5 Of The Most Common Myths About Bankruptcy

By Seth Furman

There are many rumors floating around regarding bankruptcy and what happens after you file. I want to discuss some of these rumors.

I'd like to address the top 5 most talked about myths when it comes to your bankruptcy filing.

1. If I file for bankruptcy, everyone is going to know about it. Most often the only people that will know about it are the ones you decide to tell and your creditors. Even though bankruptcy is a public proceeding, there are so many people and companies that file for bankruptcy, unless you are prominent, no one will run a press release about it.

2. I'm going to lose all that I own. Unfortunately, this is too often the showstopper for the people bankruptcy could help the most. Each state has it's own laws regarding bankruptcy and your rights, but all of them will protect certain assets of yours. Things like you house, clothes, retirement savings, etc. are protected. You can even keep your mortgage and car loan active if you can make the necessary payments.

3. My credit will be destroyed forever and I'll never get it back. Not so. You will be offered credit again, albeit at higher interest rates. Large purchases should be made prior to bankruptcy due to the higher interest rates. Getting loans for things like a car or house may prove more difficult. However, you will be able to get credit again.

4. The bankruptcy process is a long and hard one. That isn't true. The process isn't that difficult to go through and with the help bankruptcy lawyers in Michigan, you will find it isn't that bad.

5. Filing for bankruptcy has a bad stigma attached to it and I don't want to be a deadbeat. The majority of bankruptcies are filed because people have come upon hard times. They got sick, divorced, or laid off. Bills piled up and there was little they could do to keep up.

Filing for bankruptcy isn't a process you should take lightly. It is a good idea to consult with bankruptcy lawyers in Michigan to make sure you are handling all aspects of the process correctly. - 31380

About the Author:

When you are facing the prospect of filing for bankruptcy a good idea is to connect with bankruptcy lawyers in michigan. Ardelean & Dunne are talented bankruptcy lawyers in michigan. Ardelean & Dunne will help to resolve your bankruptcy issue and get you on the right track again.

IVAs Can Help Over-Indebted People To Avoid Bankruptcy

By Robert Prime

If you've found yourself in the position of being unable to meet your monthly bills, you're certainly not alone. Insolvency and bankruptcy are more common now than perhaps ever before in our troubled economic climate. However, things may not actually be as dire as they seem, and you may have choices that can help you avoid bankruptcy.

Over time, the government have introduced a series of measures to help people from having to become bankrupt, and Individual Voluntary Agreements are one of those. The reality for your creditors is that if you go bankrupt, they will likely receive fewer of your funds owed than if they accept an IVA.

If you're considering using an IVA, you'll need to consult the services of an Insolvency Practitioner. These are professionals who've been authorised to carry out the legal processes associated with insolvency, and are well placed to advise you on what your various options are, if you feel you can no longer keep up with your outgoings. They will take into account such matters as assets that you may have, and should be able to make suggestions about the best way to get on top of your financial pressures, with any luck avoiding bankruptcy.

An IVA is a legal contract that you sign up to through which you commit to paying a certain amount to your creditors over a specified time period. The amounts are worked out according to what you can actually afford to pay, rather than on what you've agreed to pay in the past, and are therefore tailored to your own circumstances. Although your creditors will almost certainly receive less than the debt you owe them, they will be likely receive even less if you go bankrupt, and so they tend to be open to the agreements. Working out what you can actually afford to pay can be a task in itself, and it's something that a good Insolvency Practitioner can help you to arrive at. Naturally, it's best that you only commit to what is realistically affordable for the IVA to be effective in helping your financial situation. It may be the case that some of your debt is 'written off' although stories of this are often thought to be exaggerated.

In order to use an IVA, your Insolvency Practitioner will present your proposal to the creditors through the court system. As an IVA is normally used when you have multiple creditors to whom you owe debt, they will usually then meet and have a vote to decide whether or not to accept the agreement.

IVAs don't just help you to avoid bankruptcy, they afford you protection from further legal action regarding the debts that are part of the agreement. They also make the debts more manageable as the interest tends to be frozen while the term outlined in the IVA plays out. For this reason, IVAs can truly help you to get on top of your financial difficulties and start building a more stable future. - 31380

About the Author:

If you are having problems with debt and want to apply for an IVA you should call IVA.net. They are experts in debt management and they could help you to write off some of your debt.

Understand the Impact of Personal Bankruptcy

By Chris Blanchet

For those who are considering personal bankruptcy, it is unlikely that all of the personal and professional consequences are known. However, the impact is quite serious and, often, harmful.

Bankruptcy is often seen as the last resort to overcome the constant demands of credit companies and debt collectors. Even though it might sound like an easy way out, one must ensure that they do not rush into it. The impact of personal bankruptcy can momentarily pull you out of your brutal financial condition, but at times can also prove to be the most colossal mistake ever made.

The impact of personal bankruptcy can have serious effects on your current and future financial position. Let us see how:

One of the biggest risks that bankruptcy poses to the debtor is that assets are often sold by the trustee to settle debts. Assets are anything of value, including property, investments, and other items of value.

Bankruptcy might not only put current assets at risk, but future assets as well. In the case of an inheritance, creditors may also have a claim against such funds in order to settle their debt.

In addition to the sale of assets, the impact of personal bankruptcy includes harmful records on your credit bureau. Bankruptcy will impact your intentions to act as a company director and obtain non-personal credit for the rest of your life.

Taken one step further, a bankrupt individual cannot have a direct or indirect management position in a company and cannot become a counselor, magistrate, MP, or an Estate Agent. While this might not seem like a big deal, bankrupt individuals cannot hold positions as school or college governors and also cannot work at security firms or in the civil services.

What is likely the harshest impact of personal bankruptcy is something that comes after the bankruptcy notice is advertised. Given the public nature of bankruptcy, the debtor's name and personal business dealings are in jeopardy. Unlike companies who can operate under different trade names, individuals have just one name. And since bankruptcy are publicly available, anyone can access the details of your bankruptcy.

Personal bankruptcy also affects the debtor's reputation. The entire procedure of declaring bankruptcy is very stressful. At times, the financial affairs as well as the conduct of the debtor are examined in open courts thus proving to be a humiliating affair for the debtor.

On top of all of this, a personal bankruptcy will have even more of a financial impact given the court costs and processing fees that come with filing.

If you are considering bankruptcy as a debt clearance option, then try gaining some knowledge about other alternatives. For more information on the impact of personal bankruptcy and its alternatives refer to e-books and manuals available on the net. - 31380

About the Author:

With more than 17 years of experience in the financial services industry, Chris established a website about Bankruptcy Home Equity Loan among other topics. His site can be found at Home Equity Loan Site.org.

Chapter 7 Bankruptcy Information: A Clean Beginning

By John Stuart Smith

It's usually unclear to people exactly what options are open to them when they are considering Chapter 7 bankruptcy, which is why a little Chapter 7 bankruptcy information can go a long way. The economy has been very tough on a lot of Americans lately, and the recent changes to bankruptcy laws in 2005 has left many wondering exactly what Chapter 7 means. Chapter 7 is, if a filing is successful, the best way to get clear your debt. Please keep in mind though, that any decisions about the matter should be made in consultation with a bankruptcy lawyer.

Chapter 7 bankruptcy is meant to reimburse creditors as much as possible while clearing what the debtors in question owe. To that end, Chapter 7 entails liquidation of everything but non-exempt property that a debtor may own. What constitutes exemptions to liquidation is determined by either a federal set of standards and a state-determined set of standards. After the non-exempt property is liquidated, the remaining debts are dismissed.

There are only two initial requirements to file a Chapter 7 claim. The first is that the debtor, whether it is an individual or a business entity, meet with a credit counselor up to 180 days before the claim is filed. The debtors record must also be clear of malfeasance with the bankruptcy court system for 180 days or more, otherwise they may be disqualified. Not taken into consideration are the amounts owed by the debtor(s), nor their financial solvency. In other words, Chapter 7 does not require that someone be destitute to qualify for a clean debt slate.

Of course, the court system isn't about to let someone clear their debts if they are clearly capable of paying them but refusing to do so. Thus, the federal government developed a 'means test' to figure out whether or not someone is trying to abuse the system with his or her petition.

The first part of the means test checks to see whether a debtor's monthly income is above the median for their state of residence. The second part involves a concept called unsecured debt, which means the type of debt that isn't secured by the creditor with debtors' assets. Mostly, this applies to credit card debt. If your expenses exceeds 25% of their unsecured debt, then the court presumes that the case is abusive and will probably dismiss it or convert it to a Chapter 13 bankruptcy filing.

Filing a Chapter 13 bankruptcy has very different consequences. Under Chapter 13, the government helps set up a payment plan through which the debtor pays his creditor over the course of five years the maximum he or she is capable of, while still allowing for federally determined living expenses like rent, food, etc. The amount that cannot be paid after that period is erased.

Since the exemptions to what is liquidated under Chapter 7 don't include very much at all, those debtors wishing to keep the majority of the property that either has a lien on it or is the cause of debt would probably seek an alternative route to repayment. Likewise, Chapter 7 probably isn't right for those who wish to keep their business going. Another alternative, of course, is coming up with a repayment plan outside of court and avoiding the fees of filing for bankruptcy.

Chapter 7 is currently designed to resist abuses and dishonesty, so debtors should make sure that they're providing all the necessary personal information and are honestly qualified for that kind of debt relief. Chapter 7 bankruptcy information can help determine whether or not to pursue that solution to a financial crisis. - 31380

About the Author:

Get more information on Consumer Debt Relief. Anyone in serious financial difficulty must definitely consider seeing a lawyer that specializes in bankruptcy law. Find out more details about Chapter 7 Bankruptcy Information and who can apply for it?

Personal Bankruptcies Increased Last Year

By Matthew Desrochers

In this period of increased unemployment rates and home foreclosures, personal bankruptcy rates continue to increase. Last year, it has been reported, that personal bankruptcies increased by over thirty percentage points. As more and more Americans face the financial realities brought on by our current economic situation, it is expected that bankruptcy filings will continue to increase.

Total bankruptcy filings in 2009 climbed to almost one and half million. This is more bankruptcy filings than the United States has seen since Congress revamped the bankruptcy law system in 2005. Those changes were designed with the purpose of making filings more difficult. The 2009 numbers were twice as high as the filings made two years ago.

Bankruptcies filed on Chapter 7 provisions, allowing liquidation to pay debt and eliminate other debt, increased by almost half in the month of November.

Chapter 7 filings weren't the only bankruptcy filing types to experience an increase. Chapter 13 filings were also up. These filings climbed by around twelve percent. Chapter 13 filings also constitute a much smaller part of the total filings making up less than one-third of total filings made.

Nevada and California each saw some of the highest increases in filings. However, no state surpassed Arizona which saw increases in filings of about 80%. While those states saw large filing increases, states like Pennsylvania and Tennessee saw much more limited increases with filings ranging between ten and fifteen percent.

Americans that were recently financially sound are now turning to bankruptcy as a legitimate option. This is mainly a result of the continued job losses and housing marketing free fall. People that previously would not have considered bankruptcy are now taking a hard look at whether or not it is the right option for them.

More and more families are taking a hard look at their options when it comes to filing bankruptcy. For these individuals, it is important to get good information. Government websites are a good place to start. However, in order to properly explore one's options, it is usually best to discuss the situation with an experienced bankruptcy attorney. - 31380

About the Author:

When you are facing creditor harassment, wage garnishment, or foreclosure, learning your options needs to be your first priority. People often feel helpless when they find themselves in financial situations like these. Get a free bankruptcy consultation fromMassachusetts Bankruptcy Lawyer Matthew Desrochers. Debt issues are not something to take lightly, but it is not as scary as you might think.

Some of the Top Reasons to Avoid Chapter 13 Bankruptcy

By Chris Blanchet

When you first read about the provisions of Chapter 13 bankruptcies, it seems like an attractive debt management option. However, one of the top reasons to avoid Chapter 13 is that it sets unrealistic goals for the debtor. First, you need to understand what chapter 13 is.

If you have an asset that you would rather not lose through bankruptcy, such as a mortgaged home, your lawyer may advise you to file for Chapter 13. Debtors who have accumulated back taxes or assets with lower value than liens are also encouraged to file Chapter 13. You do not have to repay the entire loan amount, provided you can convince the court of your inability to repay the debt in full.

With the retention of non-exempt assets being such a big benefit, Chapter 13 appears to be a great alternative to Chapter 7 bankruptcy or to having to repay the full amount owed. Since debtors can file Chapter 13 every four years, it seems like a short-term commitment. However, the Chapter 13 repayment plan normally lasts for as long as three to five years, during which time debtors repay their debt based on an agreed upon schedule. At the end of this plan, the creditors write off the balance provided the debtor maintained his end of the bargain. Sounds like a great debt management solution. But it often is not.

One of the top reasons to avoid Chapter 13 is that debtors must meet certain eligibility requirements. This begins with having a steady income, which excludes people who might really benefit but who are currently unemployed and having trouble making ends meet. Often, people with this type of debt problem had arrived there as a result of the lack of income. The irony is that most debtors with a steady income would have repaid the debt in full. More interesting is that the Chapter 13 means test requires that a debtor's income exceed certain thresholds in order to be eligible for this option. Go figure.

Another one of the top reasons to avoid Chapter 13 is that the debtor falls under the scrutiny of the courts. While accepting this may seem like a fair trade off when compared to the level of debt that gets forfeited, many debtors soon realize that they could have easily devised their own repayment plan on their own without such invasive sacrifices. Furthermore, Chapter 13 becomes part of the public record. Unlike a traditional budget and repayment plan, Chapter 13 allows anyone to delve into the debtor's personal financial situation at the time of filing. As well, the courts are able to obtain updated data and to mandate changes to the plan if the debtor's financial circumstances improve.

What often discourages debtors from filing Chapter 13 is that they quickly realize they are practically prohibited from substantially improving their financial condition over the course of their plan. This means that any unexpected gains and even an inheritance could be surrendered to the trustee and funneled to the outstanding debt. More intrusive however is that the debtor's spouse can often be required to submit evidence of assets, income, and expenses, even when a filing was submitted jointly.

Prior to filing Chapter 13 bankruptcy, debtors would be best served by creating their own, profession budget and repayment plan, especially if they have the means to do so. This not only enables the debtor to keep his financial circumstances out of the public domain but will actually improve his credit rather than ruin it. - 31380

About the Author:

With more than 16 years of financial services experience, Chris Blanchet currently manages a debt blog at HowToRepayDebt.com that aims to help people with Debt Trouble As well, he is the Editor of Debt Consolidation Opinions.com.

Credit Card Debt Consolidation Or Bankruptcy?

By Kylie Johnson

Most people these days tend to get into debt through their own choice, and often through foolish decision making. They spend a lot on credit cards without a second thought that the amount of money to pay the cards off will eventually be so much more than they are spending in the first place. The debt grows, the payments become smaller and smaller and next thing you know there are phone call from the card company demanding payments.

The simple fact is that if you choose bankruptcy then your financial future will suffer the most. You credit will be affected for many years to come. In the US (unlike the UK, generally speaking) you will not even get off without paying at least some of your outstanding bills as was one time the case. As such, bankruptcy can no longer be seen as an easier option or as a "get out of debt free card".

Furthermore, as mentioned, your credit rating will suffer big time and in the US declaring bankruptcy will mean that your credit record will be adversely affected for a period of between 7 and 10 years. Within this period of time, trying to attain almost any type of loan will be fairly much an impossible task, and at the same time, it can also affect your career prospects too.

Another thing that you can do is to consolidate your card debts to one or two cards or a single loan. This way, not only is it easier to ensure all your payments are made on time but if you can find a credit card or loan that is of lower interest than your current average lenders charge, its a good way to save money too.

Also be careful when you are asked to leave your contact details for information. In my own experience this led to many telephone calls and sms messages from companies offering to "help". It was not what I was looking for at all and I suspected these companies were purely in it for their own good fortune rather than trying to alleviate my issues. - 31380

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