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Filing for bankruptcy could be one of the most difficult decisions to make considering the dent that it leaves on the debtors' credit standing for the next seven years. However, it could help you to save your home from a possible foreclosure; put an end to the harassments caused by creditors as well as provides an opportunity to restart your financial life anew. For those of you considering applying for a File Chapter 7 Bankruptcy or Chapter 13 bankruptcy procedures, it is imperative to know that bankruptcy is a lawfully declared inability of debtors or business houses to repay back their creditors. And hence when you are out to get a bankruptcy consultation make it a point to ask chapter 13 or chapter 7 bankruptcy questions to your bankruptcy attorney which could help you to know what kind of a bankruptcy process you qualify for.

Under tenets of the new bankruptcy law or the "Bankruptcy Abuse Prevention and Consumer Protection Act of 2005," debtors with a higher income could find it difficult for a chapter 7 bankruptcy (liquidation) as they are required to pass the "means test" that aims to determine the disposable income available with the applicant after subtracting the expenses permitted by the IRS which does not include the actual expenditures. If the additional income exceeds certain pre-determined limit, you could most likely qualify for a chapter 13 bankruptcy and not a Chapter 7 Bankruptcy Information . A critical understanding could help you to know that chapter 13 bankruptcy laws are distinctly different from those of chapter 7 bankruptcy laws, which enables debtors to wipe out their total dues in full and get a fresh lease of financial life, in the sense that you could be required to repay a significant portion of all your unsecured debts over a 3 to 5 years period.

The interpretation of the new bankruptcy law in practice would ultimately depend on the courts as cases proceed through the system. This only further necessitates the need for chapter 7 bankruptcy protection for distressed debtors. For this it is important for troubled borrowers to get legal help from bankruptcy attorneys who could fight on their behalf to protect their rights and properties. Another critical aspect is that the new bankruptcy law requires all probable bankruptcy applicants to undergo compulsory credit counseling for managing budgets and debts..

The new bankruptcy law of 2005 stipulates probable bankruptcy filers to undergo credit counseling prior to applying for a bankruptcy under either chapter 7 or chapter 13. To qualify for a chapter 7 bankruptcy process, you are required to pass the "means test".

Continue reading "Filing For Bankruptcy Is The Inability of Debtors To Pay Their Creditors" »

You must have heard many saying "When you are drowned in debt file for bankruptcy" from the mouths of people who may be least aware of the intricacies of bankruptcy. Filing chapter 7 bankruptcy seems to be very famous among the debtors just because upon approval by the bankruptcy court it gives instantaneous discharge from most of the unsecured debts.

Filing chapter 7 bankruptcy is not as easy as it seems to be. The chapter 7 bankruptcy laws prevail over the process of filing and the final approval of bankruptcy. One may find these laws to be complex but with the professional help of companies like www.bankruptcyonly.com, the procedure of filing can be made much easier.

The first step is compiling the chapter 7 bankruptcy petition. This step is about collection and submission of all the necessary documents needed to justify that the applicant is now incapable of servicing any debt. This first step is very crucial because the documents submitted have to be genuine and at the same time in a prescribed format. Any mistake while filling the application form or a bit of mistake at furnishing the document could lead to rejection of the petition. All the actions like wage garnishment and collection calls made by the creditor or lender come to a stop. Usually on the 15th day the creditors or lenders are informed about this. Usually between the 20th day and the 40th day the bankruptcy court calls a meeting of the creditors and the debtor has to invariably be present at this meeting. After this comes the step of the trustee liquidating the non exempted property to pay to the creditors or lenders.

Continue reading "Filing Steps Related to Chapter Seven Bankruptcy Protection" »

Trying to fund higher education is a challenge many people face, as are the effects of not being able to pay off student loans in the long run.

One aspect of student loans that make them even more difficult is the fact that they are difficult to get rid of through bankruptcy. New laws passed in 2005 made all types of student loans harder to erase through filing, although a congressman is looking to change that.

Tennessee Democrat Steve Cohen, along with fellow party member and Illinois Representative Danny Davis, have authored a bill that would bring bankruptcy rules for student loans back to the way they were. In doing so, privately originated student loans would be treated the same as other forms of debt.

Cohen said that people should not be discouraged from getting further education because of the fact that it could lead to financial difficulties, and that his bill helps with that.

"The bankruptcy system should work as a safety net that allows people to get the education they want with the assurance that, should their finances come under strain by layoffs, accidents, or other unforeseen life events, they will be protected," says California Bankruptcy Attorney Steven C. Peck who may be contacted toll free at 1.866.999.9085.

If Cohen's bill doesn't pass, consumers may still have options in dealing with educational loans. One of those is debt consolidation, although people should keep in mind that private and governments loans must be handled separately.

The upswing in bankruptcy filings shows no evidence of decreasing after filings rose 32 percent in 2009.

Bankruptcy filings nationally topped 1.47 million last year, up from 1.17 million in 2008, according to the Administrative Office of the U.S. Courts.

The pace accelerated recently, as nationwide filings in March represented the highest monthly total since Congress overhauled bankruptcy laws in 2005. The 149,268 consumer filings in March were up 23 percent over the March 2009 total, according to the American Bankruptcy Institute, an Alexandria, Va., trade organization that does research and education about insolvency.

Consumer bankruptcy filings in February were up 14 percent over the year-earlier period, suggesting that the recession may be over technically, but its financial effects remain.

Lingering high unemployment and mounting debt continue to fuel the rise in insolvency.

"The sustained economic pressures of unemployment coupled with high pre-existing debt burdens are a formula for consumer filings to surpass 1.5 million filings" says California Bankruptcy Attorney Steven C. Peck.

"The obvious culprits are unemployment and the economy," says Steven C. Peck a Los Angeles Bankruptcy Lawyer. "A lot of these bankruptcies are just old lingering debt."

Bankruptcy filings could continue to rise because consumers and troubled companies petition a court for protection from creditors frequently as a last resort.

Continue reading "Bankruptcy Filings Show No Sign of Any Decrease" »

In the course of a bankruptcy action, a lawsuit may arise that is referred to as an adversary proceeding. It is initiated by filing a complaint with the court and may be filed for numerous reasons, including but not limited to objecting or revoking a discharge, determining the dischargeability of a debt, or to recover money or property of the debtor. Such proceedings are primarily governed by rules found in Part VII of the Federal Rules of Bankruptcy Procedure and may be initiated by the bankruptcy trustee or by a third party.

When such a proceeding is filed by a creditor, it is usually because the creditor is disputing that the debt owed should not be discharged. For example, the creditor may argue that the debt falls within one of the exceptions to discharge or that the bankruptcy filing was done in bad faith. When such a proceeding is filed by the bankruptcy trustee, it may be for a variety of reasons such as the paperwork being inaccurate and intentionally fraudulent or to undo a transfer of real property. The United States trustee may also file an adversarial proceeding to force the debtor to move from a Chapter 7 to a Chapter 13 filing if the trustee believes the filing was done in bad faith. In certain circumstances, it is also possible for a debtor to file an adversarial proceeding against a creditor.

If you have a question regarding Bankruptcy in San Jose please contact us at 408.279.2288 or visit www.bkanswers.com and we can connect you with one of our experienced San Jose Bankruptcy Attorneys. After you have spoken with one of our San Jose bankruptcy attorneys we can schedule you a free face to face appointment in our office location nearest you. Our team of San Jose Bankruptcy Lawyers can assist you with all aspects of your case. If you have questions about filing a chapter 7 bankruptcy, a chapter 11 bankruptcy, a chapter 13 bankruptcy, lien stripping, cram down, stopping a foreclosure or wage garnishment, discharging debt, etc. we can help! We have bankruptcy attorneys located throughout California who can assist your financial needs. Please feel free to complete our free bankruptcy evaluation and we can quickly determine if you are a qualified candidate for bankruptcy

If bankruptcy filing is considered to be a chance for a debtor to put an end to all his debts for good and anew; then filing for chapter 7 bankruptcy is an avenue to achieve the same comparatively quicker. Filing under chapter 7 bankruptcy means that the government will sell all non-exempt property of the debtor and appropriate the money among the creditors. In most cases, when the debtor goes for chapter 7 bankruptcy, he/she will usually be left little or no property to lose and so the whole procedure finish faster.

While there are many different laws of bankruptcy that a debtor would want to apply for, but it may be quite a task to choose the correct law that suits your requirements. As you can well understand from the title, this article will look at Chapter 7 Bankruptcy.

The following steps will help you filing for chapter 7 bankruptcy in the right way:

- Bankruptcy should be the last option and go for it only when you see that you have no choices left.

- Begin with a bankruptcy attorney. An attorney will have the technical know-how and ability to assist you in the whole procedure.

- Credit counseling is a must-go.

- Filing for petition if needed. Doing so will prevent the creditors from going for any legal action against you.

- Make sure that you complete all the required paper works correctly

- Make sure that you pay all your fees promptly.

- After filing for a petition, a meeting will be held in about a month's time. All your creditors will be present and they will ask you question regarding your assets and financial standing which you need to answer. This meeting is important and you cannot miss the meeting.

- In the revised bankruptcy laws, you filing for chapter 7 bankruptcy will have to attend a debtor financial management educational course organized by credit counseling agencies.

In summary, if you have followed the above steps you know you are safe to go ahead manage your debts.

Continue reading "Filing Chapter Seven Bankruptcy Is the Chance To Put An End to All Debts" »

Talk of economic recovery hasn't slowed bankruptcy filings in Utah, which could be on pace to equal records set before laws were changed to make filing more difficult.

In March, 1,824 bankruptcy cases were filed in Utah. That's a 31 percent increase over the March 2009 filings and a significant jump from the 1,192 cases filed in February and 1,036 in January of this year.

"We saw pretty dramatic increases last year and still pretty large increases this year. If we stay on target -- and there's nothing in the tea leaves I've been reading that says we're going to see a dramatic decrease in case filings -- it's going to be in the range it was before they changed the law," said David Sime, clerk of the U.S. Bankruptcy Court in Utah.

"I think it will exceed those levels. The same thing is happening around the country."

"It's definitely increasing," including clients from the construction and real estate industry in larger numbers, as well as people from all backgrounds who are now unemployed.

"They either had no work or it was really slow, and they tried to live off credit cards," "We are more busy this year than we were last year."

Utah bankruptcies also include an increase in the number of large businesses filing, he said. Chapter 11 reorganizations jumped from a couple dozen in 2006 and 2007 to 77 in 2008 and 90 last year. So far this year, 15 have been filed, he said.

In 2009, the number of bankruptcy filings increased in March and then stayed fairly level at that higher rate through the rest of the year. If 2010 repeats that pattern, Sime said to expect filings at a pace of about 1,700 to 1,800 a month, which would be "a pretty dramatic increase over where we were last year."

Chapter 7 filings, through which assets are liquidated to pay debts, continue to be the most common type registered so far this year, with 2,665. That's followed by Chapter 13 filings, "debt adjustment" for individuals, of which 1,339 were registered. Besides the 15 business reorganizations, the numbers also include one "family farm protection" Chapter 12 bankruptcy.

Continue reading "Bankruptcy Filings Continue to Rise in the State of Utah" »

Significant Changes to the Bankruptcy Code under the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA): The Presumption of Abuse and Qualification for Chapter 7 Discharge

The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) represented the most sweeping change to the Bankruptcy Code since the modern bankruptcy code was enacted in 1978. It was roundly criticized and opposed by the bench and bar, consumer advocates, and legal commentators, but a potent lobby by creditors, led by credit card banks were able to convince the Congress to enact the significant amendments which were viewed as largely business friendly changes to the law.

Perhaps the most significant change to the bankruptcy code under BAPCPA was the "Presumption of Abuse." Under the pre-BAPCPA bankruptcy code, debtors could file for bankruptcy under Chapter 7 liquidation or total discharge, regardless of their income level. Under the BAPCPA amendments, debtors had to prove that they qualified for Chapter 7 bankruptcy. BAPCPA creates a method to calculate a debtor's income, and compares this figure to the median income of the debtor's state. If the debtor's household income falls below the median income for the state, then the debtor automatically qualifies to file for Chapter 7 bankruptcy.

If the debtor's income is above the median income amount of the debtor's state, the debtor is subject to a "means test." The means test works roughly like this:

The debtor first calculates the "current monthly income" comprised of all sources of income for the household. The debtor's current monthly income is then offset by a set of deductions specified by the Internal Revenue Service. In general, the allowable deductions applicable in the means test include:

Certain specified living expenses,
Contributions to care of nondependent family members,
Expenses of administering a Chapter 13 repayment plan,
Educational expenses up to $1,500 annually per child,
Home energy costs,
A percentage of certain secured debt,
Expenses "reasonably necessary health insurance, disability insurance, and health savings account expenses,"
Expenses for protection from family violence,
A percentage of all priority debt, and
10. Contributions to tax-exempt charities.

After the debtor's income and expenses are summed, the court or trustee considers whether a "presumption of abuse" exists. Such a presumption exists if the debtor has at least $166.67 in current monthly income after the allowed deductions, the debtor has at least $100 of such income and this sum would be enough to pay general unsecured creditors more than 25% over five years (i.e., they could successfully enter into a Chapter 13 repayment plan). Absent special circumstances, if the debtor "fails" the means test, he or she cannot seek Chapter 7 liquidation or total discharge. Rather, he or she must petition for a repayment plan under Chapter 13.

Continue reading "Presumption Of Abuse Under the Bankruptcy Code Could Prohibit Chapter Seven Discharge" »

Arnold Schwarzenegger has sent redundancy notices to 20,000 government employees and shut down California's last remaining public works projects yesterday, as state politicians failed to pass a budget that will prevent his administration from running out of money.

The Governor of California, who is spending billions more each month than he can raise in taxes, has insufficient funds left to settle outstanding bills and is days away from being forced to start issuing "IOU" notes to creditors and civil servants.

The state senate has been unable to agree on a package of tax increases that will stave off bankruptcy. The administration is currently operating at a loss of $12bn (£8.4bn) a year - a figure that is rising exponentially and will hit $42bn next year.

Late on Monday night, with a proposed budget one vote short of the two-thirds majority it needs to pass, exhausted senators were sent home to sleep. They were ordered back to the chamber at 10am yesterday, and told that no one would be allowed to leave before a deal was reached.

"Bring a toothbrush," the senate president Darrell Steinberg advised them. "I will not allow anyone to go home to resume their lives, or any other kind of normal business."

Politicians had already spent the entire weekend in Sacramento trying to break the gridlock, with sometimes surreal results: at one point on Saturday, they were forced to surrender car keys to security guards, to ensure that no one took advantage of a short toilet break to run away. The tortured nature of proceedings, in the face of looming crisis, leaves California, one of the world's wealthiest regions, on the brink of becoming the first state in US history to be declared insolvent.

Civil servants are already being forced to take two unpaid days off a month, while billions of dollars in income tax repayments have been frozen. State prisons are so underfunded that a court last week ordered the release of 55,000 inmates to ease overcrowding.

Maintenance work on California's infrastructure has all but ceased - the last 275 projects will be halted this week - and the state's falling credit-rating, has made it tricky for Mr Schwarzenegger to tide himself over by borrowing funds on Wall Street.

The crisis highlights the particular pressures that the economic crisis has wrought on a region where mass immigration places a disproportionate strain on public schools, prisons and hospitals. California has America's second highest foreclosure rate after Nevada, with one in every 173 homes receiving a repossession notice last month. Income tax revenues are in steep decline, with unemployment at 9.3 percent. Though Governor Schwarzenegger has faced public criticism, he has only limited ability to manage finances thanks to California's obsession with "direct democracy" in which small interest groups can enact laws by electoral "proposition".

Property tax has been frozen for many homeowners since a proposition passed in the late 1970s. A separate measure, introduced in the 1980s, means that income tax cannot be raised without the agreement of two-thirds of the state's lawmakers.

Meanwhile, previous borrowing means that roughly 10 per cent of all California's cash is required to service its debt. A raft of other ballot measures control spending, meaning that only a quarter of Mr Schwarzenegger's spending is considered "discretionary." The rest has been "earmarked" for a particular cause.

The result is political gridlock. A minority of Republicans at the state senate and assembly, most of whom were elected on the back of "anti-tax" pledges, are able to block tax rises - while the majority of Democrats refuse to countenance spending cuts.

The process of bankruptcy offers debtors a clean slate when they are overwhelmed by financial burdens. Once a bankruptcy case is completed, however, the debtor will still need basic possessions and assets to move their life forward. Fortunately, the Bankruptcy Code recognizes these basic needs and provides a variety of property exemptions for debtors. If property is exempt, it will not be subject to the claims of creditors says California Bankruptcy Attorney Steven C. Peck.

Under new bankruptcy law, a debtor will be required to submit a schedule or list of exempt property when they file the bankruptcy petition. The schedule should include a description of the property, specifying the law authorizing the exemption, and list the value of the exemption and its market value. This information allows parties involved in the case to evaluate the exemption claim and submit any legitimate objections within 30 days from the meeting of the creditors. If someone objects, they must prove that the exemption has been improperly claimed.

Every bankruptcy case is evaluated separately but in most cases, the debtor does not have to give up their property or necessary possessions. During and after the closing of the case, the exempted property is protected by law. In fact, not only are you allowed to keep the exempted property, but also the equity, if any, that one may have on the property. Equity is the difference between the value of the exempted property and the remaining debt. In California, we have two sets of exemptions that can be chsoen depending on the proeprty which is contained in the Bankruptcy estate says Los Angeles Bankruptcy Lawyer Steven C. Peck.

Homestead Exemption

The homestead exemption applies to property used as a residence. Current law limits a homestead exemption to $136,875 if the home was acquired in the 1,215-day period before filing for bankruptcy. Exceptions apply, including when someone upgrades to a more expensive house and transfers equity to the new purchase. The homestead exemption is also limited if it is used to delay, hinder, or defraud a creditor.

Automobiles

The exemption amount for an automobile under the Bankruptcy Code is $3,225. The equity in the vehicle is based on its market value less any loans. If the equity is more than $3,225, it is possible to apply exemption amounts from other categories, such as the exemption for tools of the trade. If the trustee sells it, the debtor is entitled to receive the exemption amount. It is also possible to pay the trustee the amount above the exemption and keep the vehicle.

Household Items

Federal and state laws provide exemptions for household items of $10,775 and $525 for an individual item. However, these types of items have low resale value and most bankruptcy trustees will not view them as a viable source of assets to use in repaying creditors.

Retirement Assets

Debtors can exempt retirement funds under § 522(d)(12) of the Bankruptcy Code. The exemption applies to pension, profit sharing and stock bonus plans, employee annuities, Individual Retirement Accounts (IRAs), deferred compensation plans such as a 401(k) account, and certain trusts.

Continue reading "Bankrutcy Code Provides For Powerful Exemptions To Facilitate a Fresh Start" »

Bankruptcy or economic failure is a term that defines officially declared bankrupt or impairment of organizations or individuals to pay debts. .

In several cases, debtors start bankruptcy procedures called "voluntary bankruptcy" individuals submitted by the institution of bankruptcy or bankruptcy.

Bankruptcy in the United States:

In the U.S., is a theme made for bankruptcy under the federal jurisdiction of the United States Constitution (Article 1, Section 8, paragraph 4), and standardized laws that the legislative body, which you can orderthe subject of bankruptcies in the United States.

The performance is seen, however, the rule of law. Corresponding tools are integrated in the code States Bankruptcy Code, found in Title 11 of United. overestimation State law these acts in different places where the federal law failed to act or be responsible for specific state law.

There are six types of bankruptcy under the Bankruptcy Code in the United States:

Chapter 7: This is a basic sort clearance for businesses andIndividuals
Chapter 9: Civil economic failure
Chapter 11: rehabilitation or reorganization, used primarily by corporate debtors, but sometimes by individuals with vast assets and liabilities
Chapter 12: Chapter rehabilitation of fishermen and farmers 'family'
Chapter 13: There is a chapter with a payment plan for the rehabilitation of people with normal income
Chapter 15: There is a chapter in subsidiaries economic failure and in other cases worldwide.

Chapter 7

Chapter 7 deals with consumer demand for economic failure. This lack of adequate funds to repay those creditors. We are then given time to resolve the debtorthis problem and help to reassure their creditors.

Here are all the assets of the debtor in case of failure. The trustee is to turn the property into money for that and after the liquidation of its total assets in cash, the trustee distributes funds to creditors to cancel all debts.

Chapter 13

In many cases, bankruptcy, try creditors, debtors move to pay them. This type of restoration can be called harassment orpersonal visits. Chapter 13 of the Bankruptcy Code is the best way for borrowers to avoid such harassment. This section allows the court to keep an eye on the progress of the debt is paid by the debtor to maintain and restore the activities of creditors.

Chapter 11

Again the control of debtors and their assets and properties are used as "debtor in possession (DIP). Creditor and debtor to the bankruptcy court to address the work on the debt amount. If a plan is negotiated, confirmed, then the debtorconfirmed to operate and continue to pay the debt on terms agreed in the plan.

Continue reading "Different Classification of Bankruptcy Petitions in the Unired States" »

You might be aware that IRAs have some creditor protection. In fact, a 2005 bankruptcy law allows an individual to protect an IRA worth as much as $1M from creditors. However, a recent court case seems to indicate that this bankruptcy protection does not apply to IRAs that are inherited from another person.

The precedent-establishing Texas case involves a daughter who inherited an IRA from her mother and later filed for bankruptcy. The daughter maintained that the inherited IRA should receive the same $1M in protection afforded to other IRAs. However, the Texas court ruled that only the debtor's own funds qualify for the protection. The case likely hinged on the fact that inherited IRAs remain titled in the name of the original account holder. (When you inherit an IRA from anyone other than a spouse, you actually keep the name of the original account holder and add "for benefit of the beneficiary")

Finally, you should know that the $1M exemption put in place with the 2005 law has now increased to $1,171,650 due to the impact of inflation.

Continue reading "IRAs Allow as Much As $1 Million Protection From Creditors When In Bankruptcy In Most Situations" »

In March, 2010 more individuals and businesses filed for bankruptcy than in any month since October 2005, when federal bankruptcy laws were made more restrictive. There were 158,141 U.S. bankruptcy petitions filed last month -- a 35% increase over February's figure, according to data compiled by Automated Access to Court Records (AACER). This was a 19% increase over the number in October 2009, the last record-high month.

In the first quarter of 2010, the rate of personal bankruptcy filings in a dozen states increased by double-digit percentages over 2009's monthly averages. "What is surprising is that there are still hefty increases in states like Arizona, California and Florida," says AACER president Mike Bickford, referring to the fact that it might seem that the worst would be over in states hard-hit by the housing bubble. "Intuitively, you would think there might be some leveling off in these states, but that is not the case. In addition, there were large increases in bankruptcy filings in the Midwest, especially Michigan and Illinois."

But many law scholars are not surprised by Americans' mad rush to bankruptcy court. Adjusted for inflation, personal borrowing in the U.S. is 10 times greater than in 1960, according to the Federal Reserve. "Now, consumer credit has dried up," says law professor Robert Lawless, an expert on bankruptcy among sole proprietors and small entrepreneurs at the University of Illinois. "That is why people are ending up in bankruptcy court."

Katherine M. Porter, a bankruptcy expert at the University of Iowa and the University of California, Berkeley's Boalt Hall Law School, says people typically "seriously struggle" with their debt for two years before turning to bankruptcy.

The statistics show that Chapter 7 bankruptcy filings are rising faster than the more complex Chapter 13 filings. While the latter requires individuals to repay a substantial portion of their debt and prevents banks from foreclosing on their homes, Chapter 7 bankruptcy allows a debtor to wipe out his or her debts entirely and get a fresh start. "It is very fast and very deep debt restructuring," says Porter. Since 2005, Chapter 13 filings have dropped from about 35% of all personal bankruptcy filings to 25%, she says. "Systemically, that's a big change."

That change suggests that more home owners are simply walking away from their mortgages, rather than attempting to make payments, especially during a recession with record-high long-term unemployment. "Chapter 13 was designed for regular economic times when people might lose their jobs and fall behind on their mortgage for three to four months, but having found a new job they would be able to use the Chapter 13 process to keep their homes," says Porter, noting that even during normal economic times only 1 in 3 Chapter 13 bankruptcy filings results in the individual's successful meeting of payment obligations.

Contact Steven Peck's Premier Legal toll free at 1.866.999.9085 to talk to an experienced California Bankruptcy Attorney and visit us on-line at www.premierlegal.org.

Read more: http://www.time.com/time/business/article/0,8599,1977728,00.html#ixzz0kIAyLa9k

Continue reading "More People Filing for Bankruptcy Protection" »

There are multiple types or chapters of bankruptcy. Chapter 13 bankruptcy is frequently also known as reorganizational bankruptcy and also as a wage earner's plan. It can be used by individuals as well as unincorporated businesses. This allows the filer to structure a repayment plan for their financial obligations which is supervised and approved by the bankruptcy court. Under this plan, you are given a period of time, typically three to five years, to get your debt repaid. After you have filed, your existing creditors cannot call or harass you, and are not permitted to start collections proceedings against you.

This type of bankruptcy may be better suited for some people, although each case is different. For example, with Chapter 7 bankruptcy, the consumer's debt is almost completely eliminated. While this sounds like good news, the caveat is that your assets will be sold in order to repay the debt. By contrast with Chapter 13, while your debt remains, it is reorganized so that you can comfortably make payments and you are allowed to retain your assets.

While many people may view this as a debt consolidation loan, it really is not a loan in any sense of the word. The debt remains, only a restructured repayment plan is defined and the money is distributed to the creditors via a trustee appointed by the courts. Although the consumer no longer has a contract with the creditors, the fact that the debt still exists cannot be overlooked. Certain types of debts are given a priority and must be paid in full.

If you have a lot of assets like a house that you do not want to go through foreclosure on, this type of bankruptcy can protect that. If foreclosure proceeding are already in place, the bankruptcy will stop those from progressing further. You may have delinquent mortgage payments which need to be brought up to date, but they may lose their delinquent status. You must also keep up with future mortgage payments.

The basis for this type of reorganization is that your debt is restructured and rescheduled to make it easier for you to comfortably make your payments. This is done through a variety of methods, including lowering the interest rate or extending the term of the loan to result in lower payments. The goal here is to allow you to make the payments, but with lower payments so that you can make them on time.

There are certain limitations with Chapter 13 bankruptcy in terms of the amount of debt that can be restructured. Your total of unsecured debt must be less than approximately $307,000 and the sum total of your secured financial obligations must be less than approximately $923,000. These figures are adjusted occasionally to be in sync with the consumer price index.

Before you are eligible to file bankruptcy, you must first go through credit counseling. The credit counseling must be through an agency that is approved by the United States Trustee's office. Although the companies may charge a fee for their services, if you are unable to pay their fee, they must reduce the cost and make adjustments for your individual situation.

The bottom line is that this allows individuals some financial breathing room to repay their debts and does not require liquidation of their assets. A viable repayment plan is worked out so that debts can be repaid. This works for consumers who can still make payments but have found themselves with too much debt to handle at a particular time in their lives.

For more insights and further information about Chapter 13 Bankruptcy as well as getting a free bankruptcy evaluation from a bankruptcy lawyer local to you

Federally sanctioned supplemental exemptions are permitted to be used according to the bankruptcy laws in California and can be used with the allowed California State exemptions. According to California bankruptcy laws, a person must choose one of two categories of exemption. The two categories are simply known as the 703 exemptions and the 704 exemptions. An experienced California Bankruptcy lawyer will be able to choose which set of California Bankurptcy exemptions would be proper in any particular case.

According to California law, one set of exemptionshas a homestead exemption of a maximum of $50,000 for one person who isn't handicapped, a maximum of $75,000 for families and a maximum of $125,000 for seniors. In addition, this set of exemptions allows for personal property exemptions of as much as $2,000 cash in the bank; as much as $2,000 worth of building materials; as much as $5,000 worth of jewelry and heirlooms; motor vehicles valued up to $1,900; burial plots; appliances; home furnishings; personal clothing; health related aids; food; and any money that results from personal injury or wrongful death claims. Also, allowances are provided for the following under the first set of exemptions: any type of insurance claims; pensions; benefits like unemployment compensation; workers' compensation claims; health assistance claims; tools of the trade which includes tools, uniforms, equipment, books and manuals needed to continue in a trade; and wages exempt at a minimum of 75%.

There are many differences between the 703 and 704 exemptions under California bankruptcy laws. For the 704 exemptions, $17,425 is the highest exemption for every homestead category. The maximum amount for jewelry and heirlooms is $1,150. The trade tools exemption is limited to $1,750 while the exemption for motor vehicles is as much as $2,775. In addition, this exemption allows the total amount of personal benefits that can be exempted at $17,425. However, a wild card exemption of as much as $925 is permitted. The 704 exemptions doesn't have any wage exemption but there is an exemption for ERISA eligible pensions.

Due to the complexity involved in these two exemption systems under the California bankruptcy laws, people are strongly advised to engage a lawyer who specializes in this field of law for assistance with bankruptcy. Basically, a lawyer will consider all of your financial issues and advise you about which one of the two exemption systems would be right for you when your bankruptcy case is filed. says California Bankruptcy Lawyer Steven C. Peck who may be contacted toll free at 1.866.999.9085 or on-line at www.premierlegal.org

Proceedings under Chapter 7 in Bankruptcy call for a liquidation of the debtors assets. However, there are assets that are exempt from liquidation. The exemptions that are available to debtors depending on where they live and whether their state has opted out of the exemptions available in the federal statute or if they provide exemptions in addition to those in the bankruptcy law.

Options to Keep Your Property
One way to keep property under Chapter 7 is to make sure that you have not over valued property when listing exemptions.

For instance, your household goods should be valued at a distressed sale value.
Make sure you have used any state exemptions that may be available
Property that can be classified as tools of your trade are usually exemptible up to a certain value.
If your state allows federal exemptions there is a wild card exemption under Section 522 that allows a debtor to exempt property that has not already been exempted under other sections of the bankruptcy code.
Is Your Property worth Liquidating
Another way that you may be able to keep property when Chapter 7 exemptions are used up is dependent upon the Bankruptcy trustee. Some property may be too expensive to liquidate which may cause the trustee to abandon it. For example, if your state exemptions allow you to keep a car worth $3500 but the car is worth $4500, the $1000 difference in value may be reduced to less the $500 once the expenses of the selling it are deducted. Five hundred dollars to be divided between 12 creditors is not worth the trustee's time to administer. If the trustee abandons the property to the debtor the debtor keeps property worth more than the exemption available.

Exemptions in a Joint Bankruptcy Case
If you are married and you file a joint petition in bankruptcy the amount of your exemptions are doubled. Do not forget this when exempting property it can increase your exemptions and allow you to protect property in the bankruptcy estate.

Continue reading "Exemptions in a Chapter Seven Bankruptcy Estate" »

There are many myths floating around out there about how filing for bankruptcy affects your credit and the long term after effects of a chapter 7. While filing bankruptcy under a chapter 13 is a whole different game regarding the effect on your credit, when you file for bankruptcy under a chapter 7 it truly is what it is referred to; a fresh start.

The first thing to keep in mind after your chapter 7 bankruptcy is discharged is you now are essentially debt free. In the eyes of the creditor this is now a good thing. Sure the creditor sees that you went through a file and that is an adverse issue but now you have wiped out all your debt that you could not afford and you have got a fresh start.

Another factor the creditor looks at is that according to law your filing for bankruptcy by way of a chapter 7 and a consecutive discharge prohibits you to file for bankruptcy under a chapter 7 for eight years. Hence you will not be able to discharge your debt with them again for at least eight years.

Your bankruptcy attorney will advise you that almost immediately after your bankruptcy has been discharged you should start receiving secured credit card offers with small limits and rather high interest rates. These cards will no doubt also have a high annual fee. Do not be deterred by these factors. You have a filing on your credit and are still a high risk but with a secured card where you have to make a deposit and you are only allowed to use credit up to that deposit, the credit card company is mitigating the risk.

You should open accounts with at least one or two of these secured credit cards but do not use them just keep them open. Slowly after a few months you may receive an unsecured credit card offer with a very small limit, a high interest rate and a hefty annual fee. You should open this account and wait. Again do not use the card. After a little time the credit card offers will start to become more attractive and annual fees and high interest rates will slowly begin to disappear.

Bankruptcy Attorneys will not be able to tell you exactly at what point you will be eligible for a mortgage after filing. For this you will have to consult a mortgage specialist. However, depending upon the type of mortgage you are applying for, the general rule is 2 years after a bankruptcy has been discharged, some credit has been reestablished and there are no late payments on the new credit.

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