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Is Bankruptcy A Good Option For Me

Maintain Your Job And Home

How Do I Know if Bankruptcy Is the Right Thing For Me?

Maintaining your job and home is an essential part of life after bankruptcy and rebuilding your financial profile and reliability. You want to show lenders that you can pay back debts such as your mortgage and that you can maintain a reliable, steady stream of income through a job.

In addition, many lenders consider your employment history when reviewing applications. Having a consistent income improves your chances of being approved for future loans. Job hopping or gaps in employment on the other hand, can make you look like a risk.

Restrictions On People Who Have Been Declared Bankrupt

Once you have been declared bankrupt, you will be guilty of an offenceif:

  • You do not disclose the bankruptcy when getting a loan or any other credit facility of 650 or more
  • When trading in a name other than that in which you were made bankrupt, you do not disclose the bankruptcy
  • You act as a director, manager, auditor, liquidator or receiver of a company without permission of the court

These offences carry a maximum penalty of 5 years in prison and a fine of1,270.

Other consequences of bankruptcy are:

  • If you wish to travel outside the State, you should tell the Official Assignee. You may be arrested if it seems to the High Court that you are leaving the State in order to avoid the consequences of your bankruptcy.
  • You cannot be granted an enduringpower of attorney on behalf of someone else, and if you hold one already, it is automatically revoked if you become bankrupt.
  • Under the Charities Act 2009, you may not be a trustee of a charity if you are adjudicated bankrupt.
  • Some professional bodies disqualify members who are adjudicated bankrupt

When Is Bankruptcy A Good Idea The Answer Depends On Your Situation

Bankruptcy is not inherently bad or good, but it is an important protection for honest consumers who find themselves in big trouble with debt. A small minority of filers try to abuse the bankruptcy process to hide assets and cheat creditors. These stories are dwarfed by the stories of honest people who have suffered through tough times and finally turned to bankruptcy because they cant see a way out. Even the Bible calls for debt forgiveness every 8 years.

If you find yourself in a tough financial position and cant see a way out, meet with an experienced bankruptcy attorney. The forum has contacts in 50 states check them out today. Dont let stereotypes stand in the way of getting the relief you and your family need.

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The Ability To File For Bankruptcy Protection Is Firmly Rooted In The United States Constitution

Article 1, Section 8, which enumerates the powers granted to Congress, gives Congress the power o establish . . . uniform Laws on the subject of Bankruptcies throughout the United States. Bankruptcy is the legal forum that is specifically created to balance the rights of creditors with the need to protect debtors. The establishment of bankruptcy was a cornerstone in the realization of this belief in economic fairness.

As a practical matter, a persons need to file bankruptcy may be determined by the financial events that are taking place in his or her life. The bankruptcy test below consists of a series of yes or no questions that may assist in determining whether bankruptcy is right for you. While the test is not definitive, if you answer yes to two or more of the questions, please contact us to learn about the protections and benefits that bankruptcy can offer you.

Advantages And Disadvantages Of Debt Settlement

Is Bankruptcy Right for Me?

Debt settlement can be the best way out of a financial mess, but it is full of pitfalls, and the Consumer Financial Protection Bureau warns: Debt settlement may well leave you deeper in debt than you were when you started. Now theres a sobering thought.

The biggest problem is convincing a creditor, or multiple creditors, to accept less than they are owed. Creditors arent obligated to enter a settlement agreement, but many are willing if they believe you cant pay and otherwise will file for bankruptcy protection. If that happens, it means they receive little or nothing.

Some people hire a debt settlement firm to represent them others negotiate themselves. The advantage to contracting with a debt settlor is saving time and avoiding the hassle of negotiating yourself. But the CFPB warns: Dealing with debt settlement companies can be risky.

If you decide to pursue debt settlement on your own, its vitally important you educate yourself on the details of the debt that you owe, develop a realistic plan on how much you can save each month based on your current financial situation, and negotiate with creditors or collectors with a sensible repayment plan that they will agree to in writing.

Heres a quick look at some of the pros and cons of debt settlement:

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If You Do Not Live In England Or Wales

The process to become bankrupt is different if you live in Scotland or Northern Ireland. You cannot apply to become bankrupt in England or Wales.

You might be able to apply if you live anywhere else – talk to a debt adviser.

You must not break the bankruptcy restrictions in England or Wales. These might also apply outside England and Wales – check the laws of the country you live in.

Advantages And Disadvantages Of Bankruptcy

Bankruptcy chapters 7 and 13 are the two avenues individuals can use to clear their debts through the courts. Chapter 7 eliminates your debts, but in some states it might require you to liquidate all you own, including your car and house, to help compensate your creditors.

Chapter 13 protects your home from foreclosure but requires that you partially repay creditors over a 3-5 year period. Because it requires repayment, it is often called wage earners bankruptcy.

Both chapters will cause long-lasting damage to your credit report. In addition, student loan debt, income taxes and child support payments cant be discharged in bankruptcy, so you will still be obligated to repay them.

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What Happens When You Are Declared Bankrupt

A Bankruptcy Inspector from the ISI will serve you with a copy of the Orderof Adjudication and Warrant of Seizure. The Inspector willalso give you a form to complete, requesting various details, which the ISIwill use to contact you and process your bankruptcy.

Your bank accounts will be frozen, except for one current account in whichyou can keep a balance of up to 1,000 for general living expenses.

The ISI will contact all financial institutions and inform them that youhave been made bankrupt.

As soon as your bankruptcy starts, you are free of debt. The OfficialAssignee now owns your assets and administers your estate. Your creditors canno longer seek repayment directly from you. They must deal directly with theOfficial Assignee and all correspondence should be forwarded to him.

You must contribute any surplus income to the Official Assignee.

Your name will appear in the Bankruptcy Register, which is kept in the Office of the Examinerof the High Court. Anyone can check this register.

Read more in the ISIs guide Afteryou are made bankrupt .

Income

The Official Assignee will negotiate an Income Payment Agreement or seek anIncome Payment Order for the surplus of your income over the reasonable livingexpenses for your situation, based on the ISIsguidelines. The agreement or order will last up to 3 years. Act 2015 reduced this period from 5 years, with effect from 29January 2016.)

No deductions will be made from social welfare payments.

Assets

Understand What Bankruptcy Means

Is bankruptcy my only option?

Unexpected or lengthy illnesses, sudden or prolonged unemployment, and many other factors beyond your control can plunge you into debt that you might struggle to recover from. Insurmountable debt can make it impossible to meet your daily needs and can also lead to persistent pressure and anxiety.

When that happens, you can file for one of many chapters of bankruptcy, which will allow you to greatly decrease or completely dismiss overwhelming debt. Bankruptcy protection is a federal process and cannot be filed or tried in a state court. Federal bankruptcy laws will allow you to begin the credit and finance journey over with a new start.

In addition to removing debt for consumers and businesses, bankruptcy also provides some measure of protection for creditors who might still recover a portion of the debt they are owed through restructured or reorganized debt payments. Your lawyer can help you choose the right bankruptcy chapter and filing to fit your specific financial needs.

For a legal consultation, call

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How Does Bankruptcy Affect My Personal Assets

As previously stated, Chapter 7 bankruptcy is the best option to eliminate debt quickly, but to achieve financial relief quickly, an individual may have to agree to sell or liquidate non-exempt personal assets. Such assets may include homes, other real estate or land, luxury vehicles, and anything else, that is not otherwise protected, of value that can pay off debt. You should speak to an experienced bankruptcy attorney regarding your assets before filing a Chapter 7 bankruptcy. Most debtors contemplating a Chapter 7 bankruptcy will have no assets at risk of liquidation.

Are Certain Debts Non

Absolutely. The right to a fresh start is not without limitations. You cannot discharge fraudulent debts, some taxes, student loans , amongst others. The list of what is non-dischargeable is as much black letter law as it is good lawyering. However, if you have been honest and forthright, chances are that you will not have any problems.

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Do My Debts Qualify For Bankruptcy

Not all debts qualify for bankruptcy. Debts that cant be wiped out are child support, alimony, some types of taxes, debts to government agencies, debts for personal injury caused by driving while intoxicated and any court fines or penalties.

Debts that can be wiped out in Chapter 7 bankruptcy include credit card debt, medical bills, personal loans, lawsuit judgments and obligations from leases or contracts. Chapter 13 bankruptcy wipes out those debts, plus debts from a divorce , debts for loans from a retirement plan. Technically, student loans can be discharged if you prove undue hardship, however, this is often a difficult task.

There are some people who are considered judgment proof because everything they have is exempt under state law. People that are judgment proof may not need to file bankruptcy because creditors cant touch their assets if their source of income is from social security, pension plans, 401 retirement savings, disability benefits, veterans benefits, alimony or support payments.

You Could Become Homeless

Bankruptcy Counselling vs. Credit Counselling: What Is the ...

Once you file bankruptcy, the option to buy a home could be off the table for seven to 10 years as well, though there are ways you can try to overcome the situation. More important, filing bankruptcy may lead to a future filled with declined rental applications. Many landlords will check your credit before they approve you for a lease arrangement. Having a bankruptcy is usually a red flag that you could be a risky tenant who wont pay rent.

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Do I Have To Qualify For Bankruptcy

Sort of. You do have to qualify for a Chapter 7 bankruptcy by passing the Means Test. This is based off of your last 6 months of income. It is important to note that they did not take away bankruptcy with the new law. This is a myth which we hear all too often. Even if you dont qualify for a Chapter 7, you can almost always find relief under Chapter 13 or even Chapter 11.

Bankruptcy Is Not The End Of Your Financial Life

If you can no longer afford to pay your bills and you haven’t been able to negotiate better terms with your lender, then it may be time to consider bankruptcy. Don’t beat yourself up over it too much, Rao says.

Filing for bankruptcy is often seen as this admission that “I’m a failure,” but that’s not usually the case, he says. And while it’s a step most people don’t want to take, bankruptcy can provide a lot of relief if done right.

“It really does provide that fresh start,” Tadross says, adding that once your Chapter 7 bankruptcy is approved, or you receive a discharge in your Chapter 13 case, you’re completely debt-free.

Chapter 13 bankruptcies can stay on your credit report for three years, while Chapter 7 cases disappear after 10 years. But that won’t prevent you from getting approved for credit.

Quite the opposite, Tadross says, adding he usually advises clients that they will likely receive dozen pre-approved credit card offers within a week of completing their bankruptcy. Why? Because creditors know you’re debt-free and that you’re not going to be able to file for another bankruptcy for several years.

Debt can feel like an albatross around your neck, Tadross says, but you shouldn’t feel humiliated that you’re taking steps to rectify it through bankruptcy. “You’re just making arrangements to catch up on what you owe it’s not the end of the world,” he adds.

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You Could Hurt Your Job Prospects

Depending on the type of bankruptcy you file, a record of your bankruptcy can be on your for seven to 10 years. Many employers have no interest in checking your , but you give them the right to do so when you approve a background check. If you plan to work in any position involving the handling of moneyor even in nonfinancial roles within the insurance, finance, law, or academic industriesyour credit will likely be one facet of your background check. A bankruptcy on your record could cause potential employers to deem you ineligible for a job.

Why does it matter? According to human resource expert Lisa Rosendahl, a deputy human resources officer at the U.S. Department of Veterans Affairs in St. Cloud., Minn., how a person manages their own personal finances is an indicator of how they may manage someone elses.

If a prospective employer asks for a background check and you approve it, the employer has the right to see your credit score.

When To Consider Debt Settlement Or Bankruptcy

How do I Know that Filing Bankruptcy is the Right Decision for Me?

If your monthly debt payments, excluding mortgage or rent, exceed 20% of your income, you have a debt problem that requires action. The seriousness of the problem, and your ability and commitment to overcoming it, will determine whether a debt settlement plan or bankruptcy is the better option.

Here are some scenarios in which debt settlement may provide the better path out of debt:

  • Youre able and willing to negotiate with creditors or debt collectors on a settlement plan that you can afford.
  • Your creditors will agree to greatly reduce your debt burden in exchange for your commitment to make a lump-sum payment.
  • Your income is stable enough that you can continue to pay your mortgage or rent and other essential bills in addition to the payments required under a debt settlement, while still saving some money for emergency expenses.

Here are some scenarios in which bankruptcy is the better option:

Its important to remember these are general guidelines. Anyone weighing the pros and cons of debt settlement vs. bankruptcy should consult with a nonprofit credit counselor. Counselors from National Foundation for Credit Counseling member agencies such as InCharge Debt Solutions can help evaluate your current financial situation and the various debt relief options available to you.

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Your Creditors May Hold A Meeting

Sometimes, a meeting of creditors is required or requested. The purpose of this meeting is to

  • allow creditors to obtain information about the bankruptcy
  • confirm the appointment of the LIT
  • appoint up to five inspectors to supervise the administration of your estate and
  • allow creditors to give direction to the LIT.

If a meeting is called, you will be required to attend.

Will You Lose Your Car Or Other Property

How much property you get to keep depends whether you’ve pledged the property as collateral for a debt, and on the “exemption” laws that are available in your state. If you file for Chapter 7, you might lose your car if you have substantial equity that isn’t protected by your state’s exemption laws.

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Can You File For Bankruptcy After Debt Settlement

Yes. In fact, that route to clearing debt is fairly well-traveled. Many people understandably consider bankruptcy a last-resort solution and often first try other debt solutions such as debt consolidation, debt management plans and debt settlement.

Filing Chapter 7 bankruptcy removes the obligation to pay your debt. That applies to the terms of the original agreement as well as the agreement you negotiated with your creditors as part of your debt settlement.

A successful debt settlement with a creditor can be subject to a preference avoidance action brought by a bankruptcy trustee. The trustee can recover those funds if you successfully settled one or more accounts and paid more than $600 to a creditor in the 90 days before the bankruptcy filing. A preference avoidance means that money paid to settle a debt with a creditor will be divided up among the other unsecured creditors you still owe.

Nationwide Criminal Appeals Attorney

Is Bankruptcy a Good Option for You?

When you suspect that an error at trial has affected the outcome or your Texas civil suit, you have a right to appeal that decision. Your window for filing an appeal is very short, and your Notice of Appeal must be filed quickly. For those involved in a civil legal action at the state level in Texas, the appeals process is very different from trial court. The proceedings generally involve only legal briefs based on extensive legal research. In some situations, the appellate judge will request oral courtroom presentations for further clarification thats where the Law Office of Kretzer and Volberding P.C. come in.

Contact our firm today if you feel that an error has affected your civil ruling, and our civil appeals attorneys in Texas will work to set the facts straight.

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