Revealed – Chapter 7 Bankruptcy Laws
There are different reasons for filing under chapter 7 bankruptcy laws, with both plus and minus points.
Perhaps the major attraction of the Chapter 7 bankruptcy laws is that it allows the applicant to restart their life debt free and with a “clean slate”. However, the downside is that Chapter 7 results in the liquidation of personal property and valuables, including the family home, as opposed to Chapter 13, where no assets have to be sold.
A Chapter 7 bankruptcy stays on one’s credit record for ten years, as opposed to Chapter 13′s seven.
Once a Chapter 7 bankruptcy has been filed, the individual filing then has the protection of the court by means of an “order of relief” and “automatic stay”.
This means that all creditors are prevented from hounding the individual which is important, particularly if a foreclosure notice has been served.
There are some exceptions to debt that can be legally discharged under any type of bankruptcy, including, but not limited to alimony and outstanding tax demands.
Given that a chapter 13 bankruptcy results in a repayment plan so that all debts are subsequently repaid, if a major contributor to the bankruptcy application is debt that cannot be discharged under the chapter 7 bankruptcy laws, chapter 13 would be the most appropriate chapter to file backruptcy under.
The process to file under Chapter 7 bankruptcy laws is as follows:
1. An individual will be requested to list all assets (with values) and details of income. In addition, all debts must be listed, and to whom they are owed.
2. Complete required bankruptcy forms and file them at your nearest Federal court.
3. The individual is then protected from their creditors by means of an “order of stay”, which prohibits any creditor from contacting the individual concerned.
4. Approximately one month later the court will notify the individual of the “341″ meeting that it is compulsory for you to attend. This gives the creditors the chance to check that you are unable to meet your debts to them, and are not merely trying to avoid payment. Once satisfied, the discharge will be approved.
5. This is where a Trustee is appointed to oversee the liquidation of the individal’s non exempt assets, which are duly sold.
6. After approximately 2 – 3 months the discharge is granted by the court and a discharge notice issued.
7. With the exception of non-exempt debt, there is no further liability for any debt on behalf of the individual after the discharge notice is granted.
Individuals are granted a Chapter 7 discharge in 99% of cases.
In some cases a discharge under the chapter 7 bankruptcy laws will not be granted, this can be for the following reasons:
1. The individual did not provide accurate accounts.
2. The individual tried to hide personal assets from the court.
3. The individual was seeking bankruptcy under criminal circumstances.
4. The individual broke a bankruptcy court order
5. Estate property was transferred, hidden or destroyed by the individual.
After notice of discharge has been issued, if it is discovered that property had been hidden, transferred or destroyed, the notice of discharge will be revoked.
However, it is possible to retain certain types of property, perhaps a classic car for example, under “reaffirmation”.
This simply means that a written agreement is made and filed with the court, in which the seller and debtor agree that the item may be kept as long as repayment s are maintained.
The two main alternatives to chapter 7 bankruptcy are chapter 13 and to a lesser extent, chapter 11.
Chapter 11 is useful if you are in business and wish to avoid liquidation, while Chapter 13 allows you to retain your personal property.
Repayment of debt is still the leading principle of bankruptcy. Should it be decided via means testing that an individual can repay their debt over the longer term (3 – 5 years), they will be forced into a chapter 13 filing by the court.
If you need more free inIf you needmation on chapter 7 bankruptcy laws and other areas of bankruptcy, including rebuilding your creditworthiness after bankruptcy, go to www.howtoclaimbankruptcy.net. Free reprint avaialable from: Revealed – Chapter 7 Bankruptcy Laws.
Credit Cards After Bankruptcy – Nothing To Fear
In these difficult economic times, many people have been unable to cope financially and have gone through all the emotional pain and heartache that is bankruptcy. Having come out the other side they are thinking about how to build their credit rating, and also whether or not credit cards after bankruptcy are a good idea.
Credit cards see to some to offer “free money”, or at least a supply of funds that don’t have to be repaid, and as such can be one of the prime reasons for insolvency.
As credit builds up even the minimum payments become impossible, and as the balance increases, exactly the opposite happens to the individual’s credit rating.
Credit cards after bankruptcy are often shunned by individuals who do not want to risk getting back into debt, which is entirely understandable – but is it really a good idea?
Contrary to what many may think, a credit card can be key to restoring your credit record.
Avoiding debt is not the answer. Sure, it’s sensible, vital in fact, not to get into debt that you cannot repay, but demonstrating you can repay some debt is key to restoring your financial record.
Perhaps surprisingly, it is possible to obtain credit cards after bankruptcy if you are prepared to do some legwork. It will be at a much higher interest rate though.
Before going any further, a word of warning. Stay away from unscrupulous card issuers. They will charge an exhorbitant rate of interest, but may not register your card. By law, any card should be registered with the credit authorities – if it isn’t you won’t see any benefit to your credit score, as no one will know about it!
The best thing to do is to take out a secured credit card. This is where you deposit a sum of money, say $500, and the company will give you credit up to that $500. The card is “secure” as you are using funds that you have deposited with them.
What’s the point – why not just spend the money?
Remember, this is about restoring your credit score – not about using a credit card. A secured card simply means that you’re spending money through a card rather than just using cash. The point is, spending cash doesn’t improve your credit rating, spending money via a credit card and repaying it, does.
If you choose to live using cash only, that’s fine and you’ll stay out of debt – but your rating will stay poor. A secured credit card gives you security and an improved credit rating.
This is just one aspect of increasing your credit rating. credit cards after bankruptcy are one weapon in the arsenal of credit repair. For more free information concerning this and bankruptcy in general visit www.howtoclaimbankruptcy.net Get a totally unique version of this article from our article submission service
How To Claim Bankruptcy – Consider This
These days many people are becoming interested in finding out how to claim bankruptcy, which is a situation that arises when individuals can no longer service or repay their debts.
It is not always the individual themself who files for bankruptcy. In some situations a creditor can file what is called a bankruptcy order against the individual who owes money. This will proceed whether the individual likes it or not.
Claiming bankruptcy should only be entered into as a last resort, and all avenues should be explored before taking this final step.
So what are the pros and cons of Bankruptcy?
Probably the most attractive advantage of filing bankruptcy is the fact that, under chapter 7, an individual emerges debt free. True, some debt cannot legally be written off, such as alimony or government tax to name two, but the majority of debt is removed, allowing a fresh start.
There are two downsides to this however.
The first and most difficult is the fact that virtually all your worldly goods are sold and the money disbursed amongst your creditors, leaving you with very little.
The other downside is that those who have had financial dealings with you in the past, if, after selling all your possessions are still out of pocket, are unlikely to want to have any financial dealings with you in future.
It doesn’t have to be this way however if you qualify for chapter 13 bankruptcy.
Since the introduction in 2005 of the Bankruptcy Abuse Prevention and Consumer Protection Act, all bankruptcy applicants are subject to a financial means test.
There is also an examination of your income over the past 6 months, and if it is found to be above the median income for a family of the same size as yours in the same state, and you fail the means test, you are in elligible for chapter 7 bankruptcy. In this case one would normally file chapter 13 bankruptcy.
The advantages of the chapter 13 bankruptcy rules are that you do not have to sell any of your personal assets, and that your creditors are paid in full by way of a repayment plan, over 3 – 5 years.
The means test used to define an individuals allowances and income is complex and quite harsh. The means test can also make your income look better than it is, resulting in a repayment plan that leaves an individual with very little disposable income.
After bankruptcy, rebuilding one’s credit score is vital. Your credit record will retain details of a chapter 7 bankruptcy for a period of 10 years and a chapter 13 for 7 years.
Should you require additional free inShould you requiremation on how to claim bankruptcy and the different chapters and how they work, go to www.howtoclaimbankruptcy.net Get a totally unique version of this article from our article submission service
Declaring Yourself Bankrupt – How to Go About it
With the passing of the boom years and the entry into more recessive times, many people are finding life financially impossible – crushed by the weight of debt taken on in the good years. No amount of loyalty to any financial institution has value any more – they simply want their money. By declaring yourself bankrupt you can wipe away your debts and rebuild your financial position.
It is vital however, that you treat bankruptcy as an absolute last resort and examine every possible means of avoiding it. Indeed, under the Bankruptcy Abuse Prevention and Consumer Protection Act 2005, any individual must undergo proper consumer credit counselling before 180 days have passed since filing.
These are the steps to be taken if it is found that having gone through all the options bankruptcy is the only viable way forward.
The first thing to do is to determine the relevant chapter to file under. The two main chapters are 7 and 13. Chapter 7 results in the selling of your goods, after which you have no further liability for any debt and is therefore often the most favoured option. Chapter 13 is a 3 – 5 year repayment plan. Which type you file under is often determined by the means test applied under the BAPCPA rules.
The second thing to consider is legal representation. Ironically, declaring yourself bankrupt is not an area where you want to save money. Lawyers are not cheap, but it is highly recommended that you hire one, and make sure they are aware of the laws in your state.
Thirdly, your application for bankruptcy can be quashed if you use your credit cards after filing for bankruptcy, due to the fact that you are running up credit that by definition (bankruptcy) you know you can’t repay.
“Automatic stay” is triggered when your lawyer files your bankruptcy case. Creditors then have to approach your lawyer direct regarding any debt, thus taking the pressure off yourself.
In order to check that you are being truthful regarding your financial position, you will be required to attend a meeting of creditors shortly after filing for bankruptcy. At this meeting you will be questioned under oath, so that both the court and creditors can be satisfied as to the veracity of your claimed financial situation.
The trustee then arranges liquidation of your assets with the proceeds used to pay off as much debt as possible. Once this has been done you are no longer liable for any debt left over. Approximately 60 days later you will receive notice of discharge. This is the case for a chapter 7 bankruptcy.
Chapter 13 works differently to 7 in that no assets are sold. A repayment plan is drawn up, the terms of which are determined by means test and can be harsh, to repay all your creditors over a 3 – 5 year period. The bankruptcy is discharged when the repayment plan is complete and 30 – 60 days have passed since the final payment.
For additiaboutal free informatiabout about bankruptcy go to www.declaringyourselfbankrupt.org where you will find a lot of useful informatiabout and advice about declaring yourself bankrupt.
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