Why Does Filing An Asset Or No
Whether you file an asset or a no-asset case is important to you, but it’s also important to your creditors. In a no-asset case, you don’t lose any property and your creditors get nothing. By contrast, in an asset case, not only do you have to give up property, but your creditors stand to get paid if they follow the correct procedures.
Here’s how it works.
The court alerts creditors that you’ve filed for bankruptcy by sending out a notice. The notice includes the bankruptcy case number, the name of the trustee, and states whether it’s an asset or a no-asset case.
If it’s an asset case, the notice will include the date by which a creditor must complete a proof of claim form to receive a portion of available funds. If a case is initially filed as a no-asset case, but the bankruptcy trustee finds assets later, the trustee will send out a new notice with a proof of claim filing date.
How To File For Bankruptcy
Yeahit’s going to feel like you’re digging up and showing off every bit of private information you’ve ever had.;Really, the only upside is they dont ask for that awkward eighth grade yearbook photo.
You’ll Get Stuck Paying Credit Card Charges Made Shortly Before Bankruptcy
Lawmakers recognize that some people considering filing for bankruptcy could be tempted to run up debts before filing a caseand that wouldn’t be fair to creditors. Bankruptcy law has provisions that make many of those last-minute debts potentially nondischargeable.
For instance, there are two ways a creditor could challenge a charge made shortly before filing:
- a luxury item purchased on credit, or cash advance, might be considered presumptive fraud, and
- any credit purchase made when you have no intention to repay the debt could also be fraudulent in bankruptcy.
In either case, the creditor could file an adversary proceeding in your bankruptcy case to challenge the discharge of the debt. Keep in mind that it is permissible to charge necessary items, such as food and needed clothing.
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Work With Your Attorney
Many bankruptcy attorneys will let you pay your Chapter 7 fees over time, but they will usually require that your fees be paid in full before the case is filed. For a Chapter 13 case, the attorney fees can be included in your monthly Chapter 13 payment. Some bankruptcy courts will allow you to file a Chapter 13 case through which you pay only your attorneys fees over some number of months, then convert the case to Chapter 7.
A Chapter 7 bankruptcy is a liquidation, which means your debt is discharged and you don’t have to repay it. A Chapter 13 bankruptcy is a reorganization, which means you establish a three- to five-year payment plan with your creditors.
Ways To Pay For Legal Help When You Dont Have Any Money In The First Place
If youâre not eligible for legal aid and need the help of a bankruptcy lawyer for your case, there are things you can do to pay for the attorneyâs fees. Most bankruptcy attorneys realize that coming up with the fees in a lump sum can be hard and offer payment plans to their clients. So, when they say you have to pay the attorneys fees âup frontâ they often mean âbefore your bankruptcy case is filedâ and not that you have to come up with a lump sum payment somehow.
Use your tax refund to pay the attorneyâs fees: Consumer bankruptcy filings in March and April are much higher than the rest of the year because many people take advantage of their tax refund to pay for legal help.
Stop paying your unsecured debts, like credit card debt, and use that money to make payments to the law firm youâve hired.
Sell something thatâs not protected by an exemption. Any property you own when you file bankruptcy that isnât protected by an exemption can be sold by the bankruptcy trustee to pay your creditors. If you already know that something you own wonât be protected, itâs ok to sell it for itâs fair market value and use the funds to pay your bankruptcy lawyer.
Your best bet is to talk to schedule a free consultation with a bankruptcy lawyer and ask about their recommendations on how to come up with the money to pay them.
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Filing Bankruptcy With No Money While Being Unemployed Is An Option
As discussed above, filing Chapter 7 while unemployed is an option and is not an unusual occurrence. Bankruptcy exists to help everyday people with debt relief when they need it the most. While it is possible to file bankruptcy with no money, you should be careful about when to file based on your particular circumstances. If you are not certain what timing is best, you can always consult a bankruptcy attorney or partner with a nonprofit like Upsolve for assistance.
Acknowledge Your Debt Situation
- Your credit cards are at, or over, their limits;
- You are using one credit card to make the payment on other credit cards;
- You are using credit card cash advances to pay monthly bills;
- Collection calls demanding payment on your debt that you cannot make are becoming a nuisance;
- You have received a legal action notice.
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Here’s What To Do If You Can’t Afford The Legal Fees Of A Chapter 7 Bankruptcy Attorney
By Cara O’Neill, Attorney
Many debtors have a difficult time affording the fees charged by attorneys for Chapter 7 Bankruptcy. But payment options exist. If you can’t afford a Chapter 7 bankruptcy lawyer, consider whether one of the following might work for you:
- stop making payments on debts that will get wiped out in bankruptcy and pay your attorney instead
- borrow the fees from a friend, family member, or even your employer
- retain a bankruptcy lawyer who will handle creditor calls while you pay fees over time
- file on your own
- obtain assistance from a free clinic, legal aid society, or pro bono attorney, or
- file for Chapter 13 bankruptcy and pay attorney fees through your repayment plan.
You’ll also learn why paying your bankruptcy lawyer with a credit card isn’t an option. If you’re considering Chapter 13 as a way of financing bankruptcy fees, you’ll want to understand the differences between Chapter 7 and Chapter 13 bankruptcy.
Want step-by-step bankruptcy guidance? Read What You Need to Know to File for Bankruptcy in 2021.
Debts That Can And Cant Be Discharged In Chapter 7 Bankruptcy
Chapter 7 should dismiss most of the debts you owe, but there are some hard-and-fast debts that cant be discharged in Chapter 7.
The list of non-dischargeable debts includes:
- Child support
- Student loans must prove undue hardship
- HOA fees if you surrender your home or condo
- Any other form of unsecured debt.
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How To Pay For A Bankruptcy
Filing Chapter 13 means you have the financial footing to structure a repayment plan for your debts including attorney fees after youve filed.
But if youre in enough financial distress that you need to file Chapter 7, youll likely need to pay your attorney before he or she files your case. If you cant afford these costs, you can:
-
Raise the money
-
Work out a payment plan before filing
-
Go pro bono, which means finding an attorney who will take your case free of charge
The first option takes creativity and hard work. The others require you to prove financial need, so gather proof of your income and expenses, as well as your tax statements, before meeting with any legal counsel.
Costs If You Have Assets
After you’re made bankrupt there might be other costs you’ll need to pay if you have:
- assets – for example, property
- spare income – this is money leftover after you’ve paid for everyday living costs
Any assets or spare income you have are called your ‘bankruptcy estate’. A trustee from the government’s Insolvency Service will be appointed to oversee your bankruptcy estate.;
The costs could include:
- an admin fee of £1,990
- a general fee of £6,000
- a trustee fee – this will be 15% of the amount they get from selling your assets
- the cost of selling your assets – for example, estate agents’ fees
You only have to pay these fees if you have enough money or assets in your bankruptcy estate.;After the trustee has paid these costs from your estate, they’ll share the rest of the money left in your bankruptcy estate among your creditors.
Read more about bankruptcy costs you might have to pay from your spare income.
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Bankruptcy Exemptions On Prince Edward Island
- No limit on clothing for you and your family
- No limit on medical or health aids
- Any motor vehicle needed for transportation to work up to $6,500, or up to $3,000 if not used for work
- Household furniture, utensils, equipment, food and fuel up to $5,000
- Tools used by you in your business or trade, up to $2,000
What To Do After Chapter 7 Bankruptcy
Push the re-start button on your financial life.
Thats the first thing anyone should do after having debts discharged in Chapter 7 bankruptcy. Hopefully, that re-start button includes a plan for reduced spending and paying all bills on time.
The easiest way to do that is to draw up a budget that realistically accounts for your income and expenses.
If youre not good at that, call a nonprofit credit counseling agency and get some free assistance from their professional certified counselors. Helping consumers come up with an affordable monthly budget is their specialty.
They can give you the benefit of their training and experience at drawing up monthly budgets, plus tips on how to make the bottom line come out in your favor every month.
If you get in the habit of paying bills on time, you will begin to , and youll regain favor with lenders and credit card companies. A few years of good practice and you and your creditors will forget this ever happened.
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Start Fresh Debt Free
+ How does it work? At Bromwich+Smith we offer a powerful debt relief solution called a Consumer Proposal, which usually reduces;debt to only a percentage of original amount owed. The rest is forgiven.;
+;Eliminating debt shouldn’t cost you more money!;Only a Licensed Insolvency Trustee like Bromwich+Smith has the legal authority to administer a Consumer Proposal for you. In fact, if an online or offline debt relief service offers a Consumer Proposal, ask if they are Licensed Insolvency Trustees. If they are not, they will by law be required to engage an external Trustee, which could add their unnecessary fees to the process.;
+;Legally binding on all creditors, including CRA Taxes, Credit Cards, Payday Loans, Bills and all other unsecured debt.
+;5 years to pay, interest free!;Get off the interest treadmill. There are absolutely no interest charges with a Consumer Proposal, and a Proposal can be paid over 5 years, with all debt combined into a single monthly payment.
+;Immediately stops all creditor calls and actions.;All creditor collections and legal actions must stop. No more bothersome calls or stressful letters. If wages are being garnisheed, this too is stopped.
+;Does not involve your assets.;Your home, car and other possessions are not touched by a Consumer Proposal.
+;No Hidden Fees. We are paid out of;the settlement to your creditors.;
Need Help Contact Walker & Walker Today
Have you had enough of creditors calling and bills you dont know if you can pay every month? It may be time to investigate bankruptcy and how it can help you get the chaos in your life under control.;Contact us;today to see what Walker & Walker Law Offices can do to help you get started with and get through the bankruptcy process.
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Attorney Fees Are Expensive
It could take a long time for someone to tuck away enough funds for a Chapter 7 filing the national average to hire a bankruptcy lawyer in the U.S. is about $1,500 according to Upsolve, a nonprofit that helps low-income families file for bankruptcy for free. The cost of hiring a bankruptcy attorney can vary and largely depends on factors such as the complexity of your case. Plus, Chapter 7 attorneys typically require payment in full before theyll file a case.
The costs to file bankruptcy dont stop there. You might also need to dole out cash for court filing fees, credit counseling and a financial management course.
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Pros And Cons Of The Bc Bankruptcy
For many people, bankruptcy in BC seems like the perfect solution. If there is no other way to get out of debt, bankruptcy releases you from your obligations and allows you to start over financially without losing everything. Bankruptcy also enables you to get financial counselling to help you avoid similar problems in the future. Moreover, debt collectors are legally required to stop contacting you once you file for bankruptcy.
On the other hand, there are many reasons why you should pause before you file for bankruptcy. BC residents see their credit suffer for seven years after a bankruptcy is discharged, making it difficult to get new loans and the most affordable rent, mortgage, and interest charges. A bankruptcy will also force you to surrender a great deal of your property. Unless other arrangements are made, you will have to surrender:
vehicle equity over $5,000 home equity over $12,000 in Vancouver and Victoria, and $9,000 elsewhere in British Columbia the value of household items such as furniture minus $4,000 equity in tools of your trade worth over $10,000
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Northwest Territories Bankruptcy Exemptions
In the Northwest Territories, property exempt from seizure in bankruptcy is set out in the Exemptions Act 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 household furniture and equipment in your home worth $5,000 and you do not owe any outstanding loans on these items, the equity you have is $5,000. In the Northwest Territories, the exemption for the total of these items is $5,000. In this case, you would be entitled to keep these possessions and your creditors cannot take them from you.
How A Person Goes Into Bankruptcy
There are two ways a person can go into bankruptcy.
The first and more common way is to have the person make an assignment in bankruptcy.
This means that you voluntarily place yourself into bankruptcy.
The second, and rarely used, way is for creditors to ask the court to make an order that a person is bankrupt.
In both these cases a trustee in bankruptcy is required to administer the bankruptcy and you will need to make an appointment to see one.
Meeting With the Trustee
Before you meet with the trustee, he or she will likely ask you to fill out a form setting out your pertinent financial information.
This makes the meeting more productive.
The first meeting is free and last approximately an hour.
The trustee or an administrator will review your financial information, discuss any options, explain how bankruptcy or a proposal works, and answer your questions.
The meeting is non-judgemental and is conducted in a pressure-free manner.
What Happens Next?
The debtor usually thinks things over a day or two before making up his or her mind.
Once you decide to go bankrupt, you will contact the trustees office and tell them to proceed.
It only takes a day or two for the trustee to prepare the documents before you go to the trustees office to sign them.
The trustee will immediately file the documents with the Office of the Superintendent of Bankruptcy.
You are bankrupt when the documents are filed.
Stay of Proceedings
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