What Happens To My Savings Account While I File For Bankruptcy
Filing for bankruptcy does not mean that you have no money at all. Instead, filing for bankruptcy usually means you are struggling with excessive debt, and need a fresh start. The purpose of bankruptcy, depending on which type you file, is to discharge your debts or create a doable debt repayment plan so that you can get to a better financial place.
Before filing for bankruptcy, you may still have some money in a savings account. If you do have money in a savings account, it is important to know what will happen to that money if you choose to file for bankruptcy.
Your Case Is Assigned A Number And A Judge
After file for bankruptcy, what happens when you file bankruptcy. Your situation immediately becomes a case in the eyes of the law. This means that your case will be given a case numberjust like a medical claim numberand will also be assigned a trustee and a judge.
Your case number is very important. Once you do receive it, its important to have it on hand at all times. You will be able to give this case number to any creditors who come knockingthey wont be able to hound you the moment that your bankruptcy filing becomes a case due to the law of automatic stay.
Financial Institutions Conversion
Throughout the extent of your case, creditors and other financial institutions wont be able to contact you because of automatic stay. They will have to speak with the court itself if they want to have a conversation.
Your trustee will be an important contact. He or she will be asking you the majority of questions during your court appearances.
You will likely already have an attorney at this point, such as a Stone Law Firm Columbia bankruptcy lawyer. He or she will be essential after you file for bankruptcy.
How Much Does It Cost To File For Bankruptcy
When filing for bankruptcy, you may have to pay filing fees along with attorneys fees. If you cannot afford an attorney, check with your local Bar Association, they can sometimes provide legal access and resources for free.
According to Debt.org, the average person who files for bankruptcy will pay between $1,500 – $4,000 in filing and legal fees.
Some fee breakdowns from Debt.org are:
Chapter 7 Total Filing Fees: $338
Filing fee: $245.
Re-opening a Chapter 7 filing: $260.
Chapter 13 Total Filing Fees: $310
Filing fee: $235.
Re-opening a Chapter 13 filing: $235.
Average Attorney Fee for Chapter 7 Bankruptcy: $1,450
A 2016 Martindale-Nolo study revealed that the average national average cost was $1,450 for Chapter 7 cases. The cost depends on where the case is filed. Chapter 7 fees generally range from a low of $1,000 to a high of $1,750. Of course, every case is different, and a number of factors can affect the cost of your case.
Average Attorney Fee for Chapter 13 Bankruptcy: $3,000
The Martindale-Nolo study showed an average of $3,000 for Chapter 13 cases, with ranges from $2,500 to $5,000. Chapter 13 fees are often governed by the bankruptcy court in the particular district, so fees vary widely from district to district.
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What If I Lose My Property
Whether you file chapter 7 or chapter 13, bankruptcy, what happens to your property will depend on which option you choose. You can find out which bankruptcy option is best for you by reading Bankruptcy: Chapter 7, vs. Chapter 13. Based on the route you choose, heres what you can expect.
Chapter 7 bankruptcy is also known as liquidation bankruptcy. This is because you will need to sell some assets to pay at least a portion.
However, some assets are exempted from liquidation by state law. This includes your retirement accounts, home, and car. To find out which property you are allowed to keep, consult a bankruptcy lawyer in your state.
Chapter 13 bankruptcy means that you wont have to sell your assets to pay your debts. Instead, your debts are reorganized so you can pay them off in part or full over the next three- to five years.
Remember that creditors could sue you if your payments are not made according to the plan.
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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How To File Bankruptcy
People in financial distress are often advised to consider filing bankruptcy as a last resort option. Although bankruptcy can help you get your finances in order and may even allow you to start over, it can also have negative consequences that could affect your possessions and make credit approval difficult for many years.
These are the things you should know before you file.
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
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Role Of The Case Trustee
When a chapter 7 petition is filed, the U.S. trustee appoints an impartial case trustee to administer the case and liquidate the debtor’s nonexempt assets. 11 U.S.C. §§ 701, 704. If all the debtor’s assets are exempt or subject to valid liens, the trustee will normally file a “no asset” report with the court, and there will be no distribution to unsecured creditors. Most chapter 7 cases involving individual debtors are no asset cases. But if the case appears to be an “asset” case at the outset, unsecured creditors must file their claims with the court within 90 days after the first date set for the meeting of creditors. Fed. R. Bankr. P. 3002. A governmental unit, however, has 180 days from the date the case is filed to file a claim. 11 U.S.C. § 502. In the typical no asset chapter 7 case, there is no need for creditors to file proofs of claim because there will be no distribution. If the trustee later recovers assets for distribution to unsecured creditors, the Bankruptcy Court will provide notice to creditors and will allow additional time to file proofs of claim. Although a secured creditor does not need to file a proof of claim in a chapter 7 case to preserve its security interest or lien, there may be other reasons to file a claim. A creditor in a chapter 7 case who has a lien on the debtor’s property should consult an attorney for advice.
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.
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The Truth About Bankruptcy
If youre reading this, youre probably thinking about bankruptcy. The world may tell you this route is a fresh start . . . or a horrible ending. But whats the truth about bankruptcy?
In simple terms, bankruptcy is a legal process a person can go through to clear some of the debts theyre unable to pay.
If youre so overwhelmed by debt that bankruptcy feels like your only option, know these three things: 1) There is hopeand you will be okay. 2) There are other optionsand you should try every single one before jumping into bankruptcy. 3) Bankruptcy does not define you and will not be the end.
Keep these three things in mind as you read through the rest of this article and learn the truth about bankruptcy, including a breakdown on these specific topics:
Your Attorney Steps In
In the interim between your filing and first court appearance, your attorney will take the reins for a while. He or she will take care of some necessary paperwork and communications.
This includes communicating with the trustee for your case, making sure all documents are in order. Your attorney will also make sure that any other attorneys involved in your situation are aware of the case and that any ongoing lawsuits cease, after what happens when you file bankruptcy.
Your attorney will appraise all property and assets you own. If you are filing a Chapter 7 bankruptcy, this property may be sold to pay back creditors.
Your attorney will also have a conversation with you about the types of questions your trustee will ask you at the creditors meeting, so you can feel confident in how youll answer.
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Prepare And File Bankruptcy Petition
Once this is complete, the next step is to prepare and file a bankruptcy petition. While legal counsel is not a requirement of filing for bankruptcy, it is highly recommended. Representing yourself during such a complex process can put you in an unnecessarily risky situation.
Flexer Law consistently files more bankruptcy petitions than any other law firm in the Middle District of Tennessee. We practice law with understanding, kindness, and respect.
It is important to know which type of bankruptcy is best for your situation. There are many essential distinctions between Chapter 7 and Chapter 13 bankruptcies. Chapter 7 is also known as liquidation, and Chapter 13 is also known as the wage earners plan.
An experienced attorney will know which type of bankruptcy is right for you. They will also know the best way to fill out and file all of the associated paperwork. Minor errors can derail the entire process and negatively impact the outcome of your case.
Speak With A Credit Counselor
If youre in enough debt that youre considering the extreme step of filing bankruptcy, the first thing you should do is speak to a credit counselor. , which is available free through nonprofit accredited debt management agencies, can be a good way for a nonjudgmental person who understands the ins and outs of personal finances, to help you fully assess what your situation is. Credit counseling can also help if you need financial advice after a bankruptcy.
Nonprofit accredited debt management agencies can be found through the NFCC. The counselor may recommend a debt management plan, in which they negotiate lower interest rates with creditors, usually credit card companies. You would pay one monthly payment to the debt management agency over three to five years, and the agency pays your creditors. Unlike bankruptcy, this doesnt appear on your credit report, and is a less catastrophic way to pay down debt without filing bankruptcy.
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What Happens To My Debt If I Declare Bankruptcy In Canada
Bankruptcy will eliminate most of your debts, such as unsecured debts including credit card bills, medical bills, and payday loans. You may still be required to pay your secured debts, such as your mortgage or motor vehicle loan.
Some debts cannot be eliminated by your bankruptcy. Those include:
- Court-imposed fines
- Debt incurred by misrepresentation
- Alimony or maintenance payments
- Debt for damages imposed by Civil Court for intentional bodily harm, sexual assault, or wrongful death
- Student loans, if bankruptcy occurs within 7 years of ceasing full- or part-time studies
Can You Continue Making House Payments After Chapter 7 Bankruptcy
It’s also important to be sure you can afford to continue paying the mortgage payment after a Chapter 7 bankruptcy. Losing the house after your case might put you in a worse financial position. Why? If the lender couldn’t sell the home for the amount you owe, you’d be stuck with a deficiency balance depending on the laws of the state you live in.
Worse yet? You’d have to wait eight years to file a second Chapter 7 bankruptcy, leaving the lender plenty of time to collect a deficiency balance using collection methods such as garnishing your wages or levying on a bank account.
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What Happens To Your Debts
Student loan debt can also be included in a bankruptcy if you have been out of school for seven years.
Bankruptcy will not eliminate support payments and court fines.
Bankruptcy does not affect secured debts like a mortgage or car loan. You will be required to keep making your monthly payments to secured creditors unless you voluntarily give up those assets as part of your bankruptcy.
Your creditors are entitled to file a claim against the money in your bankruptcy estate. Once your trustee approves this claim, they will be entitled to their pro-rata share of any money available in your bankruptcy. Trustee fees are included in your bankruptcy costs and come out of the monies paid to your creditors.
Bankruptcy Exemptions In Nova Scotia
- No limit on clothes for you and your family
- No limit on fuel and food for your family
- Up to $5,000 in household furniture and appliances
- One motor vehicle up to $6,500
- All medical and health aids for you and your family
- Farm equipment, fishing nets, or other tools of your trade up to $7,500
- No limit on grain and seeds or livestock for domestic use by you and your family
For more information on bankruptcy exemptions in Nova Scotia, contact a local a BDO trustee near you.
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Why File For Bankruptcy
Bankruptcy laws exist to provide a safeguard for people who are overwhelmed by debt. During the consumer bankruptcy process, an individual petitions the courts to release them from financial liabilities. The nature of your debts and how they are affected in the bankruptcy depend on what chapter of bankruptcy being is filed . Whether you file for Chapter 7 or Chapter 13 will be decided by you and your lawyer, so begin the process by consulting an attorney.
If your financial obligations have accumulated to the point where you can no longer keep up, filing for bankruptcy may be your best option.
Bankruptcy Normally Lasts For 3 Years And 1 Day From The Day We Accept Your Bankruptcy Form
Your bankruptcy period starts from the day we accept your bankruptcy application. If a creditor makes you bankrupt, the bankruptcy period starts from the date you file a statement of affairs that we accept. In some cases, your trustee can lodge an objection to extend the bankruptcy for up to eight years.
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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.
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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.
Benefits Of Filing Bankruptcy
While filing for bankruptcy certainly has negative effects on your finances, it also boasts some benefits, especially when it comes to your long-term financial standing.
When your application gets approved, you get immediate protection through the automatic stay benefit.
Most people who have undergone bankruptcy believe that this is the greatest benefit of a bankruptcy.
Since you receive immunity from collectors, you avoid the stress of dealing with collection agents.
Another great benefit is the guarantee that you will not lose all your property because bankruptcy exemptions are there to protect you.
With these exemptions, you get to keep a certain amount of exempted property, and have the opportunity to reorganize your debts.
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