2005, have made filing bankruptcy complicated and confusing.

For most people filing bankruptcy requires legal assistance. When possible, it is a good idea to interview three or four bankruptcy lawyers. Most law firms offer complimentary consultations to review financial information and provide advice. Filing bankruptcy can be an emotionally-charged experience, so it is important to work with a lawyer whose personality is complimentary to yours.

Prior to or during the bankruptcy process, debtors are required to undergo credit counseling. The Bankruptcy Abuse Prevention and Consumer Protection Act requires consumers to obtain counseling through a U.S. Trustee Program agency. Credit counseling must take place a maximum of 180 days prior to filing.

Debtors must also undergo the "means" test to determine if they are eligible to file for personal bankruptcy protection. A provision of BAPCPA requires consumers must pay a portion of their debts if possible. The means test is used to determine how much debt will be repaid.

In cases where debtors fall significantly below the median income level of their state, they may be allowed to file Chapter 7 bankruptcy. Chapter 7 involves liquidation of assets and discharge of debts. Otherwise, debtors will be required to file Chapter 13 bankruptcy and repay debts over an extended period of time.

In order to file bankruptcy, debtors must petition the bankruptcy court in the judicial district where they reside. A creditor meeting will be arranged and a repayment plan submitted to the court. BAPCPA requires debtors to pay a substantial amount of disposable income toward repayment of debts. If the debtor is unable to adhere to the repayment plan, they will fail out of bankruptcy and lose protection of the court. Failing out of bankruptcy means creditors can proceed with collection actions including initiating foreclosure.

When homeowners file bankruptcy to stop foreclosure, it is crucial they understand the consequences of failing out of bankruptcy. Mortgage lenders can commence the foreclosure process where it left off when bankruptcy was filed. In many instances, homeowners are only days away from eviction when they file. If they fail out of bankruptcy, the lender can foreclose in a matter of days.

Filing bankruptcy has far-reaching effects and should only be considered when all other debt elimination plans have failed. These might include debt settlement, debt consolidation or credit counseling. Take time to become educated about bankruptcy and fully understand the pros and cons. Look for alternatives that can yield the same results without being as detrimental to your credit.