tag:blogger.com,1999:blog-24865437528770763242024-03-12T19:21:57.424-07:00Bankruptcy101Anonymoushttp://www.blogger.com/profile/13904025712362695035noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-2486543752877076324.post-3776028975979936642013-09-12T04:11:00.002-07:002013-11-25T14:55:07.933-08:00The Federal Bankruptcy Act<!--[if gte mso 9]><xml>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiSEZUMtuxIR42sQetGJgf07yS5dN2gMUD_m4etpypkKZGTUoyA1eIPxytx5v0ARZL3JoKpq_VAxhEJiiJLeHILdUOTttt7wZlrq3ctN-g0BrYSiIHK39lEX3AyUXWdj5jkIal_OLHWxIMR/s1600/images3.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" height="128" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiSEZUMtuxIR42sQetGJgf07yS5dN2gMUD_m4etpypkKZGTUoyA1eIPxytx5v0ARZL3JoKpq_VAxhEJiiJLeHILdUOTttt7wZlrq3ctN-g0BrYSiIHK39lEX3AyUXWdj5jkIal_OLHWxIMR/s320/images3.jpg" width="320" /></a></div>
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Individuals and businesses have
the option to file for bankruptcy under the Federal Bankruptcy Act, usually
called the <a href="http://www.bankruptcylawyersanantonio.com/">Bankruptcy Code</a>. There are three different types of bankruptcy,
called Chapters. Each chapter provides its own legal and financial solution.
Individuals can use Chapter 7 or 13, while businesses can use either Chapter 7,
11 or 13.</div>
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The different types of bankruptcy
are based on different situations of the debtors. The Federal Bankruptcy Act
has some features that can benefit the debtors, regardless which Chapter the
case is filed under. One of these features is the automatic stay.<span style="mso-spacerun: yes;"> </span>The stay stops the collections efforts of all
the creditors.<span style="mso-spacerun: yes;"> </span>The moment the bankruptcy
petition is filed, all of the debtor's creditors have to halt their debt
collection activities immediately, which includes repossession, foreclosures,
lawsuits, letters, and phone calls.</div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
Debt discharge is another
important feature of the Federal Bankruptcy Act. It provides debt relief by
wiping out debts permanently. A debt discharge applies to a particular amount
depending on what chapter the bankruptcy case is filed under.</div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
Wherever you are in the United
States, you can file for bankruptcy as long as you satisfy the requirements.
The bankruptcy proceedings occur in the U.S. District Bankruptcy Courts. The
Bankruptcy Courts are organized based on the state boundaries. However, the
bankruptcy law is regulated by federal judges because it is a federal law.</div>
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<br /></div>
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Chapter 7 bankruptcy cancels most
of your debts. It mainly involves liquidation of your assets. Your nonexempt
property at the time the bankruptcy petition was filed will be sold by the
court-appointed trustee. The proceeds are then distributed to the creditors. </div>
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<br /></div>
<div class="MsoNormal" style="text-align: justify;">
The court will discharge most of
the remaining debts you incurred before the filing. Because of this, Chapter 7
provides individuals an opportunity to start over by eliminating debt. However,
if a company files for Chapter 7, the business will cease to exist once the
case is over.<span style="mso-spacerun: yes;"> </span>All the company's assets
will be sold off and the remaining debts will be discharged by the court.</div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
Chapter 11 bankruptcy allows
businesses to restructure their business or debt. It is a very expensive and
complex bankruptcy that requires a reorganization plan, which is subject to a
court's approval. The business has to prove to the court that it can make
sufficient money to pay its creditors through the restructuring.<span style="mso-spacerun: yes;"> </span>Once a court confirms the Chapter 11 plan,
the company will be allowed to continue its operations.<span style="mso-spacerun: yes;"> </span></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
Chapter 13 can be used by an
individual or a business to reduce debt and pay creditors through a debt
repayment plan. If the plan only pays part or some of the debts, the remaining
unpaid amount will be discharged provided that the plan has been approved by
the court. Chapter 13 plans normally take three to five years to complete.<span style="mso-spacerun: yes;"> </span>One advantage of Chapter 13 filing to a
business is that it would be able to continue with its operation under its
present form.<span style="mso-spacerun: yes;"> </span>Moreover, filing Chapter
13 bankruptcy can provide more time to pay off debts, and some of the debts can
even be reduced with the court's permission.</div>
Anonymoushttp://www.blogger.com/profile/13904025712362695035noreply@blogger.com0tag:blogger.com,1999:blog-2486543752877076324.post-65385939344533832612013-09-05T04:45:00.001-07:002013-11-25T14:55:48.581-08:00How to Get a Bankruptcy Discharge on Credit Card Debt<!--[if gte mso 9]><xml>
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<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi7K-MLM8bBU20_Bh7YroB5Ki4F2hmqII5Ussu2UcoixjxggYkBiX7q_yVQDfyfowf9ywvpbZjx1TG_lf1gw3DbNMcWieJA7s6Pe5Y8pSJXcf_RKnArGnn900vJrJTmiRSSQ2B6ER9BF1Nz/s1600/images.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi7K-MLM8bBU20_Bh7YroB5Ki4F2hmqII5Ussu2UcoixjxggYkBiX7q_yVQDfyfowf9ywvpbZjx1TG_lf1gw3DbNMcWieJA7s6Pe5Y8pSJXcf_RKnArGnn900vJrJTmiRSSQ2B6ER9BF1Nz/s1600/images.jpg" /></a></div>
<div class="MsoNormal" style="text-align: justify;">
Credit card debts are unsecured
debts that are dischargeable in bankruptcy. However, if the debt was incurred
because of a non-dischargeable item in bankruptcy, it will not be forgiven by
the courts. For example, if you paid a non-dischargeable tax obligation with a
credit card, the credit card bill will not be discharged because the taxes are
non-dischargeable.</div>
<div class="MsoNormal" style="text-align: justify;">
Credit card bills are mostly
wiped out in bankruptcy but the courts will also determine whether you made the
purchase in good faith. The following are some of the factors which are going
to be considered.</div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
The court will scrutinize the
status of your finances when you made the purchases using credit card. If it
turns out that you could not possibly pay back the charged amounts, the court
may presume that you used the card knowing that you could not possibly repay
it. It will also be considered how many charges were made. In case there were
more charges prior to the bankruptcy filing, it would appear that the debtor
was attempting to abuse the bankruptcy.</div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
The amounts you charged on your
card will also be scrutinized. If the luxury items bought within the past 3
months prior to the filing exceed $600, the court may suspect that you defraud
the credit card provider. Small amounts for basic needs are not usually scrutinized.</div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
Your spending pattern will also
be checked. If you want to file for bankruptcy should not change spending habit
within the months leading to the bankruptcy; otherwise, you might find it hard
to justify in court. Multiple purchases within a single day are going to be
scrutinized as well. </div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
It is also a factor whether you
had a job or income at the time you were using your credit cards. Your
employment prospects will also be considered. If you have no job or income you
should not be using the credit card. It will be seen as fraudulent when there
is no logical expectation that the money owed will be paid back. Charges on
basic necessities will not be scrutinized in general, while charges on luxury
products or services will be a problem.</div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
If most of your debts are credit
cards, there is a chance that one of your creditors will file an adversary
action and proceeding against you. This is where a credit card company claims
that you should not be relieved from your obligation to pay. It is possible
that a creditor may charge you of committing fraud in incurring the debt. The
credit card provider might claim that it would be unfair if the debt is
discharged. For this reason it is a good idea to see a bankruptcy lawyer before
filing. </div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
The best way to steer clear of
problems like these is to be truthful with your credit card use in the first
place. Quit using your credit cards immediately if you really want to file
bankruptcy. It is almost certain that if you accumulate large credit card bills
within 2 to 3 months of <a href="http://www.bankruptcylawyersanantonio.com/san-antonio-bankruptcy-attorney">declaring bankruptcy</a>, that debt will not be discharged.</div>
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