Archive for September, 2009

Free Bankruptcy Evaluation

Thursday, September 17th, 2009 at 6:08 pm

In the midst of a global economic recession, it should come as no surprise to anyone that personal bankruptcy filing is on the rise. In fact, bankruptcy filings are up by over a third from the same time last year. What to do?

If you are considering filing for bankruptcy, you should always consult a competent bankruptcy lawyer. The fact is that there are several kinds of bankruptcy and you will have to identify the one that is right for you. It is also important to note that bankruptcy laws are constantly changing and you need to know everything you can about the current laws. These laws also vary from state to state and sometimes the differences are dramatic. Therefore, it is essential that you consult a trained professional who is up to speed on all the laws and all the procedures in your home state.

Even if you are familiar with bankruptcy and know what chapter you want to file, you need to know that it’s not your decision to make. The courts decide what chapter you can file based on how your financial information is presented, and a bankruptcy attorney knows how to present your financial data in a light so as to be able to achieve the desired result.

But even if you plan on exploring your bankruptcy options, this is not a process you want to enter with your eyes closed. So, before you consult a professional, it is always a good idea to examine your many options. And once you feel like you are on firm ground, you should talk to an expert. Do not attempt a do-it-yourself bankruptcy. It is not only that bankruptcy law is complicated, but also that it is constantly changing and if you are a neophyte you are inevitably going to miss something.

What exactly is bankruptcy?

Bankruptcy is a legal status that helps you slowly pay off your creditors when debts are mounting and you no longer have the ability to compensate them on their timetable. The process is often initiated by an individual debtor who wants to get his finances in order and needs a hand from the federal government.

When an individual files for bankruptcy, they will have to attend a hearing in which their debt is restructured and a payment plan for creditors is put into effect. According to US law, there are currently six forms of bankruptcy protection that are available for individuals and businesses. In the next few paragraphs we are going to take a look at each of them.

Chapter 7: This is the most basic form of liquidation for both private citizens and businesses. It is often referred to as straight bankruptcy because it is the simplest, the quickest and because the laws don’t vary much from state to state.

Chapter 9: This form of bankruptcy is probably the least popular and is only utilized in cases of municipal bankruptcy.

Chapter 11: This form of bankruptcy is commonly used by US businesses who have gone into debt and need the help of the government. The process is also known as corporate bankruptcy and it allows companies to continue to operate their business while they repay their debts and improve their credit.

Chapter 12: Includes debt solutions for farmers and fishermen.

Chapter 13: This plan was specifically designed for people with a regular source of income who are able to repay their debts but simply need more time.

Chapter 15: A process for foreign debtors.

As we mentioned, the first thing you should do if you are considering filing for bankruptcy is to consult a bankruptcy lawyer. Most of them will be happy to give you a free bankruptcy evaluation and will inform you of all of your rights and the steps you need to take to declare bankruptcy. They will also let you know which form of bankruptcy is right for you.

It is important to note that the most popular form of bankruptcy for individuals, Chapter 7, can be used only once in an eight-year period. So, if you have already filed for bankruptcy protection in the past eight year, then you cannot apply again.

For more insights and additional information about Filing Personal Bankruptcy as well as having the option to get a free bankruptcy evaluation from a qualified bankruptcy lawyer in your local area, please visit Free bankruptcy evaluation web site at Bankruptcy Evaluation.

FREE BANKRUPTCY EVALUATION

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Can I Keep My Credit Cards After I File Bankruptcy?

Sunday, September 6th, 2009 at 3:17 pm

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PastDue Many bankruptcy filers are wondering whether they are entitled to keep one or several credit cards for emergencies backup. In general, you may not because your credit cards will be cancelled regardless, since you file the bankruptcy. The credit card issuers tend to punish their card holders for filling any kind of bankruptcy; in most cases, the credit cards of bankruptcy filers will be terminated once they file for a bankruptcy. But there are some exemptions where terms and conditions will be applied to enable the bankruptcy filers to continue holding their credit cards.

There are some exceptions applicable only to chapter 7 bankruptcy filers. Some credit card’s issuers will allow you to keep your credit card but with a sized down credit limit, and in return you need to repay them for some of your debts. In fact, some companies will automatically send you or your attorney a proposed reaffirmation agreement, a contract between you and your creditor that you will pay all or a portion of the money owed, despite the bankruptcy filing, in exchange for a minimal amount of new credit.

Beside the sized down credit limit, a chapter 7 bankruptcy filers may allow to keep their credit cards by some of their card issuers but the interest rate will be revised to a higher than the normal interest rate. But, if you can always pay your credit balance in full each month, you will never incur a finance charge, and the high interest rate won’t hurt you.

Other than chapter 7 bankruptcy filers, all credit cards must be given up at the filling of bankruptcy. However, there are credit card holders who have maintained their credit cards at zero balance for a long period of time do not report their credit cards during the filing. This action can be considered illegal since in effect your preference on one creditor (your credit card issuer) over other creditors, because repayment ordination is a trustee job.

If you are not eligible to file under chapter 7 or even you are filling under chapter 7 but you didn’t manage to get approval from your credit card issuers to keep your credit cards, the best thing is report all your credit cards and give them up. In most cases, your need to wait until the bankruptcy filing has cleared and then work with a debt management consultant to rebuilt your credit step by step. Of course, in the months and years after the bankruptcy filling, you may not be eligible for top-tier or even middle-tier credit cards.

But with some efforts and fiscal strategy such pay your monthly credit balance in full and on schedule will help you to rebuilt your good credit record and you can begin to erase the stigma of the bankruptcy; and eventually put you back in the realm of good to high credit score.

In Summary

In most cases, bankruptcy filers need to give up their credit cards. But, there are exceptions for bankruptcy filers in chapter 7, the debtors who file