How to Determine If Chapter 13 Bankruptcy is Right For You is a post from: Bankruptcy Court Online

The popular culture and overwhelming desire to live up to one’s financial obligations can — as noble as that goal is — tremendously complicate an individual, family, or organization’s efforts to eliminate debts and proceed in a more fiscally responsible manner. By creating the impression that the inability to meet payment schedules constitutes some sort of personal or moral failing, these cultural barriers can cause people to strain themselves physically, emotionally, and monetarily well beyond the point of reason. Though bankruptcy is not simply an easy out and should not be looked at as an escape valve at the first sign of financial distress, there are many circumstances under which it represents the best and most sensible option.

The reality is that the majority of those who are driven to consider bankruptcy end up in dire straits due to significant changes that are beyond their own control. These tend to be dramatic shifts in one or more areas of life, including divorce, the loss or reduction of employment, or affliction with a substantial physical or mental illness. It is important that you bear this in mind as a factor in your own financial struggles so that you do not judge yourself harshly and that you can maintain an accurate perspective on the appropriateness of bankruptcy in your present condition.

Signs and Choices

Knowing when the time has come to draw the line and to take the difficult emotional step of filing for bankruptcy protection depends on maintaining an awareness about the specifics of your debt situation. This means taking a long, hard, and honest look at the terms and rates of your varied repayment agreements and realistically determining how quickly you can pay the debt off on your own. In performing such calculations, it is essential that you take into account all the necessary and reasonable incidental expenses so that you can accurately project your capacity to make payments.

Then weigh the following signs that bankruptcy may be right for you:

• If you discover that your debt load is too high to pay off in a reasonable time frame
• You have many dependents
• Cash in accounts, including savings, is limited

A skilled and experienced bankruptcy attorney can help you to identify the best chapter under which to file for your particular debt distribution. Most likely you would file under:

• Chapter 7
• Chapter 11
• Chapter 12
• Chapter 13

For the Help You Need

If you are unsure what to do next, contact the Arizona bankruptcy lawyers of the Harmon Law Office, L.L.C.

Joseph Devine

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When Enough is Enough – Choosing to File For Bankruptcy is a post from: Bankruptcy Court Online

The majority of American families find themselves in the unpleasant life situation of living from paycheck to paycheck and this makes them incredibly vulnerable to financial collapse in the event of a medical emergency, job loss, or other event that disrupts income or creates a dramatic increase in the level of one’s obligations. Typically, when one enters into debt and establishes repayment agreements with his or her creditors it is with an optimistic view that does not take into account the potential for these problematic occurrences to arise. As a consequence it may become impossible to keep up with the demands of your creditors and filing for bankruptcy protection may offer the best solution.

Though nobody sets out with the intention to fall behind on the repayment of his or her debts, there comes a point when scrambling and struggling to make ends meet causes more harm than it accomplishes good. It can be difficult to determine where that transition takes place, but a continual inability to make minimum payments on time and an abundance of collection calls and letters are some indicators that a substantial change is necessary.

Advantages of Bankruptcy

Even when filing for bankruptcy protection offers the best and swiftest path to the resolution of an overwhelming and unmanageable debt load, many people are still hesitant to file. Part of the reason for this is the longstanding negative public perception and judgment of those people who seek the advantages offered by the provisions of the United States Bankruptcy Code. But there are potentially adverse health effects, devastating and irreversible strains placed on relationships, and other troubling consequences associated with needlessly enduring a high stress debt situation.

Depending on the form of bankruptcy protection that you seek, you will be subject to different requirements and the procedural handling of your case will vary, though effectively all of the options will serve to somehow ease your terms of repayment of debts. Some of the advantages of a filing include:

• Granting an extended period of time to make payments (Chapter 13)
• Offering the opportunity to restructure repayment agreements or businesses (Chapters 11/12)
• Forgiveness and discharge of debts (Chapter 7)
• Automatic stay of collection efforts and creditor contact (Most chapters)

For More Information

Choosing which form of bankruptcy will be the most beneficial for your situation requires a consultation with a skilled and experienced attorney.

For more information, contact the Arizona bankruptcy lawyers of the Harmon Law Office, L.L.C.

Joseph Devine

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http://EzineArticles.com/?The-Broken-Bank—Choosing-Bankruptcy&id=3530846

The Broken Bank – Choosing Bankruptcy is a post from: Bankruptcy Court Online

There is a seemingly endless variety of ways in which an individual or small business might end up in dire financial straits. For an individual, job losses, unanticipated expenditures on necessary home or automobile repairs, and illness or serious injurysustained in an accident caused by another party’s negligence represent only a small portion of the potential sources of disaster. For corporate interests, a fluctuating economy, shifting consumer sentiments, litigation brought by competitors, and even crime might be a source of difficulty. Under some circumstances these factors may inhibit your ability to satisfy the terms of your agreements with creditors and service providers, raising the need for consideration of a bankruptcy filing.

Though bankruptcy is not the best option for every debtor or business, there are many circumstances in which it may offer much needed relief from aggressive collection efforts. The measures taken by a creditor or collection agency to compel your payment of an outstanding debt can range from strongly worded letters and harassing phone calls to the filing of a lien against you or your property and the pursuit of a default judgment. These actions can haunt you by tarnishing your credit report and reputation for years to come. Bankruptcy protection can prevent this from happening.

Chapter 7

Chapter 7 bankruptcy is perhaps the most extreme in terms of the demands that it makes of a filer, but it may also grant the greatest relief from debt pressure. Key points include:

• Liquidation of some assets which are not covered by exemptions
• Proceeds generated from a bankruptcy sale are divided and distributed to creditors
• Successful completion of a bankruptcy results in the discharge of most debts
• A Chapter 7 filing effectively terminates a business as a going concern

Chapter 11

Chapter 11 Bankruptcy is most frequently sought by corporations, but is also available to individuals. Commonly referred to as a “reorganization” bankruptcy, Chapter 11 does this. Important aspects are:

• Debtors propose a restructuring of their debts and business operations where appropriate
• Filers gain access to special lending rates that grant them new negotiating power with creditors
• Businesses may continue to operate while in Chapter 11 bankruptcy
• Failure to comply with the terms of a bankruptcy plan may result in forced conversion to Chapter 7

Chapter 13

Chapter 13 is similar to Chapter 11 in some ways, and very different in others. Notable details include:

• Available only to individuals who are actively employed
• Debtors propose a 3-5 year payment plan for outstanding debts
• Foreclosure proceedings may not begin or continue during the bankruptcy period

To Learn More

To gain more information about these and other bankruptcy options, contact the Arizona bankruptcy lawyers of the Harmon Law Office, L.L.C.

Joseph Devine

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http://EzineArticles.com/?A-Brief-Overview-of-Several-Forms-of-Bankruptcy-Protection&id=3835641

A Brief Overview of Several Forms of Bankruptcy Protection is a post from: Bankruptcy Court Online

Chapter 13 Bankruptcy Basics

Though much has been made in recent years about both the individual and corporate financial struggles that are being faced due to the credit crunch and other broad economic factors, the reality is that there have always been genuine challenges to fiscal security. The free availability of consumer credit and predatory mortgage lending practices have combined to create something of a perfect storm for the debt-strapped, and when you add into the mix the fact that developing a credit history is now an essential part of progressing into adulthood, the deck seems to be stacked against the unwitting consumer. In the most overwhelming circumstances, it may be appropriate to consider filing for Chapter 13 bankruptcy protection.

Even if you have been working steadily for years and manage your money responsibly, it is likely that a single accident, serious illness, or other unpredictable and substantial adverse life event can suddenly threaten to undo all that you have built. Part of this is attributable to the dramatically escalating cost of medical care in the United States, which has considerably outpaced increases in the average income of American workers over the past decade. If you are uninsured or exhaust the benefits available under your insurance policy, you can be stuck with tens of thousands of dollars or more in medical debts for even fairly minor injuries.

Elements of Chapter 13 Bankruptcy to Consider

The United States Bankruptcy Code exists to help debtors to resolve their outstanding financial obligations to creditors and service providers. There are forms of bankruptcy that are available to businesses and others that are solely accessible to individuals and families that are suffering from economic woes. Chapter 13 bankruptcies are restricted to individual filers who are employed at the time of the bankruptcy filing and who appear to have some degree of job security.

As each chapter of the Bankruptcy Code is designed to serve a different set of needs and parties, so, too is each of processes differently structured and requiring of distinctly separate qualifications. A few of the relevant details pertaining to Chapter 13 bankruptcy are:

• Liquidation of assets is not a required step as it is with many Chapter 7 filings
• Chapter 13 bankruptcy filings stop and prevent foreclosure actions
• Debts are not erased, but rather the debtor has the opportunity to propose an extended repayment plan over a 3-5 year period
• Collection efforts must cease during the bankruptcy plan

For More Information

For further information about credit management and bankruptcy protection, contact the Arizona bankruptcy lawyers of the Harmon Law Office, L.L.C.

Joseph Devine

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http://EzineArticles.com/?The-Basics-of-Chapter-13-Bankruptcy&id=3411768

The Basics of Chapter 13 Bankruptcy is a post from: Bankruptcy Court Online

Bankruptcy is a legally declared inability of an individual or organization to pay creditors. During the course of a bankruptcy, a debtor may ask a court to dismiss the case. If the court finds that dismissal will not harm the creditors, ordinarily a court will grant a petition to dismiss a Chapter 7 or a Chapter 13 bankruptcy.

There are several reasons a debtor may prefer to file a Chapter 13 bankruptcy petition. The reasons include the debtor wishes to resolve certain debts that may not be discharged in a Chapter 7 bankruptcy. The debtor may also wish to protect certain cosigners on personal loans from being pursued by creditors for repayment or feels obligated to repay certain debts. The debtor may believe that future creditors will look more favorably on Chapter 13 reorganization than a Chapter 7 discharge. A debtor may be required to file a Chapter 13 bankruptcy if he or she has received a Chapter 7 bankruptcy discharge within the prior six years, or obtained a Chapter 13 bankruptcy discharge within the prior six years and has not paid off at least 70% of the unsecured debts and was subject to the discharge of a prior Chapter 7 or Chapter 13 bankruptcy filing within the prior 180 days, because the debtor violated a court order, or requested dismissal after a creditor sought relief from the automatic stay.

After filing a Chapter 7 bankruptcy petition, some debtors discover that they are better served by pursuing relief under Chapter 13. By filing an appropriate motion with the bankruptcy court, the debtor has an absolute right to convert the petition to a Chapter 13 filing, if the debtor has not previously converted a Chapter 7 bankruptcy to a Chapter 13 bankruptcy, and the debtor’s estate qualifies for Chapter 13 relief.

Chapter 13 provides detailed information on Chapter 13, Chapter 13 Bankruptcy, Chapter 13 Trustee, Filing Chapter 13 and more. Chapter 13 is affiliated with Filing Bankruptcy.

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Chapter 13 Bankruptcy Dismissal is a post from: Bankruptcy Court Online

Struggling to keep your finances under control may not be a possibility for many of you during this time of economic stress. For those of you wanting to answer the question “how does a bankruptcy work?”, keep on reading this article.

It’s tough being in a situation where you feel you’re not in control, but how you got into this mess is not as important as learning to get out of it. To find out the best way for you to deal with this type of situation its best for you to have a free consultation with someone who has experience in dealing with circumstances like this.

Because there are currently 3 types of bankruptcy to be filed: Chapter 7, Chapter 11 or Chapter 13. By speaking with a specialist you’ll be able to learn exactly which chapter will be best utilized for your business and / or personal financial situation. Understanding which chapter to file could mean the difference between having your creditors getting part or all of your assets. You may also find yourself lucky enough to be free of your financial burden completely.

Are you still asking yourself how a bankruptcy works? I have to repeat this information to be sure you understand how important it may be to have an idea of what property may be exempt from your creditors. You may not have to lose everything you own and you may actually be able to keep some of the things you value most. The difference between Chapter 7 and Chapter 13 could mean creating a plan to repay your debt or being released from your debt and starting fresh. Please understand you’ll have an easier time dealing with this situation if you are aware of what you’ll be letting go off and the stress of moving forward could be easier to deal with.

Another thing you may not yet understand is that although your financial burden may be eased after you file for bankruptcy, you’ll have to prepare for having this on your credit report for at least 10 years. For most families who prepare for this in advance, this may not be an issue. If you can plan together to support each other during this time then it should be easier to deal with. If you find you’ll have to go bankrupt to survive, I can tell you from personal experience, the time does go by fast and there should be credit options available for you to help rebuild your credit as soon as your bankruptcy is approved and closed.

Hopefully, you now have some answers to how a bankruptcy works. I’m sure you have more to learn so start today by doing some online research. I know bankruptcy is unpleasant and irritating but peace of mind is within your reach.

How You Can Get a Free Consultation
The sooner you file the sooner you can begin rebuilding your credit. CLICK HERE have your questions answered by an expert in the field of bankruptcy. They are my #1 recommendation and since the bankruptcy evaluation is free, you have nothing to lose.

The road to financial freedom and recovery is closer to you than you think.

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How Does Bankruptcy Work? The Truth Behind Freeing Yourself From the Aggravation of Economic Failure is a post from: Bankruptcy Court Online

With the new bankruptcy law in effect since October 17, 2005, there is a lot of confusion with regard to the new “means test” requirement. The means test is used by the courts to determine eligibility for Chapter 7 or Chapter 13 bankruptcy. The purpose of this article is to explain in plain language how the means test works, so that consumers can get a better idea of how they will be affected under the new rules.

When most people think of bankruptcy, they think in terms of Chapter 7, where unsecured debts are normally discharged in full. Bankruptcy of any variety is a difficult ordeal at best, but at least with Chapter 7, a debtor was able to wipe out their debts in full and get a fresh start. Chapter 13, however, is another story, since the debtor must pay back a significant portion of the debt over a 3-5 year period, with 5 years being the standard under the new law.

Prior to the advent of the “Bankruptcy Abuse Prevention and Consumer Protection Act of 2005,” the most common reason for someone to file under Chapter 13 was to avoid the loss of equity in their home or other property. And while equity protection will continue to be a big reason for people to choose Chapter 13 over Chapter 7, the new rules will force many people to file under Chapter 13 even if they have NO equity. That’s because the means test will take into account the debtor’s income level.

To apply the means test, courts look at the debtor’s average income for the 6 months prior to filing and compare it to the median income for that state. For example, the median annual income for a single wage-earner in California is $42,012. If the income is below the median, then Chapter 7 remains open as an option. If the income exceeds the median, the remaining parts of the means test comes into play.

This is where it gets a little bit trickier. The next step in the calculation takes income, less living expenses (excluding payments on the debts included in the bankruptcy), and multiplies that figure times 60. This represents the amount of income available over a 5-year period for repayment of the debt obligations.

If the income available for debt repayment over that 5-year period is $10,000 or more, then Chapter 13 will be required. In other words, anyone earning above the state median, and with at least $166.67 per month of available income, will automatically be denied Chapter 7. So for example, if the court determines that you have $200 per month income above living expenses, $200 times 60 is $12,000. Since $12,000 is above $10,000, you’re stuck with Chapter 13.

What happens if you are above the median income but do NOT have at least $166.67 per month to pay toward your debts? Then the final part of the means test is applied. If the available income is less than $100 per month, then Chapter 7 again becomes an option. If the available income is between $100 and $166.66, then it is measured against the debt as a percentage, with 25% being the benchmark.

In other words, let’s say your income is above the median, your debt is $50,000, and you only have $125 of available monthly income. We take $125 times 60 months (5 years), which equals $7,500 total. Since $7,500 is less than 25% of your $50,000 debt, Chapter 7 is still a possible option for you. If your debt was only $25,000, then your $7,500 of available income would exceed 25% of your debt and you would be required to file under Chapter 13.

To sum up, first figure out whether you are above or below the median income for your state – median income figures are available at http://www.new-bankruptcy-law-info.com. Be sure to account for your spouse’s income if you are a two-income family. Next, deduct your average monthly living expenses from your monthly income and multiply by 60. If the result is above $10,000, you’re stuck with Chapter 13. If the result is below $6,000, you may still be able to file Chapter 7. If the result is between $6,000 and $10,000, compare it to 25% of your debt. Above 25%, you’re looking at Chapter 13 for sure.

Now, in these examples, I have ignored a very important aspect of the new bankruptcy law. As stated above, the amount of monthly income available toward debt repayment is determined by subtracting living expenses from income. However, the figures used by the court for living expenses are NOT your actual documented living expenses, but rather the schedules used by the IRS in the collection of taxes.

A big problem here for most consumers is that their household budgets will not reflect the harsh reality of the IRS approved numbers. So even if you think you are “safe,” and are able to file Chapter 7 because you don’t have $100 per month to spare, the court may rule otherwise and still force you into Chapter 13. Some of your actual expenses may be disallowed.

What remains to be seen is how the courts will handle cases where the cost of mortgages or home rentals are inflated well above the government schedules. Will debtors be expected to move into cheaper housing to meet the court’s required schedule for living expenses? No one has any answers to these questions yet. It will be up to the courts to interpret the new law in practice as cases proceed through the system.

Charles J. Phelan has been helping consumers become debt-free without bankruptcy since 1997. A former senior executive with one of the nation’s largest debt settlement firms, he is the author of the Debt Elimination Success Seminar™, a five-hour audio-CD course that teaches consumers how to choose between debt program options based on their financial situation. The course focuses on comprehensive instruction in do-it-yourself debt negotiation & settlement designed to save $1,000s. Personal coaching and follow-up support is included. Achieves the same results as professional firms for a tiny fraction of the cost. Visit http://www.zipdebt.com/seminar.php for more information.

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The New Bankruptcy Law “Means Test” Explained in Plain English is a post from: Bankruptcy Court Online

The prospect of filing for bankruptcy is thought by many to be frightening and humiliating. In the view that has been sown and spread by creditors and neighborhood gossips everywhere, a bankruptcy filing represents a personal failure of the greatest magnitude. The reality of the matter is that most people are driven to bankruptcy not as a result of their own recklessness and irresponsibility but as a consequence of adverse life events that are largely beyond their control. Medical bills, for example, are one of the leading triggers for personal bankruptcy. Divorces, job losses, natural disasters, and serious accidents can also prompt one to consider bankruptcy protection.

Without having a proper understanding of what a successful bankruptcy filing will and will not accomplish there is little hope that you will be able to make the right decision for your own unique circumstances. Though you can certainly educate yourself about some bankruptcy basics, it is difficult to gain a full view of the situation without consulting with a skilled and experienced bankruptcy attorney.

Five Frequently Held Misconceptions

Creditors and their advocates have been overwhelmingly successful in their efforts to prevent debtors from being adequately informed about the debt resolution options that are available to them. The following are five of the most widely held notions regarding bankruptcy:

• Chapter 7 Bankruptcy erases all debts – child support, student loans, and other classes of debts cannot be discharged
• A bankruptcy filing requires an individual to sell all of his or her property – debtors are able to retain all of their property in most cases
• Access to credit will be forever lost – you can gain access to many high interest credit options shortly after filing for bankruptcy, and in the long run bankruptcy filing can help you to rebuild your credit record
• Members of the community will judge me – since a bankruptcy proceeding is conducted in the United States Bankruptcy Court, the matter becomes a public record, but unless you tell people about your filing or are seeking new credit or other opportunities it is unlikely that the issue will ever arise
• Chapter 13 filings require full repayment of debts – a Chapter 13 bankruptcy plan requires that an individual make all the payments pursuant the terms of an agreed payment arrangement and this may be for any portion of the outstanding debt.

For Helpful Guidance

We can help you to sort through the complicated web of misinformation that exists about bankruptcy. Contact the Arizona bankruptcy lawyers of the Harmon Law Office, L.L.C.

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http://EzineArticles.com/?Common-Bankruptcy-Misconceptions&id=4165125

Common Bankruptcy Misconceptions is a post from: Bankruptcy Court Online

For better or for worse, many people grow up to be deeply concerned with their reputation and how they are perceived by others. While in principle this seems like it could be a genuinely beneficial trait as it might motivate positive actions and behaviors, in practice it can instead prove to cause significant distress as an individual attempts to create a positive outward impression that is distantly removed from the actual reality of the situation. This is frequently true with regard to a person’s financial circumstances as there is a social pressure to appear successful and at a minimum absolutely responsible with the repayment of debts. In some cases, filing for bankruptcy may be the best option.

Despite the fact that there are instances in which seeking bankruptcy protection offers relief not only from the stress of lingering debts, but also from the anxieties caused by aggressive collection efforts. Frequent and threatening letters and phone calls can take a toll on a person’s emotional health and may adversely affect his or her work life and interpersonal relationships. It is no coincidence that disputes regarding money are one of the most commonly cited causes of marital arguments and dissolutions. Choosing to file for bankruptcy protection can give you the opportunity to begin rebuilding your economic stability instead of continuing to struggle and scramble in the hope that something will improve.

Starting Over, Starting Better

In addition to the social taboo against utilizing the forms of protection afforded by the United States Bankruptcy Code, the immediate and lasting effect that a bankruptcy filing has on a person’s credit score and his or her access to loans and credit also serves as a deterrent to some. This is regrettable, though, because an unmanageable debt load and an ongoing inability to make timely payments can trigger a perpetual condition that has the same consequences as a bankruptcy filing might but without the advantage of having some assistance with the resolution of outstanding debts.

After you have filed for bankruptcy protection, you will be followed by that fact on your credit report for up to 10 years and may struggle to obtain credit, but the same will be true if you are consistently failing to repay your debts. As you begin to rebuild after bankruptcy, the following are some important steps:

• Adjust your standard of living to fit your new economic reality – if you continue with the same behaviors and habits that led to your bankruptcy filing, you will end up in the same difficult position
• Pay all of your bills on time, with no exceptions
• Seek a credit card so that you can aggressively start to rebuild a positive relationship with credit by paying your bill in full each month

The Help You Need

It can be intimidating to seriously wrestle with the issue of filing for bankruptcy or taking other steps to overcome massive debt. For the advice that you need contact the Arizona bankruptcy lawyers of the Harmon Law Office, L.L.C.

Joseph Devine

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http://EzineArticles.com/?Life-After-Bankruptcy—Starting-Over&id=3664325

Life After Bankruptcy – Starting Over is a post from: Bankruptcy Court Online