What Happens After Filing For Bankruptcy
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In a Nutshell
Knowing what happens after you file bankruptcy can make it seem less intimidating. Read on to learn about filing Chapter 7 bankruptcy, the meeting of creditors, keeping your car, and why creditors must stop contacting you after filing.
Knowing what happens after you file bankruptcy can make it seem less scary. Read on to learn about filing Chapter 7 bankruptcy, the meeting of creditors, keeping your car, and why creditors must stop contacting you after filing.
Can Bankruptcy Hurt Your Current Or Future Employment Status
If youre considering bankruptcy, you may worry about how it will affect your job. People who file for bankruptcy face a lot of stigma. Some employers may think its evidence that youre disorganized or bad at managing money, but that may not be fair to you.
The Bankruptcy Code contains several provisions that safeguard job applicants and employees from discrimination. The Fair Credit Reporting Act also offers some protection by limiting how employers can use credit screenings. But the protections are limited, and in the real world, discrimination can be tough to prove.
Know your rights, which jobs are more likely to be impacted by a bankruptcy filing, and which employers are most likely to discover it.
What Can You Do If You Can’t Find A Licensed Insolvency Trustee
If you are unable to get an LIT to accept your file, or if you cannot afford to hire an LIT, the OSB’s Bankruptcy Assistance Program may be able to help, provided that you:
- have contacted at least two LITs and tried to obtain their services
- are not, and have not recently been, involved in commercial activities
- are not required to make surplus income payments and
- are not in jail
A creditor is harassing me daily. What should I do?
Although the regulations differ slightly across Canada, there are limits on what creditors and collection agencies are allowed to do. For example, they cannot make telephone calls of such a nature or frequency that they amount to harassment of you or your family. In addition, there are certain times when they are not allowed to call.
Tips for dealing with collection agencies If you feel you are being harassed, contact either an LIT or a qualified and experienced credit counsellor. They can help you by serving as an intermediary between you and your creditor.
and we will send you some information and a list of LITs who participate in the program.
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Does My Stock Or Bond Have Any Value
Usually, the stock of a Chapter 7 company is worthless and you have lost the money you invested.
If you hold a bond, you might only receive a fraction of its face value. It will depend on the amount of assets available for distribution and where your debt ranks in the priority list on the first page. If your bond is secured by collateral, your payment will depend in large part on the value of the collateral.
Keep Track Of Your Credit During The Process
You should also monitor how your credit scores are affected by certain actions. Also, be aware of potential errors or negative information that could impact your credit score. You can dispute any information that you find on your credit reports.
Youll be able to track your credit score over time and how you can improve it.
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Top 5 Reasons To Consider Loan Consolidation
The term “loan consolidation” is often thought of as simply receiving a loan, but that’s not really the full picture. Loan consolidation can also include combining your current loans into one single payment, sometimes at a reduced rate that can save you money. If you have ever heard of a loan consolidation company, then you may already know how the process works. If not, this article will explain the process and whyit may be beneficial for anyone who is in need of valid financial relief.
Stop bill collector calls
Have you ever been late with a credit card bill? If so, how many times has the issuing bank called you before your second payment was even due? If you miss one single payment, the telephone begins to ring and you instantly recognize the importance of loan consolidation. If you miss two consecutive payments, you can forget about having any peace within your household. The collections department that serves most creditors is ruthlessand the people on the phones are considerably less than pleasant. After a short period of time in a loan consolidation program, the majority of collection calls will stop.
Lower your monthly payments
Reduce your number of bills
Pay off your loans faster
Can I File For Bankruptcy On My Own
You can file for bankruptcy on your own, but the process is long and complicated, and you could benefit from the guidance and clarity a bankruptcy attorney can provide. Even the U.S. Courts recommend working with an attorney to help you fully understand your options, exemptions, bankruptcys benefits, and the complexities of the process.
A bankruptcy lawyer will:
- Be familiar with applicable state and federal laws
- Obtain all necessary paperwork and documentation
- Explain files, schedules, and other paperwork
- Represent you at hearings and in court
For many bankruptcy filers, an important benefit of hiring a bankruptcy lawyer is their peace of mind. This comes from knowing each step is being met, and your fresh financial start will be error-free and effective.
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Getting A Mortgage After Bankruptcy
You may not be able to get a mortgage during bankruptcy, but you can get one after bankruptcy if you otherwise qualify. Nonconforming loans like those from government agencies may not even have a waiting period.
Next up, learn what you need to know if youre trying to buy a new house or refinance your current home after a bankruptcy.
Before diving into specifics around guidelines, its also worth noting in general that a bankruptcy of any kind has a major negative impact on your credit. Its not impossible to move forward and get a mortgage down the line, but you may have some recovery to do. A secured credit card or credit builder loan can help. Discover the keys to buying a house with bad credit.
Prince Edward Island Bankruptcy Exemptions
On Prince Edward Island, 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 P.E.I., the exemption for a car is $6,500. In this case, you are entitled to keep the car and the creditors included in your bankruptcy claim cannot take it from you.
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What Happens When I File Bankruptcy
After your Licensed Insolvency Trustee , files the necessary paperwork with the Office of the Superintendent of Bankruptcy, you are officially bankrupt.
Once you have become bankrupt you will promptly receive protection from your creditors through what is known as the stay of proceedings.
Need Help Reviewing Your Financial Situation?Contact a Licensed Trustee for a Free Debt Relief Evaluation
* Any lawsuits to attempt collection by your creditors will stop
* Wage garnishments will stop
* Any non-exempt property will be surrendered to the trustee and sold.
The proceeds will be distributed to your creditors.
Once you go bankrupt, a record of the fact will be reported to the credit bureaus and your credit report.
You will stop paying on all of your unsecured debts, although they wont be legally eliminated until your bankruptcy is over.
What Is Chapter 7 Bankruptcy
Some companies are so far in debt or have other problems so serious that they can’t continue their business operations. They are likely to “liquidate” and file under Chapter 7. Their assets are sold for cash by a court appointed trustee. Administrative and legal expenses are paid first, and the remainder goes to creditors. Secured creditors will have their collateral returned to them. If the value of the collateral is not sufficient to repay them in full, they will be grouped with other unsecured creditors for the rest of their claim. Bondholders, and other unsecured creditors, will be notified of the Chapter 7, and should file a claim in case there’s money left for them to receive a payment.
Stockholders do not have to be notified of the Chapter 7 case because they generally don’t receive anything in return for their investment. But, in the unlikely event that creditors are paid in full, stockholders will be notified and given an opportunity to file claims.
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Examine Your Bankruptcy Alternatives
Filing for bankruptcy protection will provide you with the financial relief you are entitled to. In Chapter 7 and Chapter 13 bankruptcy proceedings, our team represents individuals and small business owners. We can also assist with Chapter 11 reorganization bankruptcy and Chapter 12 bankruptcy filings for family farmers and fishers.
We can assist you with the petitioning and filing procedures. When you file for Chapter 7 bankruptcy, we can help you keep your assets. With complicated financial arrangements or very high debt burdens, we can even assist in restructuring your debt via additional bankruptcy cases.
An Automatic Stay Will Stop Debt Collection
Filing for bankruptcy will trigger the automatic stay. The automatic stay will ensure that creditors will not try to collect from you while your case is pending. What this means is they can’t contact you to collect on debts like credit card debts and other types of unsecured debts. The automatic stay will also stop the garnishment of your wages.
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Filing Bankruptcy: The Cons
Of course, filing bankruptcy also comes with many drawbacks. Given the complex nature of the process, we recommend contacting an experienced bankruptcy attorney to assist with your case.
You could lose assets of value
Depending on which type of bankruptcy you qualify for, your income, the equity in your assets and other factors, you may lose your home, your car and other valuable items. Your trustee may be required to sell these items to repay your creditors.
Bankruptcy can be expensive
Youll need to cover the costs of bankruptcy, including service and court fees. The average Chapter 7 bankruptcy case costs between $1,000 and $1,750 in out-of-pocket costs, while the average Chapter 13 bankruptcy costs around $3,300.
Federal student loans are exempt from bankruptcy
In most cases, federal student loans are not dischargeable there are some exceptions, but they are rare. Instead, if youre struggling to keep up with your federal student loan payments, you may have to look into forbearance, deferment or income-based payment plans.
You may still be responsible for some debts
While most debts can be discharged, there are some debts you will still be responsible for repaying. Besides federal student loans, certain other liabilities are not dischargeable, including taxes, alimony, child support, court orders and debts incurred through illegal activity.
If you have joint accounts, the other party is still responsible
You could face criminal charges if you arent honest
Full Disclosure Of Financial Privacy
The bankruptcy court will require you to disclose all your financial information and, if you want the best options possible, you should strive to be transparent.
While your bankruptcy will appear on public records, your personal information remains protected.
Watch this video by Todays TMJ4 for things you should know before filing for bankruptcy:
Filing for bankruptcy offers the benefit of a fresh start but the process could take at least 2 months and it is not the cheapest alternative when swamped up with debts.
It is, therefore, necessary to learn all the information about the impacts of filing for bankruptcy.
Do you know what happens when you file bankruptcy? Let us know your thoughts in the comments section below.
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What Happens When You File Chapter 7 Bankruptcy In California
No one opens a business expecting that it will fail, but the data can be grim. According to the U.S. Bureau of Labor Statistics, about 20% of small businesses fail within their first year of operations by year five, roughly 50% have shuttered.
When your small business fails, you can be on the hook for thousands of dollars or worse, saddled with insurmountable debt. Are you stuck with that financial burden forever?
Whether youre a business owner who has decided to close up shop or an individual whose debts have simply become unmanageable, your liabilities do not have to hang over your head for the rest of your life.
Bankruptcy is designed to help people and businesses resolve their debts so they can start anew.
Helping Clients In Charlotte Regain Financial Freedom
If you are facing uncontrollable debt, talk to an experienced bankruptcy lawyer about your financial situation. At theLaw Office of Kimberly A. Sheek, I havemore than a decade of experience guiding clients through bankruptcy and other debt relief options.
Get started on your path to financial freedom. Call 842-9776 orreach out online to the Law Office of Kimberly A. Sheek.
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How Will I Know What’s Going On
Sometimes, you may first learn about a bankruptcy in the news. If you hold stock or bonds in street name with a broker, your broker should forward information from the company to you. If you hold a stock or bond in your own name, you should receive information directly from the company.
You may be asked to vote on the plan of reorganization, although you may not get the full value of your investment back. In fact, sometimes stockholders don’t get anything back, and they don’t get to vote on the plan.
Before you vote, you should receive from the company:
- a copy of the reorganization plan or a summary
- a court approved disclosure statement which includes information to help you make an informed judgment about the plan
- a ballot to vote on the plan and
- notice of the date, if any, for a hearing on the court’s confirmation of the plan, including the deadline for filing objections.
Even when stockholders do not vote, they should get a summary of the disclosure statement, and a notice on how to file an objection to the plan.
Stockholders may also receive other notices unrelated to the plan of reorganization, such as a notice of a hearing on the proposed sale of the debtor’s assets, or notice of a hearing if the company converts to a Chapter 7 bankruptcy.
How Do I Declare Bankruptcy
To declare and file bankruptcy, you are required to complete a credit counseling class to learn about bankruptcy, alternative options, and managing your finances on your own.
After completing the course, you must submit a petition to the U.S. bankruptcy court in the federal judicial district where you live. This petition will list your:
- Assets, such as cars, homes, and bank accounts
- Monthly income and expenses
You’ll also need to submit a copy of your most recent tax return with your petition. You can have an attorney prepare the petition for you, or you can obtain bankruptcy forms and instructions from the U.S. courts.
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How Does Bankruptcy Affect Assets And Liabilities
Depending on how you choose to declare bankruptcy, your assets and liabilities will be affected in different ways. In a Chapter 7 bankruptcy, many of your assets are up for liquidation to pay your creditors with the proceeds. In Chapter 13, you retain assets while working on a repayment plan for your outstanding debts.
See how bankruptcy affects assets and debts in the following debtee categories.
Small Business Owners
For small business owners with lots of personal debt, bankruptcy may help them continue to stay in business. It’s important to note that business debts aren’t alleviated with Chapter 7 or Chapter 13 unless you’re a sole proprietor and are personally responsible for them.
- Chapter 7: For sole proprietors, business and personal debts can be wiped out in a single bankruptcy case. You’re not obligated to meet income requirements if your business debt exceeds your personal debt.
- Chapter 13: Your business assets aren’t liquidated, but only your personal liability for business debts can be wiped out. The business remains responsible for its debts.
Some business assets can be exempt from Chapter 7 bankruptcy filings. For instance, if your business is service-based and doesn’t maintain equipment or significant inventory, you can likely continue to run your business after discharging business debts through bankruptcy.
Student Loan Holders
Mortgage Holders
Beware Of Bankruptcy Myths
The filing process can seem uncertain and confusing even scary. While it is important to learn as much as you can at the onset of the process, you have to be careful about your sources of information. There is a lot of misinformation about bankruptcy that can hinder your best possible outcome. Flexer Law offers free consultations to first-time clients. This time can be used to find the best course of action based on your unique situation.
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