ne 1 have Bankruptcy knowledge. I’m at a crossroad?

I need current info on the BP laws pros and cons. I have read some info but would like ne 1 with personal experience to share their knowledge. Thank you, Mark

This entry was posted on Thursday, July 2nd, 2009 at 1:39 am and is filed under Bankruptcy Law. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.

2 Responses to “ne 1 have Bankruptcy knowledge. I’m at a crossroad?”

1. valstpatrick Says:
   July 4th, 2009 at 2:30 am

   There are 2 different ways to file BK.
   One is CH 7, this states you have NO real assets and all unsecured debts goes away, all secured debt (cars) as long as you continue to PAY the payment, you get to keep the secured property.
   The other is CH 13 -this is generally if you have a house or other assets and requires you to pay a small portion to a trustee monthly, this includes past due payments on the house, or cars (secured debt) BUT also requires you to keep current with the secured property payments. CH 13 will not reduce your mortgage on your primary residence, but protect you from foreclosure if you are delinquent on the payments. Once you file CH 13 - you MUST continue to make the correct mortgage payment along with the trustee payments. If you do not make the required payments, you are DISMISSED from protection and the bank can foreclose on your home. Once you make all required payments to the trustee (24-36 months) you are discharged (like in CH 7) and the unsecured debts are finished.

2. AllBusiness Editors Says:
   July 5th, 2009 at 10:36 pm

   Filing for personal bankruptcy is a last resort. While such a situation is very stressful and will all but put an end to your credit rating for a long time, the federal bankruptcy law is gives you a clean slate. It’s a step that’s considered when an individual’s debt is climbing at a rate faster than he or she can pay it off.

   Bankruptcy Basics:
   Bankruptcy is something that one enters into with the help of a qualified bankruptcy attorney, who will usually look first to see if there are any possible alternatives. Should bankruptcy be the only option, you’ll begin by filing a petition with a statement of your assets and liabilities, as well as a list of your creditors.

   There are two types of personal bankruptcy: Chapter 7 and Chapter 13. Chapter 7 bankruptcy involves liquidating your assets and turning them over to the courts. A trustee of the courts follows a court-supervised procedure, reduces the debtor?s assets to cash, and then pays the creditors. State or federal law will exempt some assets in both types of bankruptcy.

   A Chapter 13 bankruptcy is filed by a debtor who has a valuable asset, such as a house, that he or she wishes to keep, but is not covered by the state or federal exemptions. Under this type of bankruptcy, the debtor, through the courts, sets up a plan of payment with the creditors over a period of several years. Often the creditors, in hopes of getting something sooner than later, will settle for less than the full amount. This will work for someone with a steady source of income. Rules and regulations are spelled out by the court, and must be followed by both the debtor and creditors.
   Once someone has filed for bankruptcy and the court has approved the petition, all transactions are frozen. Notices are sent to creditors who must stop all actions to recover or collect money from the debtor. Once the debt has been satisfactorily resolved under the agreement set forth in the bankruptcy proceedings, a discharge is issued, releasing the debt. All creditors receive a permanent order to stop all forms of collection action on discharged debts, including legal action and all communications with the debtor. For bankruptcy to be beneficial, you must provide full disclosure. Hiding assets or trying to fool the courts can result in penalties for fraud.

   As for the credit rating of the debtor, bankruptcy will stay on a credit report for 10 years. The debtor can, however, still file for and typically receive a debit card or other type of cash card.

   Personal bankruptcy laws have changed recently, with the primary result being that the new rules make it more difficult to declare Chapter 7 bankruptcy. Currently, more than twice as many people file for Chapter 7 than for Chapter 13. Under Chapter 7, most of the filer’s unsecured debts are written off, whereas Chapter 13 requires the consumer to repay all or part of their debts within three to five years. Under the new law, it may be harder to make payments, as the courts will determine the amount to be repaid to creditors based on the basic cost of living in your state or county, as determined by the IRS and Bureau of Labor Statistics. The difficulty is that your actual living expenses are usually higher than what the IRS has set as standards.

   If it looks like bankruptcy may be the only way out, contact a qualified bankruptcy attorney. Do not follow any scheme in which someone advertises that they can make everything okay. They can’t.

   The web is a great resource for aid in your research, although searches can be difficult at times. Worry not, however, for below we’ve listed the most reputable sources of help and information on personal finance and getting out of dire straits like the brink of bankruptcy.

   Here are the aides:
   Smart Money:
   Kiplinger:
   CNN Money:
   [for other great financial sources on the web, consult the full list at]

   For more practical information, visit allbusiness.com’s Personal Finance Corner:

   or see the Top 10 Personal Banking Mistakes:

   Personal Finance can become a burden for many, so rest assured that there’s information out there to help you gain a clearer picture of your status.