Top 10 Things You Should Know About Bankruptcy Court
If you need legal advice and assistance, contact bankruptcy lawyers.
1. Deadlines are critical in bankruptcy court. The regulations for this process are very complex, can be technical, and all case deadlines must be met. Failing to file the appropriate forms or documentation on time could result in your case being dismissed or delayed. If your case is dismissed you could lose your filing fees and have to start over again from the beginning.
2. New federal regulations passed in 2005 make it harder to qualify for complete debt elimination. The Bankruptcy Code was changed in 2005 to make it more difficult for consumers to wipe out debt completely if there are resources available to pay these obligations. Many consumers who would have qualified for a Chapter 7 discharge before these changes must now use Chapter 13 instead, which involves repayment of some of your debts. This is determined using the Means Test.
3. A Chapter 13 bankruptcy includes a repayment plan that must be filed with the bankruptcy court. The court will determine exactly what income and expenses you have, and then calculate the reasonable expenses and monthly repayment amount for your case. This plan must be submitted to the court and confirmed.
4. Representing yourself in bankruptcy court can be a big mistake. The laws regarding bankruptcy can be very confusing, and many common errors could cost you a chance at a new financial start. An experienced attorney can help you determine the right exemptions, represent you at hearings and meetings with creditors, and get the best results possible for you.
5. Bankruptcy court is a court which exclusively deals with bankruptcy cases. These courts are located around the United States, and they only handle bankruptcy cases and matters related to this legal area.
6. The bankruptcy court will appoint a trustee in your case. This trustee will be responsible for overseeing your specific case and ensuring that all of the documentation is filed. The trustee is not in favor of either the consumer or creditors, but is an officer of the court instead.
7. Choosing the right attorney to represent you in bankruptcy court is important and can affect the outcome of your case. You want a lawyer who will aggressively defend you and work hard to overcome any objections that may be presented by your creditors or the trustee. Experience is also important, so you want an attorney who is very knowledgeable in bankruptcy law.
8. The penalties for lying or hiding assets in a case can be severe. The bankruptcy court judge has the authority to dismiss your case, order fines and penalties deemed appropriate, or even have perjury or other criminal charges filed against you. It is essential that you are completely honest in all your dealings with the court to avoid any sanctions or penalties.
9. The exemptions you claim in bankruptcy court will affect whether or not your property can be seized and sold to pay creditors. The laws of each state are different. An experienced attorney can help you determine whether to use the federal or state exemptions, or whether a combination of these two are better in your specific case.
10. A discharge is the order issued by the bankruptcy court when your case is completely finished and closed out. Usually any debts that have not been repaid are eliminated in the process unless you have reaffirmed your obligation.
Bankruptcy Forum Sites: What They Are And How They Work
What is a bankruptcy forum, how can you find these websites, and what do they offer?
Bankruptcy is a legal proceeding which can help you eliminate or reorganize your debts and unpaid obligations in many cases. If you are experiencing financial difficulty, have problems paying your bills on time or meeting other monthly household expenses, or are facing possible foreclosure or repossession, then filing for bankruptcy may help you.
Many lawyers who specialize in this legal field offer a bankruptcy forum website where you can view questions and answers or ask a question yourself concerning bankruptcy law. These sites can be very helpful in determining whether you should consult an attorney in this matter, as well as answering other common questions about this legal proceeding and reviewing feedback from consumers about previous experiences with these cases.
A Bankruptcy Forum Does Not Offer Legal Advice
It is very important that you understand the answers and information you find in a bankruptcy forum is not intended as legal advice, only a general guideline. Every bankruptcy case is unique and original, with various factors and elements combined, so that no two cases are the same.
Only an attorney who has been retained can provide legal advice concerning your specific bankruptcy case and answer questions concerning this matter. You can use these forums to see what some of the most common answers are to any questions you may have and to evaluate whether you should consult with a lawyer regarding your financial situation.
Determine Which Documentation You May Need For An Initial Consultation
A bankruptcy forum can help you prepare for an initial legal consultation, with helpful hints about what documentation and information to bring with you. You will need to answer many personal questions about your income, expenses, and unpaid debts. Some attorneys who specialize in bankruptcy law will send you a pre-filing list of questions and forms for you to complete, but some may not.
If you receive a packet, make sure to fill out all the forms and papers completely and honestly before the meeting. You will also normally need copies of your tax returns for the last 2-3 years, check stubs and proof of income for the current year, and copies of all monthly bills and expenses. You should also prepare a list of all unpaid debts and creditors.
A Bankruptcy Forum Offers Tips On How To Find The Right Attorney For Your Specific Case
You can browse through a bankruptcy forum and find tips about choosing the right attorney for your case. Some common advice includes:
Choose a lawyer who specializes only in consumer bankruptcy cases and who has plenty of experience
Prepare a list of questions to ask before the initial consultation
Find out how many bankruptcy cases the attorney handles each year and their success rate
Carefully read and evaluate any paperwork before signing
Make sure the Retainer Agreement includes a complete breakdown of the cost types and amounts, including who pays the filing fee to the court
Bankruptcy Information You Need To Know
There is a lot of bankruptcy information that can be found with a simple online search, and with many people facing financial difficulties these searches are more popular than ever.
Bankruptcy is a legal proceeding which can help you take control of your finances and give you a fresh start in many cases. If you are having any problem paying your debts, meeting your monthly expenses, have a judgment against you, or are at risk of losing your car or home, then bankruptcy may be the right step to take. Getting correct and accurate bankruptcy information is critical for you to make the right decision on whether to file for this type of debt relief.
Common Bankruptcy Types
There is some bankruptcy information you will need to know before you can even file a bankruptcy petition with the court. One of the most important is under which Bankruptcy Chapter to file. These can include:
Chapter 7- This type of bankruptcy may eliminate some or all of your debt completely and does not take years to receive a discharge. If you pass a Means Test concerning your income then you will file a list of all your assets. Any that are not exempt will be sold off to pay your creditors and you will receive a fresh start once all of your past debts are discharged.
Chapter 11- Some individuals may file this type of bankruptcy. If your debts exceed what is allowed under Chapter 13, you may use this Chapter instead. Normally businesses file this type because you reorganize large amounts of debt and can continue daily operations.
Chapter 12- This type of bankruptcy is usually used by farmers, so that the farm continues to operate and the debts are reorganized instead of eliminated.
Chapter 13- If you fail the Means Test for Chapter 7 bankruptcy, you will usually file under Chapter 13. You submit a payment plan to the trustee appointed by the court, listing all of your income, assets, expenses, and debts. This plan outlines monthly payments that the trustee will use to pay off some of your debt. At the end of the plan period, which can range from 3-5 years, any remaining debt is eliminated.
The Recent Changes In Bankruptcy Laws
Make sure that any bankruptcy information you receive takes into account the changes that took effect in the last decade. New bankruptcy regulations have made it harder for many consumers to file under Chapter 7. The best way to get the most accurate bankruptcy information possible is to speak with an experienced attorney who specializes in this area of the law.
Specific Bankruptcy Information On Your Case: Is A Lawyer Needed?
Once you have the bankruptcy information you need, is it really necessary to pay attorney fees? Some consumers may file and represent themselves, but you could be making a huge mistake if you do this. The recent changes have made the bankruptcy process much more complicated, with many technical aspects that are difficult for consumers to understand and follow. Even the smallest error could cause your case to be delayed or dismissed, and could cost you much more than it would to pay for qualified legal representation.
Bankruptcy Loan FAQ
What Is A Bankruptcy Loan?
A bankruptcy loan is a loan that is available once you have gone through bankruptcy. Filing for bankruptcy and having a successful discharge means you have a clean financial slate and a new start. Often this makes you a good credit risk for some lenders because you must wait a specified period before you can file for bankruptcy again. You may start to receive offers for credit cards and loans in small amounts soon after your case has been completed in some circumstances. You should be careful in choosing which credit and loan products you accept, so you do not end up back in financial difficulty.
Does A Past Bankruptcy Filing Prevent You From Receiving A Loan Or Credit?
Filing for bankruptcy will not keep you from receiving a bankruptcy loan or certain credit cards in most cases. In fact, contrary to common belief it is often easier to obtain some types of credit once you have gone through the bankruptcy process.
Who May Qualify For A Bankruptcy Loan?
Anyone who has filed for bankruptcy and had a successful discharge will usually qualify for a bankruptcy loan and credit cards. These offer you a chance to rebuild your credit when used properly, but they can also help you get in over your head again if you are not responsible and careful. Just because you are approved does not mean you have to take the loan or card. You can simply decline the offer instead.
When Can You Apply For A Bankruptcy Loan?
As soon as your bankruptcy discharge has been received you can try and get approval for certain types of credit, including some loans and certain credit cards. There is no need to wait six months or a year. In fact, the sooner you start to rebuild your credit after your bankruptcy is over, the better off you will be as long as you are responsible with these efforts.
How Can You Find The Best Bankruptcy Loan Possible?
There are some different factors that you need to look at before choosing the right bankruptcy loan in your specific situation. Stay away from those which have extremely high interest rates or exorbitant annual fees. Choose loans and credit cards which report your payments to a credit bureau because this report will help increase your credit score. You should also avoid any credit products which approve you for a set amount but then take more than half of the amount approved as fees and other expenses. Avoid expedited shipping as well because these fees are expensive and usually not worth the cost to receive your loan or card a few days earlier.
Is A Bankruptcy Loan More Expensive?
Because you have just finished bankruptcy proceedings you will usually pay a higher interest rate than someone with an excellent credit rating, but this is needed to build up your credit score again. Another method you could use is to get a secured credit card or loan. If you choose this method, make sure that after a certain time period of regular payments this account converts into an unsecured account and any security deposit is refunded.
Top Questions About A Bankruptcy Register
What Is A Bankruptcy Register?
A bankruptcy register may go under different names in different countries, but this is a registry that contains information only on bankruptcy cases that have been filed with the court and are either in process or have been discharged. These records may be kept in physical or electronic form, and the information contained can vary depending on the specific location. The number of years that information is kept about each case can also differ, depending on the specific register being looked at.
Who Is Listed In A Bankruptcy Register?
Anyone who has ever filed a consumer or business bankruptcy will be listed in the bankruptcy register if one is kept by the country where the bankruptcy was filed. The way that cases are listed may also be different depending on the location of the registry. Some will list by the case number, while others may list by name in alphabetical order.
Is The USA The Only Country With A Bankruptcy Register?
No. Many countries have some type of bankruptcy register in place. In the U.S., the Public Access to Court Electronic Records system, also known as the PACER system, is used. This system can be viewed at no cost for basic information, but there is a charge for a complete case record. England, Ireland, Scotland, Australia, New Zealand, and Canada are among the countries that also keep a bankruptcy register, but many countries do not.
Who Can View A Bankruptcy Register?
Anyone who chooses to and is willing to pay the applicable fee if one is charged can look through the records of the register. Some countries charge to look at even the most basic case information, while others may charge for complete details or other types of enhanced access. Many times any credit applications you submit may involve a search to determine if you have filed for bankruptcy. Some companies may pay a subscription for unlimited access to the bankruptcy records because they search so often.
Why Is There A Record If My Debt Is Eliminated By Bankruptcy?
This is a common question. You declared bankruptcy because you wanted a fresh start, so why is there a record of this action? The laws in many countries have established that these court proceedings should have a record kept for a specified number of years. This allows any possible creditors to evaluate your credit history and correctly assess your credit worthiness.
Will The Bankruptcy Register Listing Affect My Ability To Get Credit?
If you are listed in the bankruptcy register because you have filed for bankruptcy recently, you may not be approved for some types of credit. In many cases you will find that you are being approved for secured credit and options which are designed to help you rebuild credit. The type of credit you apply for is important, and you should only choose those products which report your payments and do not charge outrageous fees and interest rates. This will help you rebuild your credit while at the same time keep your costs down.
Bankruptcy Service Information And Tips
A qualified bankruptcy service will only specialize in these types of cases. Some law firms and legal professionals may take a few of these cases each year but normally practice in other legal fields instead. For the best possible results, it is better to choose a service or attorney who has a lot of experience and knowledge in this area.
What Does A Bankruptcy Service Do?
A bankruptcy service helps consumers file for bankruptcy and work through the process until discharge. This can include:
Gathering all of the necessary information about the case
Preparing the bankruptcy petition and all supporting and supplemental forms and documentation
Strategies and techniques for money management
Enforcement of any stays issued by the bankruptcy court
Optimal asset allocation by determining the best exemption strategy for the case
Preparing and filing any additional forms, motions, or answers
Dealing with creditors
Questions To Ask A Possible Bankruptcy Service Or Lawyer
How many years of experience?
What is the success rate?
How many cases are filed each year?
Who will be responsible for the case?
What is the fee charged?
What does this fee include?
Who pays the filing fee?
What type of retainer fee is required?
What documentation is needed?
These questions and others should be put into a list before the initial consultation. Some bankruptcy specialists may send a form with a number of questions, and this should be completed before the first meeting.
Typical Bankruptcy Service Costs
The typical cost for bankruptcy service can vary widely, depending on a number of factors. Each state or country may have different costs, depending on the location where the case is filed. In the U.S., some filing fees may only be $300. The complexity of the bankruptcy case will also help determine the final costs involved. The complexity will also impact the fees charged by an attorney or service if one is used. If additional motions or objections must be filed, this can also increase the costs.
Is A Bankruptcy Service Really Necessary?
Is it really necessary to use a bankruptcy service? Some consumers may represent themselves in bankruptcy court, but this is not advised by legal professionals for a number of reasons. Bankruptcy is very technical, the laws are complex and confusing, and there are strict deadlines in place concerning filings and hearings. Many common mistakes are made by consumers who represent themselves in these matters, which could cause a delay or dismissal in the case.
How To Tell When Bankruptcy Service Is Needed
There are a number of common signs which indicate a bankruptcy service may be needed. These include:
Difficulty paying bills and meeting financial obligations
Unpaid debts piling up
Creditors calling on the phone frequently demanding payment
Demand letters from creditors in the mail
Fear of foreclosure or repossession because of missed payments and delinquent amounts
Court judgments in favor of creditors
Wage garnishments to pay off debts
Property has been seized for unpaid debts
Credit After Bankruptcy
The Best Ways To Get Credit After Bankruptcy
Bankruptcy can affect credit, and often this will make it harder to get credit approval. There are some ways that can help rebuild credit after bankruptcy has been discharged, though, and many of these do not involve high interest rates or expensive fees. Before choosing a type of credit product following a bankruptcy, make sure the interest rate charged is reasonable. It is also a good idea to check how long it will be before the interest rates or fees can be changed.
A Secured Credit Card Can Establish Credit After Bankruptcy
A secured credit card can be a good way to rebuild credit after bankruptcy. These cards require a security deposit which is put into an account set up for this purpose, usually in the amount of the credit limit on the card. As long as the card payments are made on time, the deposit is not touched and is usually refunded after a specified time period as long as the account does not go delinquent during that time.
Not All Secured Cards Are Alike
Not all secured cards are the same when it comes to credit after bankruptcy. In addition to different interest rates and fees, some of these card companies do not report regular payments to the different credit bureaus. If the payments are not reported then they do not improve the credit history or rating of the account. A secured card account should also release the security deposit and convert to a traditional card that is not secured after a period of a year to 18 months.
Unsecured Credit After Bankruptcy
Approval for unsecured credit cards and loans right after bankruptcy may not be so easy to get from many companies, but there are some who specialize in bad credit or poor credit individuals. These usually offer a low credit limit, and include fees that can run into the hundreds of dollars in some cases. Many times a card will be approved for a set limit, such as $300, but when the card is received less than $100 is still available due to various fees and charges.
The Benefit Of A Cosigner With Credit After Bankruptcy
Having a cosigner for credit applications after bankruptcy can help with the approval process, if the cosigner has good credit. Often a cosigner is all that is needed to get an unsecured loan or higher credit limit card. It is important to make the payments on time or before they become due because the cosigner will have their credit rating affected or have to pay up if the borrower does not.
Credit After Bankruptcy And Personal Loans
Getting a personal loan after declaring bankruptcy can be tough unless collateral or a cosigner are offered as security. It is possible to do this in some cases with a security deposit. Placing a deposit in the account may allow a loan in that amount to be taken out. If a payment is missed, the loan defaults and the balance due is deducted from the security deposit. When the loan is paid in full, the credit score will improve significantly.
Mortgage After Bankruptcy
Qualifying For A Mortgage After Bankruptcy
Most people believe that qualifying for a mortgage after bankruptcy, even a year or two later, is impossible. This is not true. In some cases individuals have received mortgage approval in as little as one or two days after the bankruptcy discharge has been approved and filed.
There are many factors evaluated before a mortgage application is approved, including the income, debt amounts, employment history, home value, and others. The financing company will evaluate all of the factors and determine whether an applicant is a good credit risk or not. In some cases, a lower credit score could result in higher interest rates on a mortgage.
Debt To Income Ratio
The debt to income ratio is a very important number because this figure compares the amount of debt against the income of the applicant. It is preferable that this percentage amount is as close to zero as possible. Many lenders will not approve any applicant who has a debt to income ratio of more than 36%, but others may be willing to go as high as 40%-45%, though these are not typical lenders. Any mortgage application that has a ratio that exceeds 50% is considered very dangerous and is almost never approved.
Credit Report Accuracy Can Affect Approval For A Mortgage After Bankruptcy
The accuracy of the applicant's credit report can be crucial. Order a copy of all 3 credit reports and check them carefully for any mistakes. All of the debts which were discharged in bankruptcy should be listed that way. If any errors are found, these should be corrected immediately by contacting the credit bureau and notifying them. This will start an investigation into whether or not the claim is valid. If the entry is mistaken, the bureau has a specific time limit to correct the error.
Is A Lawyer Needed To Fight Credit Report Errors?
If repeated contact fails to correct an erroneous entry on a credit report it may be necessary in some cases to retain legal counsel to force the credit bureau to fix the problem and correct the account information. If this becomes necessary it may be possible to ask the judge to reimburse these fees if the case is won. The law is very clear on the time allowed for a credit bureau to fix any mistakes once they are notified of this problem. If an account entry is disputed, then the debt status and other information must be verified by the reporting agency or removed.
Typical Documentation Necessary For A Mortgage After Bankruptcy
What type of documentation will be required to qualify for a mortgage after bankruptcy discharge? Some common documentation requirements may include:
Tax returns for the previous 3 years
Check stubs showing gross income and deductions
Proof of home insurance coverage
Any unpaid debt or other obligations still owed
Driver’s license and social security card
An appraisal of the home the mortgage is for which shows the current market value
A corrected credit report if any errors were found
Types Of Bankruptcy
The Different Types Of Bankruptcy
The different types of bankruptcy which are possible involve the Chapters of the Bankruptcy Code. When a bankruptcy is filed, this is done under the specific Chapter that fits the circumstances of the case. There are 4 main types of bankruptcy when it comes to consumers, while government entities, large corporations, and businesses may have other options as well.
Chapter 7: Consumer Debt Liquidation
Chapter 7 is one of the types of bankruptcy that is most commonly used by consumers. This is also referred to as liquidation. To qualify for bankruptcy under this Chapter, a Means Test must be passed. This test determines whether there is sufficient income to repay a portion of the debt over time. A Chapter 7 case does not involve a repayment plan, and most if not all of the past debt is eliminated. Any assets above the exemption limits will be sold by the trustee. This is one of the quickest discharges available, and the case is usually complete in a year or so.
Chapter 9: Municipal And Government Entity Debt Restructure
This is one of the types of bankruptcy not used by consumers. A Chapter 9 case involves a municipality and deals with debt adjustments rather than liquidation. This Chapter covers municipal and government entities which may need to adjust debt payments, rather than pay on the current schedule. Consumers and businesses do not file under this Chapter of the Bankruptcy Code.
Chapter 11: Business And Consumer Reorganization
Chapter 11 is one of the types of bankruptcy that allows for debt reorganization rather than liquidation. Normally businesses and corporations file under this Chapter, but it is used for consumers in some cases. If the income, assets, or amount of debt owed is more than the amounts allowed under Chapter 13, then a consumer may choose to file under Chapter 11 instead.
Chapter 12: Family Farm And Commercial Fishing Operations
Chapter 12 is not one of the types of bankruptcy typically used by consumers. This Chapter of the Bankruptcy Code covers family farmers and fishermen who have a regular annual income. A Chapter 12 case allows these individuals to file to reorganize their debts so that the assets needed to operate the farm or fishing business are not affected, and the day to day operation of the venture is not prevented.
Chapter 13: Debt Adjustment With A Regular Income
A Chapter 13 is one of the two most common types of bankruptcy file by consumers, with Chapter 7 being the other most common filing type. Chapter 13 allows consumer debt to be reorganized, and a payment plan must be submitted to the court which must be confirmed. Under this bankruptcy, the court may oversee the finances of the filer for 3-5 years, after which any remaining debt is wiped clean.
Chapter 15: International Cases
Chapter 15 is not one of the usual types of bankruptcy. This Chapter of the Bankruptcy Code covers cases involving international debt and issues that cross the borders of more than one country. These cases are unusual and are not commonly filed.
Is A Bankruptcy Lawyer Necessary?
Each bankruptcy case is different, and several types of bankruptcy may be possible depending on the circumstances. It is a good idea to consult with a bankruptcy specialist so that the right exemptions are chosen and the right Chapter of the Bankruptcy Code is used for the petition. Any property not exempt can be taken by the trustee and sold, with the proceeds being distributed to creditors of the case, so it is important that the appropriate exemptions are chosen. An experienced attorney can determine the best possible Chapter to be used for filing bankruptcy, taking into consideration all of the facts in the case.
Interesting Personal Bankruptcy Facts And Statistics
Personal bankruptcy cases have seen an increase in the last few years, and there are many interesting facts and statistics that can be found on this subject. The most common types of personal bankruptcy cases filed are Chapter 7 and Chapter 13.
It is estimated that around 4,300 people file for bankruptcy protection every single day, and this is only in the United States. The number of filers per day increases significantly if the global population is considered. In the initial four months of 2010, one out of every 225 homes in the U.S. will have sought protection from creditors through bankruptcy.
Facts About Personal Bankruptcy
Chapter 7 can liquidate debt and eliminate it completely. Chapter 13 takes longer and involves some repayment of creditors, but usually does not include asset seizure by the trustee in most cases.
With a Chapter 13 case, unsecured debt cannot exceed $100,000 and secured debt cannot exceed $350,000. If these amounts are too low and cannot be met then the debtor may choose a Chapter 11 filing instead.
If the debtor is married and the debt was incurred during the marriage, a joint filing should be done. If only one spouse files for bankruptcy protection then the debts may simply be transferred over to the spouse who has not filed for bankruptcy.
Changes In The Personal Bankruptcy Laws
In 2005 there were sweeping changes made to the laws regulating personal bankruptcy. This was the year the Bankruptcy Abuse Prevention And Consumer Protection Act (also referred to as BAPCPA) was passed. This is also commonly known as bankruptcy reform, and these changes made it more difficult for some filers to utilize Chapter 7 and have all of their debt eliminated. The Means Test was put into place to determine whether the income of the filer is below the median income level for the area where the case is filed. If the income received is too large to pass the Means Test, then Chapter 13 must be used instead and some portion of the debts must be repaid.
Statistics Concerning Personal Bankruptcy
It is expected that more than 1.6 million people will file for personal bankruptcy protection in the year 2010
Roughly 3 out of every 4 bankruptcy cases still involve a Chapter 7 filing, but these statistics vary widely depending on the state
The results expected by creditors from the personal bankruptcy changes have not materialized. These changes were intended to make it more difficult for debtors to eliminate debt completely, but recent economic events have caused many consumers to pass the Means Test.
Southern states seem to have a higher percentage of Chapter 13 filings than states in the northern part of the country. In Louisiana 55% or more of the cases filed recently have been Chapter 13 cases. Some states have less than 10% of filers choosing Chapter 13 instead of Chapter 7, including New Mexico, South Dakota, and Iowa.
According to official statistics, there are around 2 million people who will be involved in a personal bankruptcy case this year. This figure reflects both individual and joint bankruptcy filings.