I Made An Advance Payment To A Company That Has Declared Bankruptcy What Can I Do
If you pre-paid for a service, you become a creditor and the LIT will send you a Proof of Claim form with your creditor’s package. Follow the instructions on the form and in the package, and make sure you have all of the required documentation proving that the debtor owes you money.
To be recognized as a creditor and to be eligible to share in the distribution of dividends, if any, you must provide the LIT with a completed Proof of Claim.
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When To File Chapter 7 And Chapter 13 Bankruptcy
Bankruptcy is a viable option for you no matter how high or low your debts are. Although the bankruptcy court does not have an outline regarding the minimum debt threshold, there are certain requirements that you need to meet in order to qualify.
- Filing history requirements: If you have filed and been discharged from a bankruptcy in the past, you may not be eligible to file for another bankruptcy discharge until a certain amount time has elapsed. The number of years depends on the type of bankruptcy you chose or the circumstances of your previous dismissal.
- Income requirements: To qualify for Chapter 7 bankruptcy, you need to pass the Chapter 7 Means Test wherein your income will be compared to the income of other families of your size within your state. This test allows the bankruptcy court to determine whether you have the capacity to pay off your debts.
- Other acceptable debt requirements: It is important to note that only certain types of debts can be discharged under this type of bankruptcy. Unsecured debts such as payday loans and credit card debts can be discharged in bankruptcy. ;You can also discharge the debts from a car or home that you dont wish to keep if you are underwater. If you are behind on either a mortgage or car loan, then you can catch up on those payments via a Chapter 13 bankruptcy.
Will I Lose My Car If I File Bankruptcy
If you file for Chapter 7 bankruptcy and local bankruptcy laws allow you to exempt all of the equity you have in your car, you can keep the vehicleas long as youre current on your loan payments. And if the market value of a vehicle you own outright is less than the exemption amount, youre in the clear.
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Can I Buy A House After Filing Bankruptcy
Its possible to get a mortgage after a bankruptcy. The amount of time you need to wait after your bankruptcy is dismissed or discharged depends on the type of bankruptcy and your loan type. FHA loans are a great option after bankruptcy because they allow you to buy a home with a lower credit score.
Are Your Debts Dischargeable
Even if you do qualify to file a Chapter 7 case you want to make certain it will give you the relief you are seeking, a true fresh start. To determine this it is important to look at the type of debts that you are seeking to discharge. Most debts are fully dischargeable, although discharging a secured debt likely means surrendering the collateral.
There is another category of debts called priority debts, which are generally non-dischargeable, meaning these debts will survive a bankruptcy filing. Priority debts include child support, alimony payments, tax debts and student loan. If the bulk of your debts are non-dischargeable filing a bankruptcy will not give you a full fresh start and may not be the best solution for you. You may want to consider reasonable alternatives, such as working with creditors to create a payment plan.
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How To File Bankruptcy In Canada
The first thing you must determine is if you are having severe enough financial problems to warrant going bankrupt to become debt free.
At this point you should find a trustee in bankruptcy, who is required to declare bankruptcy as only a trustee can administer a bankruptcy filing in Canada.
Once you have set up an appointment to meet with a local Licensed Insolvency Trustee you should be prepared to bring details about your income, assets, expenses and debts to help your trustee review your debt situation.
With all of the necessary information your trustee can also help outline the alternatives to bankruptcy that could help with your debt problems.
You can ask the trustee all of the questions you need to have answered, and take as much time as you need to make a comfortable decision about whether to claim bankruptcy.
Once you have taken the time to review all of your options and the information you have received from the trustee you will have to decide whether bankruptcy is right for you.
The decision is completely up to you but your trustee can provide as much help and advice as you need.
If you decide to go bankrupt you will need to provide the trustee with your personal information such as your name, address and birth date, a list of who you owe money , and what you own .
The trustee will begin preparing your bankruptcy paperwork and you will attend a second meeting with the trustee to review your paperwork.
The Benefits Of An Automatic Stay Of Proceedings
As soon as the trustee files your paperwork, the Bankruptcy and Insolvency Act guarantees your right to an automatic stay of proceedings. This means that all collection actions and attempts to force repayment are suspended immediately while you go through the legal process of bankruptcy. This includes:
- Collection calls
- Repossession
- Foreclosure
No new enforcement actions can be started, and even current enforcement actions must cease. For example, if you owe back taxes to the Canada Revenue Agency and they are garnishing your wages, the garnishment will stop once you file.
This can give you some welcome breathing room if your wages are being garnished or if youre dealing with threatening calls from collectors.
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When You Need To Buy A Car During Bankruptcy
Something that happens far more often than you might think is this: You file for bankruptcy and soon after filing you discover you need to replace your car. What to do? You know your credit is bottoming out or you wouldnt be filing for bankruptcy in the first place. The first thing you need to do is get on the phone with your bankruptcy attorney. Explain your situation and they will let you know if its a good idea for you to seek financing at that point in your bankruptcy process.
You might think it would be impossible for you to get any kind of car loan, but there are lenders who do have specific programs for people who need to finance a used car purchase while their bankruptcy is still open or after it has been discharged. At Day One Credit, weve spent years developing an extensive network of relationships with lenders who will work with bankruptcy customers. And you dont have to wait to apply for financing through us. As soon as you have a Chapter 7 case number or a Chapter 13 approved payment plan and the written permission of your bankruptcy trustee, we can help you find the bankruptcy car loan that fits your situation. You can get started right away on seeking a bankruptcy car loan, find out more information on our Common Questions page, or give us a call at 855-475-4725 to find out more about your options!
Do I Lose All My Assets When I File For Bankruptcy
Contrary to popular belief, when you file for bankruptcy, you will not lose everything. Each province and territory has its own exemptions to the bankruptcy law that outline which of your assets, and how much equity, you are allowed to retain. There are also certain costs and processes that apply across the country. Lets take a look at them below.
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Debt Secured By Collateral: Mortgages Car Loans And More
When you purchase expensive property on credit, the lender often requires collateral in case you fail to pay the loan. Known as a “secured debt,” this type of loan is used when taking out a:
- mortgage
- car loan, or
- a loan for business property, such as fixtures or equipment.
Whether you can discharge a secured debt will depend on if you return the property you pledged as collateral. If you give the collateral back to the bank, the loan associated with it will be dischargeable in your bankruptcy case.
If you fall behind while you’re in bankruptcy, the bank must file a motion and get permission from the court to proceed against the property; however, once the case ends, the lender is free to pursue its lien rights.
How Much Debt Do I Need To File For Chapter 7
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In a Nutshell
There’s no such thing as too much or too little debt for Chapter 7 bankruptcy. But, there are a lot of important factors to consider when determining if filing bankruptcy now is the best debt relief solution for you.
Written by Attorney Eva Bacevice.
There is no threshold amount that you need to reach to file a bankruptcy. Some chapters of bankruptcy have debt limits, but there is no such thing as a debt minimum. That being said, you certainly can and should evaluate if filing a bankruptcy makes sense in your current situation.
The better question to ask is do I qualify for a Chapter 7 and will it afford me the relief I am seeking?
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Irs And Chapter 13 Bankruptcy
You should apply for a Chapter 13 bankruptcy discharge if you cannot file under Chapter 7 bankruptcy. The only reason why you may find it difficult to discharge your personal income tax during bankruptcy is if its termed priority unsecured debt, Chapter 13 bankruptcy will make you pay your debt in full.
One major advantage to filing for bankruptcy in IRS tax is that the service will halt all collection efforts till you get a discharge on the money, or you get a rejection. Also, Chapter 13 bankruptcy can help you pay a loan for less than what you owe.
If you desperately need IRS to stop their constant calls and harassment, then filing for a Chapter 13 bankruptcy can do that. It helps you repay your debts without foreclosures, levies, and wage garnishments. Discuss with your bankruptcy attorney before you file for a Chapter 13 bankruptcy or any other type of bankruptcy. One thing to remember when filing bankruptcy is that there are certain rules that are dependant on the state. For example, if you are filing bankruptcy in Tennessee, filing bankruptcy in Indiana, filing bankruptcy in Illinois, or filing bankruptcy Louisiana, there are going to separate and individual rules for each place.
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What Should You Do If You Or Your Company Has Too Much Debt
If youre dealing with serious financial issues, contact a trustee, who is the Canadian bankruptcy expert. For the reasons already given, you should do this whether or not youre contemplating bankruptcy. The reason is very simple: the licensed insolvency trustee will assess your situation, offer you all of your available options and will do this for you for free! You cant find a better deal anywhere.
Were not only bankruptcy experts; were experts in dealing with debt. ContactIra Smith Trustee & Receiver Inc. today for a free consultation and you will be well on your way to regaining your former quality of life Starting Over, Starting Now.
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Once The Relief Program Ends You May Need To Take Additional Actions
Forbearance and deferment programs will only last so long, and then you’ll need to pay your bills. And some lenders may even require you to pay all your missed payments at once. If you’re still struggling at that point, it may be time to ask your lender for some longer-term relief such as lowering the interest rates or monthly payment amount on your mortgage, auto loans or credit cards.;
Underwater on your mortgage? You can apply for a loan modification that will rework the terms of your mortgage. Typically, if approved, you can reduce your monthly payment to a more affordable amount. This step requires you to file paperwork with your loan servicer.
While you can self-submit the application, Tadross says it may be better to work with an expert who specializes in this. If you do hire an attorney, expect to pay a flat rate of about $2,500 to have the paperwork compiled and processed. You can also reach out to a HUD-approved housing counselor, who will work with you for free to compile the necessary paperwork for the application.
When it comes to credit card debt, Tadross says the best thing to do is negotiate a debt management plan;or a settlement, where you work with a non-profit debt counselor to consolidate all your outstanding debt into a single monthly payment that you pay off over the course of three years. Usually your counselor will negotiate a lower interest rate for you while you’re working to pay off your balances.;
Preparing For Chapter 7 Bankruptcy
Theres some protocol to follow in the months before filing for bankruptcy. Failing to follow these instructions could undermine your efforts.
Dont Pay Creditors It seems counterintuitive and you should definitely make routine payments. But any large or unusual payments could be viewed as preferential transfers. That means one creditor has benefited unfairly over others.
No New Debt A new creditor could claim you took out a loan or ran up the balance on a credit card without intending to pay it back. Legally, thats fraud and it will not be forgiven.
No Unusual Transactions Dont stray from the routine. Dont transfer titles of cars or homes. Dont buy luxury goods. Dont transfer your business or remove your name from it. They can all be classified as fraud.
Be Truthful You are required, while filing for bankruptcy, to provide full and complete information. You must disclose any debt, assets, accounts or other financial information. Failure to comply could lead to fraud and potential criminal charges.
Dont Touch Retirement Funds You are generally allowed to keep retirement plans and accounts, so keep them safe while considering bankruptcy and dont use those funds to pay down debt.
Never think you can get away with something sneaky or dishonest. Your bankruptcy lawyer is always a good resource for what you should and shouldnt do.
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Signs It May Be Time To File Bankruptcy
Looking at all the different debts you owe versus what you make in terms of income can be an eye-opening experience. Some people go through life not paying attention to the big picture of their debt and income until something happens that forces them to do it. When the reality of the picture sinks in, it can cause a wave of panic, often followed by despair at what might feel like a hopeless situation. This is when filing for bankruptcy might be your best option to reduce your debts and work towards a brighter financial future. This article describes 10 different signs to help you realize when it may be time to file bankruptcy.
Cooperating With The Trustee
Bankruptcy filers have an obligation to cooperate with the trustee throughout their bankruptcy case. Filers will need to provide the trustee with a copy of the tax return for the year the case was filed.
After the meeting of creditors the trustee will file a Report of No Distribution indicating that no funds are going to be distributed to your creditors or a Notice of Claims Bar Date stating the due date for creditors to file claims to receive funds in your bankruptcy. Other than these filings, ideally you will not hear from the trustee after the meeting of creditors.
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New Brunswick Bankruptcy Exemptions
In New Brunswick, property exempt from seizure in bankruptcy is set by the provincial government and applies to the equity in an asset. Equity is the difference between the value of the asset and what you owe on the asset.
Example: If you have a car worth $6,000 and you still owe $3,000 on the loan, the equity you have in the car is $3,000. In New Brunswick, the exemption for a car is $6,500. In this case, you would be entitled to keep the car and your unsecured creditors cannot take this from you during the bankruptcy process.
Doesnt Filing For Bankruptcy Ruin My Reputation And My Life
Not if it gets you out of debt. You might be able to run from creditors for a while, but eventually the stress of that overwhelms people. Bankruptcy lets you stop running and start over again. It may take a few years for you to get loans and obtain credit again, but at least youll have that opportunity. Bankruptcy is meant to give people who made financial mistakes a second chance. In todays turbulent economy, that is a good thing.
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