Bankruptcy Basis: Chapter 13 and Chapter 7 Information
Attorney Malik Ahmad : Las Vegas
Should I Declare Bankruptcy?It seems as though this question gets asked more and more often especially in todays society. "Should I declare bankruptcy?"
People tend to believe that this is the easy way out of their financial obligations. While it is true that this is a way to get out of your financial burdens the important thing to remember is that declaring bankruptcy is final and should not be taken lightly.
This is the worst thing that you can do to affect your credit score and it will leave a mark on your credit report for seven years. While it is possible to establish good credit after filing bankruptcy; the thing that you are going to realize is that it is going to be difficult to get creditors to trust you again.
When creditors pull your credit report and they notice that you have filed bankruptcy; then their first instinct is that you can not handle your financial obligations. They are also more determined not to lend you money.
Of course you may still get that auto loan or mortgage loan; however you are going to notice that it is not going to be the best interest rate. As a matter of fact it is most likely going to be higher than you anticipated paying back.
So the answer to your question "should I declare bankruptcy?" Well that is a personal choice; once you have done your research and discovered the negatives and the positives of filing it; then if you still feel as though it is still your only choice then of course you should take care of you and your family.
There is nothing more stressful than having to deal with dealing with payments that you can not make or if you are being bothered by those annoying calls by the creditors.
If you want to be informed about bankruptcy and the effects that it has on your life; visit our site below. You will discover that there is life after bankruptcy and how you can quickly get back on your feet and ensure that you never have to deal with this situation again.
Pros for filing Bankruptcy to Stop Foreclosure
* The Foreclosure proceedings will be temporarily suspended.
Cons for filing Bankruptcy to Stop Foreclosure
* There will be a bankruptcy on your record for 10 years.
* The Mortgage Company can work around the Bankruptcy and still Foreclose.
* You lose any leverage and control you once had.
* A deal must still be worked out with the Mortgage Company to repay the past due amount.
* If you are 1 day late on any trustee payments your case "may" be dismissed, the stay will be lifted and you will be back in Foreclosure.
* We can negotiate on your behalf with the Mortgage Company to keep your Home from Foreclosure and get your loan back in good standing. There are certain debts which are not dischargeable:
o taxes;
o student loans;
o child support and alimony;
o marital debts;
o intentional torts;
o operating a vehicle while intoxicated;
o recent credit purchases/cash advances;
o fines and citations; and
o fraud.
Many debts can be eliminated, or discharged, through a bankruptcy. However, certain debts may not be eliminated through bankruptcy. These types of debts are called "non-dischargeable debts." If you're considering bankruptcy, you'll need to know what types of debts can and cannot be resolved through a bankruptcy filing.
If you file a Chapter 7 bankruptcy case, you will still be responsible for repaying non-dischargeable debts after you receive your bankruptcy discharge. If you file for Chapter 13 bankruptcy relief, non-dischargeable debts can be paid through your Chapter 13 bankruptcy repayment plan. If the non-dischargeable debts are not paid, the creditor will be able to collect on any remaining balance. An experienced bankruptcy attorney can advise you on whether a bankruptcy can help resolve your debt.
There are several types of non-dischargeable debts:
Taxes: Income tax debt will not be discharged in your Chapter 7 bankruptcy unless: o the income tax is more than three years old,
o the tax return was filed timely, and
o the tax return was correct.
If the tax return was filed late, but filed more than two years prior to filing the bankruptcy, the tax may be dischargeable if all other requirements are met. There may be special considerations in determining the dischargeability of tax debt. An experienced bankruptcy attorney can determine whether or not your tax debts are dischargeable in bankruptcy.
Are you a Prime Candidate for bankruptcy? a litmus test:
Take a closer look at the black and white numbers
A good place to start may be to simply sit down at your kitchen table with all of your bills. This is really the only way that you may get a good handle on the total situation. Take a good look at what you owe and how much you have coming in. Then, ask yourself a few questions such as:
Why Chapter 7?
Chapter 7 bankruptcy cases move relatively quickly, and you may receive your discharge in just a few months. A discharge will eliminate unsecured debts like credit card debt, medical bills, most personal loans, judgments resulting from car accidents, deficiencies on repossessed vehicles, some older tax debts, payday loans, and garnishments. Certain debts are classified "non-dischargeable debts" and cannot be discharged, or can only be discharged under very specific circumstances. These include child support, most student loans, and many tax debts.
Is Filing bankruptcy right for you?
We'll help you schedule a free consultation with an attorney who may assess your financial situation, discuss your legal rights and further explain why Chapter 7 bankruptcy may be the right option if you:
* Have no income or low income
* Have little or no money left after paying your necessary living expenses each month
* Rent or have little equity in your home
* Have few assets (or no assets) outside your furniture, clothing and other necessities.
The Law Requires You Must Receive a Credit Counseling
The law requires that you receive a Credit Counseling Briefing from a certified credit counseling agency before filing bankruptcy, regardless of whether you're filing Chapter 7 bankruptcy or Chapter 13 bankruptcy. The agency will explain financial management and how to do a budget analysis, and will also discuss alternatives to filing bankruptcy. While there are some hardship exceptions to this rule, most debtors will have to get this briefing, and failing to do so before filing may result in your case being DISMISSED. Your Chapter 7 bankruptcy lawyer may refer you to the appropriate agency.
The Law Requires You Must Receive a Credit Counseling
The law requires that you receive a Credit Counseling Briefing from a certified credit counseling agency before filing bankruptcy, regardless of whether you're filing Chapter 7 bankruptcy or Chapter 13 bankruptcy. The agency will explain financial management and how to do a budget analysis, and will also discuss alternatives to filing bankruptcy. While there are some hardship exceptions to this rule, most debtors will have to get this briefing, and failing to do so before filing may result in your case being DISMISSED. Your Chapter 7 bankruptcy lawyer may refer you to the appropriate agency.
What is a Mean Test?
Before filing for Chapter 7 bankruptcy, you will have to qualify through a Chapter 7 means test. Although there was a lot of media hype about the Chapter 7 bankruptcy means test disqualifying people from filing for Chapter 7 bankruptcy when it was introduced in 2005, the truth is that more than 96% of potential Chapter 7 petitioners still qualify. In the unlikely event that you are one of those few who do not, filing bankruptcy may still be an option; this time in the form of Chapter 13 bankruptcy. Here are some reasons why filing Chapter 7 bankruptcy may not work for you
The Chapter 7 means test is a two-step process which begins with a median income comparison. Explaining this first step of the Chapter 7 bankruptcy means test in more detail, your monthly income is compared to the median income in your state for a family that is the same size as yours. If your income is at or below the median income, you qualify for Chapter 7 bankruptcy. If your income is higher than the median income, it doesn't mean that you can't file for Chapter 7 bankruptcy, but rather triggers the second step of the Chapter 7 bankruptcy means test.
Calculating disposable income and unsecured debts is the second step of the Chapter 7 means test. If your disposable income over the next five years is less than $6,000 ($100/month), you "pass" the Chapter 7 bankruptcy means test and can thus file for Chapter 7. A local bankruptcy attorney can further explain how disposable income is calculated. If your disposable income during that five year period is greater than $6,000 but less than $10,000, you may still be able to file for Chapter 7 bankruptcy protection, depending upon your allowed expenses.
