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There are primarily two ways for an individual to file for bankruptcy, Chapter 7 and 13. According to Chapter 7, a person may keep a certain part of his property together with most liens, like real estate mortgages. If the person has other assets then these are sold off by the interim trustee to pay off the creditors. However, in any US city like Los Angeles and San Diego there are numerous unsecured debts which get cancelled if Chapter 7 is filed. says Los Angeles Bankruptcy Attorney Steven C. Peck.

There is one major disadvantage of filing Chapter 7. A record of it stays for 10 years on the debtor's credit report. This practically makes the debtor less eligible to get any further credit for the next 10 years and/or the terms of credits available would be less friendly. This can only be improved once the actual debt is removed from the debtor's record, which in turn would also improve his creditworthiness.

* Things You Must Know About The Chapter 7
There are various things an individual or a company can do for debt consolidation - one of the way-out is declaration of bankruptcy. When in deep debt, one should consider the clauses given in the chapter 7 of the United States Code.

* Basic Facts About Chapter 7:
Bankruptcy is a court proceeding in which a debtor declares his inability to repay the creditors. A trustee is appointed to liquidate his assets and pay off the creditors.

* What Is Chapter 7 Bankruptcy?

Do you own property in San Diego? Are you aware about the concept of filing for bankruptcies and foreclosures? First of all, let us take up the term, "bankruptcy." You have bought a property by taking a loan from a bank or from a lender.

* Going Through Chapter 7 Bankruptcy:

Going through a Chapter 7 bankruptcy can be emotionally draining, and often confusing. It does not have to be so bad, though, if you simply make sure to follow some guidelines. You obviously would not be considering Chapter 7 bankruptcy if you did not feel like you were in some deep financial trouble that could damage your family and well-being. When you are in this kind of situation, it is good to take a few deep breaths and tell yourself that you are not alone, and that you can get through this with your sanity intact. Following some basic guidelines can help you through the process ...

In the future, the chances of being eligible for any type of credit is mainly dependent on the creditworthiness of a person.

Creditworthiness and the possibility of getting a Chapter 7 discharge are some of the numerous issues to consider for determining whether to file bankruptcy. Sometimes the effects of bankruptcy on a person's creditworthiness is given high importance. In reality, by the time a debtor is ready to file for bankruptcy, his credit score is already destroyed.

In numerous US cities like San Francisco and Oakland, it is seen that even businesses, which are unable to pay off its creditors may file for bankruptcy under Chapter 7. In such situations filing for bankruptcy would mean that the business is willing to sell off its entire assets, deal out the proceeds to its creditors, and finally stop all its operations.

However, it is important to understand that filing for bankruptcy by a business firm, may or may not necessarily mean that the employees would lose their jobs. There have been situations when a firm has sold off an entire division intact to another firm.

Continue reading "An Explainantion of Chapter 7 Bankruptcy by Los Angeles Bankruptcy Attorney Steven C. Peck" »

People who are burdened by debt or strapped for cash are entitled to file for total bankruptcy or any other types of it so that they can have a fresh start and a second chance in their lives. These bankruptcy laws are aimed to give honest debtors a shot at redemption. Total bankruptcy and a few of its variants in the Bankruptcy Law can be a bit complex as there are a lot of considerations that must be taken into account in view of the whole process. For people who are thinking of filing bankruptcy, it is important to seek an expert's help first before making any decisions about filing this and that or signing this and that.

Bankruptcy: What it does?

1. People filing for total bankruptcy or any type of bankruptcy for that matter can discharge your liability for most if not all of your debts. The moment that the debt is discharged, the debtors has no legal obligation about that debt whatsoever.

2. Total bankruptcy and other types of bankruptcies can put a halt to foreclosures. Nobody wants to give up their homes that easily and bankruptcy can help people keep their homes regardless of their debt by enabling them to catch up on their missed payment in accordance to their ability to pay.

3. Repossessions can be prevented by bankruptcy as well. Therefore your car and other properties are safe with bankruptcy. In cases where repossession has already taken place, the bankruptcy law can force them to give back the repossessed items to you.

4. Bankruptcy can put an end to different types of harassment brought about by debt collection including wage garnishment.

5. Utility services such as electricity, telephone ad the like can be restored if already cut prior to the filing of total bankruptcy. In cases where it is not yet disconnected, prevention of it is most likely to happen.

6. Interest rates and monthly payments will be lowered dramatically the moment one files for bankruptcy. These include car loans, secured debts and the like.

7. Another thing about total bankruptcy and its variants is that it the debtors a chance to challenge claims of creditors whom they think are falsely accusing them of debts or those which charge more than what they actually owed.

Continue reading "Bankruptcy The Means To Receive a Fresh Start" »

Chapter 7 of the Title 11 of the United States Code (Bankruptcy Code) governs the process of liquidation under the bankruptcy laws of the United States. (In contrast, Chapters 11 and 13 govern the process of reorganization of a debtor in bankruptcy.) Chapter 7 is the most common form of bankruptcy in the United States.

For individuals:

Individuals who reside, have a place of business, or own property in the United States may file for bankruptcy in a federal court under Chapter 7 ("straight bankruptcy", or liquidation).Chapter 7, as with other bankruptcy chapters, is not available to individuals who have had bankruptcy cases dismissed within the prior 180 days under specified circumstances.

In a Chapter 7 bankruptcy, the individual is allowed to keep certain exempt property. Most liens, however (such as real estate mortgages and security interests for car loans), survive. The value of property that can be claimed as exempt varies from state to state. Other assets, if any, are sold (liquidated) by the interim trustee to repay creditors. Many types of unsecured debt are legally discharged by the bankruptcy proceeding, but there are various types of debt that are not discharged in a Chapter 7. Common exceptions to discharge include child support, income taxes less than 3 years old and property taxes, student loans (unless the debtor prevails in a difficult-to-win adversary proceeding brought to determine the dischargeability of the student loan), and fines and restitution imposed by a court for any crimes committed by the debtor. Spousal support is likewise not covered by a bankruptcy filing nor are property settlements through divorce. Despite their potential non-dischargeability, all debts must be listed on bankruptcy schedules.

A chapter 7 bankruptcy stays on an individual's credit report for 10 years from the date of filing the chapter 7 petition. This contrasts with a chapter 13 bankruptcy, which stays on an individual's credit report for 7 years from the date of filing the chapter 13 petition. This may make credit less available and/or terms less favorable, although high debt can have the same effect. That must be balanced against the removal of actual debt from the filer's record by the bankruptcy, which tends to improve creditworthiness. Consumer credit and creditworthiness is a complex subject, however. Future ability to obtain credit is dependent on multiple factors and difficult to predict.

Another aspect to consider is whether the debtor can avoid a challenge by the United States Trustee to his or her Chapter 7 filing as abusive. One factor in considering whether the U.S. Trustee can prevail in a challenge to the debtor's Chapter 7 filing is whether the debtor can otherwise afford to repay some or all of his debts out of disposable income in the five year time frame provided by Chapter 13. If so, then the U.S. Trustee may succeed in preventing the debtor from receiving a discharge under Chapter 7, effectively forcing the debtor into Chapter 13.

It is widely held amongst bankruptcy practitioners that the U.S. Trustee has become much more aggressive in recent times in pursuing (what the U.S. Trustee believes to be) abusive Chapter 7 filings. Through these activities the U.S. Trustee has achieved a regulatory system that Congress and most creditor-friendly commentors have consistently espoused, i.e., a formal means test for Chapter 7. The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 has clarified this area of concern by making changes to the U.S. Bankruptcy Code that include, along with many other reforms, language imposing a means test for Chapter 7 cases.

Creditworthiness and the likelihood of receiving a Chapter 7 discharge are only a few of many issues to be considered in determining whether to file bankruptcy. The importance of the effects of bankruptcy on creditworthiness is sometimes overemphasized because by the time most debtors are ready to file for bankruptcy their credit score is already ruined. Also, new credit extended post-petition is not covered by the discharge, so creditors may offer new credit to the newly-bankrupt.

Continue reading "Chapter Seven Bankruptcy Protection Governs Liquidation and Discharge Of Payment Obligations" »

Chapter 13 is a type of bankruptcy called a plan of reorganization or repayment. The debtor must pay all or part of their debts. The debtor must first submit a plan for repayment in bankruptcy court so that it can be approved. This means that the debtor will pay his debts with the protection of the court. Within that period, the debtor must pay his debts to a Chapter 13 trustee. The trustee will distribute the money paid by debtors to creditors says Peck law Grouip Bankruptcy Attorney Steven C. Peck.

The only time that the debtor is relieved of its debts is when the repayment is completed. When you file personal bankruptcy, Chapter 13 is necessary to know its drawbacks, this can help make your decision. The main disadvantage of this failure is that the duration of the state of bankruptcy will last for some years. This state of bankruptcy, leaving a big red mark on your credit report and this affects the chances of getting a new loan. Bankruptcy can also affect the future employment of individuals. It will be difficult for employers to hire someone for a management position that has a history of failure. Also make sure you have a stable income for the period of repayment, not being able to pay the amount indicated in the repayment plan, the bankruptcy court can dismiss your Chapter 13 type of bankruptcy. This allows you to convert your Chapter 7 bankruptcy of a type of failure.

Continue reading "Chapter 13 Bankruptcy Is A Plan Of Reorganization and Repayment" »

Types of Bankruptcy:

Six basic types of bankruptcy cases are provided for under the Bankruptcy Code. The cases are traditionally given the names of the chapters that describe them.

Chapter 7:

Chapter 7, entitled Liquidation, contemplates an orderly, court-supervised procedure by which a trustee takes over the assets of the debtor' s estate, reduces them to cash, and makes distributions to creditors, subject to the debtor' s right to retain certain exempt property and the rights of secured creditors. Because there is usually little or no nonexempt property in most chapter 7 cases, there may not be an actual liquidation of the debtor' s assets. These cases are called " no-asset cases." A creditor holding an unsecured claim will get a distribution from the bankruptcy estate only if the case is an asset case and the creditor files a proof of claim with the bankruptcy court. In most chapter 7 cases, if the debtor is an individual, he or she receives a discharge that releases him or her from personal liability for certain dischargeable debts. The debtor normally receives a discharge just a few months after the petition is filed. Amendments to the Bankruptcy Code enacted in the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 require the application of a " means test" to determine whether individual consumer debtors qualify for relief under chapter 7. If a debtor' s income is in excess of certain thresholds, the debtor may not be eligible for chapter 7 relief.

Chapter 13:

Chapter 13, entitled Adjustment of Debts of an Individual With Regular Income, is designed for an individual debtor who has a regular source of income. Chapter 13 is often preferable to chapter 7 because it enables the debtor to keep a valuable asset, such as a house, and because it allows the debtor to propose a " plan" to repay creditors over time - usually three to five years. Chapter 13 is also used by consumer debtors who do not qualify for chapter 7 relief under the means test. At a confirmation hearing, the court either approves or disapproves the debtor' s repayment plan, depending on whether it meets the Bankruptcy Code' s requirements for confirmation. Chapter 13 is very different from chapter 7 since the chapter 13 debtor usually remains in possession of the property of the estate and makes payments to creditors, through the trustee, based on the debtor' s anticipated income over the life of the plan. Unlike chapter 7, the debtor does not receive an immediate discharge of debts. The debtor must complete the payments required under the plan before the discharge is received. The debtor is protected from lawsuits, garnishments, and other creditor actions while the plan is in effect. The discharge is also somewhat broader (i.e., more debts are eliminated) under chapter 13 than the discharge under chapter 7.

Chapter 11:

Chapter 11, entitled Reorganization, ordinarily is used by commercial enterprises that desire to continue operating a business and repay creditors concurrently through a court-approved plan of reorganization. The chapter 11 debtor usually has the exclusive right to file a plan of reorganization for the first 120 days after it files the case and must provide creditors with a disclosure statement containing information adequate to enable creditors to evaluate the plan. The court ultimately approves (confirms) or disapproves the plan of reorganization. Under the confirmed plan, the debtor can reduce its debts by repaying a portion of its obligations and discharging others. The debtor can also terminate burdensome contracts and leases, recover assets, and rescale its operations in order to return to profitability. Under chapter 11, the debtor normally goes through a period of consolidation and emerges with a reduced debt load and a reorganized business.

Chapter 12:

Chapter 12, entitled Adjustment of Debts of a Family Farmer or Fisherman with Regular Annual Income, provides debt relief to family farmers and fishermen with regular income. The process under chapter 12 is very similar to that of chapter 13, under which the debtor proposes a plan to repay debts over a period of time - no more than three years unless the court approves a longer period, not exceeding five years. There is also a trustee in every chapter 12 case whose duties are very similar to those of a chapter 13 trustee. The chapter 12 trustee' s disbursement of payments to creditors under a confirmed plan parallels the procedure under chapter 13. Chapter 12 allows a family farmer or fisherman to continue to operate the business while the plan is being carried out.

Chapter 9:

Chapter 9, entitled Adjustment of Debts of a Municipality, provides essentially for reorganization, much like a reorganization under chapter 11. Only a " municipality" may file under chapter 9, which includes cities and towns, as well as villages, counties, taxing districts, municipal utilities, and school districts.

Continue reading "What Are The Different Bankruptcy Chapters?" »

Rehabilitation, or reorganization, of debt is an option that courts usually favor because it provides creditors with a better opportunity to recoup what is owed to them. Rehabilitative bankruptcies are governed most often by chapter 11 or chapter 13 of the Bankruptcy Code. Chapter 11 bankruptcy typically applies to individuals with excessive or complex debts, or to large commercial entities such as corporations.

Unlike liquidation, as done with a chapter 7 bankruptcy, rehabilitation provides the debtor with an opportunity to retain nonexempt assets. In return, the debtor must agree to pay debts in strict accordance with a reorganization plan approved by the bankruptcy court. During this repayment period, creditors are unable to pursue debts beyond the provisions of the reorganization plan. This gives the debtor the chance to restructure affairs in the effort to meet financial obligations.

To be eligible for rehabilitative bankruptcy, the debtor must have sufficient income to make a reorganization plan feasible. If the debtor fails to comply with the reorganization plan, the bankruptcy court may order liquidation. A debtor who successfully completes the reorganization plan is entitled to a discharge of remaining debts. In keeping with the general preference for bankruptcy rehabilitation rather than liquidation, the goal of this policy is to reward the conscientious debtor who works to help creditors by resolving his or her debts.

Continue reading "Reorganization Is A Favored Because It Provides Creditors A Better Opportunity To Recoup What Is owed To Them" »

Mortgages certainly are a hot button issue with over 2 million homeowners left needing protection from foreclosure in 2009. So, how is your home equity line treated in a California Chapter 7 bankruptcy?

A home equity line is usually considered the same as a second or third mortgage. Mortgages are secured debts that are tied to your house, and if you don't pay them, you could be left needing protection from foreclosure. In a California Chapter 7 bankruptcy, almost any debt can be discharged unless it is tied to property that you wish to keep. You cannot discharge a home equity line in a California bankruptcy if it is connected to property you intend to keep.

Luckily, a California bankruptcy lawyer has a different way to help those intending to keep their homes. Your back payments will be put into your plan while you continue to make your payments and stay current with a California chapter 13 bankruptcy. And, in some instances, if you owe more than the home is worth, you may be able to strip the loan and discharge the debt completely. You would be well-advised to contact a California bankruptcy attorney who can help you determine the best course of action to take with your home equity line.

The many options that can be considered for a home equity line is yet another indicator that the bankruptcy code was truly designed to help the average American as much as possible. You will have an easier time getting the exact results you need from a Chapter 7 bankruptcy by finding a California bankruptcy attorney who knows all the ins and outs of the bankruptcy code. The writers of the bankruptcy code made it so that help is available in almost every scenario you can imagine. However, only an experienced Peck Law Group bankruptcy lawyer can truly help you find the perfect solution to your financial situation.

Continue reading "How Are Home Equity Lines Treated In A Chapter Seven Bankruptcy?" »

Types of bankruptcy:

One might have heard the words Chapter 7 or Chapter 11 but, what are they?

These are actually the type of bankruptcy which is named after the title chapter of the federal bankruptcy act. Below given are the three common type of bankruptcy available.

Chapter 7:

Chapter 7 is also called as liquidation bankruptcy. In the chapter 7 bankruptcy rules, all assets and the non exempt properties if they exist are turned to a trustee for converting them into cash, so they can pay it to the creditors. In return of this the debtor will receive Chapter 7 discharge which will release all the debts from his accounts. To check whether a person is eligible for filing chapter 7 or not, he has to give Chapter 7 Bankruptcy Means Test. This test is a formula which is designed to keep away the filers of higher income from filing it.

Chapter 11

This bankruptcy is normally used for business and it's not an option for individual consumer. This type of bankruptcy gives business an opportunity to reorganize the business, restructure the debts and get out from it. It's also expensive to pursue chapter 11 bankruptcy.

Chapter 13

Chapter 13 bankruptcy is also called as mini chapter 11 because it also allows few qualified individuals and small proprietary business to file it. Chapter 13 bankruptcy enables a debtor to retain his assets which would or else be liquidate by chapter 7 trustees.

According to chapter 13 bankruptcy information, one can keep his home and car under chapter 7 or chapter 13. Though there are few cases in which it would not allow to keep the rental properties, gun collections etc. but if a person files for chapter 13 bankruptcy than he can keep his luxurious items.

Continue reading "What Are The Different Types of Bankruptcy?" »

People can file either Chapter 7 or Chapter 13 bankruptcy. Chapter 7 discharges (eliminates) debt. Chapter 13 creates a payment plan to repay debt. To file Chapter 7, filers must pass a "means test" showing they do not have enough income to repay their debt. The bankruptcy reform law tried to discourage this type of filing, but Chapter 7 filings were up by 42 percent in 2009. In July, Chapter 7 accounted for 75 percent of bankruptcy filings. Know that occasionally, student loans are discharged, but it takes a special process to prove undue hardship. The process can be expensive and difficult says California Bankruptcy Attorney Steven C. Peck.

Whatever you do, know that you are not alone. Repaying student loans can be difficult and challenging, particularly if you are among the many unemployed or underemployed Americans. Ultimately, an education can be a valuable investment, but be mindful of the impact large student loans will have on your future budget. If you are burdened with large student loans, remain positive about your opportunities and seek out as much help as you can to eliminate your student loan debt.

Continue reading "Student Loans May Be Dischargeable In Bankruptcy If You Can Prove Hardship" »

No, you don't have to be a resident. If you are a non-citizen, but have a Social Security card or a Tax ID, you can file a bankruptcy. If you don't have a United States ID, but own property in the U.S., you can still file a bankruptcy.

Continue reading "Do I Need to be a Citizen of The United States of America to File a Bankruptcy?" »

Yes. There are certain debts that are NOT dischargeable in bankruptcy. Generally speaking, the following debts will not be discharged: taxes; spousal and child support; debts arising out of willful misconduct and or malicious misconduct by the debtor; liability for injury or death from driving while intoxicated; nondischargeable debts from a prior bankruptcy; student loans and criminal fines, penalties and forfeitures.

Those debts which are secured will be discharged, however, expect the creditor to take the necessary legal steps to take back the property. In most cases if the debtor's equity interest in the property is exempt, the debtor may retain the property by redemption or reaffirmation.

Continue reading "Are There Any Debts That I Can't Wipe Out in Bankruptcy?" »

Under some circumstances once the bankruptcy proceedings have started, special motion can be filed to remove certain liens. It will take a bankruptcy court order to remove them. This is a complicated area of the bankruptcy law and an attorney should be consulted. However, here are the guidelines for removing tax liens:

You can discharge (wipe out) debts for federal income taxes in Chapter 7 bankruptcy only if all of these five conditions are true:

1. The IRS has not recorded a tax lien against your property. (If all other conditions are met, the taxes may be discharged, but even after your bankruptcy, the lien remains against all property you own, effectively giving the IRS a way to collect.)
2. You didn't file a fraudulent return or try to evade paying taxes.
3. The liability is for a tax return (not a Substitute or Return) actually filed at least two years before you file for bankruptcy.
4. The tax return was due at least three years ago.
5. The taxes were assessed (you received a notice of assessment of federal taxes from the IRS) at least 240 days (eight months) before you file for bankruptcy. (11 U.S.C. §§ 523(a)(1) and (7).)

Continue reading "Will the Filing of A Bankruptcy Petition Remove A Tax Lien?" »

Yes. However, a home is an asset usually secured by a deed of trust. The lender is entitled to apply to the court for relief from the automatic stay, the order preventing creditor action by virtue of the bankruptcy. Depending upon several factors, you may be able to prolong a foreclosure until you have received your discharge from bankruptcy. You usually may have to make a deal with the lender in order to keep a home that is in foreclosure.

Continue reading "Will Bankruptcy Stop A Foreclosure?" »

Dependent upon which exemption scheme is selected and your circumstances, you may exempt up to $100,000 in equity. for real estate in your jurisdiction. When calculating your equity you should use a value that is based upon a forced liquidation as opposed to the best selling conditions to arrive at a value for your home. Once you determine this value, subtract the amount owed plus selling and transfer costs from the value to calculate the equity.

As for personal property, in California, you are permitted exemptions for a variety of personal property. These include:

* automobiles,
* household furnishings and personal effects,
* jewelry,
* tools of the trade,
* retirement plans,
* unmatured life insurance,
* personal injury awards,
* earnings,
* animals and
* other miscellaneous property

The value of each exemption and which exemptions can be used are determined by the statutory exemption scheme is selected. Again, state laws vary.

Continue reading "Exemptions In Bankruptcy" »

All property of the debtor at the time of the filing (and certain other property to be received in the future) becomes the property of the bankruptcy estate once bankruptcy is filed. This means that the bankruptcy trustee will take control of this property for purposes of satisfying the creditors. HOWEVER, there is certain property which is either excluded or exempt which the debtor will be able to keep.

Property or asset exemption are determined based upon your situation, income and the laws of your state. The best way to determine which property to keep requires a detailed analysis of your situation.

Continue reading "Real and Personal Property May Be Exempt From Creditors After Filing For Bankruptcy Protection" »