Chapter 7 bankruptcy is a filing in which the individual filing for bankruptcy has very few assets and is primarily delinquent in unsecured debt. Unsecured debt is debt in which the borrower did not put up any initial collateral in exchange for the credit.
Chapter 13 bankruptcy is often referred to as the Wage Earner’s Bankruptcy. Unlike Chapter 7, Chapter 13 bankruptcy gives the debtor the opportunity to pay off all, or parts, of their debt over time rather than liquidating their property or facing steep penalties. This chapter of bankruptcy is for individuals that have a consistent income, however, they need a little more time to pay off their debts than the creditors are allowing. In this chapter of bankruptcy, you can pay the debt off over a course of 3 to 5 years.
Chapter 11 bankruptcy cases are typically filed by corporations, limited liability companies, and business partnerships. Individuals that are in substantial debt and have too much income to qualify for Chapter 7 or Chapter 13 bankruptcy may also apply for Chapter 11 as well.
There probably isn’t a law student alive who has not, at least for a brief moment, wondered whether they could file for bankruptcy to get out of their student loan debt. Most law school graduates leave school with an albatross of debt — common figures tossed around at the bar exceed six figures. And while everyone’s mental image of a lawyer is a rich guy in a pinstripe suit with a Porsche, most lawyers don’t make anywhere near that money, especially at the beginning of their careers. And yet, despite being very well educated and likely able to file a bankruptcy petition on their own, almost none of them do.
It is no surprise then that discharging tax debt is not exactly simple or easy. And while it is far from impossible (especially if it is older federal income tax debt), it is not as simple as discharging a past due credit card bill or debt from a business that went belly up. There are a number of rules that determine whether your income tax debt can be discharged, as well as strict timing that must be followed.
Many Americans face steep challenges paying off their debt. Fortunately, there are many financial relief and repair options available to help do this. These include debt settlement, credit repair, loan consolidation, and bankruptcy.
If you are contemplating whether to file for bankruptcy, you may be concerned about having all of your personal possessions "liquidated" during the proceedings. Do not fret. There are specific rules and regulations governing which assets are eligible for bankruptcy liquidation and which assets are exempt. You may be surprised to learn that there are numerous assets and personal possessions that are protected during a bankruptcy proceeding.
If you are struggling with the burden of paying down your student loan debt, you are not alone. Millions of people are carrying tens of thousands of dollars in outstanding loan debt from their educational pursuits. If you are struggling financially, you may wind up asking yourself, “Can student loan debt be discharged in bankruptcy?” Here is the answer – student loan debt is extremely difficult, but not impossible, to have discharged in a bankruptcy proceeding. The reason discharge of student loan debt is so difficult is the governing standard used by courts across the country – you need to provide evidence that making payments towards your student loan debt “will impose an undue hardship on you and your dependents.”
It is understandable why someone in Chapter 13 bankruptcy would want to speed through the repayment plan–if they can–and move past this experience. However, it is important to consider that once you are in a repayment plan, if your financial situation improves and you show that you can pay more faster, then your creditors might rescind their debt forgiveness and increase the debt owed to them, thus increasing your monthly payments.
If you are struggling financially and unable to make progress in paying down your debts, you may want to consider filing for Chapter 7 bankruptcy. It is a legal option that has helped many people clear their debt and get back on their feet financially. If you are curious about this option, you may be asking yourself, “how long does it take to file for Chapter 7 bankruptcy?”
Once you have made the decision to file for bankruptcy, getting the required documentation in order can be overwhelming. There are several questions you will be asked when filling out your bankruptcy paperwork, and you will be asked to disclose ample amounts of information related to your financial positioning. Whether you are filing a Chapter 7 bankruptcy or have a Chapter 13 matter, the documentation is the same. When going through bankruptcy, you have to provide the following documents to the trustee and reveal additional information when completing the bankruptcy paperwork. This article will give you an overview of the documents that you will need when filing for bankruptcy.
When a person files for bankruptcy, the court has a motive to provide an equal distribution among creditors that are similarly situated. For this reason, there is a procedure to protect the debtor from the pillaging of creditors upon the initial filing for bankruptcy—the protection granted is an automatic stay and takes effect immediately.
Over the past few months, you may have heard in the news about the CARES Act (Coronavirus Aid, Relief, and Economic Security Act), which has resulted in items like the national stimulus checks, expanded unemployment insurance and the founding of the Coronavirus Relief Fund, amongst many other things. One major change that has come with the 2020 CARES Act, is a change to the official forms that are required to be filled out when filing for bankruptcy. While not every bankruptcy form has been changed, there are 5 that have been affected under the new 2020 CARES Act.
If you were hoping to get a $1,400 stimulus check from the recently enacted American Rescue Plan Act of 2021, but have unpaid debts, you need to temper your expectations. Why? Because it has come to light that creditors can garnish stimulus checks to recover on unpaid debts.
When someone decides to file for Chapter 7 bankruptcy, they may be curious to know whether they can retain the tax refund or if the expected refund will be diverted during bankruptcy to pay your creditors. Unfortunately, there is no single correct answer. In reality, the answer will depend on your unique circumstances.
If you go through Chapter 7 bankruptcy proceedings, a common question that arises is whether you are still eligible to apply for, and obtain, a mortgage. Here is the answer - yes, you can still qualify for a mortgage after a Chapter 7 bankruptcy. Though, it is important to understand that each mortgage lender has its own unique requirements and waiting periods for mortgage applicants with a bankruptcy filing on their record.
Bankruptcy and divorce can go hand in hand. Stress-related to mounting debt creates tension among the married couple, which in turn can put a strain on the relationship. Next thing you know, divorce is a real possibility.
So it’s not uncommon to consider filing for bankruptcy during a divorce. However, entering into a bankruptcy proceeding while at the same time divorcing can create additional issues you need to be aware of.
The specifics depend upon whether you’re considering a Chapter 7 or Chapter 13 bankruptcy.
Usually, your employer will not find out about your bankruptcy. However, there are a few cases where they may discover or be informed of it. These include being in the public record, managing wage garnishments, creditor listings, and Chapter 13 payroll deduction orders.
After your debt is discharged, there’s generally no waiting period to apply for a credit card. However, that does not mean your application will be accepted, because bankruptcy has a lasting effect on your credit score.
There are a lot of benefits that come from filing bankruptcy, and these benefits could mean the difference between struggling financially while dodging debt collectors for the next decade or more of your life and building a firm financial future with better credit, better opportunities, and an easier time providing for your family.
While bankruptcy certainly has its benefits, there are some significant downsides to this drastic measure that should be considered before filing. A Chapter 13 filing, which makes up about a third of all filings, means you’ll still pay much of the debt back. And for the majority of filers – the Chapter 7s who walk away from much of the debt – there are still major downsides.
Nothing can be further from the truth. Bankruptcy in the United States generally takes one of two forms for individuals (not businesses): a Chapter 7 debt elimination filing or a Chapter 13 reorganization filing that allows the consumer to pay back much of what she owes.
Bankruptcy is certainly one solution out of this common situation. You may have even had friends or colleagues who have whispered to you about their own bankruptcy filings over a cup of coffee, giving you hope for a debt-free path forward. But before you rush to file, you need to know about the most intimidating part of the process: the Means Test.
Most small businesses do not want to get into debt collection because of the incredible array of laws and regulations that govern collections. They will typically sell your debt to a third-party collector. The same goes for government agencies, such as parking ticket collections. Larger businesses, like credit card companies, may have a debt collection unit, but when they strike out on collecting, they will typically sell it off to a third party as well.