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Bankruptcy | United States Courts

About Bankruptcy

Filing bankruptcy can help a person by discarding debt or making a plan to repay debts. A bankruptcy case normally begins when the debtor files a petition with the bankruptcy court. A petition may be filed by an individual, by spouses together, or by a corporation or other entity.

All bankruptcy cases are handled in federal courts under rules outlined in the U.S. Bankruptcy Code.

There are different types of bankruptcies, which are usually referred to by their chapter in the U.S. Bankruptcy Code.

Bankruptcy Basics provides detailed information about filing.

Seeking the advice of a qualified lawyer is strongly recommended because bankruptcy has long-term financial and legal consequences. Individuals can file bankruptcy without a lawyer, which is called filing pro se. Learn more.

Use the forms that are numbered in the 100 series to file bankruptcy for individuals or married couples. Use the forms that are numbered in the 200 series if you are preparing a bankruptcy on behalf of a nonindividual, such as a corporation, partnership, or limited liability company (LLC). Sole proprietors must use the forms that are numbered in the 100 series.

If you need help finding a bankruptcy lawyer, the resources below may help. If you are unable to afford an attorney, you may qualify for free legal services.

See the original post here:

Bankruptcy | United States Courts

Bankruptcy – definition of bankruptcy by The Free Dictionary

I shall confine myself to a cursory review of the remaining powers comprehended under this third description, to wit: to regulate commerce among the several States and the Indian tribes; to coin money, regulate the value thereof, and of foreign coin; to provide for the punishment of counterfeiting the current coin and secureties of the United States; to fix the standard of weights and measures; to establish a uniform rule of naturalization, and uniform laws of bankruptcy, to prescribe the manner in which the public acts, records, and judicial proceedings of each State shall be proved, and the effect they shall have in other States; and to establish post offices and post roads.And here I am, unknown and unemployed, a helpless artist lost in London–with a sick wife and hungry children, and bankruptcy staring me in the face.Suddenly there came a letter saying that the firm had gone into bankruptcy, that the business had been completely wrecked, and that the Sawyer money had been swept away with everything else.But this did not disconcert the enthusiast, who proceeded with the story of Joseph Smith’s bankruptcy in 1837, and how his ruined creditors gave him a coat of tar and feathers; his reappearance some years afterwards, more honourable and honoured than ever, at Independence, Missouri, the chief of a flourishing colony of three thousand disciples, and his pursuit thence by outraged Gentiles, and retirement into the Far West.While this bankruptcy of the Circling Brothers had been the greatest financial achievement of Harris Collin’s life, nevertheless he enjoyed no mean permanent income from his plant, and, in addition, split fees with the owners of his board animals when he sent them to the winter Hippodrome shows, and, more often than not, failed to split any fee at all when he rented the animals to moving-picture companies.Bankruptcy must inevitably have come of this young Pagan, in Lombard-street, London, and also of a curtained alcove in the rear of the immortal boy, and also of a looking-glass let into the wall, and also of clerks not at all old, who danced in public on the slightest provocation.It was with greater satisfaction that they welcomed his success, since Perkins and Cooper had fallen upon evil days: Cooper drank like a fish, and just before Tom Perkins took his degree the linendrapers filed their petition in bankruptcy.Opposite to him was a Peer who was even then engaged in threading the meshes of the Bankruptcy Court, what did they care for that?Only it will be that or the bankruptcy court before longWhile I was being removed to the bankruptcy court, my uncle in the soap and candle trade was being removed to the other world.That they were gone was clear; and the bankruptcy proceedings which followed were like a sinister farce, bursts of laughter in a setting of mute anguish–that of the depositors; hundreds of thousands of them.They were sure Jones and I were ruined past help, and they blamed themselves as accessories to this bankruptcy.

Read more here:

Bankruptcy – definition of bankruptcy by The Free Dictionary

Bankruptcy – All You Need to Know | Bankruptcy HQ

Personal Bankruptcy

In a nutshell, most individuals and married couples have two types of bankruptcy under the Bankruptcy Code: Chapter 7 Bankruptcy or Chapter 13 Bankruptcy. While you can receive a bankruptcy discharge and thus eliminate your debts by filing either chapter, Chapter 7 and Chapter 13 function very differently.

Chapter 7 is intended for those looking for a fresh start. Its often referred to as liquidation bankruptcy — meaning that you must be prepared to give up any assets that you cant protect by your jurisdictions bankruptcy exemptions to get a clean slate of your debts. Below is a checklist of needed information for Chapter 7. For more detailed information on any of the checklist items, please click the highlighted links.

Chapter 13 is commonly referred to as the reorganization bankruptcy. Its filed for many reasons – most commonly to save a home from foreclosure, stop IRS collection or to consolidate debts into a single monthly affordable payment. Below is a checklist of needed information for Chapter 13. For more detailed information on any of the checklist items, please click the highlighted links.

There are many different life situations that result in people filing personal bankruptcies. Some of them are:

See the original post:

Bankruptcy – All You Need to Know | Bankruptcy HQ

Bankruptcy Basics | Nolo.com

If you are deciding if bankruptcy is right for you, the first step is to learn about bankruptcy. Here you’ll find overview articles explaining what bankruptcy is, the difference between Chapter 7 and Chapter 13 bankruptcy, how each type of bankruptcy works, and what bankruptcy can and cannot do.

Continued here:

Bankruptcy Basics | Nolo.com

Bankruptcy | United States Courts

About Bankruptcy

Filing bankruptcy can help a person by discarding debt or making a plan to repay debts. A bankruptcy case normally begins when the debtor files a petition with the bankruptcy court. A petition may be filed by an individual, by spouses together, or by a corporation or other entity.

All bankruptcy cases are handled in federal courts under rules outlined in the U.S. Bankruptcy Code.

There are different types of bankruptcies, which are usually referred to by their chapter in the U.S. Bankruptcy Code.

Bankruptcy Basics provides detailed information about filing.

Seeking the advice of a qualified lawyer is strongly recommended because bankruptcy has long-term financial and legal consequences. Individuals can file bankruptcy without a lawyer, which is called filing pro se. Learn more.

Use the forms that are numbered in the 100 series to file bankruptcy for individuals or married couples. Use the forms that are numbered in the 200 series if you are preparing a bankruptcy on behalf of a nonindividual, such as a corporation, partnership, or limited liability company (LLC). Sole proprietors must use the forms that are numbered in the 100 series.

If you need help finding a bankruptcy lawyer, the resources below may help. If you are unable to afford an attorney, you may qualify for free legal services.

Read the rest here:

Bankruptcy | United States Courts

Bankruptcy – All You Need to Know | Bankruptcy HQ

Personal Bankruptcy

In a nutshell, most individuals and married couples have two types of bankruptcy under the Bankruptcy Code: Chapter 7 Bankruptcy or Chapter 13 Bankruptcy. While you can receive a bankruptcy discharge and thus eliminate your debts by filing either chapter, Chapter 7 and Chapter 13 function very differently.

Chapter 7 is intended for those looking for a fresh start. Its often referred to as liquidation bankruptcy — meaning that you must be prepared to give up any assets that you cant protect by your jurisdictions bankruptcy exemptions to get a clean slate of your debts. Below is a checklist of needed information for Chapter 7. For more detailed information on any of the checklist items, please click the highlighted links.

Chapter 13 is commonly referred to as the reorganization bankruptcy. Its filed for many reasons – most commonly to save a home from foreclosure, stop IRS collection or to consolidate debts into a single monthly affordable payment. Below is a checklist of needed information for Chapter 13. For more detailed information on any of the checklist items, please click the highlighted links.

There are many different life situations that result in people filing personal bankruptcies. Some of them are:

Read more here:

Bankruptcy – All You Need to Know | Bankruptcy HQ

Bankruptcy | United States Courts

About Bankruptcy

Filing bankruptcy can help a person by discarding debt or making a plan to repay debts. A bankruptcy case normally begins when the debtor files a petition with the bankruptcy court. A petition may be filed by an individual, by spouses together, or by a corporation or other entity.

All bankruptcy cases are handled in federal courts under rules outlined in the U.S. Bankruptcy Code.

There are different types of bankruptcies, which are usually referred to by their chapter in the U.S. Bankruptcy Code.

Bankruptcy Basics provides detailed information about filing.

Seeking the advice of a qualified lawyer is strongly recommended because bankruptcy has long-term financial and legal consequences. Individuals can file bankruptcy without a lawyer, which is called filing pro se. Learn more.

Use the forms that are numbered in the 100 series to file bankruptcy for individuals or married couples. Use the forms that are numbered in the 200 series if you are preparing a bankruptcy on behalf of a nonindividual, such as a corporation, partnership, or limited liability company (LLC). Sole proprietors must use the forms that are numbered in the 100 series.

If you need help finding a bankruptcy lawyer, the resources below may help. If you are unable to afford an attorney, you may qualify for free legal services.

Originally posted here:

Bankruptcy | United States Courts

Understanding Bankruptcy: How to File & Qualifications

What is Bankruptcy?

Bankruptcy is a court proceeding in which a judge and court trustee examine the assets and liabilities of individuals and businesses who cant pay their bills and decide whether to discharge those debts so they are no longer legally required to pay them.

Bankruptcy laws were written to give people whose finances collapsed, a chance to start over. Whether it was bad decision-making or bad luck, lawmakers could see that in a capitalistic economy, consumers and businesses who failed, need a second chance.

And nearly all of them get it!

The American Bankruptcy Institute (ABI) did a study of PACER stats (public court records) from 2016 and found that 95.5% of the 499,909 Chapter 7 bankruptcy cases decided that year were discharged, meaning the individual was no longer legally required to pay the debt.

Only 22,388 cases were dismissed, meaning the judge or court trustee felt like the individual had enough resources to pay his/her debts.

Individuals who used Chapter 13 bankruptcy, best known as wage earners bankruptcy, were about split in their success. Slightly more than half (166,424) were discharged and 164,626 were dismissed.

The individuals and business who file for bankruptcy have far more debts than money to cover them and dont see that changing anytime soon. In 2015, bankruptcy filers owed $113 billion and had assets of $77 billion, most of that being real estate holdings, whose real value is debatable.

What is surprising is that people not businesses are the ones most often seeking help. They have taken on financial obligations like a mortgage, auto loan or student loan or perhaps all three! and dont have the income to pay for it. There were 844,495 bankruptcy cases filed in 2015, and 97% of them (819,760) were filed by individuals.

Only 24,375 bankruptcy cases were filed by businesses in 2015.

Most of the people filing bankruptcy were not particularly wealthy. The median income for the 819,760 individuals who filed, was just $34,392 and expenses were just $30,972.

It is important to understand that while bankruptcy is a chance to start over, it definitely affects your creditand future ability to use money. It mayprevent or delay foreclosureon a home and repossession of a car and it can also stop wage garnishment and other legal actions creditors use to collect debts, but in the end, there is a price to pay.

There is no perfect time, but there is a good rule of thumb to keep in mind when youre asking yourself the question: should I file for bankruptcy? If it is going to take more than five years for you to pay off all your debts, it might be time to declare bankruptcy.

The thinking behind this is that the bankruptcy code was set up to give people a second chance, not to punish them. If some combination of mortgage debt, credit card debt, medical bills and student loans has devastated you financially and you dont see that picture changing, bankruptcy might be the best answer.

Other possible debt-relief choices include a debt management program or debt settlement, but both of those typically need 3-5 years to reach a resolution and neither one guarantees all your debts will be settled when you finish.

Bankruptcy carries some significant long-term penalties because it will remain on your credit report for 7-10 years, but there is a great mental and emotional lift when youre given a fresh start and all your debts are eliminated.

The primary reason for declaring bankruptcy is to start all over again with a clean slate.

However, there is a secondary reason for filing that might ease some of the tension related to your problems. Declaring bankruptcy will stop the badgering phone calls, letters and other attempts to contact and collect from you.

Legally, its referred to as the automatic stay. It means that creditors are prohibited from filing a lawsuit against you or entering liens against your property or constantly contacting you in an effort to get a payment on the debt. It also stops things like eviction, utility disconnection and wage garnishments.

Bankruptcy is a long- tormenting situation. Once you have filed, the process usually takes six months or more to complete. Before, and during that time, you and possibly your friends or workplace, have received phone calls from debt collection agencies trying to settle your accounts. Those calls must stop as soon as you declare bankruptcy.

Like the economy, there is a rise and fall to bankruptcy filings in the U.S. In fact, the two are as connected as peanut butter and jelly.

Bankruptcy peaked with just over two million filings in 2005. That is the same year the Bankruptcy Abuse Prevention and Consumer Protection Act was passed. That law was meant to stem the tide of consumers and businesses too eager to simply walk away from their debts.

The number of filings dropped 70% in 2006 to just 617,660, but then the economy tanked and bankruptcy filings increased rapidly to 1.6 million in 2010. They retreated again as the economy improved and have gone down 50% through 2016.

Filing for bankruptcy is a legal process that either reduces, restructures or eliminates your debts. Filing bankruptcy with a court is the first step. You can file on your own or you can file with an attorney. Bankruptcy costs include attorney fees and filing fees. If you file on your own, you will still be responsible for filing fees.

Bankruptcy is not simply a matter of telling a judge Im broke! and throwing yourself at the mercy of the court. There is a process a sometimes confusing, sometimes complicated process that individuals and businesses must wade through to be successful.

It starts with compiling all your financial records debts, assets, income, expenses and listing them. This not only gives you a better understanding of your situation, but also gives anyone helping you (and eventually the court) a better understanding.

The next step is to receive credit counseling within 180 days before filing your case. This is required step. You must obtain counseling from an approved provider listed on theUnited States Courtswebsite. Most counseling agencies offer this service online or over the phone.

The courts want you to do this to make sure you have exhausted all possibilities of finding a different way to handle your problem. Its important to understand that credit counseling is required. You will receive a certificate of completion from the course and this must be part of the paperwork when you declare bankruptcy, or your filing will be rejected.

Next, you file the petition for bankruptcy. If you havent done so at this point, this might be where you realize you need to find a bankruptcy lawyer. Legal counsel is not a requirement for individuals filing for either Chapter 7 or Chapter 13 bankruptcy, but you are taking a serious risk if you choose to represent yourself.

For one thing, you may not understand federal or state bankruptcy laws or be aware which laws apply to your case, especially regarding what debts can or cant be discharged. Judges are not permitted to offer advice and neither are the court employees involved in a case.

There also are many forms to complete and some important differences between Chapter 7 and Chapter 13 that you should be aware of when making decisions. Finally, if you dont know and follow the proper procedures and rules in court, it could affect the outcome of your case.

When your petition is accepted, your case is assigned to a court trustee, who sets up a meeting with your creditors. You must attend the meeting, but the creditors do not have to be there. This is an opportunity for them to ask you or the court trustee questions about your case.

If you cannot afford to hire an attorney, you may have options for free legal services. If you need help finding a lawyer or locating free legal services, check with the American Bar Association for resources and information.

There are several types of bankruptcy for which individuals or married couples can file, the most common being Chapter 7 and Chapter 13.

Chapter 7 bankruptcyis a chance to receive a court judgment that releases you from responsibility for repaying debts. You are permitted to keep key assets, considered exempt property, but non-exempt property will be sold to repay part of your debt.

Property exemptions vary from state to state. You may choose to follow either state law or federal law, which may allow you to keep more possessions.

Examples of exempt property include your home, the car you use for work, equipment you use at work, Social Security checks, pensions, veterans benefits, welfare and retirement savings. These things cant be sold or used to repay debt.

Non-exempt property includes things like cash, bank accounts, stock investments, coin or stamp collections, a second car or second home, etc. Non-exempt items will be liquidated and the proceeds used to repay lenders.

Your assets will be sold by a court-appointed bankruptcy trustee. The proceeds go toward paying the trustee, covering administrative fees and, if funds allow, repaying your creditors as much as possible.

Chapter 7 is the most popular form of bankruptcy, making up 63 percent of individual bankruptcy cases in 2015.

Chapter 13 bankruptcies make up about 30 percent of non-business bankruptcy filings. AChapter 13 bankruptcyinvolves repaying some of your debts to have the rest forgiven. This is an option for people who do not want to give up their property or do not qualify for Chapter 7 because their income is too high.

People can only file for bankruptcy under Chapter 13 if their debts do not exceed a certain amount. The specific cutoff is reevaluated periodically, so check with a lawyer or credit counselor for the most up-to-date figures.

Under Chapter 13, you must design a three- to five-year repayment plan for your creditors. Once you successfully complete the plan, the remaining debts are erased.

However, most people do not successfully finish their plans. When this happens, debtors may then choose to pursue a Chapter 7 bankruptcy instead. If they don’t, creditors then can resume their attempts to collect the full balance owed.

The overriding principle of bankruptcy is that it gives you a fresh start with your finances. Chapter 7 (known as liquidation), wipes away debt by selling nearly all your possessions. Chapter 13 (known as the wage earners plan) gives you an opportunity to develop a 3-5 year plan to repay all your debt and keep what you have.

Both equal a fresh start.

Bankruptcy remains on your credit report for 7-10 years, depending upon which chapter of bankruptcy you file under. For example, Chapter 7 (the most common) is on your credit report for 10 years, while a Chapter 13 filing (second most common) is there for seven years.

During this time, a bankruptcy discharge could prevent you from obtaining new lines of credit and may even cause problems when you apply for jobs.

If you are considering bankruptcy, yourcredit report and credit scoreprobably are damaged already. Your credit report may not endure significantly more damage, especially if you consistently pay your bills after declaring bankruptcy.

Still, because of the long-term effects of bankruptcy, some experts believe its most beneficial when you have more than $15,000 in debts.

Bankruptcy does not necessarily erase all financial responsibilities.

It also does not protect those who co-signed your debts. Your co-signer agreed to pay your loan if you didn’t or couldn’t pay. When you declare bankruptcy, your co-signer still may be legally obligated to pay all or part of your loan.

Most people consider bankruptcy only after they pursuedebt consolidation or debt settlement. These options can help you get your finances back on track and won’t negatively impact your credit as much as a bankruptcy.

Debt consolidationcombines all your loans to help you make regular and timely payments on your debts. Debt settlement is a means of negotiating with your creditors to lower your balance. If successful, it directly reduces your debts.

To learn more about bankruptcy and other debt-relief options, seek advice from a local credit counselor or read theFederal Trade Commission’sinformational pages.

See the rest here:

Understanding Bankruptcy: How to File & Qualifications

Bankruptcy Basics | Nolo.com

If you are deciding if bankruptcy is right for you, the first step is to learn about bankruptcy. Here you’ll find overview articles explaining what bankruptcy is, the difference between Chapter 7 and Chapter 13 bankruptcy, how each type of bankruptcy works, and what bankruptcy can and cannot do.

Read the original here:

Bankruptcy Basics | Nolo.com

Bankruptcy | United States Courts

About Bankruptcy

Filing bankruptcy can help a person by discarding debt or making a plan to repay debts. A bankruptcy case normally begins when the debtor files a petition with the bankruptcy court. A petition may be filed by an individual, by spouses together, or by a corporation or other entity.

All bankruptcy cases are handled in federal courts under rules outlined in the U.S. Bankruptcy Code.

There are different types of bankruptcies, which are usually referred to by their chapter in the U.S. Bankruptcy Code.

Bankruptcy Basics provides detailed information about filing.

Seeking the advice of a qualified lawyer is strongly recommended because bankruptcy has long-term financial and legal consequences. Individuals can file bankruptcy without a lawyer, which is called filing pro se. Learn more.

Use the forms that are numbered in the 100 series to file bankruptcy for individuals or married couples. Use the forms that are numbered in the 200 series if you are preparing a bankruptcy on behalf of a nonindividual, such as a corporation, partnership, or limited liability company (LLC). Sole proprietors must use the forms that are numbered in the 100 series.

If you need help finding a bankruptcy lawyer, the resources below may help. If you are unable to afford an attorney, you may qualify for free legal services.

See the original post:

Bankruptcy | United States Courts

Declaring Bankruptcy | Internal Revenue Service

If you owe past due federal taxes that you cannot pay, bankruptcy may be an option. Other options include an IRS payment plan or an offer in compromise.

If you are a person that has filed bankruptcy, a debtors attorney or a U.S. Trustee with questions about an open bankruptcy you may contact the IRS Centralized Insolvency Operations Unit, Monday through Friday, 7:00 a.m. to 10:00 p.m., EST, at 1-800-973-0424.

For individuals, the most common type of bankruptcy is a Chapter 13. Before you consider filing a Chapter 13 here are some things you should know:

Partnerships and corporations file bankruptcy under Chapter 7 or Chapter 11 of the bankruptcy code. Individuals may also file under Chapter 7 or Chapter 11. For additional tax information on bankruptcy, refer to Publication 908, Bankruptcy Tax Guide and Publication 5082, What You Should Know about Chapter 13 Bankruptcy and Delinquent Returns (PDF).

Other types of bankruptcy include Chapters 9, 12 and 15. Cases under these chapters of the bankruptcy code involve municipalities, family farmers and fisherman, and international cases. For information see Other Types of Bankruptcy Chapters 9, 12 & 15.

Rate the Small Business and Self-Employed Website

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Declaring Bankruptcy | Internal Revenue Service

Bankruptcy Basics | United States Courts

Bankruptcy Basics is a publication of the Administrative Office of the U.S. Courts. It provides basic information to debtors, creditors, court personnel, the media, and the general public on different aspects of federal bankruptcy laws. It also provides individuals who may be considering bankruptcy with a basic explanation of the different chapters under which a bankruptcy case may be filed and answers some of the most commonly asked questions about the bankruptcy process.

Bankruptcy Basics (pdf) For cases filed before October 17, 2005

Bankruptcy Basics (pdf) For cases filed on or after October 17, 2005

Bankruptcy Basics is not a substitute for the advice of competent legal counsel or a financial expert, nor is it a step-by-step guide for filing for bankruptcy. The Administrative Office of the United States Courts cannot provide legal or financial advice. Such advice may be obtained from a competent attorney, accountant, or financial adviser.

November 2011Third Edition

While the information presented is accurate as of the date of publication, it should not be cited or relied upon as legal authority. It should not be used as a substitute for reference to the United States Bankruptcy Code (title 11, United States Code) and the Federal Rules of Bankruptcy Procedure, both of which may be reviewed at local law libraries, or to local rules of practice adopted by each bankruptcy court. Finally, this publication should not substitute for the advice of competent legal counsel.

View post:

Bankruptcy Basics | United States Courts

Understanding Bankruptcy: How to File & Qualifications

What is Bankruptcy?

Bankruptcy is a court proceeding in which a judge and court trustee examine the assets and liabilities of individuals and businesses who cant pay their bills and decide whether to discharge those debts so they are no longer legally required to pay them.

Bankruptcy laws were written to give people whose finances collapsed, a chance to start over. Whether it was bad decision-making or bad luck, lawmakers could see that in a capitalistic economy, consumers and businesses who failed, need a second chance.

And nearly all of them get it!

The American Bankruptcy Institute (ABI) did a study of PACER stats (public court records) from 2016 and found that 95.5% of the 499,909 Chapter 7 bankruptcy cases decided that year were discharged, meaning the individual was no longer legally required to pay the debt.

Only 22,388 cases were dismissed, meaning the judge or court trustee felt like the individual had enough resources to pay his/her debts.

Individuals who used Chapter 13 bankruptcy, best known as wage earners bankruptcy, were about split in their success. Slightly more than half (166,424) were discharged and 164,626 were dismissed.

The individuals and business who file for bankruptcy have far more debts than money to cover them and dont see that changing anytime soon. In 2015, bankruptcy filers owed $113 billion and had assets of $77 billion, most of that being real estate holdings, whose real value is debatable.

What is surprising is that people not businesses are the ones most often seeking help. They have taken on financial obligations like a mortgage, auto loan or student loan or perhaps all three! and dont have the income to pay for it. There were 844,495 bankruptcy cases filed in 2015, and 97% of them (819,760) were filed by individuals.

Only 24,375 bankruptcy cases were filed by businesses in 2015.

Most of the people filing bankruptcy were not particularly wealthy. The median income for the 819,760 individuals who filed, was just $34,392 and expenses were just $30,972.

It is important to understand that while bankruptcy is a chance to start over, it definitely affects your creditand future ability to use money. It mayprevent or delay foreclosureon a home and repossession of a car and it can also stop wage garnishment and other legal actions creditors use to collect debts, but in the end, there is a price to pay.

There is no perfect time, but there is a good rule of thumb to keep in mind when youre asking yourself the question: should I file for bankruptcy? If it is going to take more than five years for you to pay off all your debts, it might be time to declare bankruptcy.

The thinking behind this is that the bankruptcy code was set up to give people a second chance, not to punish them. If some combination of mortgage debt, credit card debt, medical bills and student loans has devastated you financially and you dont see that picture changing, bankruptcy might be the best answer.

Other possible debt-relief choices include a debt management program or debt settlement, but both of those typically need 3-5 years to reach a resolution and neither one guarantees all your debts will be settled when you finish.

Bankruptcy carries some significant long-term penalties because it will remain on your credit report for 7-10 years, but there is a great mental and emotional lift when youre given a fresh start and all your debts are eliminated.

The primary reason for declaring bankruptcy is to start all over again with a clean slate.

However, there is a secondary reason for filing that might ease some of the tension related to your problems. Declaring bankruptcy will stop the badgering phone calls, letters and other attempts to contact and collect from you.

Legally, its referred to as the automatic stay. It means that creditors are prohibited from filing a lawsuit against you or entering liens against your property or constantly contacting you in an effort to get a payment on the debt. It also stops things like eviction, utility disconnection and wage garnishments.

Bankruptcy is a long- tormenting situation. Once you have filed, the process usually takes six months or more to complete. Before, and during that time, you and possibly your friends or workplace, have received phone calls from debt collection agencies trying to settle your accounts. Those calls must stop as soon as you declare bankruptcy.

Like the economy, there is a rise and fall to bankruptcy filings in the U.S. In fact, the two are as connected as peanut butter and jelly.

Bankruptcy peaked with just over two million filings in 2005. That is the same year the Bankruptcy Abuse Prevention and Consumer Protection Act was passed. That law was meant to stem the tide of consumers and businesses too eager to simply walk away from their debts.

The number of filings dropped 70% in 2006 to just 617,660, but then the economy tanked and bankruptcy filings increased rapidly to 1.6 million in 2010. They retreated again as the economy improved and have gone down 50% through 2016.

Filing for bankruptcy is a legal process that either reduces, restructures or eliminates your debts. Filing bankruptcy with a court is the first step. You can file on your own or you can file with an attorney. Bankruptcy costs include attorney fees and filing fees. If you file on your own, you will still be responsible for filing fees.

Bankruptcy is not simply a matter of telling a judge Im broke! and throwing yourself at the mercy of the court. There is a process a sometimes confusing, sometimes complicated process that individuals and businesses must wade through to be successful.

It starts with compiling all your financial records debts, assets, income, expenses and listing them. This not only gives you a better understanding of your situation, but also gives anyone helping you (and eventually the court) a better understanding.

The next step is to receive credit counseling within 180 days before filing your case. This is required step. You must obtain counseling from an approved provider listed on theUnited States Courtswebsite. Most counseling agencies offer this service online or over the phone.

The courts want you to do this to make sure you have exhausted all possibilities of finding a different way to handle your problem. Its important to understand that credit counseling is required. You will receive a certificate of completion from the course and this must be part of the paperwork when you declare bankruptcy, or your filing will be rejected.

Next, you file the petition for bankruptcy. If you havent done so at this point, this might be where you realize you need to find a bankruptcy lawyer. Legal counsel is not a requirement for individuals filing for either Chapter 7 or Chapter 13 bankruptcy, but you are taking a serious risk if you choose to represent yourself.

For one thing, you may not understand federal or state bankruptcy laws or be aware which laws apply to your case, especially regarding what debts can or cant be discharged. Judges are not permitted to offer advice and neither are the court employees involved in a case.

There also are many forms to complete and some important differences between Chapter 7 and Chapter 13 that you should be aware of when making decisions. Finally, if you dont know and follow the proper procedures and rules in court, it could affect the outcome of your case.

When your petition is accepted, your case is assigned to a court trustee, who sets up a meeting with your creditors. You must attend the meeting, but the creditors do not have to be there. This is an opportunity for them to ask you or the court trustee questions about your case.

If you cannot afford to hire an attorney, you may have options for free legal services. If you need help finding a lawyer or locating free legal services, check with the American Bar Association for resources and information.

There are several types of bankruptcy for which individuals or married couples can file, the most common being Chapter 7 and Chapter 13.

Chapter 7 bankruptcyis a chance to receive a court judgment that releases you from responsibility for repaying debts. You are permitted to keep key assets, considered exempt property, but non-exempt property will be sold to repay part of your debt.

Property exemptions vary from state to state. You may choose to follow either state law or federal law, which may allow you to keep more possessions.

Examples of exempt property include your home, the car you use for work, equipment you use at work, Social Security checks, pensions, veterans benefits, welfare and retirement savings. These things cant be sold or used to repay debt.

Non-exempt property includes things like cash, bank accounts, stock investments, coin or stamp collections, a second car or second home, etc. Non-exempt items will be liquidated and the proceeds used to repay lenders.

Your assets will be sold by a court-appointed bankruptcy trustee. The proceeds go toward paying the trustee, covering administrative fees and, if funds allow, repaying your creditors as much as possible.

Chapter 7 is the most popular form of bankruptcy, making up 63 percent of individual bankruptcy cases in 2015.

Chapter 13 bankruptcies make up about 30 percent of non-business bankruptcy filings. AChapter 13 bankruptcyinvolves repaying some of your debts to have the rest forgiven. This is an option for people who do not want to give up their property or do not qualify for Chapter 7 because their income is too high.

People can only file for bankruptcy under Chapter 13 if their debts do not exceed a certain amount. The specific cutoff is reevaluated periodically, so check with a lawyer or credit counselor for the most up-to-date figures.

Under Chapter 13, you must design a three- to five-year repayment plan for your creditors. Once you successfully complete the plan, the remaining debts are erased.

However, most people do not successfully finish their plans. When this happens, debtors may then choose to pursue a Chapter 7 bankruptcy instead. If they don’t, creditors then can resume their attempts to collect the full balance owed.

The overriding principle of bankruptcy is that it gives you a fresh start with your finances. Chapter 7 (known as liquidation), wipes away debt by selling nearly all your possessions. Chapter 13 (known as the wage earners plan) gives you an opportunity to develop a 3-5 year plan to repay all your debt and keep what you have.

Both equal a fresh start.

Bankruptcy remains on your credit report for 7-10 years, depending upon which chapter of bankruptcy you file under. For example, Chapter 7 (the most common) is on your credit report for 10 years, while a Chapter 13 filing (second most common) is there for seven years.

During this time, a bankruptcy discharge could prevent you from obtaining new lines of credit and may even cause problems when you apply for jobs.

If you are considering bankruptcy, yourcredit report and credit scoreprobably are damaged already. Your credit report may not endure significantly more damage, especially if you consistently pay your bills after declaring bankruptcy.

Still, because of the long-term effects of bankruptcy, some experts believe its most beneficial when you have more than $15,000 in debts.

Bankruptcy does not necessarily erase all financial responsibilities.

It also does not protect those who co-signed your debts. Your co-signer agreed to pay your loan if you didn’t or couldn’t pay. When you declare bankruptcy, your co-signer still may be legally obligated to pay all or part of your loan.

Most people consider bankruptcy only after they pursuedebt consolidation or debt settlement. These options can help you get your finances back on track and won’t negatively impact your credit as much as a bankruptcy.

Debt consolidationcombines all your loans to help you make regular and timely payments on your debts. Debt settlement is a means of negotiating with your creditors to lower your balance. If successful, it directly reduces your debts.

To learn more about bankruptcy and other debt-relief options, seek advice from a local credit counselor or read theFederal Trade Commission’sinformational pages.

Excerpt from:

Understanding Bankruptcy: How to File & Qualifications

BankruptcyInformation.com – Personal Bankruptcy Information

The federal bankruptcy law is designed to provide people going through a tough financial time with an opportunity for a fresh start.

To help you determine if you need a fresh start, you can use our Credit Card Debt Calculator to determine how long it will take to pay off your credit cards if you do nothing.

There are many reasons why people file for bankruptcy relief. Often, it is because of a loss of income due to losing a job or even just a decrease in income that prevents the person from paying all of their bills.

Another life event that may cause someone to file for bankruptcy relief is a medical emergency or prolonged illness that results in massive medical costs that are not covered by insurance. Even the death of a spouse can create a financial crisis where the only alternative is to file for bankruptcy protection. It could even be that someone has made very poor financial decisions in the past and have over-extended himself or herself to the point where it is now impossible to meet all of their financial obligations given their current income.

The bottom line is that people file for bankruptcy relief because some type of life event or circumstance has caused them to be unable to continue paying for their basic living expenses in addition to paying their bills.

The ultimate goal in filing for relief under either Chapter 7 or Chapter 13 bankruptcy is a discharge of your debts.

If you qualify to file for a Chapter 7 bankruptcy case, you will receive a complete discharge of most of, in not all, of your unsecured debts when the case is completed. This means that once the bankruptcy case is closed, you will no longer be legally responsible for the payment of the debts that are discharged through the bankruptcy case.

The automatic stay provisions of Section 362 of the U.S. Bankruptcy Code prevent creditors from attempting to collect any debt that is discharged through a Chapter 7 bankruptcy action. This includes collection actions, wage garnishments, judgments and seizure of property.

If you file a Chapter 13 you will create a 3 to 5 year repayment plan. At the end of the successful competition of your plan your debts will be discharged.

The advantage of a Chapter 13 plan is that it may allow to keep your home or other property on which you are behind in payments or which are not covered by your exemptions. You will also enjoy the protections of the automatic stay when you file a Chapter 13 bankruptcy.

The property a debtor can keep through the bankruptcy is determined by the specific exemptions available under state law. Bankruptcy Information allows you to search for state exemptions. In addition, residents of certain states are allowed to choose federal exemptions instead of state exemptions.

Before deciding upon the appropriate course of action you may wish to explore somealternatives to bankruptcy and review thefrequently asked questionssection of the site in order to gain a better understanding of the bankruptcy process.

See the article here:

BankruptcyInformation.com – Personal Bankruptcy Information

Home | United States Bankruptcy Court – District of New Jersey

Please note that the Newark Clerk’s Office will be located on the 4th floor, sharing space with the District Court, in the Martin Luther King, Jr. Federal Building beginning on Tuesday, April 10th, 2018 until further notice. Moreover, Clerk’s Office hours will be 9am-4pm.Judge Poslusny’s Chapter 13 calendar for Wednesday, May 2, 2018 is adjourned to Wednesday, May 9, 2018. All times will remain the same. If you have an emergent matter that needs to be addressed before May 9, 2018, please contact Chambers.

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Home | United States Bankruptcy Court – District of New Jersey

Southern District of New York | United States Bankruptcy Court

The primary reason this bankruptcy court exists is to:

Provide, economically, a fair, consistent, and effective forum for the protection and marshaling of assets, the discharge or adjustment of debts, and timely distribution of property or securities, in accordance with applicable law.

In support of this purpose, the most critical functions performed are:

The core values and principles which guide this court in the fulfillment of its mission are:

More:

Southern District of New York | United States Bankruptcy Court

Bankruptcy Basics | United States Courts

Bankruptcy Basics is a publication of the Administrative Office of the U.S. Courts. It provides basic information to debtors, creditors, court personnel, the media, and the general public on different aspects of federal bankruptcy laws. It also provides individuals who may be considering bankruptcy with a basic explanation of the different chapters under which a bankruptcy case may be filed and answers some of the most commonly asked questions about the bankruptcy process.

Bankruptcy Basics (pdf) For cases filed before October 17, 2005

Bankruptcy Basics (pdf) For cases filed on or after October 17, 2005

Bankruptcy Basics is not a substitute for the advice of competent legal counsel or a financial expert, nor is it a step-by-step guide for filing for bankruptcy. The Administrative Office of the United States Courts cannot provide legal or financial advice. Such advice may be obtained from a competent attorney, accountant, or financial adviser.

November 2011Third Edition

While the information presented is accurate as of the date of publication, it should not be cited or relied upon as legal authority. It should not be used as a substitute for reference to the United States Bankruptcy Code (title 11, United States Code) and the Federal Rules of Bankruptcy Procedure, both of which may be reviewed at local law libraries, or to local rules of practice adopted by each bankruptcy court. Finally, this publication should not substitute for the advice of competent legal counsel.

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Bankruptcy Basics | United States Courts

Home | United States Bankruptcy Court – District of New Jersey

The United States Bankruptcy Court for the District of New Jersey will be closed on Friday, March 30, 2018 in observance of a Court holiday.Judge Poslusny’s Chapter 13 calendar for Wednesday, May 2, 2018 is adjourned to Wednesday, May 9, 2018. All times will remain the same. If you have an emergent matter that needs to be addressed before May 9, 2018, please contact Chambers.

Read the rest here:

Home | United States Bankruptcy Court – District of New Jersey

Southern District of New York | United States Bankruptcy Court

The primary reason this bankruptcy court exists is to:

Provide, economically, a fair, consistent, and effective forum for the protection and marshaling of assets, the discharge or adjustment of debts, and timely distribution of property or securities, in accordance with applicable law.

In support of this purpose, the most critical functions performed are:

The core values and principles which guide this court in the fulfillment of its mission are:

See more here:

Southern District of New York | United States Bankruptcy Court


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