1. What is Bankruptcy?

Bankruptcy is a means for good people in bad situations to legally get a fresh start. There are certain requirements, but generally, anyone meeting those requirements has a legal right to file. As soon as a petition is filed, all creditors are prohibited from attempting to collect on all debts listed in the petition until the Court either discharges you from these debts or determines that you are not entitled to such relief.

2. What is the process for filing?

First, any qualified bankruptcy attorney will probably require you to fill out a questionnaire for them to review to determine whether or not bankruptcy is right for you. If it is determined to be your best option, the attorney will have to decide under which Chapter you will file. You will likely meet with the attorney on more than one occasion to answer questions, provide documents and for the attorney to answer any questions you might have. After the bankruptcy petition (legal papers filed with the bankruptcy court that commences your bankruptcy proceeding) is filed, you will be required to appear in court on at least one occasion, the Meeting of Creditors, for a Chapter 7 filing, and probably more than one appearance if your bankruptcy petition is a Chapter 13 filing (Meeting of Creditors and Confirmation Hearing).

3. What is Chapter 7?

Chapter 7 is a liquidation proceeding under the United States Bankruptcy Code. In a Chapter 7 proceeding, a trustee appointed by the bankruptcy court will take custody of and sell off any of your non-exempt assets. The money received from this sale will be used to pay your creditors. Your debts are then discharged. This means that creditors are forever prohibited to try and collect on these discharged debts in the future.

Certain debts, like taxes, alimony, child support, student loans, and debts that have not been listed in the Chapter 7 petition (as well as debts which have been incurred as a result of either an intentional tort or the defrauding or misleading of a creditor) are not dischargeable. This means that after the discharge, you will continue to be liable for these debts.

4. What is a Chapter 13?

A Chapter 13 is designed primarily for residential homeowners, and allows a person or married couple to pay off all, or a portion, of their debts under the supervision and the protection of the U.S. Bankruptcy Court while remaining in their home. A Chapter 13 Plan is primarily used to repay mortgage arrears, while also addressing all other debts you owe to any other creditors. Payment of your mortgage other debts are generally spread out over a 3-5 year period. Chapter 13 is also used as an alternative to credit counseling. Individuals are permitted to repay their credit card debt over a 3-5 year period without any additional interest charges. A Chapter 13 filing is designed for those individuals who are currently employed and have steady incomes, yet are still overwhelmed with bills, judgments, lawsuits or other financial obligations.

5. What types of property are exempt?

Certain types of personal property is classified as exempt under the Bankruptcy Code. This means that you get to keep this property even after your debts are discharged. In New York, State Law provides for specific exemptions including, among others:(A) cash, checking or savings accounts, U.S. Savings Bond, stocks, and other marketable securities, and tax refunds up to a maximum total of $2,500.00; (B) equity in a motor vehicle up to $2,400.00; (C) basic wearing apparel; (D) $50,000.00 of the equity in your home, co-op or condo; (E) social security benefits; (F) household furnishing and certain appliances; (G) IRA, 401K and other qualified retirement accounts.

6. Will I lose all my credit cards after bankruptcy?

You are required to list all outstanding debts that you owe as of the date of the filing of a bankruptcy petition. Any accounts that have a zero balance do not have to be listed. For those credits cards that have balances, if you agree with the creditor to repay all or any portion of the card’s balance at the time of filing, you may be able to execute a document known as Reaffirmation Agreement that documents your willingness to continue to be responsible for this debt after the bankruptcy is discharged. In most cases, the Bankruptcy Court must approve of the Reaffirmation Agreement before it becomes effective.

7. How long will it take?

A typical Chapter 7 case takes normally 4-6 months. A Chapter 13 case may take anywhere to 3-5 years to complete.

8. What is a Meeting of Creditors?

Section 341 of the United States Bankruptcy Code affords creditors the right to meet with the debtor to determine if a discharge or a reorganization of debt is appropriate based upon the facts and circumstances presented by a debtor in their bankruptcy petition. While creditors do technically have the right to attend these proceedings and to question the debtor, creditors rarely appear at these proceedings.

In Chapter 7 proceeding, the Meeting of Creditors serves two important purposes. First, the Court, through examination by the Court appointed Trustee, verifies that all of the representations contained in your bankruptcy petition are true and correct to your best of your belief and knowledge. Second, the Bankruptcy Court Trustee also utilizes this meeting to verify on behalf of the Court that there are no assets that may be considered non-exempt, which could be sold by the Trustee to repay part, or all, of your debt. A typical meeting of creditors in a Chapter 7 proceeding takes approximately 5-10 minutes to complete.

In Chapter 13 proceeding, a debtor is also required to appear before the Chapter 13 trustee. In a Chapter 13 case, the meeting of creditors serves a slightly different purpose. In addition to verifying that all of the representations made by a debtor are true and correct, the Chapter 13 trustee will also verify that the debtor has calculated the means test properly, and that the debtor has the financial ability with which to make the payments proposed in the proposed Chapter 13 plan. Verification of a debtors ability to make payments in a Chapter 13 case is based upon both the debtor testimony at the meeting and various documentation, usually tax returns and/or pay statements, that must be presented to the Chapter 13 trustee to verify the representations made in your Chapter 13 petition. As in a Chapter 7 case, a typical meeting of creditors in Chapter 13 case takes between 5-10 minutes to complete.

9. How will filing affect my credit?

Under the Fair Credit Reporting Act, a Chapter 7 may remain on your credit report for 10 years. A Chapter 13 filing is legally permitted to be reported for 7 years. The filing of any bankruptcy petition will seriously impact your credit score in the near future. By beginning to slowly build up your credit after your bankruptcy is discharged, you tell future lenders that your problems with credit are now behind you. One way is to obtain a “secured” credit card from a bank as soon as you are able. With a secured card, a debtor puts up a certain amount of money, as little as $200.00, in an account at the bank to guarantee payment. This limit is usually increased as the debtor proves his or her ability to pay the debt.

Two years after your bankruptcy is discharged, you will be eligible for a mortgage loan on similar terms to individuals with similar financial profiles that have not filed bankruptcy. It is then that the amount of your down payment and your employment and income stability become more important to a bank than your past bankruptcy filing.

10. What if I filed before?

For an individual, you may only file for relief under Chapter 7 once every eight years. This date runs from the date bankruptcy is actually discharged. Please note however that the 8-year period does not run from the date of the filing of the first petition, but rather from the date the court issues the bankruptcy discharge.

11. Will I be able to get out of repaying my student loans?

With two exceptions, student loans are not dischargeable in a bankruptcy proceeding. However, the student loan may be discharged if it is neither insured or guaranteed by a governmental unit, nor made under any program funded in whole or in part by a governmental unit or non-profit institution. Finally, the student loan maybe discharged if paying the loan will “impose an undue hardship on the debtor and debtor’s dependents.” 11 U.S.C. Section 523(a)(8)

12. Will I lose my home?

A Chapter 13 proceeding is designed to help residential homeowners keep their home while helping them to reclaim their lives and start anew. Chapter 13 filing is permitted for persons that owe less than $250,000.00 in unsecured debt and less than $750,000.00 in secured debt. Thus, it is possible to file bankruptcy and keep your home.

13. Will I lose my car?

In New York, there is an exemption for a motor vehicle valued at $2,400 or less. If you have a $20,000 car and owe $10,000 on this vehicle, it is likely that the bankruptcy trustee will liquidate such an automobile in a Chapter 7 proceeding.

14. Does my spouse have to file?

New York is a common law state. Unlike community property states, your spouse will not be affected by your bankruptcy if they are not responsible for any of your debt. If they have a supplemental credit card they are probably responsible for that debt, but unless they also signed the agreement, they are probably not responsible in NY. Community property states are: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin.

15. What happens if I don’t list all my property?

Failing to list all property is a crime. Many assets are protected from being seized by the bankruptcy court, but only if they are listed. Bankruptcy crimes are punishable by imprisonment for up to five years. Criminal conduct includes: filing a bankruptcy petition to defraud your creditors; concealing property from the court or bankruptcy trustee; knowingly and fraudulently make a false oath or account; an intentional transfer or concealment of property to defraud creditors; and concealing, altering, destroying, or falsifying records or documents.

16. Will my employer find out?

Technically, Chapter 7 filings are public records and it is possible for anyone to find out. However, unless your employer searches bankruptcy filings, it is unlikely they will find out. The Credit Bureaus will record your filing and it will remain on your credit record for 7-10 years.

17. Can I lose my job?

No. Employers are prohibited from discriminating against you because you filed bankruptcy pursuant to U.S.C. Sec. 525.

18. Is my pension/retirement accounts safe?

Employee contributions to ERISA qualified retirement plans, deferred compensation plans, tax-deferred annuities, and health insurance plans are exempt assets. Also, Section 522 of the Bankruptcy Code states that an individual can now exempt up to one million dollars in an IRA account. Interestingly enough, Section 522 specifically excludes SEP IRA’s from such exemption, although this type of IRA may possibly fall under an ERISA plan (anyone self-employed should consult with their attorney and ensure that their SEP IRA is actually exempt before filing).

I am a New York Licensed Attorney at Law providing Wealth Building and Debt Elimination services through an innovative Life Planning practice where clients can literally transform their lives by designing a road map for their future!

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Your 18 Bankruptcy Questions Answered is a post from: Bankruptcy Court Online

When you are struggling to make your credit card payments, mortgage, car payment, or other outstanding bills, you may find yourself deep in debt. At a certain point it may feel that you are so far behind that you are never going to catch up. Fortunately, United States law offers provisions to debtors who are under severe financial stress to help them secure a fresh start. While bankruptcy has its downsides, it can be a much better alternative to being burdened with a large pile of debt for the rest of your life. Individuals who are looking to file for bankruptcy have multiple bankruptcy options available, each of which is ideal for different people in different situations.

What is Chapter 13 Bankruptcy?

One bankruptcy option that is available to an individual with a high amount of personal debt is Chapter 13 Bankruptcy. Under Chapter 13, an individual clears his or her debts by drafting a plan to save money and pay back the debts over 3 to 5 years. This gives the debtor a large grace period to reevaluate finances and gradually work towards becoming debt free. For some people, this form of bankruptcy is a much preferred method over Chapter 7, which requires a debtor to liquidate, or sell, much of his or her property to pay back debts. With Chapter 13, you will liquidate little to no property and will pay back debts using income that you earn over time.

Eligibility: Debt Limits

In order to file for Chapter 13, you must meet certain strict debt limits. Anyone with debts over the amounts listed below will not be eligible for Chapter 13 and must file for Chapter 7 instead. The restrictions on debt are divided into secured and unsecured debt as follows:

Must have less than $336,900 in unsecured debts
Must have less than $1,010,650 in secured debts
Must be an individual debtor. No partnerships or corporations are eligible for Chapter 13.
Eligibility: Sufficient Income

Because debts under Chapter 13 bankruptcy are paid back with saved income, an individual who wishes to file for this form of bankruptcy must have sufficient income to do so. The debtor must have a reliable source of income that is expected to continue until all debts have been repaid. Also, the income must be large enough that necessary expenses are covered while still having disposable income left over that can be used to pay back outstanding debts. Without a reliable or sufficient income, a debtor cannot realistically keep his or her promise to have all debts paid back in 3 to 5 years. Those with low or unreliable income may be required to file under Chapter 7 instead.

If you meet the above eligibility requirements, Chapter 13 may be an ideal bankruptcy option available to you. Consider scheduling a consultation with a bankruptcy lawyer to discuss the specifics of your situation. A bankruptcy attorney will guide you through the filing process and help you create a sound repayment plan that you can realistically complete over the next 3 to 5 years. While you may have to make some financial sacrifices now, the short term losses will be largely outweighed by the huge gains of finally escaping the stranglehold of personal debt.

For More Information

To learn more about filing for Chapter 13 bankruptcy and how you can take steps now to secure a more secure financial future, please visit the website of the   rel=nofollow New Orleans bankruptcy attorneys of Kervin & Young, LLC today.

Joseph Devine

Article Source:  Chapter 13 Bankruptcy Eligibility Requirements

Chapter 13 Bankruptcy Eligibility Requirements is a post from: Bankruptcy Court Online

There are many situations in life when you fall back in meeting some important payments and when this happens with regard to your mortgage payments, you take a huge risk of losing your home and any equity that you have built up. A foreclosure is the last thing that you want to happen, so perhaps filing for bankruptcy could help save you from such a horrendous situation.

All those who have a steady flow or source of income like those having small businesses or a salaried income can file for Chapter 13 bankruptcy. Most repayment plans allow you to pay off a portion of your total debts within a period of five years. However, there are some limitations for filing under Chapter 13. There is a maximum limitation of personal loans set at 300,000 dollars and total loans set at 922,000 dollars.

It is always essential to first determine whether bankruptcy would be the best solution for your particular case. Once you decide to file for bankruptcy, make sure whether Chapter 7 or Chapter 13 would be the right bankruptcy option. You can start by consulting with a bankruptcy lawyer to help you get a better position in the court later on. Then you need to file a petition with the bankruptcy court in your home district.

Such forms, can be obtained by visiting the stationery shops rather than having to go to the court. Along with that, you will need to file these supporting documents, such as a schedule of liabilities and assets, a schedule of current income and expenditures. You’ll need to list your exempt assets and unexpired leases. Pay all the necessary fees such as the court filing fee and administrative fees, which will stay all further actions on the part of your creditors until the case is settled in the court of law.

Along with the petition, or within 15 days, you need to file a plan of repayment of your debts. The bankruptcy judge will comment on your plan for repayment when you attend the confirmation hearing. This decision is then conveyed to the creditors and they can put in their objections, if any, to such repayment plan. After getting court sanction for the proposal, the final step is obviously to start paying according to the agreement.

Most people find that filing all the necessary paper work and clearly presenting their case to the court is beyond their capabilities, so they use the services of an experienced bankruptcy lawyer. A bankruptcy attorney will take your side and represent your situation in the best possible light to give you a result you can live with.

Given any situation, filing for a Chapter 13 bankruptcy is always better than going in for a credit consolidation service or program which not only charge you high monthly fees but also make you continue pay interests on your debts. It is always better to seek the best solution with the help of your attorney.

In the Milwaukee and Waukesha area Michael Burr specializes in bankruptcy and debt relief services.   Milwaukee Chapter 7 bankruptcy is an effective way to eliminate many types of debt and have a fresh financial start. Contact Attorney Michael Burr directly. He understands what you are going through and can help you get on with your life. - http://www.burrlawoffice.com

Article Source: http://EzineArticles.com/?expert=Nick_Messe

Chapter 13 Bankruptcy Can Put Your Life on Track is a post from: Bankruptcy Court Online

Every 13 seconds another home enters foreclosure, according to the Center for Responsible Lending.

If you’re being threatened with foreclosure, you’re probably trying everything you can to save your home. But if you’ve fallen too far behind on payments and having difficulty catching up, Chapter 13 bankruptcy may be able to give you the relief you’re looking for.

Chapter 13 was designed to stop foreclosure and repossession.

Chapter 13 Bankruptcy and Foreclosure

The personal bankruptcy option of Chapter 13 offers some debtors a chance to catch up on those late mortgage payments through the Chapter 13 repayment plan. Under Chapter 13, the filer is placed on a repayment plan that’s agreed upon by the court, the creditors and him or herself and/or the bankruptcy lawyer. One the terms are approved, the filer then makes one lower monthly payment on past due and current debts.

The Benefits of Chapter 13 Bankruptcy

In exchange, the filer is permitted to keep the property he or she is repaying on, such as a house or car. This repayment plan typically lasts between three and five years. During this period, the filer has no direct contact with creditors, which means the harassing calls stop and the collection letters stop piling up in your mailbox.

In addition, if all payments are made according to schedule by the end of the Chapter 13 repayment plan, the bankruptcy court has the option of discharging (eliminating) the rest of the filer unsecured debts.

Unsecured debts are considered debts not tied to property (as opposed to secured debts like a home or car note) and can include:

•  credit card debt
•  medical bills
•  payday loans
•  utility bills
•  some personal loans
•  parking tickets

Who Can File Chapter 13 Bankruptcy?

There is no official “test” to determine whether a person is qualified to file Chapter 13; however, since the Chapter 13 plan involves monthly payments, filers usually need a steady income in order to be able to keep current with payments.

If you’re struggling with debt but don’t have a steady income and rent or have little equity in your home, Chapter 7 bankruptcy may be a better personal bankruptcy option.

Chapter 7 involves the discharge of unsecured debt, but it can also involve the liquidation (sale) of a debtor’s significant property in order to repay creditors.

For this reason, Chapter 13 is likely to be a better option for people who are filing bankruptcy and want to keep their home.

Bankruptcy Questions?

It’s important to know that everyone’s situation is unique and filing bankruptcy isn’t right for everyone. A bankruptcy lawyer can be a good person to talk to about whether bankruptcy may be able to help you get out of debt and/or keep your hard-earned property.

LJ Adama writes articles on financial advice and bankruptcy help. To get a better understanding for   filing bankruptcy and to learn about chapter 7 as well as chapter 13 please visit http://www.bankruptcychapter7and13.com/

Article Source: http://EzineArticles.com/?expert=LJ_Adama http://EzineArticles.com/?Learn-How-Bankruptcy-Can-Stop-Foreclosure-Now&id=2396305

Learn How Bankruptcy Can Stop Foreclosure Now is a post from: Bankruptcy Court Online