It would probably not surprise too many of us today, given the current economic conditions in the nation and the long emerging national statistics that show that more and more Americans all across the country have been filing personal bankruptcy at astronomical levels. But a recent national random sample pulling made by one researcher about chapter 7 and chapter 13 bankruptcy cases filed by American debtors during the two month period of July and August of 2010, made this significant finding: namely, that overall, a little more than 1 out of every 9 cases (11.3%) filed in the American bankruptcy courts, were filed by the debtors themselves, WITHOUT using an attorney. In deed, the pulling, which was done by Professor Robert Lawless of the University of Illinois Law School, a well-known expert on bankruptcy and credit law, showed that the rate of non-attorney filings by debtors, was higher in chapter 13 cases (13.8%) than it was in chapter 7 (10.1%). In short, today more debtors are undergoing bankruptcy without lawyer.

An interesting piece of information, no doubt!

But note, though, that these specific figures are yet merely a “national average.” You should note that, though significant, this figure of 1 in 9 bankruptcy filings being done without an attorney, will probably not really strike many experts who are knowledgeable in the field as particularly dramatic or representative of the whole statistics. In deed, as Lawless himself pointed out, a fact long-established in bankruptcy administration has been that there are some court districts across the United States in which the rate of persons who file bankruptcy without a lawyer, is in fact as high as 30%. Or more! As in major urban areas, for example, such as California, New York city, etc. In such districts, debtors save on bankruptcy fees with petition preparer, as there is really no such thing as low-cost bankruptcy lawyer.

 
Nevertheless, this current release of the Lawless survey is very significant. The Lawless survey which shows that nationwide at least a significant proportion of bankruptcy filers, some 1 out of 9 of them (and the findings by other data which show that up to 30% or more in certain larger urban court districts) do so without using attorney, immediately throws a big wrench in one basic argument of the organized bar and bankruptcy lawyers obviously engaged in the protection of their lucrative business of bankruptcy filings. A major favorite of bankruptcy lawyers and common argument often heard from them, is that probably the most important reason why the job of doing what is, essentially, a FINANCIAL business of bankruptcy filing, should be left solely to remain the exclusive preserve of “attorneys,” is that, according to them, the process involved in filing bankruptcy is a “complex” undertaking. According to them, doing bankruptcy work is unusually a forbidding task too difficult for anyone, except for the “highly skilled and educated” type, to do, and if you’re a debtor even with any thoughts whatsoever about doing bankruptcy yourself, maybe you had better re-thing that, for, they say, nothing could be more foolish or “risky” an undertaking for you to attempt! You simply, of course, should just hire an “attorney” to walk you through it like a baby, they say!

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So with this latest reminder just released, if bankruptcy is supposedly so “complex” that only a person with presumably the special skills and training of a bankruptcy “lawyer” can undertake it, then how is it that such large number and huge proportion of debtors (some 10, 20 or 30% or more of them, depending on which districts) who are not “attorneys,” actually do it? And do it largely just as successfully and as well as the lawyers, themselves? But is there ever really any such thing as low-cost bankrupt lawyer?

“It’s very interesting that the pro se rate for the converted/dismissed chapter 13 cases, is the same as the overall rate.,” noted Professor Lawless about the findings of his survey. Adding that “That would suggest that being pro se in chapter 13 is not meaningfully associated with having one’s case dismissed or converted.” Consequently, more debtors going bankruptcy without lawyer as they seek to save on bankruptcy fees with petition preparer

Actually, the reason the above situation is the actual case, is rather simple. The reason is that, actually, the truth of the matter is that most personal bankruptcies (or, for that matter, a good deal of small business bankruptcies, as well) are really in deed simple. So much so, in fact, experts (lawyers, court trustees, judges, etc) who specialize in bankruptcy law and procedures, say, that you really don’t need the services of a lawyer to handle ordinary personal bankruptcy since they are generally too simple, they say, and too elementary and largely clerical to undertake.

Many experts who make such points generally cite two basic reasons on which they base this claim: First, that an overwhelming majority of personal bankruptcy cases are so-called or “minimum asset” cases – that is, cases in which the owing debtors literally have or own absolutely NOTHING that the creditors can claim or attach, let alone any money for paying the lawyer’s hefty fees; and second, the FACT that bankruptcy, they say, is really a relatively simple matter (contrary to the layman’s common belief that bankruptcy is a complicated procedure), which often actually involves the mere completion of simple routine forms and submitting them to the local bankruptcy court.

is a Professor of law at Golden State University, San Francisco, and a recognized author and expert on personal bankruptcy issues. She says: “If you can do that [prepare your income tax return] you can probably handle your… [bankruptcy] yourself…”

California Attorney, prominent author and specialist in bankruptcy law, most recently summed it up this way: “There is seldom a good reason to use an attorney in a consumer Chapter 7 bankruptcy case. The procedures are almost exclusively administrative – that is, there is no appearance before a judge…The forms are all (with very few exceptions) pre-printed in plain English…[But, in spite of
that fact], What’s tragic is that people actually think they have to have attorney representation [to be able to do it].”

And Jonathan B. Alper, practicing Florida bankruptcy attorney, put it this way: “Most Chapter 7 consumer bankruptcies are relatively simple and [hence the] legal fees are [should be] low compared to other legal work.” Do bankruptcy cheap?

Is there any way to do bankruptcy cheap? Summed up simply, an important objective reality already – an established FACT, according to a recent research finding cited above – is that at least 1 out of every 9 debtors (and it’s even much higher than that in certain parts of the nation) who file for bankruptcy across America today, file it WITHOUT using a lawyer. That there are more debtors going bankruptcy without lawyers. Rather, they file bankruptcy, in stead, with the assistance of a non-attorney service called the Debt Relief Agency or Bankruptcy Petition Preparer – usually well-trained and experienced paralegals specialized in bankruptcy document preparation and procedures, but who offer their services to debtors at far lower and more AFFORDABLE cost than the lawyer’s fees. Given this reality, it becomes clear that as a debtor probably contemplating filing bankruptcy, you need NOT, as the bankruptcy lawyers are often wont to claim you should, necessarily run to or use a person titled a “lawyer” whenever you wish to file bankruptcy, or necessarily have to pay exorbitant legal fees usually associated with attorney involvement in bankruptcies. Rather, you have a real option that you may choose to exercise – a non-attorney bankruptcy option that could be just as effective in getting you a bankruptcy filing, but which is low-cost and more affordable. With bankruptcy fees still rising, you can definitely save on bankrupt fees with petition preparer.

Wish to join the growing army of restive, financially hard-pressed bankruptcy seekers across America today who seem increasingly to prefer and flock to available “non attorney” assistance and services to get their bankruptcy filing done, but at costs that are low, low, and affordable? Or, may be you want pointers on how to end the “too broke to even declare bankruptcy” problem confronted by many debtors today, through using a good, reliable Federally-approved Debt Relief Agency or Bankruptcy Petition Preparer to do a successful bankruptcy filing for yourself at an incredibly low-cost that you can well afford? Please visit this site: http://

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More Debtors Going Bankruptcy Without Lawyer – Save on Bankruptcy Fees Using Petition Preparer

Filing bankruptcy is a major decision in one’s life and since it a tedious and complex process the individual filing bankruptcy online or filing business bankruptcy should be careful about ones budget as well. Bankruptcy is such a process which cannot be accomplished successfully without the help of bankruptcy counselors and bankruptcy lawyers. All form a part of making the bankruptcy case a success which will automatically reflect on their capability to offer reliable and effective bankruptcy services.

Filing bankruptcy online will require some fees just like filing bankruptcy by going to a court. The cost factor is an important reason why many people first seek bankruptcy counseling to understand their financial position and how much they can afford to determine which type of bankruptcy will help them get rid of their debts smoothly. If a person has nothing to offer in the form of cash then he will be suggested to file chapter 7 bankruptcy whereas if a person has a stable source of income then he can opt for chapter 13 bankruptcy. Once it is decided that there is no other option than filing bankruptcy the individual will have to calculate his budget and keep funds aside for the fees for bankruptcy lawyers and other bankruptcy services offered by him. Even filling up the various forms requires some amount as fees and so the entire cost of filing bankruptcy online or on-site goes up several notches.

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Since a person who is filing for bankruptcy is already under a lot of debt so that person is given a lot of options while filing bankruptcy within ones financial status without spending a fortune. Just following a few measures can help an individual save a lot of time and energy trying to collect the fees required for filing bankruptcy online or filing business bankruptcy.

The cost for filing bankruptcy whether chapter 7 bankruptcy or chapter 13 bankruptcy has risen over the years and this substantial increase in the fees has led to increase in the total cost of filing bankruptcy online, through a bankruptcy court or filing business bankruptcy. Now the fees for filing bankruptcy nowadays is around two hundred dollars to one thousand dollars depending on the case and the type of bankruptcy the individual is filing. One also needs to shell out fees for numerous forms required for filing bankruptcy petition.

Filing bankruptcy online whether one is filing chapter 7 bankruptcy or filing business bankruptcy can be reduced to a large extent. Anyone and everyone can file bankruptcy online and the best part about online bankruptcy processing is that all the forms required for filing bankruptcy are available free of cost. Another low cost affair of filing bankruptcy online is that the review process initiated by an online agency for correcting errors on the bankruptcy form is much lesser than the fees charged by the bankruptcy lawyer.

Filing bankruptcy online can no doubt reduce a part of the cost associated with filing chapter 7 bankruptcy, chapter 13 bankruptcy or filing business bankruptcy but the benefits of a good bankruptcy attorney cannot be negated as the bankruptcy attorney guides the individual right from filing the petition till getting discharged of all his debts. This bankruptcy service will not be provided by an online agency. However, depending on individual cases and the type of bankruptcy being filed one can decide the medium of filing bankruptcy.

Mathew Haydon is a regular writer on Bankruptcyonly.com, a US based portal, which provides detailed information on Bankruptcy Services, and other related issues.

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How to Asses the Filing Bankruptcy Cost

We have done enough short sales to see our fair share of bankruptcies occur. There is an impact to a homeowner’s credit and their short sale if they file bankruptcy. Homeowners in need of filing need to speak to an experienced attorney if they are considering bankruptcy as an option to stall a foreclosure or capture their deficiency from a short sale. I would even suggest they find a bankruptcy attorney that also specializes in Real Estate.

Rapid Property Relief, LLC works with several experienced attorneys. When we meet with homeowners facing foreclosure or with mounting debt, we always refer our clients to attorney’s who we have worked with in the past or that we know see the value of a short sale as opposed to foreclosure.

I was granted the distinct opportunity to interview one of the attorneys we work with and refer homeowners to. Attorney Jessica Greenwood, from the Law Office of Todd Beauregard, spoke with me about the impact of bankruptcy on a homeowner’s short sale. My interview is now (audio clip) live on our site for any homeowner who wants more information about a Massachusetts or New Hampshire bankruptcy.

Let’s go over the highlights of the interview:

Rapid Property Relief – Which homeowners should be filing bankruptcy?
Attorney Jessica Greenwood – There are three types of homeowners that should file a bankruptcy:

The homeowner who can afford their mortgage, and are current on it but simply have a lot of credit card debt.
The homeowner, who can afford their mortgage, however fell behind due to an unforeseen circumstance but has since recovered. Filing a Chapter 13 Plan can help to cure an arrearage and help a homeowner stay in their home.
The homeowner who cannot afford to keep their home, they can file a Bankruptcy and surrender the home and be alleviated from the debt from the house.

Rapid Property Relief – Can you explain the difference between Chapter 7 and Chapter 13 for us?
Attorney Jessica Greenwood – In both cases it is necessary to determine income and asset protection levels,
this will help you structure your case and determine chapter.

Chapter 7: In order to file you must be below a median income that is defined state by state. Once you determine you are below a median income, you are able to list your assets, keep those which you are current on the payments and surrender those assets in which you decide you no longer wish to keep.
Chapter 13: A Chapter 13 case is a repayment plan of all or a part of the debt you owe. Unlike a 7, this requires some form of a payment plan. In this type of case, you can keep assets even if you are not current on the payment and provide for payment in the plan.

Rapid Property Relief – When would you tell a homeowner NOT to file bankruptcy?
Attorney Jessica Greenwood –

If a homeowner is in the middle of obtaining a loan modification, it is absolutely best NO to file until that is complete unless there is an emergency that would dictate otherwise.
If a homeowner has too much equity in their home or assets that the Bankruptcy Code does not provide protection for, it would not be advisable to file.
At times a homeowner has no other debt except for the home, and then I would not advise filing the Bankruptcy just to get rid of the home. I would suggest a short sale or a deed in lieu of foreclosure before the bankruptcy. Not all lenders are issuing deficiencies these days and it may be putting the cart before the horse by filing a Bankruptcy.
If the homeowner is attempting a short sale, and a foreclosure is impending then a Bankruptcy can stop the foreclosure and allow for more time for the short sale to go through
Chapter 7 Bankruptcy – once filed the bankruptcy cannot be voluntarily dismissed by the debtor.
—- i. By filing a complete petition before the foreclosure, requires the lender to abide by the Automatic Stay and postpone the foreclosure sale
Chapter 13 Bankruptcy – once filed the bankruptcy can be voluntarily dismissed by the debtor
—-i. Some Attorney’s will file a Chapter 13 to obtain the “automatic stay” for the debtor and allow the case to dismiss without a discharge
— ii. This is not advisable. (1) This is abuse of process of the system and the attorney and the debtor can suffer the consequences and (2) the debtor’s credit already has the ‘bankruptcy’ mark.

If a debtor’s income is too high for a Chapter 7, and needs the bankruptcy protection to stop or delay a foreclosure, then a Chapter 13 Plan can be formulated to pay off any other unsecured debt while surrendering the home and allowing the short sale to move forward

Rapid Property Relief – When should a homeowner in Massachusetts or New Hampshire file bankruptcy in conjunction with a short sale?
Attorney Jessica Greenwood - Unless the bankruptcy is needed to post pone a foreclosure, it is best to file the bankruptcy after the short sale

Rapid Property Relief – How and Why does a bankruptcy affect a foreclosure auction?
Attorney Jessica Greenwood – Once a debtor files for Bankruptcy, whether 7 or 13, the debtor has the protection of the “Automatic Stay”. This provides a ‘shield’ against the creditors. The creditors cannot foreclose, repossess or collect on any debt until the Automatic stay is lifted or the case is closed. Because of this Stay, the bank cannot foreclose on a home while under the automatic stay and thus the sale is postponed until the lender foreclosing gets relief from stay or the case closes.

Rapid Property Relief – How fast can someone file bankruptcy if eligible and facing foreclosure?
Attorney Jessica Greenwood – Bankruptcy filing is electronic and can be done in a very short time period, however, in order to file a list of documentation is needed and to draft a full petition does take some time. If an extreme emergency, an attorney can file a ‘shell’ petition; however there is a very limited time frame to supplement the filing.

In order to be prepared for all scenarios, a homeowner should closely watch the impending foreclosure date, and if it appears that a bankruptcy is imminent to stop the foreclosure OR imminent due to a large deficiency or credit card balance, the homeowner should consult with an attorney two weeks prior to the foreclosure date. This time frame will lessen the stress of the homeowner and the attorney attempting to help the homeowner.

Rapid Property Relief – How does a bankruptcy affect a person’s credit?
Attorney Jessica Greenwood – Bankruptcy is a notation on your credit report for 8 – 10 years. Most creditors are giving new credit almost immediately after a bankruptcy, however car loans and home loans you will likely need to wait at least a year or two before obtaining good rates. The best way for a debtor to recover from bankruptcy on their credit is to get a secured credit card immediately after the case discharges, making sure the secured credit card reports to the credit bureau, and if the debtor has secured debt they are keeping, keep the payments on time.

Rapid Property Relief – Credit wise what’s worse; Bankruptcy and a short sale or bankruptcy and a foreclosure?
Attorney Jessica Greenwood – Again, Bankruptcy is a notation on your credit report for 8 – 10 years. If you wish to be a homeowner again in the near future, it is better to short sale than to foreclose. Although foreclosure is sometime inevitable, if you can short sale first, it looks better on your credit in the long run (especially to mortgage companies).

Rapid Property Relief – What process does a homeowner follow if they are in the midst of a short sale and want to file bankruptcy?
Attorney Jessica Greenwood – If you file a bankruptcy in the midst of a short sale, you need to work with your attorney to ask the Trustee to “abandon the asset” from the bankruptcy estate. When you file a bankruptcy, all your assets become assets of the bankruptcy estate. Let the Trustee know you are working on a short sale with your lender and more than likely the Trustee will ‘abandon’ the asset and allow the sale. The rest of the bankruptcy will proceed.

Rapid Property Relief – Can a homeowner file bankruptcy YEARS after completing a short sale if the lender has “reserved the right to pursue the deficiency?
Attorney Jessica Greenwood – Yes. There is not a statute of limitations on how old the debt will have to be to discharge it.

Rapid Property Relief – It seems like some attorneys could care less about short sales if the homeowner files bankruptcy. Why do you think that is?
Attorney Jessica Greenwood – I can’t speak for all attorneys, just what I have seen …Going through a short sale can be stressful to a homeowner who is probably dealing with other stressors. The attorney may feel it is easier for a homeowner to just file a bankruptcy and let the lender foreclose. I tell my clients that if they work with the right short sale negotiator and realtors then it should feel just as seamless as allowing the bank to take it back.

Rapid Property Relief – What is the difference between deficiency and deficiency judgment in short sales in NH and MA?
Attorney Jessica Greenwood – Both states: When you sign a promissory note, you promise to pay back the entire balance, plus cost to the lender. Thus when a foreclosure occurs, or at times a short sale, the lender loses money and has the right to pursue collection efforts.

New Hampshire: The last law on the books for NH collection of a debt due to a mortgage loss is 20 years. Now, it is highly unlikely that a lender collects 20 years later, there are defenses to this such as ‘Laches’, an undue delay on behalf of the creditor. Most often it is within 1-5 years.

Massachusetts: The claim on a mortgage note followed by foreclosure is 2 years, however if they sue on that debt within 2 years and obtain a judgment, then its swiftly preserved for 20 years

Rapid Property Relief – What is your thought on approvals with boilerplate language that states the lender reserves the right to pursue the deficiency?
Attorney Jessica Greenwood – Boiler plate is what it is, boiler plate. You probably are not going to get a lender to remove the preserving language. The best way to protect homeowners is to read the fine print and try to get language in the short sale approval letter that states “ABC Lender will not, under any circumstance, pursue homeowner for loss sustained due to the sale amount of XX”

Rapid Property Relief – If a homeowner is considering a bankruptcy to stall a foreclosure, or capture deficiency from a short sale, when would you tell them to contact you?
Attorney Jessica Greenwood – The sooner the better! If you are entertaining a bankruptcy, the homeowner should have a consultation with an attorney at the beginning of the short sale process. This way, the homeowner is armed with all the knowledge they need with regards to the short sale process, the bankruptcy process, and how, if they have to be, are tied together.

We at Rapid Property Relief specialize in preforeclosure acquisition. We have see our fair share of homeowners file bankruptcy. What I’d like to add to the above information is if a homeowner files bankruptcy before the short sale is complete, the “stay” will add at least 30-60 days onto your short sale, provided you are still allowed to proceed with the short sale and only an experienced attorney will be able to tell you that.

Again, feel free to download the audio file of my interview with Jessica. There was a lot more information in the audio file and I streamlined it for this blog. If you are a homeowner considering bankruptcy, Jessica practices in Massachusetts and New Hampshire and can easily assist you. Please contact her today at:

If you are considering a short sale, I’m more than happy to work with you. We utilize attorneys, accountants, Realtors, and work as a team to assist you in the process. We keep all homeowner information confidential and treat you with the utmost respect.

Post from: Finance Articles

Bankruptcy and Short Sales in Massachusetts and New Hampshire. How does bankruptcy affect your short sale? Interview with attorney

This essay attempts a simple outline of the different types of bankruptcy available under the banruptcy code for American debtors, and the basic procedures and process involved in a debtor filing for personal bankruptcy for legal discharge of his or her debt.

BANKRUPTCY AS A CONSTITUTIONAL RIGHT.

Personal bankruptcy is a fundamental Constitutional right. Article I, Section 8, of the United States Constitution authorizes Congress to enact “uniform Laws on the subject of Bankruptcies” for the benefit of debtors who are United States citizens. Under this grant of authority, Congress enacted today’s “Bankruptcy Code,” last significantly revised or amended in 2005. The Bankruptcy Code, which is codified as title 11 of the United States Code, is the uniform federal law that governs all bankruptcy cases. Hence, bankruptcy being a fundamental Constitutional right, debtors need a cheap low-cost alternative bankruptcy system to high lawyers fees, and need to be able to afford bankruptcy without lawyers, or with lawyers. The point is that the cost and fees of filing for bankruptcy should never be made to be so high as to be a bar or hindrance for qualified American debtors who need to file for bankruptcy. Could that mean having to file bankruptcy with no bankruptcy attorney – to assure it will be low-low cost bankruptcy? Yes, maybe. Atimes, when the circumstances warrant that to make it practicable for a debtor to be able to excercise or enjoy that fundamental citizenship right.

THE BASIC PROCEDURES OF THE BANKRUPTCY PROCESS

The procedural aspects of the bankruptcy process are governed by the Federal Rules of Bankruptcy Procedure (often called the “Bankruptcy Rules”) and the local rules of each bankruptcy court. The Bankruptcy Rules contain a set of official forms for use in bankruptcy cases. The Bankruptcy Code and Bankruptcy Rules (and local rules) set forth the formal legal procedures for dealing with the debt problems of individuals and businesses.

There is a U.S. bankruptcy court for each “judicial district” that has been set up in the country. Each state has one or more districts, and there are 90 bankruptcy districts all across the whole country, with each of the bankruptcy courts generally having its own Clerk’s offices.

The court official with decision-making power over federal bankruptcy cases is the United States bankruptcy judge; he or she is the judicial officer who presides over the given United States district court. The bankruptcy judge may decide any matter connected with a bankruptcy case, such as eligibility to file or whether a debtor should receive a discharge of debts. In realistic and practical terms, however, much of the bankruptcy process is really not “judicial” or “legal” or even “financial” at all. But is, rather, merely ADMINISTRATIVE, both in nature and content, and is conducted, in fact, completely away from the bankruptcy courthouse. In deed, in cases dealing with the chapters 7, 12, or 13 types of bankruptcy (meaning largely the personal types of bankruptcy, as opposed to corporate or business types), and sometimes in chapter 11 cases, this administrative process is carried out by someone known as a “trustee” – a person who is not a bankruptcy judge or a court officer, but merely contracted by the court is to process and oversee the case.

Under the bankruptcy process, a debtor’s involvement with the bankruptcy judge is usually very limited. If you are a chapter 7 debtor (see below), for example, you typically will not appear in any bankruptcy court or judge’s courtroom, nor will you ever see the bankruptcy judge – unless, say, an objection is raised in your case by one of your creditors, an occurrence that is very uncommon. If you are a chapter 13 (see below) debtor, you would only have to appear before the bankruptcy judge at one point, only at a hearing as to the confirmation of your repayment plan. Generally, whether in a chapters 7, 12, or 13 type of case, the only formal proceeding at which a debtor is required appear or be personally present in a case, is what is called “the meeting of creditors.” Informally called the “341 meeting” because it is Section 341 of the Bankruptcy Code that mandated it, this meeting is held principally and primarily just so that the debtor’s creditors can question the debtor about their debts and property. This meeting is usually held, not in the court house or any judge’s chambers, but at usually at the offices of the U.S. trustee.

THE “FRESH START” MISSION AND GOAL OF THE BANKRUPTCY LAW & SYSTEM

Consistent with the original mandate of the U.S. Constitution that bankruptcy is a fundamental constitutional right, probably the single most fundamental goal and mission for which the federal bankruptcy laws are enacted by Congress, is to give debtors a financial “fresh start” from the burden of crushing debts. The U.S. Supreme Court made this point about the purpose of the bankruptcy law in a 1934 decision:

[I]t gives to the honest but unfortunate debtor…a new opportunity in life and a clear field for future effort, unhampered by the pressure and discouragement of preexisting debt. [Local Loan Co. v. Hunt, 292 U.S. 234, 244 (1934)].

For the debtor, this fundamental goal and mission becomes basically accomplished through being granted the bankruptcy discharge by the bankruptcy court, and this releases the debtor from personal liability from specific debts and prohibits creditors from ever taking any action against the debtor to collect those debts.

HOW DO YOU FILE FOR BANKRUPTCY? CAN YOU AFFORD IT?

Before we get to the basic types of bankruptcy that may be open to you under the bankruptcy law, just a few words about this vital issue: HOW DO YOU FILE FOR BANKRUPTCY AFFORDABLY, IF YOU WERE TO WANT TO DO SO? And secondly, as a debtor contemplating it, how can I AFFORD BANKRUPTCY? Actually, under the bankruptcy law, you’re given essentially three basic options: either take a do-it-yourself approach and prepare and file the bankruptcy papers (if you know the procedures) yourself; or, if you prefer, hire a knowledgeable bankruptcy attorney (not every attorney necessarily knows squat about bankruptcy!) to file the bankruptcy for you; or, the third option, you may hire a competent Debt Relief Agency or Agent (also called a Bankruptcy Petition Preparer or BPP) to prepare the same bankruptcy papers for you, but at a far lesser and more affordable cost for the bankrptcy filing than the attorney’s. Hence, a debtor, should he or she so prefer, may very well have bankruptcy with no bankruptcy attorney. With the help of either a bankruptcy lawyer or a BPP (depending on which one of the methods you prefer to go with), you’ll basically need to file a petition with the court that details your creditors and how much you, or if applicable, your business, owes to them. Then, a “trustee” is appointed by the bankruptcy court to oversee your case, and he then is responsible to administer the entire process till you get your court discharge from your debts in a Chapter 7 type of bankruptcy, and/or you repay the debts, say, in a Chapter 13 type of case.

THE BASIC TYPES OF BANKRUPTCY CASES

There are six basic types of bankruptcy cases provided for under the U.S. Bankruptcy Code – Chapters 7, 11, 13, 12, 9, 15. These designations derive from the names of the chapters of the Code that describe them. The following are a brief description of each of these.

CHAPTER 7. This is often called “liquidation” bankruptcy. This type of bankruptcy primarily contemplates an orderly, court-supervised procedure by which a court-appointed “trustee” takes over the assets of the debtor’s estate (to the extent that he or she has any, if at all), “liquidates” or reduces them to cash, and makes distributions of such recovered funds to creditors. The debtor is allowed to retain certain “exempt property” that will allow him the bare necessities to enable the debtor to live on even after bankruptcy. In practice, however, there is usually little or no nonexempt property left in most chapter 7 cases, and hence, there is generally NO actual “liquidation” of the debtor’s assets in the average case. These cases are called “no-asset cases.”

For the most part, in chapter 7 cases, the debtor who is an individual, receives a court discharge that releases him or her from personal liability for certain dischargeable debts. Discharge occurs usually just a few months after the debtor files his or her petition for.

You should note, however, that in 2005, certain amendments which were made to the Bankruptcy Code in 2005, called the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, require the debtor first takes a financial “means test” which is now the basic determinant of whether the individual consumer debtor qualifies to file for relief under chapter 7. If such a debtor’s income is exceeds certain income thresholds, the debtor may not be eligible to file for bankruptcy relief under chapter 7.

CHAPTER 13. This is often called the “adjustment of Debts” bankruptcy for an individual with a regular income. This type of bankruptcy is designed for an individual debtor who has a regular source of income. Chapter 13 is usually preferred to chapter 7 by debtors who have some valuable asset that they need to keep, such as a house, because this type of bankruptcy enables the debtor to propose a “plan” to repay creditors their debts over time – usually three to five years. Chapter 13 is also used by consumer debtors who do not qualify for chapter 7 relief because they do not meet the “means test” requirements. Basically, in a Chapter 13 case, the debtor works up a “repayment plan” by which he or she is to repay the debt, in part or in whole. There is then a confirmation hearing held by a judge on the proposed plan; the court then either approves or disapproves the debtor’s repayment plan, depending on whether it meets the Bankruptcy Code’s requirements for confirmation.

Chapter 13 is very different from chapter 7 in a few ways. The chapter 13 debtor usually remains in possession of the property of the estate and makes payments to creditors, through the trustee, based on the debtor’s anticipated income over the life of the plan. Unlike chapter 7, the debtor does not receive an immediate discharge of debts. The debtor must complete the payments required under the plan before the discharge is received. In return, the debtor is protected from lawsuits, garnishments, and other creditor actions while the plan is in effect. The discharge is also somewhat broader (i.e., more debts are eliminated) under chapter 13 than the discharge under chapter 7.

CHAPTER 11. This is often called the “Reorganization” bankruptcy. Ordinarily, it is meant for and primarily used by commercial enterprises that desire to continue operating a business and to repay creditors concurrently, through a court-approved plan of reorganization. The chapter 11 debtor usually has the exclusive right to file a “plan of reorganization” for the first 120 days after it files the case and must provide creditors with a disclosure statement containing information adequate to enable creditors to evaluate the plan. The court ultimately approves (confirms) or disapproves the plan of reorganization. Under the confirmed plan, the debtor can reduce its debts by repaying a portion of its obligations and discharging others. The debtor can also terminate burdensome contracts and leases, recover assets, and rescale its operations in order to return to profitability. Under chapter 11, the debtor normally goes through a period of consolidation and emerges with a reduced debt load and a reorganized business.

CHAPTER 12. This is often called the “Adjustment of Debts” bankruptcy for a Family Farmer or Fisherman with Regular Annual Income. It provides debt relief to family farmers and fishermen with regular income. The process under chapter 12 is very similar to that of chapter 13, under which the debtor proposes a plan to repay a debtor’s debts over a period of time – no more than three years unless the court approves a longer period, not exceeding five years. There is also a trustee in every chapter 12 case whose duties are very similar to those of a chapter 13 trustee. The chapter 12 trustee’s disbursement of payments to creditors under a confirmed plan parallels the procedure under chapter 13. Chapter 12 allows a family farmer or fisherman to continue to operate the business while the plan is being carried out.

CHAPTER 9. This is Adjustment of Debts of a MUNICIPALITY; it provides essentially for reorganization, much like a reorganization under chapter 11. Only a “municipality” may file under chapter 9, which includes cities and towns, as well as villages, counties, taxing districts, municipal utilities, and school districts.

CHAPTER 15. The purpose of Chapter 15, which is entitled “Ancillary and Other Cross-Border Cases,” is to provide an effective mechanism for dealing with cases of cross-border insolvency. This Chapter 15 largely applies where a debtor or its property is subject to the laws of the United States and one or more foreign countries.

Finally, in addition to the above outlined basic types of bankruptcy cases, there is also the SERVICE MEMBERS’ CIVIL RELIEF ACT. This is the law and process of bankruptcy filing which, among other things, provides protection to members of the military against the entry of default judgments and gives the court the ability to stay proceedings against military debtors. And there also a liquidation proceedings that comes on under the Securities Investor Protection Act (“SIPA”). True, the Bankruptcy Code provides for a stockbroker liquidation proceeding. However, it is still far more likely that a failing brokerage firm will find itself involved in a SIPA.  How? Under the SIPA procedure, investors securities and cash left with failed brokerages are returned to the investors. Since its establishment in 1970 by Congress, the Securities Investor Protection Corporation has protected investors who deposit stocks and bonds with brokerage firms by ensuring that every customer’s property is protected, up to 0,000 per customer.

FURTHER INFORMATION & HELP ON FILING BANKRTCY.

What to do when and if swimming in debt!? To learn more details about the requirements, qualifications and procedures, involved in each of the different types of bankruptcy discussed in this essay? Or, to get more specific information on how to actually file for cheap, low cost alternative bankruptcy system to high lawyers legal fees that you can well afford? Simple visit this site: www.afford-bankruptcy.com

Bankruptcy, IRA Accounts: Hot Trends
Bankruptcy and IRA accounts are the trending topics on Google and Yahoo.
Read more on TheStreet.com

Post from: Finance Articles

Different Types of Personal Bankruptcy. Which Bankruptcy Type Do You Qualify for, or Can Afford?

Deciding to file bankruptcy is not an easy decision for most people. Bankruptcies in Florida are no exception. The number of people for personal bankruptcy in the United States has reached epidemic proportions. Unemployment has reached a fourteen-year high.

There are very few people who start out with the intention of filing bankruptcy. Circumstances often force people to change their best intentions. Most people want to pay their bills.There are consequences to filing bankruptcy that should be considered.

There are many considerations before filing bankruptcy.The most obvious consideration and consequence is your credit rating. Bankruptcies stay on your credit report for ten years. Bad credit rating typically stay on your report for 7 years, so 3 extra years may not seem that bad. Obtaining credit after either case will be more challenging and far more expensive.

Bankruptcy is a moral decision for many You have been taught to pay what you owe. For many walking away form debt becomes a moral decision. This is especially true in the Christian community. However he law of the land concerning bankruptcy are there to protect the citizens.

The economy needs productive citizens to function. Drowning in debt will never produce productive citizens. There is no law that says you cannot pay back your debts one you are re-established.

Is bankruptcy right for you? Deciding if bankruptcy is the right decision is a personal one. No to people or circumstances are alike. Seeking the advice is bankruptcy lawyer is a good place to start. Most bankruptcy lawyers offer a free initial consultation.

Federal laws have established guidelines and metrics that help determine of you qualify to file bankruptcy.

The biggest mistake made by individuals filing bankruptcy is delaying the decision to do so. You know when your obligations are not being met. That is the first warning sign. The current in the stream of debt can be very powerful, heed the early warning signs, and make a decision. Once you have decided make sure to include all your obligations, as you cannot go back and claim you forgot a debt.

Once you have made a decision to file bankruptcy do not look back. Should you decide filing bankruptcy is not right for you, the same principle is applied. Take the time to make an informed decision by talking with your lawyer.

There is something very liberating to telling bill collectors you have retained an attorney for the purposes filing bankruptcy. From that point forward you are on your way to financial recovery.

Post from: Finance Articles

Personal Decisons When Filing Personal Bankruptcy