Bankruptcy court is a special court that handles all types of bankruptcy cases. You can file your petition regarding such cases in this type of a court. These courts have specially been established for this very purpose. It has the final authority with regard to the judgment related to your case. The court looks into several factors and come to a decision that is not very hard for the debtor. At the same time, the creditors also get their money back. However, there are several factors that you need to know while you are planning to avail bankruptcy help. For example, you must know whether getting declared as insolvent will stop an eviction action or foreclosure. Always remember, when it comes to making the best use of your case, education is the key. You have to be well informed.
Does Getting Bankrupt Will Stop An Eviction Action?
If you are filing your petition with the intention to stop the eviction action, the bankruptcy court will consider it a fraudulent act - an abuse of chapter 7. However, if it was not your intention and your filing was genuine, there are chances that it will indeed stop the eviction action. However, it is imperative that you know that such things will only delay the inevitable. If you are the owner of the property, you are entitled to possession of your property. Till the time you get your discharge from insolvency, you can be allowed to remain in the property. On the other hand, if you are found guilty of the abuse of chapter 7, filing bankruptcy will only put you into a much deeper problem, as the court will impose other legal and monetary sanctions on you. You must know at this point that after the inclusion of the new laws, almost no loopholes are left. If you try some fraudulent act, you are quite likely to pay heavily for the same. So, you are recommended to play it safe. Be genuine.
Does Getting Bankrupt Stop A Foreclosure?
In normal circumstances, then the answer is yes. Once the bankruptcy court imposes the automatic stay, it is likely to stop a foreclosure. However, since the properties are usually secured by a deed of trust, the mortgage company retains the option to apply and the court may grant them relief from the legal stay. However, there are several factors in this regard that are taken into consideration. In usual cases, as per the new bankruptcy laws, in order to keep the home that is in foreclosure, it is mandatory for you to make a deal with the note holder.
Very few people know that filing a petition will also stop a wage attachment. What is more, it is also important for you to understand the automatic stay imposed by the bankruptcy court will also stop most of the civil judgments. This legal stay remains in place during the complete proceedings of your case.
Saturday, March 29, 2008
Bankruptcy - Myths and Facts
There are many myths associated with bankruptcy. It is in fact not that scary, as people have considered it to be. The credit for this popularized scariness goes to the several misconceptions that are hovering around this financial step. Let me give you a brief insight into some of those myths.
Myth 1: Filing Bankruptcy: Everyone Will Come To Know
Most people think that when they file for bankruptcy, everybody will come to know about it. Well, it is just a misconception, as until you do not tell anybody specifically about that, it is very unlikely that others will get to know that you are filing bankruptcy. The people who know about this fact include your creditors only. Obviously, you cannot hide this fact from them. However, if you are a major corporation or a prominent person, and media is giving special coverage to your case, you certainly get nothing much to do to keep the proceedings a secret. In normal scenario, despite the fact that such cases are public proceedings, does not mean that your case will be publicized. It is very important for you to understand that you are not the only person who is filing for bankruptcy. There are thousands of others as well. Therefore, it is very unlikely for every case to get the attention of public. No media has enough time, money, work force, or even interest to cover all of these cases. Even publications do not have much space.
Myth 2: Filing under chapter 7 means all debts will be wiped out
Another popular misconception is that, filing under chapter 7 bankruptcy helps you wipe out all kinds of debts completely. The laws pertaining to the same do not allow discharging or erasing some specific types of debts. These specific types of debts may include debts incurred as the result of fraud, government-guaranteed or government-issued student loans, debt related to alimony, debts related to child support etc. What is more, if some legal settlements are also under process, such amounts are also not dischargeable. It means, if in some earlier legal cases, you have been order to pay a specific amount of sum to the person who had sued you, you will be liable to pay the same even after you have been discharged bankruptcy.
Myth 3: All Your Assets Will Be Sold Off If You File Under Chapter 7
Likewise, people also have the misconception that if they file under chapter 7 and are granted bankruptcy, all their assets and properties will be sold off completely. In fact, many people who need to file under this chapter do not do so because of this fear that they will lose everything. However, you will be glad to know that you will not lose everything even if you file under chapter 7. The laws pertaining to the same also provides a provision of exemptions to certain kinds of properties, which may include clothing, household goods, and money in qualified retirement plans, vehicles, residential properties, and much more.
Overall, there are many myths associated with bankruptcy.
Myth 1: Filing Bankruptcy: Everyone Will Come To Know
Most people think that when they file for bankruptcy, everybody will come to know about it. Well, it is just a misconception, as until you do not tell anybody specifically about that, it is very unlikely that others will get to know that you are filing bankruptcy. The people who know about this fact include your creditors only. Obviously, you cannot hide this fact from them. However, if you are a major corporation or a prominent person, and media is giving special coverage to your case, you certainly get nothing much to do to keep the proceedings a secret. In normal scenario, despite the fact that such cases are public proceedings, does not mean that your case will be publicized. It is very important for you to understand that you are not the only person who is filing for bankruptcy. There are thousands of others as well. Therefore, it is very unlikely for every case to get the attention of public. No media has enough time, money, work force, or even interest to cover all of these cases. Even publications do not have much space.
Myth 2: Filing under chapter 7 means all debts will be wiped out
Another popular misconception is that, filing under chapter 7 bankruptcy helps you wipe out all kinds of debts completely. The laws pertaining to the same do not allow discharging or erasing some specific types of debts. These specific types of debts may include debts incurred as the result of fraud, government-guaranteed or government-issued student loans, debt related to alimony, debts related to child support etc. What is more, if some legal settlements are also under process, such amounts are also not dischargeable. It means, if in some earlier legal cases, you have been order to pay a specific amount of sum to the person who had sued you, you will be liable to pay the same even after you have been discharged bankruptcy.
Myth 3: All Your Assets Will Be Sold Off If You File Under Chapter 7
Likewise, people also have the misconception that if they file under chapter 7 and are granted bankruptcy, all their assets and properties will be sold off completely. In fact, many people who need to file under this chapter do not do so because of this fear that they will lose everything. However, you will be glad to know that you will not lose everything even if you file under chapter 7. The laws pertaining to the same also provides a provision of exemptions to certain kinds of properties, which may include clothing, household goods, and money in qualified retirement plans, vehicles, residential properties, and much more.
Overall, there are many myths associated with bankruptcy.
Tuesday, March 25, 2008
Bankruptcy Laws - Some Misconceptions
The bankruptcy laws are quite complicated and that has led to several misinterpretations among people. Especially, after the introduction of the new laws, these laws have become more complex than they were previously. Since the new laws are in the favor of creditors, several debtors have taken these in the wrong spirit. If you are planning to file a court petition under chapter 7 or chapter 13 bankruptcy, it is very important for you to comprehend the basic understanding of the laws so that you can make an informed decision. The attorney will certainly be a great help to you, but the more informed you are, the better are your chances of getting the judgment in your favor. Misconceptions regarding the laws will only make things much more difficult for you. Let us go exploring some of the misconceptions and the reality behind them.
Misconception 1 - After Being Declared As Bankrupt By The Court, The Debtor Will Lose His Or Her Job
The most common misunderstanding about insolvency is that once a person is hence declared, he or she is socially rejected. This is not true at all. Bankruptcy laws prohibit such discrimination. There can be genuine reasons for a person filing for such an unfortunate thing. It should not in any way mean that they are not to be provided with another chance to get their financial life back on track. It is very important for you to understand that the bankruptcy code has been designed to achieve two objectives – protect the debtors and help the creditors get their money back. Therefore, if your employer is firing you just because you have been declared as bankrupt, they are acting against the law. You can file a case against them and fight for your rights.
Misconception 2 - Filing A Petition For Insolvency Means That You Will Be Sent To Jail
Many people think that as per the bankruptcy laws, a person must be sent to jail if he files for it. It is also not true at all, a sheer misapprehension. It is only because of the unawareness of people that they think about such drastic things. It is very important for you to understand that filing bankruptcy will not put you in jail. However, if you are caught in some fraudulent act regarding your case, you might be sent to jail as per the criminal act. But, if your case is genuine and your purpose of filing your petition is just to get protection from the court so that you could get another chance to get your financial life back on track, you will not be sent to jail. Always remember, there are no debtors prisons in the United States.
There are several other misconceptions as well. Therefore, if you want to make the best use of the bankruptcy laws, it is very important for you to be well informed.
Misconception 1 - After Being Declared As Bankrupt By The Court, The Debtor Will Lose His Or Her Job
The most common misunderstanding about insolvency is that once a person is hence declared, he or she is socially rejected. This is not true at all. Bankruptcy laws prohibit such discrimination. There can be genuine reasons for a person filing for such an unfortunate thing. It should not in any way mean that they are not to be provided with another chance to get their financial life back on track. It is very important for you to understand that the bankruptcy code has been designed to achieve two objectives – protect the debtors and help the creditors get their money back. Therefore, if your employer is firing you just because you have been declared as bankrupt, they are acting against the law. You can file a case against them and fight for your rights.
Misconception 2 - Filing A Petition For Insolvency Means That You Will Be Sent To Jail
Many people think that as per the bankruptcy laws, a person must be sent to jail if he files for it. It is also not true at all, a sheer misapprehension. It is only because of the unawareness of people that they think about such drastic things. It is very important for you to understand that filing bankruptcy will not put you in jail. However, if you are caught in some fraudulent act regarding your case, you might be sent to jail as per the criminal act. But, if your case is genuine and your purpose of filing your petition is just to get protection from the court so that you could get another chance to get your financial life back on track, you will not be sent to jail. Always remember, there are no debtors prisons in the United States.
There are several other misconceptions as well. Therefore, if you want to make the best use of the bankruptcy laws, it is very important for you to be well informed.
Bankruptcy Information - Frequently Asked Questions
When it comes to bankruptcy information, it is imperative that you understand that the more informed you are, the more accurate would be the made decisions. Following are some of the most frequently asked questions in this regard.
How Does Bankruptcy Affect The Obligations Of A Co-Signer?
As per bankruptcy information, if you are a co-signer, you will not be liable to pay the debts that are dischargeable. However, do understand that you will be held primarily responsible for the debts that are non-dischargeable. What is more, if you are filing bankruptcy with a co-signer, do not forget to list the co-signer as a creditor in your schedule. You should always remember that they have a contingent claim against you. As a co-signer, you will be liable to pay all the non-dischargeable debts, such as student loans, certain taxes etc.
Does Bankruptcy Allow The Debtor To Keep His Or Her House?
The bankruptcy information regarding homestead exemptions varies from state to state. Every state has different laws. However, each state allows exemptions of homestead properties up to a certain amount. Since laws also give you some liberty to choose your exemption scheme, the maximum amount exemptible under this section depends upon your selection of scheme and of course your specific circumstances. Overall, you may exempt a maximum of $100,000 in equity. In order to make the best use of bankruptcy exemptions in this regard, you are advised to calculate the equity of your house using a value that must be based upon the forced liquidation against the best selling conditions to arrive at your house’s real value. Now that you know the value, try deducting the total amount that you owe plus selling and transfer costs from this value. This is the right method using which you will be able to calculate the equity of your home. When it comes to bankruptcy information, you must know that the value of liquidated properties is usually very low in a depressed market. Since every state has defined the homestead exemptions in different ways, you are also advised to hire a bankruptcy lawyer. A lawyer is an expert individual who will help you make the best use of the various options available to you. They will do their best to help you keep your home even after the court has declared you as bankrupt.
Can The Debtor Keep The Credit Cards After Being Declared As Bankrupt?
There are certain circumstances in which the bankruptcy court may allow you to keep the credit cards. The court takes several factors into consideration before giving a judgment in this regard. Some of these factors include your ability to pay the present and future credit card debt, the overall balance of the credit cards at the time of filing your petition etc. As per bankruptcy information, the court also tries to know what the credit card company is willing to do.
How Does Bankruptcy Affect The Obligations Of A Co-Signer?
As per bankruptcy information, if you are a co-signer, you will not be liable to pay the debts that are dischargeable. However, do understand that you will be held primarily responsible for the debts that are non-dischargeable. What is more, if you are filing bankruptcy with a co-signer, do not forget to list the co-signer as a creditor in your schedule. You should always remember that they have a contingent claim against you. As a co-signer, you will be liable to pay all the non-dischargeable debts, such as student loans, certain taxes etc.
Does Bankruptcy Allow The Debtor To Keep His Or Her House?
The bankruptcy information regarding homestead exemptions varies from state to state. Every state has different laws. However, each state allows exemptions of homestead properties up to a certain amount. Since laws also give you some liberty to choose your exemption scheme, the maximum amount exemptible under this section depends upon your selection of scheme and of course your specific circumstances. Overall, you may exempt a maximum of $100,000 in equity. In order to make the best use of bankruptcy exemptions in this regard, you are advised to calculate the equity of your house using a value that must be based upon the forced liquidation against the best selling conditions to arrive at your house’s real value. Now that you know the value, try deducting the total amount that you owe plus selling and transfer costs from this value. This is the right method using which you will be able to calculate the equity of your home. When it comes to bankruptcy information, you must know that the value of liquidated properties is usually very low in a depressed market. Since every state has defined the homestead exemptions in different ways, you are also advised to hire a bankruptcy lawyer. A lawyer is an expert individual who will help you make the best use of the various options available to you. They will do their best to help you keep your home even after the court has declared you as bankrupt.
Can The Debtor Keep The Credit Cards After Being Declared As Bankrupt?
There are certain circumstances in which the bankruptcy court may allow you to keep the credit cards. The court takes several factors into consideration before giving a judgment in this regard. Some of these factors include your ability to pay the present and future credit card debt, the overall balance of the credit cards at the time of filing your petition etc. As per bankruptcy information, the court also tries to know what the credit card company is willing to do.
Filing Bankruptcy - Understanding Non-Dischargeable Debts
Many people have the misconception that filing bankruptcy will erase all their liabilities. There would be no obligation to pay the amounts that they owe to their various creditors. However, this not true at all. There are certain kinds of loans that have been considered as non-dischargeable ones. Filing under chapter 7 bankruptcy norms will eliminate all kinds of debts but you would still owe the non-dischargeable ones. Depending upon your specific case and the judgment of court, there can be a wide range of such debts.
Following are some of the most common ones.
Student Loans
No matter for whatever reason is that you have been forced towards filing bankruptcy, educational based debts such as student loans cannot be exempted. These may include loans for board, room, books, tuition etc. Even if the court grants your petition and orders for the liquidation of all your assets, you will still be liable to pay these loans off. However, there is a rare exception, as per which if you are able to prove the bankruptcy court that the loans will cause undue hardship for you, they may be discharged as well. For example, you may have to show some permanent disability that prevents you from getting a job and living a normal financial life. If you are capable of proving such aspects, the court may order to discharge the student loans.
Debts Owed To The Court
If you owe some court fees, such debts are also not dischargeable while you are filing bankruptcy under chapter 7. Likewise, because of any criminal activity, if you owe a certain amount to the victim or the court, such amounts are also not dischargeable. Any kind of Court imposed restitution cannot be discharged. In all cases, all such debts come under the title of non-dischargeable.
Debts Associated With A Divorce Or Marital Case
If you owe a certain amount associated with a divorce or marital decree by the court, such debts also cannot be discharged under chapter 7 of the bankruptcy code. Some people have the misunderstanding that these amounts can be discharged if the ex-spouse does not have any objection, which is not true. Even if the ex-spouse does not object, these amounts come under non-dischargeable debts while you are filing bankruptcy for straight liquidation. Therefore, while you are planning to file your petition, you must keep in mind that you will not be able to discharge the debts associated with a divorce or marital case.
Certain Kind Of Taxes
All kinds of taxes except the following are non-dischargeable as per the new bankruptcy laws. Even if you are declared as bankrupt, you will still be liable to pay these taxes.
Taxes measured by gross receipts or income taxes
If the taxes are accurate and no omissions or errors in the return are found in the IRS
If the taxes are older than three tax years
What is more, if you owe an amount associated with Alimony and child support, these are also non-dischargeable while you are filing bankruptcy for complete liquidation.
Following are some of the most common ones.
Student Loans
No matter for whatever reason is that you have been forced towards filing bankruptcy, educational based debts such as student loans cannot be exempted. These may include loans for board, room, books, tuition etc. Even if the court grants your petition and orders for the liquidation of all your assets, you will still be liable to pay these loans off. However, there is a rare exception, as per which if you are able to prove the bankruptcy court that the loans will cause undue hardship for you, they may be discharged as well. For example, you may have to show some permanent disability that prevents you from getting a job and living a normal financial life. If you are capable of proving such aspects, the court may order to discharge the student loans.
Debts Owed To The Court
If you owe some court fees, such debts are also not dischargeable while you are filing bankruptcy under chapter 7. Likewise, because of any criminal activity, if you owe a certain amount to the victim or the court, such amounts are also not dischargeable. Any kind of Court imposed restitution cannot be discharged. In all cases, all such debts come under the title of non-dischargeable.
Debts Associated With A Divorce Or Marital Case
If you owe a certain amount associated with a divorce or marital decree by the court, such debts also cannot be discharged under chapter 7 of the bankruptcy code. Some people have the misunderstanding that these amounts can be discharged if the ex-spouse does not have any objection, which is not true. Even if the ex-spouse does not object, these amounts come under non-dischargeable debts while you are filing bankruptcy for straight liquidation. Therefore, while you are planning to file your petition, you must keep in mind that you will not be able to discharge the debts associated with a divorce or marital case.
Certain Kind Of Taxes
All kinds of taxes except the following are non-dischargeable as per the new bankruptcy laws. Even if you are declared as bankrupt, you will still be liable to pay these taxes.
What is more, if you owe an amount associated with Alimony and child support, these are also non-dischargeable while you are filing bankruptcy for complete liquidation.
Personal Bankruptcy - Understanding Homestead Exemptions
When you file for personal bankruptcy, you certainly do not want to lose your home. You see this hard step as an opportunity to get rid of the mounting debts that owe to various creditors. You certainly do not see insolvency as the end of your financial life. Your intention by taking this unfortunate step is to give a fresh start to your non-existent fiscal life. No matter what the reason is that forced you towards filing bankruptcy, and how different the laws are in different states, every state provides certain homestead exemptions to the debtors. In order to make the best use of these exemptions, you must be aware of the different state laws regarding the same.
What Is Homestead Exemption
A homestead exemption is a provision in the law that protects the equity of your homestead properties up to a certain limit. Different states have defined this exemption in separate ways. The maximum limit of exemption varies from state to state. However, if the equity of your residential properties is less than the limit specified under the homestead exemptions for personal bankruptcy, you can easily protect your home from the terrifying claws of your creditors. Your house, in that case, will not be sold in order to pay the creditors’ bills.
Different State Laws
You should know that the limit specified for such exemptions vary from one state to another. Every state follows the same code of laws, but when it comes to defining exemptions and determining limits for the same, every state has the authority to define the same in different ways. Some states like Florida are very liberal for the debtors while some others have defined the exemptions in favor of the creditors.
New Changes
However, before the introduction of the new bankruptcy laws on October 2005, there had been no specified limit for such exemptions. It is only after the inclusion of these new laws that upper limits were placed on the amount of equity that could be protected. No matter how generous a particular state is in defining the homestead exemptions, there is an upper limit that you can exempt under personal bankruptcy. The amount of exemption is determined by the state. That would be the state where you have been living for the past two years before filing your petition.
Overall, we can see that it could be quite a complicated task to make the best use of the exemptions in your favor. That is the reason you are advised to hire an attorney to help you with this. But, whether you are hiring a bankruptcy attorney to handle your case or not, you are recommended to attain the basic understanding of certain exemptions, including the homestead ones.
Your home is an important asset for you and you certainly do not want to lose the same. That is the reason why you are advised strongly to understand all about property exemptions before you file for personal bankruptcy.
What Is Homestead Exemption
A homestead exemption is a provision in the law that protects the equity of your homestead properties up to a certain limit. Different states have defined this exemption in separate ways. The maximum limit of exemption varies from state to state. However, if the equity of your residential properties is less than the limit specified under the homestead exemptions for personal bankruptcy, you can easily protect your home from the terrifying claws of your creditors. Your house, in that case, will not be sold in order to pay the creditors’ bills.
Different State Laws
You should know that the limit specified for such exemptions vary from one state to another. Every state follows the same code of laws, but when it comes to defining exemptions and determining limits for the same, every state has the authority to define the same in different ways. Some states like Florida are very liberal for the debtors while some others have defined the exemptions in favor of the creditors.
New Changes
However, before the introduction of the new bankruptcy laws on October 2005, there had been no specified limit for such exemptions. It is only after the inclusion of these new laws that upper limits were placed on the amount of equity that could be protected. No matter how generous a particular state is in defining the homestead exemptions, there is an upper limit that you can exempt under personal bankruptcy. The amount of exemption is determined by the state. That would be the state where you have been living for the past two years before filing your petition.
Overall, we can see that it could be quite a complicated task to make the best use of the exemptions in your favor. That is the reason you are advised to hire an attorney to help you with this. But, whether you are hiring a bankruptcy attorney to handle your case or not, you are recommended to attain the basic understanding of certain exemptions, including the homestead ones.
Your home is an important asset for you and you certainly do not want to lose the same. That is the reason why you are advised strongly to understand all about property exemptions before you file for personal bankruptcy.
Limits To Automatic Stay As Per The New Bankruptcy Laws
As per the new bankruptcy laws, the automatic stay has now been defined in a different way for separate situations. However, before we look into those specific circumstances, it is important for you to understand what this legal stay means and what are its applications.
Automatic Stay And Its Applications
If you owe certain debts to a creditor and do not repay the same in a timely manner, the creditor may try to harass you for the repayment. The collection call agencies are usually very good in this regard. Creditors want their money back, generally at any cost. When they find that you have stopped making the repayment, they hire these agencies. The collection agencies will harass you through mail or over the phone. However, filing bankruptcy brings an automatic legal stay that instantly stops all collection proceedings against you. As soon as you file your application, the creditors are legally restricted to stop even the foreclosure proceedings. What is more, this legal stay also stops the lenders from going ahead with any pending lawsuits against you. They are also lawfully forced to stop garnishing your wages. However, as per the new bankruptcy laws, the level of protection varies depending upon the specific cases. Let me give you a brief insight into the same.
Statement Of Intent
In case of a secured debt, the court requires you to submit a statement of intent within 30 days of filing your case. In this statement, you have to explain your plans to deal with such debts. If you fail to submit this statement to the bankruptcy court within thirty days, the automatic stay will be taken away, but only with regard to the secured creditors. However, as per the new bankruptcy laws, the trustee still has the right to ask the courts to extend the automatic stay if they think it proper.
Second Time Filing
If it is the second time you are filing under chapter 7 or 13 within a year, the court will not consider your second attempt in good faith. It will provide you limited automatic stay that is usually not more than 30 days. However, as per the new bankruptcy laws, if within this period, you prove that your filing is genuine, the court may rethink about extending the stay.
Third Time Filing
However, if it is third or fourth time that you are filing your petition, the court will not allow you an automatic stay at all. At the first look, the frequent filing of bankruptcy cases does not look genuine. Therefore, if you are filing for the third or fourth time in a row, you will have to prove to the court that the reason you are filing for chapter 7 or chapter 13 bankruptcy is genuine and in good faith.
However, as per the new bankruptcy laws, such proceedings usually takes time as you would have to convince the court about that the validity of your repeated filings and you may not be able to enjoy the best advantages of the automatic stay.
Automatic Stay And Its Applications
If you owe certain debts to a creditor and do not repay the same in a timely manner, the creditor may try to harass you for the repayment. The collection call agencies are usually very good in this regard. Creditors want their money back, generally at any cost. When they find that you have stopped making the repayment, they hire these agencies. The collection agencies will harass you through mail or over the phone. However, filing bankruptcy brings an automatic legal stay that instantly stops all collection proceedings against you. As soon as you file your application, the creditors are legally restricted to stop even the foreclosure proceedings. What is more, this legal stay also stops the lenders from going ahead with any pending lawsuits against you. They are also lawfully forced to stop garnishing your wages. However, as per the new bankruptcy laws, the level of protection varies depending upon the specific cases. Let me give you a brief insight into the same.
Statement Of Intent
In case of a secured debt, the court requires you to submit a statement of intent within 30 days of filing your case. In this statement, you have to explain your plans to deal with such debts. If you fail to submit this statement to the bankruptcy court within thirty days, the automatic stay will be taken away, but only with regard to the secured creditors. However, as per the new bankruptcy laws, the trustee still has the right to ask the courts to extend the automatic stay if they think it proper.
Second Time Filing
If it is the second time you are filing under chapter 7 or 13 within a year, the court will not consider your second attempt in good faith. It will provide you limited automatic stay that is usually not more than 30 days. However, as per the new bankruptcy laws, if within this period, you prove that your filing is genuine, the court may rethink about extending the stay.
Third Time Filing
However, if it is third or fourth time that you are filing your petition, the court will not allow you an automatic stay at all. At the first look, the frequent filing of bankruptcy cases does not look genuine. Therefore, if you are filing for the third or fourth time in a row, you will have to prove to the court that the reason you are filing for chapter 7 or chapter 13 bankruptcy is genuine and in good faith.
However, as per the new bankruptcy laws, such proceedings usually takes time as you would have to convince the court about that the validity of your repeated filings and you may not be able to enjoy the best advantages of the automatic stay.
A Deep Insight Into Bankruptcy Laws
Bankruptcy laws, the name itself sounds like a big, bad scary thing. Well, these laws are not at all scary. In fact, if you have a closer look into the same, you will find that they have specifically designed to benefit the debtors. However, at the same time, they have also been designed to prevent debtors from committing fraud and misusing the laws. If you are considering filing bankruptcy, there are lots of things that you need to be aware of. The more informed you are, the better are your chances of having a favorable judgment from the court.
How Many Times One Can File For Bankruptcy?
It is not like you can file for bankruptcy again and again. There are certain restrictions that you need to follow. There must be a specific length of period between two filings of such cases by the same person or business. Earlier the restrictions were a bit easier, but after the introduction of the new laws in October 2005, things have become stricter for the debtors. As per the new laws, if you are filing for chapter 7 bankruptcy this year, you will be able to file under the same chapter only after eight years, that too, only if you are truly in a very deep debt trouble and qualify to file under this chapter. The length of the period required between two chapter 13 filings is two years. Likewise, if you have filed under chapter 7 now, you will have to wait for at least four years for a chapter 13 filing.
A Word Regarding Multiple Bankruptcies
However, it is very important for you to understand that multiple bankruptcies are very bad and you must avoid this from happening. It has been found that, sometimes people take bankruptcy laws as an easy solution to wipe out all the debts they owe to the various creditors, and they get into the habit of filing for bankruptcy repeatedly. It is not an exaggeration to say that they are sick people, and it is very much like committing a fraud. What is more, it is of no good for your financial life as well. Your credit report will get the worst negative you ever had. You may not achieve a smooth financial life ever again. You will have to take another birth to achieve the same, so you had better not do this.
Borrowing Lots Of Money Just Before Filing
Sometimes, people try to be over smart, and in order to take advantage of the loopholes of the bankruptcy laws, they try borrowing lots of money just before filing. Always remember that such activities come under fraud. What is more, the recent law changes have left no scope for such frauds. Therefore, if you are trying such things, be very alert. It can put you into a much deeper trouble, which is worse than having a debt problem.
Overall, it is always prudent to be fully aware of all the aspects of bankruptcy laws. It will help you to make right decisions.
How Many Times One Can File For Bankruptcy?
It is not like you can file for bankruptcy again and again. There are certain restrictions that you need to follow. There must be a specific length of period between two filings of such cases by the same person or business. Earlier the restrictions were a bit easier, but after the introduction of the new laws in October 2005, things have become stricter for the debtors. As per the new laws, if you are filing for chapter 7 bankruptcy this year, you will be able to file under the same chapter only after eight years, that too, only if you are truly in a very deep debt trouble and qualify to file under this chapter. The length of the period required between two chapter 13 filings is two years. Likewise, if you have filed under chapter 7 now, you will have to wait for at least four years for a chapter 13 filing.
A Word Regarding Multiple Bankruptcies
However, it is very important for you to understand that multiple bankruptcies are very bad and you must avoid this from happening. It has been found that, sometimes people take bankruptcy laws as an easy solution to wipe out all the debts they owe to the various creditors, and they get into the habit of filing for bankruptcy repeatedly. It is not an exaggeration to say that they are sick people, and it is very much like committing a fraud. What is more, it is of no good for your financial life as well. Your credit report will get the worst negative you ever had. You may not achieve a smooth financial life ever again. You will have to take another birth to achieve the same, so you had better not do this.
Borrowing Lots Of Money Just Before Filing
Sometimes, people try to be over smart, and in order to take advantage of the loopholes of the bankruptcy laws, they try borrowing lots of money just before filing. Always remember that such activities come under fraud. What is more, the recent law changes have left no scope for such frauds. Therefore, if you are trying such things, be very alert. It can put you into a much deeper trouble, which is worse than having a debt problem.
Overall, it is always prudent to be fully aware of all the aspects of bankruptcy laws. It will help you to make right decisions.
New Bankruptcy Laws - Understanding The Changes
The new bankruptcy laws were introduced on 17 October 2005. Since their entry, these laws have become all the more complicated. However, the cause of most of the complications is nothing but the general unawareness. That is the reason why it is always recommended to hire an attorney while you are filing a petition in this regard. The bankruptcy lawyer are experts in this field and they know how to use the laws in your favor. They will also help you understand the laws and differentiate the same from any misconceptions.
No One Will Know About Your Bankruptcy
Debtors usually have the fear that if the court declares them insolvent, people will come to know about this, which will eventually make their social life harder. It is imperative for you to understand that there is no such provision in the new bankruptcy laws that advertises the news of your going belly-up to your employer and others in your locality. Unless you are a renowned person and a public figure, no one from the media will be interested in your case. Under normal circumstances, only your creditors and others involved in your case will get to know about your insolvency. People who are not well aware of these aspects fear filing bankruptcy because they think if their employer comes to know about this, they will be fired from the job. If your boss is not your creditor, it is highly unlikely that they will ever come to know about this. And, whichever is the case, it is important for you to understand that the new bankruptcy laws are against any such discrimination. It means that no employer can fire an employee just because they were declared insolvent. Always remember that impoverishment is not a crime. It is just an unfortunate phase in one’s financial life.
Does Bankruptcy Remove A Lien?
Some people have the confusion whether being declared as bankrupt by the bankruptcy court removes a lien. Well, there are certain circumstances under which once the proceedings of your case are started, you are allowed to file a special motion to remove certain liens. If the court orders in your favor, these liens can be removed. However, do understand that such issues are usually very complex, especially after the inclusion of the new bankruptcy laws. Therefore, you are recommended to avail legal services of an expert attorney in this regard.
This way, we can see that the reason why many people fear from filing their petition even if they are wholly eligible is nothing else but their misapprehensions. By saying that, I do not mean that insolvency is an easy way to get rid of all your debts. No, it is not. But when all doors are closed to you, it is the only and best way to save your fiscal life. It will make your complex financial world a little easier to live in and you will get another chance to exercise monetary control. Just make sure that you are aware of the new bankruptcy laws.
No One Will Know About Your Bankruptcy
Debtors usually have the fear that if the court declares them insolvent, people will come to know about this, which will eventually make their social life harder. It is imperative for you to understand that there is no such provision in the new bankruptcy laws that advertises the news of your going belly-up to your employer and others in your locality. Unless you are a renowned person and a public figure, no one from the media will be interested in your case. Under normal circumstances, only your creditors and others involved in your case will get to know about your insolvency. People who are not well aware of these aspects fear filing bankruptcy because they think if their employer comes to know about this, they will be fired from the job. If your boss is not your creditor, it is highly unlikely that they will ever come to know about this. And, whichever is the case, it is important for you to understand that the new bankruptcy laws are against any such discrimination. It means that no employer can fire an employee just because they were declared insolvent. Always remember that impoverishment is not a crime. It is just an unfortunate phase in one’s financial life.
Does Bankruptcy Remove A Lien?
Some people have the confusion whether being declared as bankrupt by the bankruptcy court removes a lien. Well, there are certain circumstances under which once the proceedings of your case are started, you are allowed to file a special motion to remove certain liens. If the court orders in your favor, these liens can be removed. However, do understand that such issues are usually very complex, especially after the inclusion of the new bankruptcy laws. Therefore, you are recommended to avail legal services of an expert attorney in this regard.
This way, we can see that the reason why many people fear from filing their petition even if they are wholly eligible is nothing else but their misapprehensions. By saying that, I do not mean that insolvency is an easy way to get rid of all your debts. No, it is not. But when all doors are closed to you, it is the only and best way to save your fiscal life. It will make your complex financial world a little easier to live in and you will get another chance to exercise monetary control. Just make sure that you are aware of the new bankruptcy laws.
The Role Of A Bankruptcy Trustee
If you are into deep financial trouble and are planning to file for bankruptcy, it is very important for you to be aware of the role of a bankruptcy trustee in this regard. For every case that is filed, the court appoints an impartial trustee. No matter whether you are filing under chapter 7 or chapter 13, you cannot ignore the role of the trustee. In every case, the trustee will represent the creditors. However, it does not mean that the trustee will act always in favor of creditors only. In fact, the main duty of the trustee is to make sure that everything is done as per the laws and as per the judgment of the court.
The Role Of The Trustee
The main duty of the trustee is to represent the creditors. However, this role changes, depending upon the different types of cases and the judgment given by the bankruptcy court. These legal professionals are usually the representatives of the creditors, but depending upon case to case, it is also their duty to keep a watch on the debtor’s action. For example, if it is a chapter-7 case, their duty is to make sure that all the assets and properties of the debaters have been liquidated as per the laws. At the same time, they also work in favor of the debtors, by making sure that they get the properties exceptions as per the specific laws of that particular state regarding the same. On the other hand, if it is a chapter-13 case, the bankruptcy trustee keeps a watch on the debtor’s business activity. In some cases, they even work hand in hand with the debtor in order to ensure smooth and profitable running of the business of the debtor. At the same time, they also keep a watch whether the debtor is religiously working on the repayment plan suggested by the court or not.
How Does The Trustee Work?
There are several ways a bankruptcy trustee carries out its work. However, whatever way they follow, their main objective is always to protect the interest of the creditors. For example, the trustee can distribute the funds to appropriate creditors, object to discharge, or certain exemptions a debtor may claim, collect property of the estate, liquidate nonexempt property in the estate, etc.
The Degree Of Involvement
As said earlier, the degree of involvement of the trustee varies from different types of bankruptcy. For example, since in chapter 7 bankruptcy, the role of the trustee is very limited. In chapter 13, the degree of involvement is much more. Moreover, in chapter 11, their job is multi-layered.
Overall, we can see that the job of the bankruptcy trustee is a balancing act. They do not only have to keep the interests of the creditors in mind, but it is also their duty to provide assistance in the smooth performance of the debtor’s plan. In the United States of America, there is an organization “the United States Trustee” that appoints all these trustees.
The Role Of The Trustee
The main duty of the trustee is to represent the creditors. However, this role changes, depending upon the different types of cases and the judgment given by the bankruptcy court. These legal professionals are usually the representatives of the creditors, but depending upon case to case, it is also their duty to keep a watch on the debtor’s action. For example, if it is a chapter-7 case, their duty is to make sure that all the assets and properties of the debaters have been liquidated as per the laws. At the same time, they also work in favor of the debtors, by making sure that they get the properties exceptions as per the specific laws of that particular state regarding the same. On the other hand, if it is a chapter-13 case, the bankruptcy trustee keeps a watch on the debtor’s business activity. In some cases, they even work hand in hand with the debtor in order to ensure smooth and profitable running of the business of the debtor. At the same time, they also keep a watch whether the debtor is religiously working on the repayment plan suggested by the court or not.
How Does The Trustee Work?
There are several ways a bankruptcy trustee carries out its work. However, whatever way they follow, their main objective is always to protect the interest of the creditors. For example, the trustee can distribute the funds to appropriate creditors, object to discharge, or certain exemptions a debtor may claim, collect property of the estate, liquidate nonexempt property in the estate, etc.
The Degree Of Involvement
As said earlier, the degree of involvement of the trustee varies from different types of bankruptcy. For example, since in chapter 7 bankruptcy, the role of the trustee is very limited. In chapter 13, the degree of involvement is much more. Moreover, in chapter 11, their job is multi-layered.
Overall, we can see that the job of the bankruptcy trustee is a balancing act. They do not only have to keep the interests of the creditors in mind, but it is also their duty to provide assistance in the smooth performance of the debtor’s plan. In the United States of America, there is an organization “the United States Trustee” that appoints all these trustees.
The Role Of A Bankruptcy Trustee
If you are into deep financial trouble and are planning to file for bankruptcy, it is very important for you to be aware of the role of a bankruptcy trustee in this regard. For every case that is filed, the court appoints an impartial trustee. No matter whether you are filing under chapter 7 or chapter 13, you cannot ignore the role of the trustee. In every case, the trustee will represent the creditors. However, it does not mean that the trustee will act always in favor of creditors only. In fact, the main duty of the trustee is to make sure that everything is done as per the laws and as per the judgment of the court.
The Role Of The Trustee
The main duty of the trustee is to represent the creditors. However, this role changes, depending upon the different types of cases and the judgment given by the bankruptcy court. These legal professionals are usually the representatives of the creditors, but depending upon case to case, it is also their duty to keep a watch on the debtor’s action. For example, if it is a chapter-7 case, their duty is to make sure that all the assets and properties of the debaters have been liquidated as per the laws. At the same time, they also work in favor of the debtors, by making sure that they get the properties exceptions as per the specific laws of that particular state regarding the same. On the other hand, if it is a chapter-13 case, the bankruptcy trustee keeps a watch on the debtor’s business activity. In some cases, they even work hand in hand with the debtor in order to ensure smooth and profitable running of the business of the debtor. At the same time, they also keep a watch whether the debtor is religiously working on the repayment plan suggested by the court or not.
How Does The Trustee Work?
There are several ways a bankruptcy trustee carries out its work. However, whatever way they follow, their main objective is always to protect the interest of the creditors. For example, the trustee can distribute the funds to appropriate creditors, object to discharge, or certain exemptions a debtor may claim, collect property of the estate, liquidate nonexempt property in the estate, etc.
The Degree Of Involvement
As said earlier, the degree of involvement of the trustee varies from different types of bankruptcy. For example, since in chapter 7 bankruptcy, the role of the trustee is very limited. In chapter 13, the degree of involvement is much more. Moreover, in chapter 11, their job is multi-layered.
Overall, we can see that the job of the bankruptcy trustee is a balancing act. They do not only have to keep the interests of the creditors in mind, but it is also their duty to provide assistance in the smooth performance of the debtor’s plan. In the United States of America, there is an organization “the United States Trustee” that appoints all these trustees.
The Role Of The Trustee
The main duty of the trustee is to represent the creditors. However, this role changes, depending upon the different types of cases and the judgment given by the bankruptcy court. These legal professionals are usually the representatives of the creditors, but depending upon case to case, it is also their duty to keep a watch on the debtor’s action. For example, if it is a chapter-7 case, their duty is to make sure that all the assets and properties of the debaters have been liquidated as per the laws. At the same time, they also work in favor of the debtors, by making sure that they get the properties exceptions as per the specific laws of that particular state regarding the same. On the other hand, if it is a chapter-13 case, the bankruptcy trustee keeps a watch on the debtor’s business activity. In some cases, they even work hand in hand with the debtor in order to ensure smooth and profitable running of the business of the debtor. At the same time, they also keep a watch whether the debtor is religiously working on the repayment plan suggested by the court or not.
How Does The Trustee Work?
There are several ways a bankruptcy trustee carries out its work. However, whatever way they follow, their main objective is always to protect the interest of the creditors. For example, the trustee can distribute the funds to appropriate creditors, object to discharge, or certain exemptions a debtor may claim, collect property of the estate, liquidate nonexempt property in the estate, etc.
The Degree Of Involvement
As said earlier, the degree of involvement of the trustee varies from different types of bankruptcy. For example, since in chapter 7 bankruptcy, the role of the trustee is very limited. In chapter 13, the degree of involvement is much more. Moreover, in chapter 11, their job is multi-layered.
Overall, we can see that the job of the bankruptcy trustee is a balancing act. They do not only have to keep the interests of the creditors in mind, but it is also their duty to provide assistance in the smooth performance of the debtor’s plan. In the United States of America, there is an organization “the United States Trustee” that appoints all these trustees.
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