People arrive at bankruptcy for numerous reasons, such as poor spending habits, loss of income, and medical expenses, to name a few. But whether bankruptcy is a positive process or a negative one depends on two factors: the debtor’s perspective on what bankruptcy accomplishes, and the quality of legal counsel received during the bankruptcy process.
The Perspective of Bankruptcy
Concerning the first factor, bankruptcy is equally viewed as something that destroys financial freedom and something that gradually restores it. Debtors who take the former perspective are likelier to avoid bankruptcy for as long as possible, often incurring more debt that further complicates their eventual bankruptcy. Concerning the second factor, debtors who retain quality legal counsel are likelier to experience bankruptcy as a process that, although stressful, is a step toward financial freedom, not the loss of it.
When your life is being dictated by debt you are unable to pay, claiming bankruptcy can dissolve some, if not all, of your debt. Bankruptcy can dissolve monetary obligations associated with credit and medical debt. Yet, it can’t dissolve debts involving: college and/or educational loans, mortgages, charges fined by the court, alimony, child support, and civil debts associated with court rulings. For additional information concerning Pennsylvania bankruptcy laws, consult with a Philadelphia bankruptcy attorney.
Comparing Chapter 7 Bankruptcy to Chapter 13
When you declare personal bankruptcy in Pennsylvania, you have two options: Chapter 7 bankruptcy, or chapter 13. Below, we give a basic summation of each type to inform you of your options under Pennsylvania bankruptcy. For more detailed information, contact a Philadelphia bankruptcy attorney.
1. Claiming Chapter 7
When people think of bankruptcy they are probably referring to Chapter 7 bankruptcy, which utilizes the liquidation process to turn non-exempt assets into cash in order to pay off debts. In declaring Chapter 7, a trustee assigned by the court will help liquidate your assets and allocate them to creditors who then, work to dissolve your debts. This type of bankruptcy is perfect for debtors who are in a predicament where it would be impossible for them to pay down their debts even if given more time and a new payment plan.
2. Chapter 13
Unlike Chapter 7, Chapter 13 does not involve liquidation of assets. Instead, the debtor pays on his or her debts under more affordable pay arrangements for a period of time (usually 3-5 years), after which the debts are dissolved. Chapter 13 is ideal for debtors that have enough income to pay on their debts over the aforementioned period of time. In Debtors whose income exceeds their state’s median household income are usually required to file for chapter 13.
To learn more about hiring a Philadelphia bankruptcy attorney, visit the website of Reinherz & Reinherz.
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. Obtain a copy of your current credit report and evaluate your score
There are many free credit report services available today. Choose the one that best fits your needs and get that score. If you find out that your score is below 450 it is imperative that you begin working to fix your credit right away. Even if your score is 500 or below red flags will go off for creditors. Only a score of 600 and above will garner the respect of a creditor and there is still room for improvement.
2. Get a consolidation loan
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
Once you consolidate your loans make sure you make payments on time. This will truly get your creditors attention and hopefully restore their confidence in your debt-paying ability and attitude.
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.
Despite your efforts it may be too late for you to avoid filing for bankruptcy. In the event that you have no other choice you’ll want a chapter 7 bankruptcy attorney working for you. Your bankruptcy attorney will be educated on the ins and outs of the law and have your best interests in mind.
Want to find out more about chapter 7 bankruptcy, then visit David Chang’s site on how to choose the best bankruptcy attorney for your needs.
It helps to have a plan. In life. In business. In relationships. Plans are good things. So to, in Chapter 13 bankruptcy, having a plan is not only a good idea, it’s the law!
Clients look to me as their Orlando bankruptcy lawyer to formulate a Chapter 13 plan that meets all of their financial goals. The Chapter 13 plan, which lasts from 3 to 5 years, is used to cure arrearages on a mortgage, completely eliminate a second mortgage, discharge credit card debt, shave money off a car loan, or pay off IRS debt.
In a Chapter 13 bankruptcy, the person filing the case (Debtor) files a payment plan at the beginning of the case. This plan addresses what goals the Debtor wants to accomplish during the term of the plan. It also serves as guidance to creditors as to how they are going to be treated in the plan. Finally, it provides instruction to the Chapter 13 Trustee regarding who she is to pay and how much she is to pay each creditor.
There are many decisions to be made by the Debtor when constructing a Chapter 13 plan. I see many Do it Yourselfer’s in Court who have a really hard time successfully formulating a plan that can be understood by the Trustee or the creditors. This often will result in the creditors objecting to the plan, or the Trustee filing a motion to dismiss the case. When that happens, the person has a bankruptcy on her credit report and absolutely nothing to show for it.
Hiring an experienced Orlando bankruptcy lawyer who has successfully represented clients through the Chapter 13 process in Orlando is a must if you want a smooth ride through the case. In the vast majority of cases I file for my clients, so long as the Trustee payments are being made, my clients never have to appear in Court. More importantly, my clients accomplish the goals they set out to achieve at the beginning of their case.
Plans are the King in Chapter 13 cases. Having a solid plan that eliminates your debt and provides a smooth ride in your Chapter 13 case is the best!
Looking for help with filing Chapter 13 bankruptcy, then visit www.khuntergoffpa.com to find the best Orlando bankruptcy lawyer for you.
What Is Chapter 7 Bankruptcy?
Chapter 7 bankruptcy, often called a straight bankruptcy, is a liquidation proceeding. The borrower relinquishes all non-exempt property to the bankruptcy trustee who then turns it to money for payment to the creditors. The debtor receives a discharge of all dischargeable debts usually inside of 4 months. In the vast majority of cases the debtor has no assets that he / she would lose so Chapter 7 will allow that person a reasonably quick “fresh start”.
One of the primary purposes of Bankruptcy Law is to allow a person, who is hopelessly burdened with debt, a fresh start by wiping out his or her debt.
Men and women who file for chapter 7 bankruptcy must agree to go to credit counseling. After filing chapter 7 bankruptcy, it may be challenging to obtain credit for several years, and it is not possible to file for personal bankruptcy again for a set period of time.
It has become more challenging to file for chapter 7 bankruptcy in the United states, thanks to laws which drastically tightened the bankruptcy policies in the early 2000s. It is recommended to check with a legal professional and an accountant before investing in a bankruptcy filing, because although the professional fees for the consultation may be high, there may be an alternative that has not been thought about. A professional consultation can also smooth the way to move ahead with bankruptcy filings, if a person decides to continue with bankruptcy proceedings.
What Is Chapter 13 Personal Bankruptcy?
Chapter 13 Bankruptcy is commonly recognized as a reorganization bankruptcy. Chapter 13 bankruptcy is filed by individuals who want to repay their debts over a time period of 3 to 5 years. This type of bankruptcy appeals to people who have non-exempt assets that they want to retain. Additionally it is only an alternative for people who have predictable earnings and whose income is adequate to pay their reasonable expenses with some sum remaining to pay down their financial obligations.
Hiring an experienced Boston bankruptcy lawyer is an important decision that should not be taken lightly. Make sure to setup a consultation with the Massachusetts Chapter 7 attorneys so that you can better understand your available options.
If debt is overwhelming you, credit card statements are piling up, medical bills going unpaid and creditors knocking at your door day and night, you might have no alternative but to file for bankruptcy. If you live in Michigan: there are a number of very good Bankruptcy Lawyers in Massachusetts that will be able to offer you sound advice.
What is bankruptcy? It is a way to get legal protection against your creditors if you are unable to meet your debts for valid reasons. Reasons that can be put forward during the application include large medical expenses, losing your job and the loss of an income earning partner.
It is highly advisable to call in the services of a legal expert during the application process. Unless you want to walk out without a dime in your pocket.
When your lawyer submits your application to be declared bankrupt to the court, they will inform all your creditors about this. A first meeting of creditors will then be arranged, more or less thirty to forty days after the application.
At this meeting your lawyer will then provide to the court a complete picture of your financial affairs. This must include your monthly income and expenses, as well as a statement of all your assets and liabilities. After the meeting you can safely refer your creditors to your lawyer if they should turn up at your house.
Should your application be approved, you will no longer have to pay the majority of your creditors. The bad news is that everything you own will become part of the insolvent estate. You will only be allowed a couple of things, normally that needed to carry on working.
Bankruptcy Lawyers in Massachusetts are law experts. They know bankruptcy law like few people know the Bible. They are also totally familiar with the whole application process. It’s therefore in your own interest to use one of them to represent you during the application and afterward.
Filing for bankruptcy is an important and serious decision. Speaking with a Arlington Heights Bankruptcy Lawyer can help you to make a sound decision for you and your family. Speaking with a qualified Arlington Bankruptcy Lawyer will help you understand your options.
