Posts Tagged ‘Chapter 7 Bankruptcy’

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Yes, You Can File Bankruptcy Again!

November 3rd, 2010

I, like many other Orlando bankruptcy attorneys, do not like repeat customers. Referrals are the backbone of my business, but a repeat customer is someone who, after receiving bankruptcy relief once, has met with financial troubles again. While I’m sorry to see them back in a difficult situation, I am happy to say, I can usually help my client get debt relief again.

Many people believe that bankruptcy is a “once-in-a-lifetime” deal. In other words, they think that once you have filed, you cannot file again. This is simply not the case. When a previous client calls me about possibly filing bankruptcy a second, or even a third time, I explain the following:

Since life can be “unfair” and it is impossible to predict a future financial disaster, bankruptcy laws do not prohibit you from receiving debt relief by filing bankruptcy again. In light of the recent economic downturns, people have lost their jobs, incurred medical bills or other unforeseen emergencies that put them in a position in which they again feel their best solution is to file bankruptcy.

So, let’s break it down. First, you may file a Chapter 7 bankruptcy once every 8 years. Section 727(a)(8) of the Code says as much.

If your last case was a Chapter 7, and you are within the 8 year window and cannot file another Chapter 7, then you may file a Chapter 13 bankruptcy if 4 years have passed from the time you filed the Chapter 7. See Section 1328(f)(1) for that one.

If your last case was a Chapter 13, then you must wait 6 years from the time you filed the Chapter 13 before you can file a Chapter 7. However, you can still get a Discharge from a Chapter 7 case filed within the 6 years from filing the previous case if the Chapter 13 payment plan paid either 100 percent of all allowed unsecured claims or paid 70 percent of such claims, was proposed in good faith, and represented your best efforts. Section 727(a)(9) is where to go for this.

If two years have passed since your last Chapter 13 case, you may file another Chapter 13 bankruptcy.

There are exceptions to the 2 year rule for Chapter 13 bankruptcies. In general, multiple filings occur in conjunction with avoiding home foreclosure. If you can show your circumstances have changed and that you could continue to make payments resulting in a successful outcome of your case and that the Judge rules in your favor, you may file a new Chapter 13 within the 2 years.

Navigating the timelines involved in these cases can be tricky and it is a good idea to talk to experienced Orlando bankruptcy attorneys about your specific situation before making a decision on whether you can file bankruptcy or not.


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A Beginner’s Guide To Chapter 7 Bankruptcy

October 21st, 2010

Deciding to file for personal bankruptcy may be among the most difficult decisions you have to make. On top of that, what kind of bankruptcy you declare might have an effect on your future, your chosen lifestyle as well as your loved ones. Chapter 7 bankruptcy makes up about just about 2/3 of all individual bankruptcies, but what is it exactly? The following is short guide to Chapter 7 personal bankruptcy, and the things that it might change for you.

The main reason of personal bankruptcy is almost always to change financial problems into a better future, and for several reasons, Chapter 7 (also called liquidation) is usually the swiftest method of doing so. All valuable assets are assessed and handed over to a trustee, who is given the task of trying to sell the pieces, and using the earnings to pay back the collectors. In addition to the petition itself, the person needs to have the following ready: a comprehensive list of funds and liabilities, documents regarding current income and expenditures, a recent statement of the available budget and virtually any leases or contracts currently applicable.

Immediately after one files for bankruptcy, their property is preserved by an ‘automatic stay’. This helps prevent debt collectors from endeavoring to collect on virtually any unpaid debt but for when agreed upon by the court. The stay continues for however long the bankruptcy proceeding. Just some benefits of an automatic stay are proper protection from eviction, car or truck repossession and foreclosures.

As for your other assets, you’ve probably heard of ’secured debts’ and ‘unsecured debts.’ A ’secured’ creditor is one whose loan is insulated by assets of some kind; if ever the debt isn’t paid, the guaranteed items might be repossessed. Oftentimes, as soon as the secured debts are settled in a Chapter 7 process, the unguaranteed ones (those where there isn’t any collateral and therefore no risk of loss, such as credit card bills) are discharged. In some cases, where the person is without valuable property and assets, the span of time between submitting and debt relief can be just a few months, and seldom does a more involved proceeding require over six months.

One more thing to keep in mind is that many outstanding debts are not to be dismissed in any case, such as child support, overdue taxes, and student loans. Other non-dischargeables consist of any debt borne from the acquisition of a luxury item in the two months before filing bankruptcy.

If you’re considering Chapter 7, you could find yourself in need of legal assistance. The services provided by experienced Detroit Chapter 7 lawyers could greatly benefit you as you figure out your finances, and your future.


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Can Bankruptcy Eliminate IRS Debt?

September 24th, 2010

As an Orlando bankruptcy attorney, I know that my clients fear IRS debt over and above all other types of debt. That fear, in some respects, is justified given the unique powers the IRS has to collect on debt owed to it. However, in some cases, people who owe money to the IRS can obtain the same debt relief with the IRS that they can with their other creditors by filing either a Chapter 7 or Chapter 13.

Not all IRS debt is dischargeable in bankruptcy. However, with the help of an experienced Orlando bankruptcy attorney, it is possible to achieve the debt relief you seek when dealing with the IRS. Basically, it comes down to timing and meeting 5 general requirements.

1. The Three-Year Rule

Normally, tax debts are due April 15th of the year after the year for which the taxes are assessed. However, if an extension was filed or the return was filed late, that date is pushed back. Once three years have passed from the date the taxes were due, the IRS debt passes this qualification.

2. The Two-Year Rule

More than two years prior to filing bankruptcy, the tax return for the IRS debt in question must be filed with the IRS.

3. The Two-Hundred-Forty Day Rule

240 days must pass after the last assessment of the tax claim by the IRS prior to filing bankruptcy.

4. Non-Fraudulent Return

No fraud was involved in the filing of the tax return in question.

5. Willful Tax Evasion was not Present

There was no attempt by the taxpayer considered be willfully “cheating” or evading the tax.

These are very basic qualifications to determine whether IRS is dischargeable when filing bankruptcy. Only an experienced Orlando bankruptcy attorney can help you determine if your IRS debt can be eliminated by the filing of a Chapter 7 or Chapter 13 bankruptcy, and help your avoid any problems that could arise out of the given qualifications.

When my clients have IRS debt they would like to eliminate when filing bankruptcy, I advise them to file an Adversary Proceeding along with their bankruptcy case. This Adversary Proceeding allows a separate Order to be entered specifically stating that the IRS debt has been Discharged in the case. With this Order, there can be no question, once the bankruptcy is closed, that the IRS debt was eliminated in the bankruptcy.

As you can see, it is possible to eliminate money owed to the IRS when filing bankruptcy. Depending on when you file the case and how old the debt is, you may be able to Discharge all or most of the IRS debt you owe.

If you have questions about whether you can eliminate IRS debt, or when you are ready to speak to an experienced Orlando bankruptcy attorney to determine if you can indeed wipe out that debt, I hope you contact me.

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Chapter 7 Bankruptcy Is Not The Only Chapter

September 20th, 2010

Bankruptcy is the result of being unable to meet ones financial commitments.

Businesses and individuals are entitled to file for bankruptcy under chapter 7, which has the attraction of removing debt from the debtor at discharge.

The main drawback to chapter 7 is that, with a few exceptions, all personal assets are sold to provide funds for creditors in full or part payment. However, if an individual is under crushing levels of debt, losing everything and starting again can be an attractive proposition.

However, chapter 7 bankruptcy is not always an option, as a compulsory 2 stage means test has to be completed to ensure that the individual really does have no way of meeting his or her debts.

The way the means test works is to check and see if the debtor’s income is less than the median income for a same size family in the same state over the previous 5 months. If it is, the debtor can file under chapter 7. If not, a further test is applied, failure of which will result in a chapter 13 filing.

So, what are the alternatives to chapter 7?

First off, think about whether or not you really do need to claim bankruptcy at all? It can look like a simple option, and look very appealing when one is struggling to make ends meet, but the consequences are serious.

Perhaps the first thing an individual should seek to do, is to talk to those to whom they owe significant sums and see if any of these can offer a repayment holiday, or a deferral. Failing this, a simple rescheduling should be sought.

If a creditor is open to a revised payment schedule, then combine this with a debt counseling service to help formally arrange things. What you have then done is basically the same as a chapter 13 bankruptcy, but without the bankruptcy!

Chapter 11 is suited for businesses. If a case under chapter 7 has been dismissed, then that means that the court feels that the company has sufficient income to repay at least part of it’s debts. Chapter 11 allows the company to continue trading, thus generating income, whilst at the same time repaying its creditors by way of an agreed and enforced repayment schedule.

It might be that because of these harsh economic times you might be considering declaring yourself bankrupt. If you would like more free information about declaring yourself bankrupt, visit www.declaringyourselfbankrupt.net.


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Credit Repair Tips To Help You Avoid Bankruptcy

September 19th, 2010

Creditors have to determine what kind of a risk it would be to loan you money. All debtors are a risk to creditors however it is those they view as a good risk that will ultimately get the loan. In order to reach your goal of being seen as a good risk you need to first take action to raise your credit rating. A good credit score is the best way to be seen in a good light by a creditor. Use these tips below to start increasing your credit score. Keeping your credit score high is also a great way to keep bankruptcy from becoming your reality.

1. Get your hands on a copy of your credit report.

If your score is below 400 you really need to take steps to repair your credit quickly. Even a score below 500 would set of warning bells in the minds of creditors. 600 and below is acceptable but you ultimately want your score above 600 so that creditors will see you as a good debtor capable of paying them back their money. Your credit score is yours and there are many free credit reports available that will help you keep tabs on your score.

2. Consider loan consolidation

When you take your current debts and consolidate them into one loan you are likely to reduce your total monthly payment. It will also make it easier to pay off these debts.

3. Pay on or before the due date each month

Loan consolidation is a tool to help you. It is vital that once you consolidate you pay your monthly balance by the due date. You want creditors to notice you commitment to getting this debt paid.

4. Make bankruptcy a last resort

There is nothing worst that you can do to your credit score than file for bankruptcy. Having bankruptcy on your credit record means getting a small loan, buying a car or buying a home would be virtually out of reach. Bankruptcy stays on your credit report for 7 years and that is a very long time.

If your debt has become out of control and you are considering filing chapter 7 bankruptcy make sure you learn about what is involved in a bankruptcy proceeding and consult with a qualified bankruptcy attorney.

Learn more about chapter 7 bankruptcy. Stop by David Chang’s site where you can find out all about bankruptcy proceedings and what we can do for you.


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Filing Bankruptcy Under Chapter 13 May Wipe Out Your 2nd Mortgage

September 8th, 2010

It probably won’t surprise you, as an Orlando bankruptcy lawyer, I have seen it first hand: Orlando home values are on the decline, according to an article published recently in the Orlando Sentinel.

Unfortunately, the same can be said for real estate in almost all areas of Florida. It seems everyone is underwater on their homes. In the past few years, many of my Orlando bankruptcy clients have benefited from the ability, in a Chapter 13 case, for their Orlando bankruptcy lawyer to file a motion in their case which allows them to completely wipe out the balance owed on a 2nd mortgage.

To be eligible for this type of relief, you must be able show, through an appraisal of your property, that the value of the property is less than what is owed on the 1st mortgage. In a recent blog by a well respected Illinois and Wisconsin bankruptcy attorney, David Leibowitz, David points out the options available to people with regard to stripping of a lien (second mortgage) on their home.

Since the decline in the economy, there has been some question over whether a person filing bankruptcy under Chapter 7 could qualify to strip a 2nd mortgage. Recently, this question came before an Orlando bankruptcy Judge and she issued an opinion stating that lien stripping is only available under Chapter 13 bankruptcy. Just filing bankruptcy under Chapter 13 is not enough, you must also complete your Chapter 13 plan by making all payments due under the plan and have your Discharge Order entered by the Judge prior to the mortgage being eliminated.

With any luck, the Orlando housing market will rebound in the near future. At which time, once my Orlando Chapter 13 bankruptcy clients have finished making their payments under the plan, they will successfully strip away their 2nd mortgages and once again have equity in their homes.

By filing bankruptcy under Chapter 13, my clients can attain this goal, along with many others, including saving on their car loans and wiping out credit card debt. With the help of an experienced bankruptcy attorney, debt relief is possible.

If you are considering filing for bankruptcy, make sure you hire an experienced bankruptcy lawyer to work for you. Do you have more questions about filing for bankruptcy before you take the plunge? Check out K. Hunter Goff’s FREE eCourse.


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Chapter 7 Bankruptcy Now Has A Means Test

September 6th, 2010

Of all the various chapters for filing bankruptcy in the US, chapters 7 and 13 are the most popular. In fact 85% of all filings are under chapter 7, probably as this is perceived as the “best” type of bankruptcy, leaving the debtor free from any debt on discharge, unlike chapter 13 where debts have to be repaid under a repayment plan.

Even though all the individuals possessions are sold under chapter 7, the end result of freedom from debt makes chapter 7 the most popular for the debtor, but perhaps the least popular for the creditor.

This is because that although the debtor loses virtually everything, the creditor often recovers very little.

In the past, creditors lost out when sometimes they need not have done, as some people hid the true size of their wealth and used chapter 7 merely to get rid of debt that they could have afforded to repay, had their debts been restructured under a chapter 13 filing.

Therefore, 2005 saw the introduction of a compulsory means test for individuals seeking chapter 7 bankruptcy, failure of which would automatically push them into a chapter 13 filing, which is a 3-5 year repayment plan.

The means test has a number of stages, the first being a calculation of the debtor’s disposable income, based on their earnings over the previous 6 months and deducting various living expenses.

The first stage is to calculate what the applicant’s disposable income has been over the previous 6 months. In other words deducting what the court considers to be reasonable amounts for living expenses for example and seeing what’s left.

There are then two more steps. The first takes your previously calculated “disposable income” figure and compares this against the median income for a family of the same size in your state. If your income is less than this, you do not need to take part 2 of the test as you automatically qualify for chapter 7.

If you income is found to be greater than the median then you have to go through some complicated calculations. The problem an individual faces once they fail the first part of the test, is determining if your “disposable income” figure is sufficient, after paying monthly “allowed” expenses, to pay at least a proportion of your unsecured debts (credit cards for example).

The point is that you should really get professional legal advice before filing bankruptcy, so you can be properly prepared.

Bankruptcy is a drastic step, in spite of what other people may tell you. It can devastate your financial future as your credit score drops. Although chapter 7 is the most common form of bankruptcy, it may be worth looking at chapter 13 bankruptcy law. If you would like further free information and advice, visit www.chapter13bankruptcylaw.net.


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What Kinds Of Bankruptcy Exist In The United States?

August 23rd, 2010

U.S. Bankruptcy Code, through federal law, directs bankruptcy cases to all of the elements of bankruptcy related to supervised processes through Bankruptcy Rules, though, a lot of local judicial districts might have their very own rules. Over the land there’s at least ninety separate judicial districts, several states having more than others establishing varied types of procedures which are specific to each district.

Chapter 7, used by both individuals and businesses, can be an option that can offer rapid assistance for the debtor, making it possible for a halt to any course of action to pursue debt owed towards the financial institution, soon after relevant details, a “means test” plus a petition have already been recorded. By the act of the court, filing fees as well as related costs could possibly be amended, in certain conditions with time, approximately 180 days. Though the structure of Chapter 7 is needed to get help for a debtor, for his or her mounting financial obligations, they need to make note of that it also provides the creditor a much better return of money due, through liquidation of the borrowers estate assets, not really shielded by Chapter 7 exemptions. Much of the consumer’s debt should be expected to be discharged, however this method is not readily available to partnerships and corporations.

Chapter 13 is a bankruptcy option useful to debtors having sufficient income to ensure progress on the money they owe granted some support, for example respite from the particular procedures of lenders. A trustee is appointed then debtor needs to build a schedule in support of financial debt fulfillment inside a three to 5 year time period which will then be provided to the judge. To end up being allowed the plan needs to be in compliance with the Bankruptcy Codes, secured loan providers need to be provided for in comparison with the chapter 7 solution, and also the financial debt needs to be within precise boundaries. Furthermore, often the debts are not discharged until the plan payments are finished. The main advantage of Chapter 13 is the debtor won’t lose property and assets seeing that this is not some sort of liquidation method.

Chapter 12 features a equivalent process to Chapter 13, although is distinctly specific to farmers and fisherman, plus the supervision the substantial amounts of debt affiliated with his or her companies. This method allows the operation with the enterprise to carry on. Like Chapter 13, a the courtroom appointed trustee takes into account the normal earnings of the debtor, and assists with the making of the 3 to five year repayment schedule.

Chapter 11 is a reorganization course of action designed far more for firms compared to individuals. The procedure may become highly-priced along with lengthy. The judge possesses complete jurisdiction over the rejection or acceptance regarding the reorganization approach, though loan providers are continually offered the opportunity to assess the debtor’s problems. Employing Chapter 11, the debtor is permitted to make alterations to fortify their particular business to preserve trading by means of a combination of debt discharges and repayment of debt as recommended in the reorganization plan.

Chapter 9 provides relief to municipalities which are generally experiencing financial problems.

Chapter 15 can be described as bankruptcy selection to provide for the scenario in which a debtor or perhaps the debtors estate is managed under the jurisdiction with mutually United States law and those of some other country or countries.

Audus Zinkman has more San Antonio Bankruptcy articles on his personal site. If you would like to read more quality articles on bankruptcy check out his San Antonio Attorney site.


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Frequently Asked Bankruptcy Questions

July 1st, 2010

What Is Chapter 7 Bankruptcy?

Chapter 7 bankruptcy, often referred to as a straight bankruptcy, is a liquidation proceeding. The debtor turns over all non-exempt property to the bankruptcy trustee who then changes it to money for payment to the creditors. The debtor will get a discharge of all dischargeable financial obligations generally within four months. In the majority of instances the consumer has no assets that he / she would lose so Chapter 7 will offer that individual a reasonably fast “fresh start”.

One of the primary functions of Bankruptcy Law is to give an individual, who is hopelessly mired with debt, a clean start by wiping out his / her debt.

Individuals who file for chapter 7 bankruptcy will need to agree to go to credit counseling. After declaring chapter 7 bankruptcy, it may be tough to obtain credit for a few years, and it is not possible to file for personal bankruptcy again for a set amount of time.

It has become more challenging to file for chapter 7 bankruptcy in the United states, thanks to laws which significantly tightened the bankruptcy policies in the early 2000s. It is a good idea to talk to an attorney and an accountant ahead of investing in a bankruptcy filing, because even though the professional charges for the assessment may be high, there may be an alternative which has not been thought about. A professional consultation can also smooth the way to move ahead with bankruptcy filings, if a debtor decides to carry on with bankruptcy proceedings.

What Is Chapter 13 Personal Bankruptcy?

Chapter 13 Bankruptcy is also identified as a reorganization bankruptcy. Chapter 13 bankruptcy is filed by people who want to settle their financial obligations over a period of three to five years. This kind of bankruptcy is attractive to individuals who have non-exempt assets that they want to keep. Additionally it is only a choice for individuals who have predictable income and whose income is sufficient to pay their reasonable expenditures with some sum remaining to pay down their debt.

Hiring an experienced Boston bankruptcy lawyer is an important decision that should not be taken lightly. Make sure to setup a consultation with the Maryland bankruptcy legal professional so that you can better understand your available options.


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Considering A Bankruptcy In Oklahoma?

May 26th, 2010

For some Oklahoma citizens, filing bankruptcy might be a scary ordeal. Although, one helpful way of relieving this fear is realizing a few basic facts about Oklahoma bankruptcy. The following is a quick overview about the information involved in this legal issue.

While it is true the US Bankruptcy Code is the main building block to every state law dealing with this financial legality issue, different aspects to the laws will change between states. There exist certain and pinpointed things that can vary greatly. A few of these concepts deal with the median income rate and which properties individuals own that are exempt from the proceedings. This fact is true for Oklahoma, too.

There are several various types of bankruptcy. The numerous kinds are then differentiated by numbers and chapters. This is fairly simple to grasp, because the chapter and number is in reference to a chapter and number within the Bankruptcy Code. There are a lot of chapters, although the following points just cover two typical ones.

Chapter Seven is typically the most widely recognized form of this legal issue. It is also known as total liquidation, too. With it, a court appointed trustee is assigned to oversee the collection of nonexempt owned properties. These properties, or property as the case may be, is sold and the money gained in its sale is given to the relevant creditors. After which, all remaining debt is then eliminated.

Many might assume Chapter Seven is a very intimidating concept, because its very description seems scary. However, that is not the case at all. Oklahoma, as well as other states, have provisions in their laws that allow individuals to keep essential property, most specifically their home and one vehicle.

Another common type related to this legal debt relief is known as Chapter Thirteen. This chapter is sometimes called reorganization. This type is targeted to individuals and families, as well, but excluding farmers and fishermen who qualify for another form known as Chapter Twelve. Essentially in this type a payment plan for one’s debts is maintained for an extended period of time, typically five years. A person’s average income and their basic living expenses are utilized to calculate the structure of the plan.

For Oklahoma residents wishing to file, determining eligibility and meeting with a lawyer are important. If a single resident makes less than $38,929, he or she is able to qualify for Chapter Seven. Meeting that mark or surpassing it, they then are eligible for Chapter Thirteen. There exist different income levels for married individuals or married couples that have children, so contact an attorney for specific information on that.

There is a large amount of information in relationship to bankruptcy. Oklahoma bankruptcy, though, does not always have to be a tremendously scary or stressful undertaking. Having the simple facts to this legal process can aid individuals who require debt relief.

Joseph St. James is not a licensed attorney and therefore cannot provide legal advice. So, if you are thinking about an Oklahoma chapter 7 contact an Oklahoma chapter 7 lawyer. You can call the Debt Line Law Office at (888) Debt-Line.


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