fbpx

USLaw

Benefits of Filing for Bankruptcy

Many people believe that filing for bankruptcy worsens their financial position. However, this is not entirely true. While it is true that bankruptcy affects a person’s finances for some future years, in many cases, filing is the next best option. Here’s why:

Suspension of Debt Collection

Once you file for bankruptcy, the court automatically issues a stay against all creditors and debt collection proceedings. While this does not mean that your debt is canceled, it gives you some time to sort out all your debt before the bankruptcy case is deemed complete or till the stay is lifted.

In cases where debt collection is suspended, your debt collectors cannot call you or send you letters. There can be no lawsuits on the debts that you owe. You do not have to face any more wage garnishments, home mortgage foreclosures, and property repossession.

During the time that the court suspends your debt, if any creditor contacts you, your attorney has the right to bring a contempt of court action against them. This means that the court can penalize them for approaching you, stop them from their debt collection attempts, or make them pay for any inconvenience caused.

However, keep in mind that an automatic stay order does not mean you can stop criminal proceedings, government tax audits, modifying, collecting, or establishment of child support or alimony, the establishment of paternity, or co-debtors and co-signers. Moreover, if you have filed for bankruptcy only once in the past year, you can be eligible for an automatic stay. This does not apply if you have filed for bankruptcy twice or more in the past year.

Dischargeable Debt

Dischargeable debts are those that can be entirely eliminated by bankruptcy. When you file for bankruptcy, you can discharge, cancel, or overturn your responsibility to repay some debts based on your circumstances. These include credit card debt, medical and utility bills, and some personal loans.

Exceptions

Exempting an asset means that it will not get seized during bankruptcy. This applies to both Chapter 7 and Chapter 13 bankruptcy. While some exceptions protect a certain dollar amount of an asset, others cover the entire asset. Some exceptions may only apply to a set group of assets, such as a motor vehicle or wedding ring, while others can apply to other properties you own and do not wish to give up.

Credit Score

Most people do not file for bankruptcy because they worry about a tanked credit ranking. There is no denying that a bankruptcy filing leaves proof. It remains on your record for anywhere between 7 to 10 years. However, many debtors have claimed that their credit scores actually improve after they file for bankruptcy.

This is because when your dischargeable debts are canceled, you can move forward in life with a clean slate. With some patience and hard work, you can slowly rebuild your credit and gain the confidence of the people around you.

Depending on your personal financial circumstances, bankruptcy may or may not be for you. To know more about your unique case, get in touch with the bankruptcy attorneys at our firm today (insert link of the website).

Bankruptcy Forms and What You Need to Know About Them

Filing for bankruptcy can be an arduous process. It is complicated in its technicality and can be confusing in certain places. It would help if you had assistance, whether or not you are recording under Chapters 7 or 13.

Official US court sites give the official documentation for filing, which are printable and can be completed. You likewise may have to follow explicit prerequisites forced through the bankruptcy dealer of your general vicinity, which may include additional or different files. The dealer agent or a lawyer can clarify these prerequisites and instruct you on what is necessary. Sometimes, the court’s site will give the forms, too.

Form Submission

Bankruptcies and their proceedings are documented in federal courts only. All of the US states have at least one government legal locale. You should record in the locale of your main living place or where you’ve lived in for the 180 days preceding your document. (By and large, it is going to be a similar region). Business proprietors have a little extra alternatives to consider.

Forms of C7

Form b 101

The primary file in a C7 bankruptcy is the B 101, or the deliberate appeal. This will give you distinguishing information, notwithstanding information about previous forms, the end of your credit guidance, and other fundamental issues. If there’s an oust not in your favor, you should look into B 101A along with B 101B. On the off chance that you can’t pay the recording expense, you can request for payment of charge in portions from B 103A, else request a renunciationfor B 103B.

Form b 106

B 106 plus connected forms will give a rundown (or “timetable”) of your resources plus debts.B 106A and Bare meant for giving a timetable that deals with your holdings, B 106C is to give a timetable of your guaranteed exclusions, B 106D is to enlist and ensure correct lenders, B 106E or F are to enlist unstable banks, while B 106G is to enlist actionable deals yet-to-expire leases. Then,B 106H is to give the details belonging to partner account holders on your obligations, who should pay on the off chance that you don’t pay your obligations. B 106I deals with pay, while B 106J deals with month to month costs.

Form B 107 and Others

B 107 gives your Affairs Statement, that delineates, for example, your all-out pay in the course of the most recent two years, late installments to banks, continuous claims, ongoing property moves, plus assets of others in your temporary possession. B 108 is Intent Statementof your dealing with these with your obligations and yet-to-expire deals. B 121 social security details belonging to you. Forms B 122A-1 and B 122A-2 identify with the methods trial for the 7th Chapter qualification. They turn out your current month to month revenue and depict whether you need atest if your pay is more noteworthy than average.

Chapter 13 forms

The forms that an indebted person needs to document in 13relate as fairly comparable. B 101, B 101A and 101B plus B 106 along with others connected handle the very issues as 7. When recording for 13,the option to pay the documenting forgoing waivers is there, soB 103A plus 103B won’t assume a job. You won’t have to finish B 108 in 13. So, first finish B 121 to cater to Social Security details.

Chapter 13-Specific Forms

The filings explicit to 13 are B 122C-1 plus B 122C-2.B 122C-1 turns out your current month to month revenue and sets out the period in which you hope to finish your reimbursement.B 122C-2 turns out your dispensable revenue, which includes the assets utilized to issue installments under the arrangement. Notwithstanding the filings, present a different proposition for your reimbursement. It’s certifiably not a particular form and doesn’t follow a specific format; however, you can get some information regarding everything needed to be remembered for the arrangement.

A Record Low in Bankruptcy Filings

Despite the economic uncertainty brought by the pandemic this year, paradoxically, the number of bankruptcy filings in the country hit a new 14-year record low this November. According to data released by the legal giant, Epiq, new bankruptcy filings across all chapters for the month was 34,440, the lowest since January 2006.

According to Deirdre O’Conner, Epiq’s managing director of corporate restructuring, the economic uncertainty itself is to blame for the unusually low filing count.

“These historic low bankruptcy filings reflect the overall uncertainty about our economic recovery. Bankruptcy is a legal tool to restructure, but in this unknown financial environment, the benefit from seeking bankruptcy protection is unclear for individuals, families, and even large companies,” – Deirdre O’Conner.

In addition, government intervention may have also partly contributed to the fall in bankruptcy filings. The various COVID-19 related government programs and state eviction moratoriums are lessening individual incentives for filing for bankruptcy.

Individual bankruptcy filings through the year as a whole have been low. Compared to 2019 for the same period, in 2020, non-commercial filings under Chapter 7 were down 21%, from 414,625 to 325,716, and in the case of non-commercial filings under Chapter 13, the tally was down by 45%, from 252,660 to 137,764.

Source: Globe Newswire

#chapter7 #chapter13 #bankruptcy #legalnews #bankruptcynews #bankruptcyUS #COVID19 #USLaw

Planning for Chapter 7 Bankruptcy – 5 Quick & Helpful Tips

1. Any debt incurred after the bankruptcy filing date does not qualify as part of your discharge. Therefore, it is best to file when one is sure that they are reasonably sure that they won’t be incurring any further unmanageable expenses while during and after the bankruptcy process.

2. Include all qualifiable debts that you believe you won’t manage in your bankruptcy. Once a discharge is given, most debtors have to wait 8 years before qualifying for another debt discharge.

3. If you are moving to another state, time your bankruptcy filing accordingly. Depending on which state you are in and to which you are moving, it may be more advantageous to file while residing in the one with more generous exemption laws.

4. Be mindful of making large payments to preferred creditors, selling assets, or transferring them out of your name shortly before bankruptcy. It can raise suspicion of bankruptcy fraud, and the court trustee assigned to your case can get the money or property back using a clawback provision.

5. Don’t make the mistake of incurring any further debt shortly before filing for bankruptcy. The fact that you purchased items on credit knowing that you won’t pay the creditor back can make you subject to fraud allegations. Even if it does not result in a criminal investigation, the outcome could still be an objection to your discharge.

#chapter7 #bankruptcy #legaltips #bankruptcyadvice #bankrutcyUS #TX #helpfultips #USLaw

Get A Fresh Start

Schedule a time to speak with an experienced Bankruptcy Attorney today!