Confirmation Of Bankruptcy Filing Qualification
After the meeting of creditors, the bankruptcy trustee will have enough information to decide whether you will qualify for Chapter 7 bankruptcy. The trustee will look for nonexempt assets and will decide whether its worth it to liquidate nonexempt assets. The trustee may do this by understanding the retail value of the asset and whether it will sell.;
The secured debts such as a vehicle will need to be dealt with around this point in the process. You can often reaffirm the debt as an asset, which is very common for vehicles.
When Should You Consider Filing For Bankruptcy
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Youre in financial distress and youre not sure what to do. Youre past due on your mortgage, youve racked up considerable credit card debt and youre well on your way to missing your next car payment.
If youre ready to take control of your finances but arent able to pay off all your debts, bankruptcy might be the right option for you. It can allow you to have a fresh financial start bolstered by better money habits than you had before.
Heres everything you need to know about whether youd be a good candidate for declaring bankruptcy.
Indiana Bankruptcy Means Test
The Indiana means test for bankruptcy first looks at your household income in the 6 months before your bankruptcy is filed. If your average annual income based on that timeframe is less than the median income for a household of your size in Indiana, you qualify for Chapter 7 relief. If your income is greater than that, the means test calculation allows you to take certain deductions based on your living expenses which may make you eligible to file Chapter 7 bankruptcy in Indiana even though you technically Ã¢â¬ÅfailedÃ¢â¬ï¿½ the first part of the means test.
Data on Median income levels for Indiana
Indiana Median Income Standards for Means Test for Cases Filed On or After May 1, 2021
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Getting On Track To Gaining Financial Freedom
If you are facing money problems, you need to get out of debt and rebuild your credit. To do that, there are several things that you need to do so you can make sure your finances are properly prioritized and in order. If you are facing wage garnishment, foreclosure, lawsuits, repossession, or continuous collection calls, you need to understand your rights and your bankruptcy alternatives. You need to have the basic skills and tools to get your finances in order. Here are a few things that you will have to do to get yourself out of the situation you are in if you are overwhelmed by debt:
- prioritize your debts
- understand the different options you have
- negotiate with your creditors
- stop harassment by debt collectors
- deal with foreclosure, repossession, and wage garnishment
- reduce your student loan payments
- rebuild your credit
What Happens After Bankruptcy
Once you legally file for bankruptcy, your creditors should no longer phone you or sue you and any existing garnishees are lifted. An appointed Licensed Insolvency Trustee will distribute money to your creditors from your non-exempt assets and surplus income. The bankruptcy process typically lasts between 9 and 21 months.
What Does It Cost To File For Bankruptcy In Ontario
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Filing for bankruptcy is a big decision. It has both positive and negative financial consequences that impact you and your family. Before you make such a big decision its important to weigh your options and understand the ramifications of filing for bankruptcy in Ontario, both in the short and long term.
A word of caution: Filing for bankruptcy can be a complicated process that cant be fully understood by skimming through a few articles. We strongly suggest that you take your time and do your research to determine which debt management options are best for your unique situation. Ontario bankruptcy trustees are the best place to go when seeking detailed information about bankruptcy. At Hoyes Michalos we offer you a free initial consultation, which is great because it means that you can test the waters prior to making any commitments.
Not All Debts Can Be Included In Bankruptcy Student Loans Secured And Non Secured Debts
Another reason why you may not be able to file for bankruptcy as a way to eliminate your debt is if you have debts that cant be included in bankruptcy. Student loans, secured debts, and even some non secured debts may fall into this category. By not including certain debts, this means that the amount of debt youre declaring bankruptcy on is less than what you may have thought. If that is the case, you need to decide if filing for bankruptcy is really the best option for your situation.
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Formal Proposal To Creditors
If the debtor cannot deal with their debt problems through personal budgeting, negotiation with creditors, or debt consolidation, the final bankruptcy alternative is a formal proposal or deal with the creditors.
Different countries have different legal procedures for compromising debts. In the United States, a debtor can file a Chapter 13 Wage Earner Plan. The plan will typically last for up to five years, during which time the debtor makes payments that are distributed to their creditors.
In Canada, a Consumer Proposal can be filed with the assistance of a government-licensed proposal administrator. Forty-five days after filing the proposal the creditors vote on the proposal, which is considered accepted if more than half of the creditors, by dollar value, vote to approve it.
Restructure Or Refinance Your Mortgage
If you own a house and are still paying your mortgage, thats likely a big bill. If restructuring your mortgage to pay less will help you avoid bankruptcy, you should approach your lender and see if they are willing to help structure a new payment plan. They may also agree to a temporary repayment plan, until you can repair your finances.
You may also look into refinancing your mortgage, which means applying for a new one with a lower interest rate and a longer pay period. This option usually requires a good credit record, since a bank is giving you a new loan.
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Individuals faced with debts that they cannot repay often consider bankruptcy. A bankruptcy filing provides a debtor a fresh start, allowing them get rid of most, if not all, burdensome debts through either total liquidation or a repayment plan . However, a bankruptcy filing leaves damaging and long-term impact on a debtors credit rating. For this reason, its advisable to consider all available alternatives to determine whether there is a less drastic method of solving financial problems.
Help From A Chicago Bankruptcy Lawyer
Whether you are considering filing for bankruptcy or seeking other options, it is important to be careful with the choices you make. There are situations in which you could be promised the sun, moon and stars only to find out that you still have debt and that your credit is now damaged. Fully research any company you decide to work with in this regard, and be sure that you have all the necessary information about the advantages and disadvantages of bankruptcy.
At Joseph P. Doyle, we can provide you with the accurate information and the skilled legal guidance you need in your pursuit of financial recovery.Contact the Chicago bankruptcy attorney at our firm to learn more:
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Some Unique Benefits Of A Chapter 13
- Chapter 13 protects individuals from the collection actions of their and allows and permits individuals to keep their real estate and personal property.
- You may be able to discharge debts in a Chapter 13 that would not be dischargeable under other chapters such as marital dissolution equalization payments, debt allocated in a divorce, non-criminal fines, and other specialized debts.
Finally, a chapter 13 is a dignified solution to your financial problems. You have the peace of mind that you did your best to pay part of your debt back and still receive the benefit of a discharge. If you would like to see how a chapter 13 bankruptcy would help solve your financial problems call Rowdy today for a free consultation.
File Chapter 7 Bankruptcy As A Last Resort
If you are so far in debt that you will never be able to repay it, the best solution may be a Chapter 7 bankruptcy. A Chapter 7 bankruptcy is the least desirable credit-wise but you are typically out of bankruptcy in 6 months and you don’t have to repay any debt. One disadvantage is that this shows on your credit report for 10 years from the date of filing your bankruptcy. Another disadvantage is that creditors are starting to tighten their credit requirements. You may have a tough time getting financing in the future.
There is no magic solution for getting out of debt. Don’t believe anyone who tells you otherwise.
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What Are The Disadvantages Of Filing For Bankruptcy
First, the fact that you file bankruptcy can remain on your credit report for up to ten years. However, your attorney will counsel you as to how best to repair your credit and improve your credit score following the bankruptcy.
Will you be able to get a car loan or mortgage after filing bankruptcy?; Most likely yes, but you will not be offered the best terms or lowest interest rate in the years immediately following your bankruptcy discharge, because lenders will see you as more of a risk.; Again, paying your bills in full and on time will help improve your credit score, as will using credit wisely.
When you receive your bankruptcy discharge, your unsecured debt is cleared meaning, your debt-to-income ratio improves dramatically and this will help your credit score as well.
Why Cant Some People File For Bankruptcy In Canada
To answer the question, Why cant some people file for bankruptcy? we need to look at how the Canadian bankruptcy process deals with someones assets, income, equity amounts in real estate, the number of people in their household and the types of debts they have. Unlike in the States, you dont automatically lose your home if you declare bankruptcy. However, your circumstances will dictate if it will need to be sold or not. You also cant declare bankruptcy for all types of debts.
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Stop Harassment From Creditors
If your main concern is that creditors are harassing you, bankruptcy is not necessarily the best way to stop the abuse. You can get creditors off your back by taking advantage of federal and state debt collection laws that protect you from abusive and harassing debt collector conduct.
For more information, read What to Do If a Bill Collector Crosses the Line.
File Chapter 13 Bankruptcy
If Consumer Credit Counseling Services won’t take you, you may want to consider bankruptcy. Doing a Chapter 13 bankruptcy takes longer, but your credit is in a little better standing than it will be if you file Chapter 7. You have up to 5 years to pay off your debts when you file Chapter 13 bankruptcy. Another plus is the bankruptcy drops off 7 years from the date you FILE, not finish. Therefore, you will have the bankruptcy for a maximum of 7 years.
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Several Bankruptcy Alternatives Are Available
Almost everyone gets behind on a few bills at one time or another. After all, any of us can face financial woes. However, bankruptcy is not your only way out. There are currently several alternatives to filing bankruptcy. You need to be aware of all these alternatives and how each of them works. By fully understanding them, you will be able to make an informed decision about which of these options will work best for your situation and help you get out of the challenging situation you are currently facing. When you give your financial situation a closer look, you might find out bankruptcy is not the right solution for your situation at all. David Aylor Law Offices have experienced bankruptcy attorneys who can help you make the right choice regarding your money problems. We take the time to explain the options and help you come up with the right way for you to take care of your situation.
Important Consideration About Non
There is no requirement that all of your creditors agree to debt management or debt settlement, but most of them must voluntarily support it for it to work. Creditors that do not agree to the workout are not affected by it and remain entitled to pursue other remedies to collect the debts owed to them. Although they can theoretically proceed to recover the full amount due, they forfeit the right to benefit automatically from whatever partial payment the composition would have allowed had they taken part.
You should be aware that the credit counseling industry is under national scrutiny for deceptive advertising and charging excessive fees. In many cases, people who want to avoid bankruptcy may sign up for a debt repayment plan at the credit counseling office, only to find themselves scrambling to pay the associated fees, on top of a burdensome debt load. I urge my clients to listen carefully, ask many questions, and think about the financial implications of signing on to a debt repayment plan.
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Take A Personal Financial Management Instruction Course
Finally, you must complete a post-filing Personal Financial Management Instruction Course within 45 days of your meeting of creditors. Take a look at the U.S. Trustee Programs site to find an approved course near you. After youve completed the course, the last step is to wait to hear from the bankruptcy court whether your debts have been discharged.
Debt Counseling Vs Chapter 13 Repayment Plans
Participating in a credit or debt counseling agency’s debt management program is a little bit like filing for Chapter 13 bankruptcy. The agency will help you develop a plan to pay back your creditors over time, somewhat like a Chapter 13 plan. But working with a credit or debt counseling agency has one advantage: No bankruptcy will appear on your credit record.
However, a debt management program also has some disadvantages when compared to Chapter 13 bankruptcy. First, if you miss a payment, Chapter 13 protects you from creditors who would start collection actions. A debt management program has no such protection: Any single creditor can pull the plug on your plan. Also, a debt management program usually requires you to repay your debts in full. In Chapter 13 bankruptcy, you often pay only a small fraction of your unsecured debts. Finally, debt management and debt settlement scams abound. Many companies don’t care about helping you; they want to collect fees for their services. So tread carefully before you sign up for a plan.
Consumer advocates have also raised concerns about credit counseling agencies because they receive most of their funding from creditors. As a result, critics say, these agencies could face a conflict between the interests of their funders and their clients.
Learn more about debt management plans.
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Lower Expenses Making Changes To Your Budget And Lifestyle
Lowering your expenses and making changes to your budget and lifestyle to save money that can be applied to your bills isnt just an option to avoid bankruptcy, but also a good idea no matter what you decide to do to repair your finances.
It may seem overwhelming to;create a budget, but its really a matter of figuring how much money you have coming in, how much you have going out and how to make income exceed expenses. It should be standard operating procedure, no matter what your financial situation is.
One of the easiest things you can do that will create more money in your budget to help pay your necessary bills is to;lower your expenses. This can be big picture things like selling your house, getting a paying roommate or smaller things like canceling some of your streaming subscriptions.
Go through your bank accounts for the month and look at what you spend on things you dont really need, including eating out, cable TV, gym memberships and other things you dont need or may have even forgotten you were paying for. Also look at insurance, utilities, and other monthly costs and find ways to pay less.
Any money you spend should go to pay down your debt to avoid filing for bankruptcy.