Exceptions To Discharge From Personal Bankruptcy In Nine Months
The length of your bankruptcy will be nine months, unless one or more of the following is true:
- You fail to perform all your bankruptcy duties, such as regular payments of surplus income to the trustee.
- You have surplus income .
- You have been bankrupt before.
- There is an objection filed to your discharge.
How much longer your bankruptcy period will be depends on the details of your case. Twenty-one month is typical when the bankrupt individual makes a good salary .
Who Deals With Your Bankruptcy
An Official Receiver is appointed to protect your assets. They act as trustee of your bankruptcy affairs if you have no assets.
If you have assets, an Insolvency Practitioner will be appointed to act as trustee and sell your assets to pay your creditors. To read more, go to:
Once a bankruptcy order has been made against you, your creditors cannot pursue you for payment. The trustee is responsible for payments.
Do People Usually Lose Property In A Chapter 7 Bankruptcy Case
Not at all. Most Chapter 7 cases filed in the United States are no-asset cases and the filer is able to obtain debt relief without giving up any of their property. In some cases, a filer may choose to get the much-needed debt relief by filing Chapter 7 bankruptcy even though they may lose certain property. After all, filing bankruptcy and eliminating tens of thousands of debt provides a much greater benefit than keeping a $2,000 piece of real estate that hasn’t increased in value in a decade.
If youâre worried about your state’s exemptions or specific types of property and whether they’re protected, consider speaking to a bankruptcy attorney. Most law firms offer free consultations for Chapter 7 bankruptcy cases, so the most you have to lose is an hour of your time.
File on your own with Upsolve
If you donât have anything that isnât protected by an exemption and canât afford to hire a law firm to help you file Chapter 7 bankruptcy, know that you donât have to hire a bankruptcy attorney to file your case. If youâre eligible, you can use Upsolveâs free web app to prepare your bankruptcy forms. See how it works in our 10-step guide on how to file bankruptcy for free.
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How 2019 Brought Change With The Small Business Reorganization Act
So, what changed? In August 2019, the Small Business Reorganization Act was signed into law. When this happened, chapter 11 bankruptcy changed for the better. The changes were specifically designed to benefit small businesses and their owners, who had long complained that the system was set up against them. One of the biggest changes was a new subchapter of chapter 11 bankruptcy that aimed to make filing for and achieving financial relief through the process easier for small businesses than ever before.
What Are My Rights As A Creditor In A Bankruptcy
When a person who owes you money becomes bankrupt, your rights to pursue them for payment may change.
The type of debt will determine whether you can pursue payment.
Some debts are covered in bankruptcy which means youre unable to pursue payment. Other debts are not covered in bankruptcy, which means you may be able to pursue payment.
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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.
What Debts Cannot Be Discharged In Bankruptcy
The following debts cannot be discharged in either a Chapter 7 or a Chapter 13 bankruptcy case. If you file Chapter 7, you will still owe these debts after your case is over. If you file Chapter 13, these debts will either be paid in full during your plan, or the balance will remain at the end of your case.
Nondischargeable debts include:
- Unlisted debts, unless the creditor had knowledge of your bankruptcy filing.
- Recent income tax debt and other tax debt.
- Fines imposed for violating the law.
- Student loans, unless you can show that it will cause a hardship for you to repay them.
- Debts you owe under a divorce decree or settlement.
In a Chapter 7 and 13 case, a creditor may object, and a judge may agree, to theseadditional debts being discharged:
- Debts incurred by embezzlement, fraud, or larceny.
- Certain credit purchases made within 90 days or cash advances made within 70 days of filing.
- Restitution or damages awarded in a civil action for willful or malicious injury to a person.
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What Is A Creditor
First lets start with the basic definition of a creditor.
In financial terms, a is a person or company that you owe money to.
However the Bankruptcy & Insolvency Act limits the definition of a creditor to a person having a claim provable as a claim under this Act.
There are two major classes of creditors in bankruptcy in Canada secured creditors and unsecured creditors. Each of these classes is made up of a number of sub-classes.
Debt That Can’t Be Forgiven
While bankruptcy can eliminate a lot of debt, it can’t wipe the slate completely clean if you have certain types of unforgivable debt. Types of debt that bankruptcy can’t eliminate include:
- Most student loan debt .
- Court-ordered alimony.
- A federal tax lien for taxes owed to the U.S. government.
- Government fines or penalties.
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Types Of Bankruptcy Filings
Bankruptcy filings in the United States fall under one of several chapters of the Bankruptcy Code, including Chapter 7, which involves the liquidation of assets Chapter 11, which deals with company or individual reorganizations and Chapter 13, which arranges for debt repayment with lowered debt covenants or specific payment plans. Bankruptcy filing costs vary, depending on the type of bankruptcy, the complexity of the case, and other factors.
Losing Paperwork In A Natural Disaster
Filing for bankruptcy after a natural disaster is common. But not only are jobs and property lost, but the paperwork required to file for bankruptcy can end up missing, too. Fortunately, provisions are made for such emergencies. When a bankruptcy debtor loses financial paperwork in a natural disaster, the bankruptcy trustee must:
- avoid taking action against a debtor who can’t produce documents
- grant reasonable requests to ease filing requirements, and
- take into account a decrease in income or increase in expenses.
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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 Officeof the Examiner of the High Court. Anyone can check this register.
Read more in the ISIs guide Afteryou are made bankrupt .
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.
What Is Chapter 7
Bankruptcy is a serious business, so you need to understand it clearly. Chapter 7 of Title 11 in the U.S. bankruptcy code controls the process of asset liquidation. A bankruptcy trustee is appointed to liquidate nonexempt assets to pay creditors after the proceeds are exhausted, the remaining debt is discharged. There are eligibility requirements to file Chapter 7, such as the debtor must have had no Chapter 7 bankruptcy discharged in the preceding eight years and the applicant must pass a means test. This process is also known as straight or liquidation bankruptcy.
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Receivership Bankruptcy Difference Canada: What If Youre Company Has Too Much Debt
Is your company insolvent? Are you looking for solutions? The Ira Smith Team is here to offer alternatives to restructuring and turnaround services however, if required, we also act as a licensed insolvency trustee in bankruptcy matters. We offer help in Vaughan as well as throughout the GTA.
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Our motto is Starting Over, Starting Now! Ira Smith Trustee & Receiver Inc. can help you overcome your financial difficulties. Contact us today.
What Kind Of Property Do Bankruptcy Exemptions Protect
Federal law and state laws protect a lot of the same kinds of property, including:
personal property like household goods, furniture, and musical instruments
real estate used as a home
retirement accounts, including IRAs
unemployment benefits, unemployment compensation, and workers’ compensation
veteranâs benefits and other public benefits
alimony and child support
personal injury and crime victim awards
Essentially, bankruptcy law makes sure that your basic âstuffâ is protected. Some state exemptions and the federal bankruptcy exemptions even include a so-called wildcard exemption. A wildcard exemption can be used to protect property not covered by another exemption.
What that means for you, depends on your stateâs law. If youâve lived in the same state for at least 2 full years, that stateâs law will tell you two things:
What is protected by the state bankruptcy exemptions
Whether youâre able to claim the federal bankruptcy exemptions instead
If you havenât lived in the same state for at least two years, check out this article on bankruptcy after moving and consider speaking to a bankruptcy lawyer about which set of exemptions you can use.
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Receivership Bankruptcy Difference Canada: Bankruptcy
A business could be placed right into bankruptcy by any one of the following methods:
There are many reasons that a corporation could go into bankruptcy. These consist of the following:
Federal Versus State Bankruptcy Laws
In general, state laws govern financial obligations such as those involving debts created by contractsrental leases, telephone service, and medical bills, for example. But once a debtor or creditor seeks bankruptcy relief, federal law applies, overriding state law. This is because the U.S. Constitution grants Congress the power to “establish uniform Laws on the subject of Bankruptcies throughout the United States” . Federal bankruptcy power maintains uniformity among the states, encouraging interstate commerce and promoting the country’s economic stability. States retain jurisdiction over certain debtor-creditor issues that do not conflict with, or are not addressed by, federal bankruptcy law.
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Debts Not Covered By Bankruptcy
- fines & penalties
- debts incurred after the bankruptcy started.
As a creditor, this means:
- You may still be able to demand payment of the debt from the person.
- You are not eligible to receive payments from the trustee of the bankruptcy.
- The debt is not released after the bankruptcy ends.
A secured debt is a debt tied to a particular asset, e.g. car or home loan.
Bankruptcy does not change your rights as a secured creditor.
- You are still able to pursue the person for payment of the debt.
- You may repossess and sell the secured goods if the person is unable to maintain repayments.
- If you sell the asset and it doesnt cover the debt, the shortfall becomes an unsecured debt covered in bankruptcy.
Find out useful information that applies if you are a in a bankruptcy.
After a person enters into bankruptcy, we appoint a trustee to manage the bankrupt estate. The trustee will deal with any assets and make payments to creditorsif funds become available.
Creditors can also make a person bankrupt by sequestration order. If this happens, creditors may choose a trustee to manage the bankruptcy.
How Is A Claim Initiated
Before the claim is filed, a creditor will typically receive a demand letter stating how much is owed and demanding immediate payment. If the funds are not repaid, the trustee may commence a lawsuit in Bankruptcy Court. However, creditors may be able to negotiate a settlement or convince the trustee to drop the claim, either because the money is not a preference payment or the creditor has a defense. In these instances, the money does not have to be refunded. Even if the trustee is unwilling to accept the creditors defense, it may help in encouraging settlement for a lesser amount.
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Surplus Income Adds To The Cost Of Bankruptcy
In addition to the trustee fee and potential loss of assets, you may be required to pay a portion of your monthly income towards your debts, depending on how much you earn and the size of your household. The principle is that, if you earn more than your household needs to survive, you must pay a portion of the surplus income to your trustee for the creditors. The formula is prescribed by law. The idea is that the more you earn, the more you can presumably afford to repay to your creditors. In general, the greater your level of income, the greater the cost of a bankruptcy and the more attractive the alternatives to bankruptcy become.
Chapter 7 Bankruptcy Vs Chapter 11
Chapter 7 bankruptcy, also known as liquidation, is what most people think of when it comes to bankruptcy. It involves selling assets and using the proceeds to pay debts. For a business, however, selling assets often results in ceasing operations. Unless a business owner plans to shut down, Chapter 11 is often the better choice for businesses that can continue to generate income to pay off their debts.
|Chapter 7 Bankruptcy|
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The Future Of Student Loans And Bankruptcy Is There A Bubble Waiting To Burst
In March 2021, the U.S. Department of Education noted that student loan borrowers owed $1.6 trillion federal and private loans. For many, loans are the only option to attend a U.S. university or college for undergraduate, graduate, and professional studies. However, after graduation, many individuals are unable to secure jobs in their fields that pay enough to support the cost of living and pay off these student loans. This leaves many people believing that the country is experiencing or at least approaching a student loan bubble, which by definition is when the price of something substantially exceeds the value. With extremely limited bankruptcy relief available, the student loan bubble could burst and have serious economic consequences. Some new case law and proposed legislation may alleviate these affects, but only time will tell.
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