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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.

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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. If you don't qualify for bankruptcy, there is still hope.

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.

Yes, filing for bankruptcy impacts your credit score. 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.

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Understanding Bankruptcy: How to File & Qualifications

Bankruptcy Definition

What Is Bankruptcy?

Bankruptcy is the legal proceeding involving a person or business that is unable to repay outstanding debts.The bankruptcy process begins with a petition filed by the debtor, which is most common, or on behalf of creditors, which is less common. All of the debtor's assets are measured and evaluated, and the assets may be used to repay a portion of outstanding debt.

Bankruptcy offers an individual or business a chance to start fresh by forgiving debts that simply cannot be paid while offering creditors a chance to obtain some measure of repayment based on the individual's or business's assets available for liquidation. In theory, the ability to file for bankruptcy can benefit an overall economy by giving persons and businesses a second chance to gain access to consumer credit and by providing creditors with a measure of debt repayment. Upon the successful completion of bankruptcy proceedings, the debtor is relieved of the debt obligations incurred prior to filing for bankruptcy.

All bankruptcy cases in the United States are handled through federal courts. Any decisions over federal bankruptcy cases are made by a bankruptcy judge, including whether a debtor is eligible to file or whether he should be discharged of his debts. Administration over bankruptcy cases is often handled by a trustee, an officer appointed by the United States Trustee Program of the Department of Justice, to represent the debtor's estate in the proceeding. There is usually very little direct contact between the debtor and the judge unless there is some objection made in the case by a creditor.

Bankruptcy filings in the United States fall under one of several chapters of the Bankruptcy Code: Chapter 7, which involves liquidation of assets; Chapter 11, which deals with company or individual reorganizations, and Chapter 13, which is debt repayment with lowered debt covenants or specific payment plans. Bankruptcy filing specifications vary among states, leading to higher or lower filing fees depending on how easily a person or company can complete the process.

Chapter 7 Bankruptcy

Individuals or businesses with few or no assets file Chapter 7 bankruptcy. The chapter allows individuals to dispose of their unsecured debts, such as credit cards and medical bills. Individuals with nonexempt assets, such as family heirlooms (collections with high valuations, such as coin or stamp collections),second homes, cash, stocks, or bonds, must liquidate the property to repay some or all of their unsecured debts. So, a person filing Chapter 7 bankruptcy is basically selling off his or her assets to clear debt.Consumers who have no valuable assets and only exempt property, such as household goods, clothing, tools for their trades, and a personal vehicle up to a certain value, repay no part of their unsecured debt.

Chapter 11 Bankruptcy

Businesses often file Chapter 11 bankruptcy, the goal of which is to reorganize and once again become profitable. Filing Chapter 11 bankruptcy allows a company to create plans for profitability, cut costs, and find new ways to increase revenue. Preferred stockholders may still receive payments, though common stockholders will not.

For example, a housekeeping business filing Chapter 11 bankruptcy might increase its rates slightly and offer more services to become profitable. Chapter 11 bankruptcy allows a business to continue conducting its business activities without interruption while working on a debt repayment plan under the court's supervision. In rare cases, individuals can file Chapter 11 bankruptcy.

Chapter 13 Bankruptcy

Individuals who make too much money to qualify for Chapter 7 bankruptcy may file under Chapter 13, also known as a wage earner's plan. The chapter allows individuals and businesses with consistent income to create workable debt repayment plans. The repayment plans are commonly in installments over the course of a three- to five-year period. In exchange for repaying their creditors, the courts allow these debtors to keep all of their property including nonexempt property.

Other Bankruptcy Filings

Financially distressed municipalities, including cities, towns, villages, counties, and school districts, may file for bankruptcy under Chapter 9. Under Chapter 9, there is no liquidation of assets to repay the municipality's debts. Chapter 12 bankruptcy provides relief to "family farmers" or "family fishermen" with regular annual income. Both Chapters 9 and 12 make use of an extended debt repayment plan. Chapter 15 was added in 2005 to deal with cross-border cases which involve debtors, assets, creditors and other parties who may be in more than one country. This type of petition is usually filed in the debtor's home country.

When a debtor receives a discharge order, he is no longer legally required to pay any of the debts on that order. So, any creditor listed on that discharge cannot legally undertake any type of collection activity (making phone calls, sending letters)against the debtor once the discharge order is enforced. Therefore, the discharge absolves the debtor of any personal liability for the debts specified in the order.

But not all debts qualify to be discharged. Some of these include tax claims, anything that was not listed by the debtor, child support or alimony payments, personal injury debts, debts to the government, etc. In addition, any secured creditor can still enforce a lien against property owned by the debtor, provided that lien is still valid.

Debtors do not necessarily have the right to a discharge. When a petition for bankruptcy has been filed in court, creditors receive a notice and can object if they choose to do so. If they do, they will need to file a complaint in the court before the deadline. This leads to the filing of an adversary proceeding to recover monies owed orenforce a lien.

The discharge fromChapter 7 is usually granted about four months after the debtor files to petition for bankruptcy. For any other type of bankruptcy, the discharge can occur when it becomes practical.

Declaring bankruptcy can help relieve you of your legal obligation to pay your debts and save your home, business, or ability to function financially, depending on what kind of bankruptcy petition you file. But it also can lower your credit rating, making it more difficult to get a loan, mortgage, low-rate credit card, or buy a home, apartment, or business in the future.

If you're trying to figure out if you should file, your credit is probably already damaged. A Chapter 7 filing will stay on your credit report for ten years, while a Chapter 13 will remain there for seven. Any creditors you solicit for debt (a loan, credit card, line of credit, or mortgage) will see the discharge on your report, which will prevent you from getting any credit.

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Bankruptcy Definition

The Truth About Bankruptcy | DaveRamsey.com

You did everything you could to avoid it. You cut back on spending. You sold stuff to make payments. Youve been eating rice and beans for months now. But even with all the work, youve come to one painful conclusionyou may need to file bankruptcy.

Bankruptcy is confusing, not to mention emotionally devastating. Its a serious decision, and we dont want you to have surprises along the way. Here are some things you need to know before you take the first step.

Related: If you need help right now, contact one of our financial coaches.

Bankruptcy is a court proceeding where you tell a judge you cant pay your debts. The judge and court trustee examine your assets and liabilities to decide whether to discharge those debts. If the court finds that you really have no means to pay back your debt, you declare bankruptcy.

Bankruptcy can stop foreclosure on your home, repossession of property, or garnishment of your wages. Bankruptcy cancels manynot allof your debts.

Bankruptcy doesnt clear:

When you file for bankruptcy, creditors have to stop any effort to collect money from you, at least temporarily. Most creditors cant write, call or sue you after youve filed. However, even if you declare bankruptcy, the courts can require you to pay back certain debts. Each bankruptcy case is unique, and only a court can decide the details of your own bankruptcy.

Get a FREE customized plan for your money in 3 minutes!

There are two main types of bankruptcy for consumers. Youve probably heard of them: Chapter 13 and Chapter 7.

Chapter 13 means the court approves a plan for you to repay some or all of your debts over three to five years. You get to keep your assets (stuff you own) and youre given time to bring your mortgage up to date. You agree to a monthly payment plan and must follow a strict budget monitored by the court. This kind of bankruptcy stays on your credit report for seven years.

Related: Dave explains where a Chapter 13 bankruptcy falls in the Baby Steps.

Chapter 7 means the court sells all your assetswith some exemptionsso you can pay back as much debt as possible. The remaining unpaid debt is erased. You could lose your home (or the equity youve put into it) and your car in the process, depending on what the court decides. You can only file Chapter 7 bankruptcy if the court decides your income is too low to pay back your debt. This type of bankruptcy stays on your credit report for 10 years.

Related: Dave explains the difference between Chapter 7 and Chapter 13 bankruptcy.

Youve probably heard of other types of bankruptcy, like Chapter 11. Its typically reserved for businesses. You may also hear of Chapter 12 bankruptcy, which is for farmers and fishermen.

For specific information about bankruptcy laws in your area, visit the United States Courts website. There youll find information on the process and where to find help in your area. There is a bankruptcy court for each judicial district in the United States90 districts in all.

Lets not sugarcoat it: Bankruptcy takes a huge emotional toll on a person. It ranks up there with divorce, loss of a loved one and business failure. Beyond the emotional impact, here are other effects of declaring bankruptcy:

Your bankruptcy becomes public domain.This means your name and other personal information will appear in court records for the public to access. Thats right . . . potential employers, banks, clients and businesses can access the details of your bankruptcy.

Filing bankruptcy is expensive.Filing fees for Chapter 13 bankruptcy will cost around $310 plus attorney fees, which can be anywhere from $1,500 to $6,000. For a Chapter 7 bankruptcy, youll shell out $335 for filing fees and $835 to $3,835 for an attorney.(1)

Buying a home could be more complicated.Unless you pay cash for a home, it could take one to four years before you qualify for a mortgage loan.(2)

Filing for bankruptcy is a big deal, so you dont want to go into the process blind. Here are some things you need to do before you take any action:

Make a list of all debts, from your mortgage to student loans to child support. For each of those debts, find paperwork to verify the amounts. If you talk to anyone (lawyer or financial coach), youll need this information.

Before you file, try your best to pay off your debt. Get on a bare-bones budget. Talk with creditors about lowering interest rates or getting better terms. Move to a smaller place. Get an extra job to pay the bills. You get the idea.

A financial coach can give you a different, unbiased perspective on your financial situation. They can talk with you about alternatives to bankruptcy and create a customized plan to get you out of the red. And they can give you encouragement and that extra kick in the right direction!

If youve done everything you can and still cant get your head above water, bankruptcy may be your only option. Filing is complicated and involves lots of paperwork and the potential for mistakes. Working with a pro is your best option for walking through the process.

No matter where you are on the spectrum of bankruptcyfrom thinking about filing to starting over after filingwe have the resources to help you establish life-long smart money habits. Here are three ways we can help:

First, if your family decides to file bankruptcy, well be here to help you during the process and give you the tools to restore your hope after your bankruptcy is discharged. Well never get angry with someone for filing bankruptcy. Its a difficult, emotional situation. We get that.

Second, if you havent filed yet, we have coaches available to meet with you to find a better option than bankruptcy if at all possible. Our ultimate goal is to help you find financial peace and change your family tree. Bankruptcy is a setback, but your situationno matter how badis never hopeless.

Third, if you think theres any possible way to avoid bankruptcy, wed like to introduce you to Financial Peace University: a nine-week online or group program that will teach you how to get out of debt the right way.

Daves #1 course has helped millions of people make a plan for their money, stop living paycheck to paycheck and beat debt for good. This works! Hurry, groups are starting soon. Take the first step to changing your future today!

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The Truth About Bankruptcy | DaveRamsey.com

How bankruptcy was broken – The Week

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Sen. Elizabeth Warren (D-Mass.) wants to fix American bankruptcy law. Indeed, as she's told people many times, studying bankruptcy is what convinced Warren to quit her career as a Harvard professor and enter politics it's largely why she jumped ship from the Republicans to the Democrats, and why she became a populist progressive firebrand. As part of her campaign for the Democrats' presidential nomination, Warren just released a meaty plan to reform U.S. bankruptcy law.

The proposals are designed to once again make bankruptcy what it's intended to be: a balanced process that allows creditors to recoup some losses and gives debtors a genuine fresh start, while making sure both parties share responsibility for the failure. But how did American bankruptcy break in the first place? The key turning point was a 2005 law, backed by the banking and credit card industries, that made personal bankruptcy a lot harder to obtain.

Personal bankruptcy comes in two forms. Chapter 7 bankruptcy more or less wipes out people's debt, in exchange for their handing over assets and cash not protected by law from bankruptcy proceedings. The basic idea there is to allow the debtor to start over with a clean slate and make sure the creditor is reimbursed to some degree, but also that the debtor retains enough resources that they can actually start over. Chapter 13 bankruptcy allows the debtor to keep much more of their property, but also puts them on a long-term payment plan.

The Bankruptcy Abuse Prevention and Consumer Protection Act (or BAPCPA) of 2005 made a number of changes: It significantly increased the paperwork and fees required to file Chapter 7 for people making over 150 percent of the poverty line. It also made it a lot harder for people to take Chapter 7 over Chapter 13 if they made more than their state's median income. The law forbade Americans from getting rid of student loan debt through bankruptcy, and it instituted a number of other changes that generally made the process less forgiving.

In the years before the 2005 law, personal bankruptcies were on the rise, and champions of BAPCPA claimed people were abusing an overly lax system hence all the additional hurdles that BAPCPA brought. The law's proponents also argued that making bankruptcy harder to obtain would lower the cost of credit for all the other Americans who didn't file for bankruptcy. (Interestingly, BAPCPA's fans included one Senator Joseph Biden a Democrat from Delaware, where a huge proportion of America's credit card companies are based, and one of Warren's current challengers for the partys presidential nomination.)

Taking the opposite side of the fight were people like Warren, who argued that rising bankruptcies were caused not by personal shiftlessness, but by a decades-long trend of Americans getting squeezed by stagnating wages and ever-rising costs of living. That left working people in ever more precarious financial straits, in which one run of bad luck could pitch a family over the precipice. "The data showed that nearly 90 percent of these families were declaring bankruptcy for one of three reasons: a job loss, a medical problem, or a family breakup," Warren wrote.

Since BAPCPA's passage, it does look like credit became cheaper for Americans: "Typical credit card interest rates for people with fair credit might be in the mid- rather than low 20s had the reforms not been adopted," according to a summation of the research by Vox's Matt Yglesias. But the price of that reduction was that a lot of low-income families who aren't quite poor enough to fall below 150 percent of the poverty line got slammed by the increased paperwork and fees and the shift to more Chapter 13 filings. Filings for bankruptcy due to medical debt fell, and of course a lot of Americans were condemned to labor under student debt they couldn't get rid of. The period of time where people and families struggle with the decision whether to file bankruptcy nicknamed "the sweatbox" also grew considerably. That's more time in which people are bleeding down their finances, while banks and creditors continue to profit from their debt payments.

Warren's new plan proposes a number of reforms to BAPCPA. The centerpiece is she would combine Chapter 7 and Chapter 13 into one singular bankruptcy process, while doing away with the income tests and the higher fees and paperwork. Debtors would be able to choose the wipe-the-slate-clean approach or the payment-plan approach, depending on their needs. Warren would include student debt in the mix of debts that bankruptcy can do away with. Warren would also raise the amount of home equity that filers can hold onto during the bankruptcy process, and she would empower bankruptcy judges to adjust the payment terms of mortgages something the Obama administration promised to do in response to the 2008 housing crisis, and then reneged on.

Other noteworthy changes include allowing parents to protect more money for spending on their children during bankruptcy; allowing union members to keep paying their union dues; and allowing people to keep paying rent, so that the bankruptcy process doesn't result in their eviction. In fact, a lot of these alterations started life as amendments that lawmakers tried to attach to BAPCPA itself, but that were ultimately shot down.

In sum, Warren would make bankruptcy more affordable, accessible, and flexible for debtors, while simultaneously expanding the types of debt they can get rid of and the critical resources they can hold onto like homes, cars, and union benefits so that they actually can start again.

As for alternative ways to lower the costs of credit across the economy, Warren doesn't get into that. But lawmakers should consider hard legal caps on interest rates an idea floated by Rep. Alexandria Ocasio-Cortez (D-N.Y.) and Sen Bernie Sanders (I-Vt.) rather than trying to appease the banking industry by essentially sacrificing more American families to them.

Zooming out to the big picture, capitalism only functions when people are free to take risks without fearing that failure will be the end of them. Every loan is a risk; an effort to do something in the economy better than was done before. And a crucial thing to realize is that the decision to create the loan is a risk taken by the creditor as much as by the debtor both are equally responsible if the risk happens to not pan out. It's worth noting that corporations and wealthy individuals file for bankruptcy all the time often with far more advantages and options for protections than everyday consumers have and yet failure to pay debts in full only gets treated as a distinctly moral failing when everyday Americans are the debtors.

In that sense, the moral and social scales of bankruptcy have shifted much too far in favor of creditors which is to say, in favor of the rich and the powerful. Let's take a cue from Warren and push them back.

Want more essential commentary and analysis like this delivered straight to your inbox? Sign up for The Week's "Today's best articles" newsletter here.

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How bankruptcy was broken - The Week

Bankruptcy Basics: When Should You File for Bankruptcy …

Bankruptcy is a scary proposition. The word "bankruptcy" itself sounds so ominous. The media bombards us with nightmare tales of seemingly solid business giants going from bedrock to bankrupt. The list of the bankrupt runs the spectrum from personal to corporate bringing together the likes of Donald Trump with Enron.

And gossip columns never tire of dishing on the latest celebrity inches from bankruptcy whether it's Gary Coleman or Mike Tyson having to part with his pet tigers. You might even fear that you're a few steps from going under. After all, we live in an economy in which credit card offers clutter our mailboxes. And living in debt is an accepted norm. But, just how can you tell when it's time to throw in the towel and declare bankruptcy?

Here are a few questions to help you assess your financial danger zone:

Assess Your Situation

If you answered yes to two or more of the questions above, you at least want to give your financial situation a little more thought. Simply put, bankruptcy is when you owe more than you can afford to pay.

To determine where you are financially, inventory all of your liquid assets. Don't forget to include retirement funds, stocks, bonds, real estate, vehicles, college savings accounts, and other non-bank account funds. Add up a rough estimate for each item.

Then, collect and add up your bills and credit statements. If the value of your assets is less than the amount of debt you owe, declaring bankruptcy may be one way out of a sticky financial situation. However, bankruptcy shouldn't be approached casually. After all, it's not a simple, easy cure-all for out-of-control debt.

How do I Declare Bankruptcy?

You can go bankrupt in one of two main ways. The more common route is to voluntarily file for bankruptcy. The second way is for creditors to ask the court to order a person bankrupt.

There are several ways to file bankruptcy, each with pros and cons. You may want to consult a lawyer before proceeding so you can figure out the best fit for your circumstances.

Chapter 7 Bankruptcy

There are lots of reasons people file for Chapter 7 bankruptcy. You're probably not the only one, whatever your reason is. Some common reasons for filing for bankruptcy are unemployment, large medical expenses, seriously overextended credit, and marital problems. Chapter 7 is sometimes referred to as a "straight bankruptcy." A Chapter 7 bankruptcy liquidates your assets to pay off as much of your debt as possible. The cash from your assets is distributed to creditors like banks and credit card companies.

Within four months, you will receive a notice of discharge. The record of your bankruptcy will stay on your credit report for ten years. But even that doesn't have to mean doom. Lots of Chapter 7 filers have bought homes with recent bankruptcies on their record. For many people, Chapter 7 offers a quick, fresh start.

But Chapter 7 bankruptcies aren't right for everyone. Almost all assets are taken and sold to repay creditors. If a debtor owns a company, a family home, or any other personal assets which he or she wants to keep, Chapter 7 may not be the best option.

Chapter 13 Bankruptcy

For people who have property they want to keep, filing a Chapter 13 bankruptcy may be the better choice.

A Chapter 13 bankruptcy is also known as a reorganization bankruptcy. Chapter13 enables people to pay off their debts over a period of three to five years. For individuals who have consistent, predictable annual income, Chapter 13 offers a grace period. Any debts remaining at the end of the grace period are discharged.

Once the bankruptcy is approved by the court, creditors must stop contacting the debtor. Bankrupt individuals may then continue working and paying off their debts over the coming years, and still keep their property and possessions.

Declaring Bankruptcy: Scary, But Sometimes Necessary

It can be hard to admit you need help getting out of debt, or that you can't do it alone. But that's why our government has bankruptcy laws to protect not only the creditors, but you! If you have a nerve-racking debt-load, it may be time to face financial facts. Perhaps you've been trying to ignore the ringing phone and the pile of unpaid bills that won't go away.

However, you could be doing yourself a disservice by not filing for bankruptcy. With a good lawyer and the right information, filing bankruptcy could give you the financial footing you need to get a fresh start. In other words, throwing in the towel may just be the beginning you need.

If you're considering bankruptcy, it's important to understand your options. Receive a free bankruptcy evaluation from a bankruptcy attorney through LegalZoom and take the first step toward a financial fresh start.

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Bankruptcy Basics: When Should You File for Bankruptcy ...

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

The Americans Joe Biden Left Behind on the Bankruptcy Bill – The American Prospect

Elizabeth Warrens new consumer bankruptcy plan (Full disclosure: I consulted with the Warren campaign on the policy) aims squarely at unwinding one of former Vice President Joe Bidens chief legislative accomplishments, the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA). The bankruptcy bill was perhaps the most antimiddle class piece of legislation in the past century. It was also Warrens introduction into the bare-knuckle world of legislative politics. She fought the bill tirelessly and succeeded in blocking it for nearly a decade. Her new plan makes clear that she hasnt given up the fight.

Bidens support for BAPCPA is well known, but his numerous roll call votes on amendments to the bill have never been previously examined. Warrens plan draws sharp attention to these votes by adopting many of the very positions Biden opposed. An examination of Bidens roll call votes paints a very different picture of Bidens involvement with the bill than the vice president likes to present. The record makes clear that as a senator, Biden used his clout to push for the laws passage and to defeat amendments to shield servicemembers, women, and children from its harsh treatment. When votes were taken, Middle-Class Joe was no friend to the middle class.

Bankruptcy is the last resort for millions of families that find themselves overburdened with debt, often through no fault of their own, as a result of uninsured medical expenses, life savings stolen by a drug-addicted child, or a global financial crisis. By enabling honest but unfortunate debtors to wipe out debts, bankruptcy serves as a financial safety net for families desperately trying to stay in the middle class.

Bankruptcy law offers debtors a choice between a Chapter 7 and a Chapter 13 process. In Chapter 7, debtors surrender their current assets above a minimum level to creditors, but retain all of their future income. In Chapter 13, debtors retain their assets, but are required to devote all of their disposable income for several years to a demanding payment plan. Chapter 7 gives debtors an immediate fresh start, by wiping out most debts. Chapter 13 debtors have to repay more, and many ultimately fail to complete payment plans.

As the Prospect detailed Tuesday, BAPCPA made it harder for consumers to file for Chapter 7 by imposing a means test for Chapter 7 eligibility, and by substantially increasing the cost of filing for bankruptcy. This caused debtors average total out-of-pocket costs for filing for Chapter 7 to rise from $600 to $2,500. The subsequent result was a permanent 50 percent drop in Chapter 7 bankruptcy filings. BAPCPA made bankruptcy too expensive for the most broke households, making financial stress, mortgage defaults, and foreclosures more likely, particularly after the 2008 financial crisis.

Not only did the law discourage bankruptcy filings, but it made it harder to wipe out credit card debt and student loans in bankruptcy. The result was greater profits for consumer lending businesses, many of which are based in Bidens state of Delaware. Not surprisingly, then, by lowering the risk of bad lending decisions, the Biden bankruptcy bill unleashed a glut of aggressive private student lending, which has contributed to the massive rise in student loan debt.

The bankruptcy bill was perhaps the most antimiddle class piece of legislation in the past century.

BAPCPAs passage was one of Bidens long-sought goals as a senator. Not only did Biden vote for the legislation four times between 1998 and 2005, but he was so singularly committed to its success that he inserted it into a foreign-relations bill in 2000, and later was the sole Democrat on the Senate Judiciary Committee to vote for the bill.

Biden also consistently voted against efforts to soften BAPCPAs blow on vulnerable populations. He voted against three amendments to ease bankruptcy requirements for consumers whose financial troubles stem from medical expenses. He voted against an amendment that would have helped seniors keep their homes. He voted against exempting servicemembers and widows of servicemembers killed in action from the laws eligibility restrictions. He voted against an amendment to exempt women whose financial troubles stemmed from deadbeat husbands failure to pay child support or alimony. And Biden even voted against an amendment that would have ensured that children of debtors could still be given birthday and Christmas presents. Biden also voted against allowing debtors to pay their union dues during bankruptcy, potentially imperiling their employment and ability to achieve financial rehabilitation.

Several of these amendments are resurrected in the Warren bankruptcy plan, including the union dues and children of debtors amendments.

Its not as if Joe Biden was opposed to all amendments to the legislation: He voted to enshrine a millionaires loophole that allows wealthy, well-counseled debtors to shield their assets from creditors by placing them in asset-protection trusts. Nor did he act to cut off the loophole that shields assets placed by wealthy families in dynasty trusts, such as are offered by Delaware.

Biden claims that he worked to ensure that the legislation protected the interests of women and children by making the repayment of alimony and child support obligations the top priority in bankruptcy. This is false. Prior to BAPCPA, domestic support obligations were formally eighth in line for repayment. Functionally, however, they were second in line, right after the administrative costs of the bankruptcy, because the obligations ranked second through seventh priority, such as emergency bailout loans from the Federal Reserve or money owed to grain elevators, do not exist in consumer bankruptcy cases. The Biden bankruptcy bill rewrote the statute to provide that domestic-support obligations are to be paid firstunless there are administrative expenses. In other words, BAPCPAs protections for women and children wereall window dressing. Women and children still stand behind administrative expenses in bankruptcy. The claim that BAPCPA helped women and children is simply dishonest.

If anything, BAPCPA actually hurt women and children, as womens groups argued at the time. Because BAPCPA made it impossible to wipe out certain credit card and student loan debt in bankruptcy, it meant that banks would be able to compete with child support and alimony claims for deadbeat ex-husbands remaining assets after the bankruptcy.

Its hard to reconcile the Biden bankruptcy bill with Bidens claims of being Middle-Class Joe. When it counted, Joe Biden looked out for millionaires and the banks, not the middle class.

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The Americans Joe Biden Left Behind on the Bankruptcy Bill - The American Prospect

Wasted: How To Prevent Emotional Bankruptcy When Youre Overdrawn In Your Career – Forbes

Wasted at work? There are steps you can take before overextending yourself leads to emotional ... [+] bankruptcy and burnout.

The Hustle Joyride: This Centurys Cocaine

Overextending yourself is this centurys cocaine, its problem without a name. Workweeks of sixty, eighty, even a hundred hours are commonplace in major law firms and corporations; tribes of modern-day male and female Willy Lomans, manacled to cellphones, trundle through the nations airports at all hours with their rolling luggage; cafes are filled with serious young people bent over laptops; young workers at dot-coms are available for work 24/7. Could this be you?

The research team at ZenBusiness recently surveyed over 1,000 managers and employees to explore what motivates people to work overtime, how frequently it occurs and what employees think of their colleagues working overtime. The study found the top six reasons employees work overtime are:

If youre clocking overtime as you start the new year, youll be excited to learn from ZenBusiness that over 70% of managers perceive employees who work overtime as hardworking and committed. While this is good news, and all of us want to be perceived as hardworking and committed, theres a huge downside if you allow your bosss accolades to outweigh your own self-care. Be careful to interpret this study as a message that you should work harder to be successful, even if it means hitting the point of emotional bankruptcy. Researchers report that employees who regularly put in overtime work of 11-hour days or more are at higher risk for cardiovascular disease, major depression, decreased productivity and poor job performance. Other long-standing research shows that overextending yourself leads to escalating anger, depression, perfectionism, generalized anxiety, health complaints, greater unwillingness to delegate job responsibilities and higher incidences of burnout. And the story doesnt end there. The Harvard Business Review, reports that the mental and physical problems of burnt-out employees costs corporate America around $125 billion to $190 billion a year in healthcare spending. So lets back up for a second.

At first the accolades, slaps on the back, fat paychecks and gold plaques make you feel its all worth the effort. But after a while, it starts to feel like an unwelcome burden. You have a lot on your plate. Youve got to do it perfectly. Can you measure up? Or will you let others down? Youve got to prove you can do it. If you fall short, you dig your heels in deeper. You cant let up because everyones depending on you. Some folks wear their always on label like a prize, but if youre like most workers, the picture is far more subtle. You dont party or stay out late. You dont waste your time or throw money down the drain. Youre level-headed and rational. Youve been called dedicated, responsible and conscientious. You work long and hard, and youre always at your desk or available electronically.

Burrowing itself deeper into your soul, the habit of overextending yourself is like a prisoners chain that moves with you wherever you go. When youre not at your desk, your exhausting compulsive thoughts are still there. They beat you to the office before you begin the day. They stalk you in your sleep, at a party or while youre hiking with a friend. They loom over your shoulder when youre trying to have an intimate conversation with your main squeeze. You cant stop thinking about, talking about or engaging in tasks and projects. You have rigid thinkingsometimes called stinkin thinkingpatterns that feed your anxiety, reminding you how much you have undone. When youre preoccupied with completing tasks, you dont notice signals, such as physical aches and pains or a reduced ability to function, that warn of serious health problems.

Your projects take priority over every aspect of your life. You get soused by overloading yourself with more tasks than you can possibly complete. You toil around the clockhurrying, rushing and multitasking to meet unrealistic deadlines. You might even throw all-nighters, sometimes sleeping off a work binge in your clothes. The compulsive thoughts engulf you in a work fog called a brownout, numbing you to anxiety, worry and stress as well as to other people. Work highs, reminiscent of an alcoholic euphoria, run a cycle of adrenaline-charged binge working, followed by a downward swing. Euphoria eventually gives way to work hangovers characterized by withdrawal, depression, irritability, anxiety and in extreme cases even thoughts of suicide.

The Adrenaline Rush

Studies link overextending yourself to a rush of adrenalinea hormone released in times of stressthat has an effect similar to amphetamines or speed. The release of adrenaline, like other drugs, creates physiological changes that lead to work highsthat become addictive and may even be fataloften described as a rush or surge of energy pumping through the veins and an accompanying euphoria as an adrenaline high. At some point, the euphoria requires larger doses to maintain the high, created by adding more to the to-do list and increasing stress levels to the maxto get the body to pump its fix.

After a long week, a university professor left his office, butterflies in his stomach, at the thought of facing an unplanned weekend. On his way out, he was handed a memo announcing grant-proposal deadlines. Suddenly, calm descended on him, and the adrenaline began to flow as he folded the three-inch-thick computer printout under his arm. Like an alcoholic with a bottle under one arm, who was assured of plenty to drink, the professor was calmed by the guarantee of having more to do, filling the hours and giving him purpose. It was an anesthetic, a tranquilizer. After the proposal was written, the feelings of emptiness, unrest and depression returned. That professor was me, unknowingly on my way to burnout.

If youre always on, the need for adrenaline, in effect, creates a dependence on crises that lead the body to produce the hormone and give you the drug. Pushing subordinates or yourself to finish designated assignments within unrealistic deadlines is one way crises are achieved. Another is biting off too much at one time or attempting to accomplish many tasks at once. But while you get high, coworkers and subordinates experience stress and burnout. The adrenaline flow also has a boomerang effect, blocking the bodys ability to clear dangerous cholesterol from the bloodstream. Elevated cholesterol levels clog arteries, damage their inner lining and can cause heart attacks.

Are You Overdrawn? Preventing Emotional Bankruptcy

If youre burning the candle at both ends, you could be headed for emotional bankruptcy or burnoutthe physical exhaustion and depletion of emotional energy brought on by the stress of producing at the expense of taking care of yourself. Fortunately, self-care can recharge your batteries if youre facing burnout.

Think of yourself as a bank account. When overloading yourself withdraws more than self-care, its time to make some deposits toward your well-being. Practice setting limits on the demands placed on you or that you place on yourself, leaving yourself elbow room to stretch and breathe and time to look out the window or take a walk around the block. Set aside fifteen minutes to an hour each day to relax, exercise, play, meditate, pray, practice deep breathing or just watch the grass grow. Eat nutritious foods instead of fast food on the run and get ample sleep. Then look inside yourself and examine your motivations for overextending yourself. If you end up helping someone, make sure youre in the habit of showing them how to fish instead of feeding them fish. Sometimes the best way to accomplish you career goals is to have the goal of caring for yourself first.

Think of these practices as building investments in you. Make sure your daily deposits equal the withdrawals that overextending debits from your personal account. Ask yourself if you made a to-be list alongside your to-do list, what you would put on it such as soaking in a hot bath, enjoying a hobby, getting a massage or nature bathing with a hike. One item on my to-be list is sitting outdoors listening to the sounds of nature. Jot down a few of your items and check a few off in the next twenty-four hours. Continue to excel at your job and savor your managers praise, but take steps to prevent overextending yourself to the point of burnout. Youll be happier and healthier, thrive and enjoy more productivity and job performance. And instead of overextending yourself, youll overextend your career trajectory.

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Wasted: How To Prevent Emotional Bankruptcy When Youre Overdrawn In Your Career - Forbes

Pier 1 Is Closing Half Of Its Stores; Is Bankruptcy Next? – Forbes

About 450 of its stores are being cast off to sea..(Photo by Joe Raedle/Getty Images)

Pier 1 Imports is trimming its salesabout 450 of them.

In announcing another quarter of losses and declining sales, the company dropped a bombshell in saying it would close 450 of its stores, representing nearly half of its overall fleet.

The news comes amid swirling rumors, unconfirmed, that the retailer will file for bankruptcy soon. Such a move would not be unexpected given the task of getting out of store leases without the benefit of bankruptcy proceedings.

They would also be consistent with the prior history of the companys CEO, Robert Riesbeck, who was named to the post only this past November and has a history in turnaround efforts and bankruptcies. Earlier in his career, he was CEO of consumer electronics chain HH Gregg when it filed for bankruptcy in 2017. It was eventually liquidated.

Along with the store closings, a timetable for which was not announced, the company said it would cut its headquarters staff as well as some distribution centers. Bloomberg has reported the staff cuts amount to 40% of its corporate staff, or about 300 people. Pier 1 has not commented on these reports.

While the company had previously said it would close 70 doors later upped to as many as 150 this new round clearly represents a major step-up in its efforts to stay afloat. It has had declining comp store sales for nine quarters, including 11.4% this quarter, and losses for the most recent period exceeded those of a year ago.

Trading in the companys stock was halted mid-afternoon on Monday after falling nearly 17% and that continued to decline in after-hours trading.

Pier 1 has struggled for years, churning through a series of executives and marketing strategies, all the while dealing with a store count increasingly out of proportion to its overall business and the rise of e-commerce. Under prior management, online sales were discontinued for a period of time and while they were resumed the company has had to play catch-up online ever since.

With a radically reduced physical presence, Pier 1 could be in a position to be better suited to the retail landscape, but its lackluster stores, often poorly located and underinvested in over the past few years, will still have to carry the load as it tries to get fully up to speed online.

Riesbeck, in announcing the bad news, said he remained hopeful these steps would buy the company some time to fix its problems: Looking ahead, we believe that we will deliver improved financial results over time as we realize the benefits of our business transformation and cost-reduction initiatives.

Its what CEOs are paid to say when all signs would seem to indicate the ship is going down.

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Pier 1 Is Closing Half Of Its Stores; Is Bankruptcy Next? - Forbes

Hospital bankruptcies leave sick and injured nowhere to go – Houma Courier

A quiet crisis is unfolding for U.S. hospitals, with bankruptcies and closures threatening to leave some of the country's most vulnerable citizens without care.

As a gauge of distress in the health-care sector has soared, at least 30 hospitals entered bankruptcy in 2019, according to data compiled by Bloomberg. They range from Hahnemann University Hospital in downtown Philadelphia to De Queen Medical Center in rural Sevier County, Arkansas and Americore Health, a company built on preserving rural hospitals.

There's more distress to come. Already this week, the bankrupt owner of St. Vincent Medical Center in Los Angeles said it plans to shut the facility after a failed sale attempt.

The pressures on the sector are as tangled as the health-care system itself.

Americans are fleeing rural areas in favor of urban centers, reducing the demand for hospital services in already struggling communities. In both cities and towns, many hospitals that care for impoverished citizens often rely heavily on government payments that reimburse less than private insurers and may fail to cover rising costs.

The American Hospital Association, an industry group, calculated that payments from Medicare and Medicaid, the federal programs for the elderly and poor, lagged costs by $76.6 billion in 2018. Hospitals are also losing key income as more profitable procedures move to lower-cost outpatient centers.

If that weren't enough, with both Republicans and Democrats making a political football out of health care ahead of the 2020 presidential election, significant policy change could be near.

"How are you supposed to craft a business plan if you don't know if you're going to have an America with Medicare for all, or a complete repeal of the Affordable Care Act, or a million options in the middle?" said Sam Maizel, a partner with the Dentons US law firm who focuses on health-care restructuring. "If you knew Elizabeth Warren was going to get elected, you'd be writing a very different business plan."

Even before the election, the current system is being challenged, according to Georgetown University health-care policy professor Edwin Park. The Trump administration is trying to tighten eligibility rules for Medicaid, while a rule proposed late last year could also cut billions of dollars in supplemental payments to hospitals, he said. In a closely watched case, a district judge in Fort Worth, Texas is weighing whether Obamacare can survive after an appeals court ruled that its broad mandate requiring people to have health insurance was unconstitutional.

The usual playbook for managing distress doesn't readily apply. Shutting down a hospital isn't the same as boarding up a storefront. Hospitals are not only major employers, their closures often leave the most vulnerable patients bereft. Bankruptcy judges tend to push back on approving hospital closings in ways they wouldn't for a retailer, said Andrew Sherman, head of restructuring at law firm Sills Cummis & Gross.

In May, a 25-bed hospital in Sevier County, Arkansas shut down after sliding into such financial disrepair that a receiver was appointed, local newspaper The De Queen Bee reported. For many of the county's 17,000 residents, the hospital's emergency room provided the only such services within an hour's drive, court papers show. In suburban Chicago, Westlake Hospital was losing more than $1 million a month before it commenced a liquidation bankruptcy in August, sapping that community of about 550 jobs and 230 hospital beds.

"In a typical restructuring you're dealing with widgets," Sherman said. "In a health-care restructuring you're dealing with people's lives."

In many rural areas, the population just isn't large enough to justify keeping the lights on, according to Bloomberg Intelligence analyst Mike Holland. Morgan Stanley analysts led by Vikram Malhotra in 2018 found that 8% of U.S. hospitals were at risk of closing and another 10% were considered weak. AHA statistics released Tuesday show the number of U.S. hospitals fell by 64 to 6,146 in 2018, the most recent year available.

There's little reason to believe the situation has improved. The Polsinelli TrBK Health Care Services Distress Index, which tracks bankruptcy filings in the health-care sector, had nearly quadrupled as of the third quarter. The index uses 2010 as its benchmark year.

"Most of the cases we see, you're struggling to survive on a cash basis to try to get to a sale process," Sherman said. "People need to understand that these hospitals will continue to falter. Communities are going to have to inject more money if they want to maintain health care."

Some of the more recent closings are the result of large health systems weeding out weaker facilities. That's the case with hospitals run by Community Health Systems Inc. and its spin-off, Quorum Health Corp.

Quorum's revenue has been falling since it separated from Community Health in 2016. After bleak third-quarter results, the company said it would ask lenders to modify its debt agreements and reiterated a warning that it may not be able to stay afloat. Its shares and bonds plunged in the aftermath.

Late last year, KKR & Co. offered to take the company private at $1 a share in a deal that may help it refinance and stave off deeper distress.

Community Health, meanwhile, has piled up about $5 billion in losses in recent years as it labors under more than $13.5 billion in debt. A concentration of rural hospitals dependent on Medicare and Medicaid hurts Community Health, BI's Holland said. Expanded insurance coverage under the 2010 Affordable Care Act, or Obamacare, also means more people are getting care earlier and not ending up in the company's hospitals, he said, or are being directed to lower-cost outpatient facilities.

"It's a problem now for hospitals to have sufficient inpatient revenues," said Eileen Appelbaum, co-director of the Center for Economic and Policy Research.

A representative for Community Health said in a statement that factors including its recent refinancing, asset sales and a program to increase margins have positioned the company to continue to improve its operating performance.

A representative from Quorum didn't respond to a request seeking comment, while KKR declined to comment.

While rural hospitals are most at risk of failing, the controversial shutdown of Philadelphia's Hahnemann University Hospital could invite more disruption in urban centers, Appelbaum said.

Private-equity investor Joel Freedman bought Hahnemann in early 2018, but failed to revitalize the money-losing hospital and shut it after a trip through bankruptcy. Excluded from the filing, however, was its prime real estate in the heart of the city, which was separated into another entity.

Freedman didn't respond to requests for comment.

Despite the successful 2006 acquisition of HCA Healthcare Inc. by a consortium that included Bain Capital LP and KKR, private equity has found it isn't easy to make money running hospitals, Appelbaum said. The Hahnemann case may provide a new template, she said, calling the transaction "proof of concept" that if a hospital isn't profitable, you can shutter it and sell the real estate.

"Hahnemann is a safety-net hospital in a gentrifying area," Appelbaum said. "Probably every major city in America has safety-net hospitals in gentrifying areas, where the real estate is so much more valuable than the hospital to the private-equity company."

-- Bloomberg's Steven Church, Olivia Rockeman and Rick Green contributed to this report.

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Hospital bankruptcies leave sick and injured nowhere to go - Houma Courier

Hawaii hits 5-year high mark with increase in bankruptcies – Thegardenisland.com

HONOLULU The number of bankruptcies in Hawaii rose for the second straight year in 2019, records showed.

There were 1,666 bankruptcy cases for the year, up 11.8% from 1,490 in 2018, The Honolulu Star-Advertiser reported Monday.

The data released Thursday by the U.S. Bankruptcy Court for the District of Hawaii showed the 2019 mark was the highest since the states 1,702 bankruptcy filings in 2014.

The number of 2019 bankruptcies was less than half of the post- recession peak of 3,954 in 2010.

The states high cost of living is taking a toll on residents, with only a limited number of people benefiting from the rising stock market, said Ed Magauran, a Honolulu bankruptcy attorney.

I dont think there has been any change in the number of people who have not paid their debt, Magauran said.

As usual, the bottom 95% continue to suffer. The stock markets up unbelievable, but the people making money are the top 5% who are owners of public corporations, Magauran said. The other 95% are not making anything, and the last time I checked, in Hawaii a family with two children needs at least three jobs.

There were 1,135 Chapter 7 liquidation filings in 2019, up 12.8% from 1,006 in 2018.

Chapter 13 filings, which allow individuals with regular sources of income to set up plans to make installment payments to creditors over three to five years, rose 7.5% from 481 to 517.

Chapter 11 reorganization filings, which are primarily for business reorganizations, rose from three to 13.

By county, Honolulu filings rose from 1,093 to 1,238, Maui filings increased from 203 to 221 and Kauai filings rose from 60 to 74. Hawaii island filings decreased by one, from 134 to 133.

Bankruptcies rose in December in all four major counties.

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Hawaii hits 5-year high mark with increase in bankruptcies - Thegardenisland.com

He is Trying to Get Fire Victims Paid. He Has to Find Them First. – The New York Times

Ms. Foreman, 22, was hired by Mr. Kasolas to help spread the word about filing claims. She spent her day taping fliers to pizza boxes at Red Lion Pizza in Magalia, just north of Paradise, and handing out others to churches and agencies, hoping it would prompt even one more person to file a claim.

But time is short, and a bigger problem persists.

We know there was significant post-fire displacement people had to move away, said Steven Skikos, a lawyer appointed by the court to represent victims interests. But we dont know the specifics of who ended up where. Thats a real problem.

An analyst at Chico State provided Mr. Kasolas with a map produced from United States Postal Service information showing that wildfire victims had moved to almost every state, with significant clusters in the Pacific Northwest, Arizona, Texas and Tennessee. But the map does not provide addresses.

For its part, PG&E said it had employed a broad campaign to ensure that wildfire victims received information about filing claims, including newspaper, magazine, radio, social media and digital advertisements. The utility sent emails to about four million customers and claim forms by mail to more than six million customers.

We feel this is the most robust noticing effort in bankruptcy history, including outreach through national publications, Paul Moreno, a PG&E spokesman, said.

But sometimes the trouble with filing a claim is more a problem with the process.

Rosemary Peterson had traveled from Magalia for the food giveaway at Paradise Alliance Church when she saw the table with the information about filing a claim.

Ms. Peterson, 88, had tried to submit a claim online but struggled to complete it on her own. Although her home survived the Camp Fire, smoke damage required some restoration. The trees in her yard have died. And her friends and neighbors have scattered.

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He is Trying to Get Fire Victims Paid. He Has to Find Them First. - The New York Times

Celadon leaves former drivers hanging without bankruptcy filing in Canada – FreightWaves

Barb Taylor, 56, has a reminder for anyone sent to repossess her black International LoneStar truck the one with the giant pink ribbon decal.

Thats my truck, said Taylor, who has lived six years after her breast cancer returned as stage 4. Doctors expected her to live for just two.

Owning a truck is on my bucket list, Taylor added.

That truck also has the decal of Hyndman Transport, the Canadian trucking company that shut down on Dec. 9 after its U.S. owner Celadon Group filed for Chapter 11 bankruptcy.

Former employees and contractors are facing the staggering challenge of claiming what they say Celadon owes them under Canadian law. Making matters more difficult, Celadon hasnt filed for bankruptcy in Canada something that ironically could help former Canadian workers make claims and secure federal benefits.

Taylor, a lease-operator for Hyndman, had put about C$150,000 into lease and maintenance payments since 2015. She has just C$39,000 in payments left until she owns the truck.

Taylor wants to buy out the remainder of the lease but is now fearful that the rig will be repossessed and that shell lose the investment.

I could buy a house with that money, she said.

Taylor drove that truck proudly for Hyndman across North America and took part in fundraising events such as Trucking for a Cure. Her Canadian supervisors, meanwhile, worked to ensure she got the freight she wanted and got back to Canada for her treatments.

Hyndman treated me well, Taylor said. But Celadon is getting away with so much.

Randy James Ulch, a former employee-driver for Hyndman Transport, said he is owed around C$2,000 in accrued vacation pay and severance from his year at Hyndman.

There are others who are out a hell of a lot more, Ulch said.

Former employees have a clear interest in Canadian bankruptcy proceedings. They can get preferential status as a creditor in a bankruptcy, under Canadas Bankruptcy and Insolvency Act. Along with a filing, a court-appointed trustee would oversee and facilitate any outstanding obligations to Celadons Canadian employees and contractors.

In addition, even if former employees are unable to collect from the sale of any company assets, they can apply to have the federal government compensate them.

Celadon CEO Paul Svindland did not respond to FreightWaves questions about outstanding pay for its former Canadian workers or if the company has plans to have Hyndman file for bankruptcy in Canada.

While Canadian subsidiaries frequently file for bankruptcy concurrently with their U.S. parents, but they arent necessarily legally required to do so.

Celadons obligations would depend on its corporate structure and relationship between the U.S. and Canadian companies, said Hans Parmar, a spokesperson for the federal Ministry of Innovation, Science and Economic Development, which oversees bankruptcy and insolvencies.

Sara Slinn, a professor at Osgoode Hall Law School at York University in Toronto and Canadian labor law expert, said Hyndmans former employees and contractors could consider pooling their resources for a lawyer and taking their case to the federal Industrial Relations Board for unpaid wages or severance, independent of any bankruptcy proceedings.

If they can coordinate themselves and work as a group, they have a much greater chance of success, Slinn said.

Owner-operators and lease-operators could also potentially challenge their status as contractors depending on the specifics of their work with Hyndman.

Misclassification is very common in trucking, Slinn said.

Slinn couldnt speak to the particulars of how Celadon shut down Hyndman but said U.S. firms are known to neglect their obligations to Canadian workers, particularly in cases of mass dismissals resulting from closures or bankruptcies.

This is a problem in Canada. We have a lot of American companies operating here. Its not that uncommon to have employees left in the lurch when they shut down and often the executives are untouchable.

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Celadon leaves former drivers hanging without bankruptcy filing in Canada - FreightWaves

Forever 21 files for bankruptcy. It will close US stores …

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Targeting rural and lower income communities, dollar stores have managed to thrive in the digital age.","descriptionText":"While many retailers close stores, dollar stores are opening up new locations. Targeting rural and lower income communities, dollar stores have managed to thrive in the digital age."},{"title":"These are the unexpected winners of the grocery wars","duration":"01:48","sourceName":"CNN Business","sourceLink":"","videoCMSUrl":"/video/data/3.0/video/business/2019/05/16/grocery-wars-aldi-walmart-orig.cnn-business/index.xml","videoId":"business/2019/05/16/grocery-wars-aldi-walmart-orig.cnn-business","videoImage":"//cdn.cnn.com/cnnnext/dam/assets/190405095545-01-aldi-store-germany-file-large-169.jpg","videoUrl":"/videos/business/2019/05/16/grocery-wars-aldi-walmart-orig.cnn-business/video/playlists/business-retail/","description":"Today, big box stores and foreign discount chains are beating out more traditional supermarkets. Here's how they're attracting customers like never before.","descriptionText":"Today, big box stores and foreign discount chains are beating out more traditional supermarkets. Here's how they're attracting customers like never before."},{"title":"How Walmart is taking on Amazon","duration":"01:11","sourceName":"CNN Business","sourceLink":"","videoCMSUrl":"/video/data/3.0/video/business/2018/09/21/walmart-amazon-retail-cnnbusiness-orig.cnn-business/index.xml","videoId":"business/2018/09/21/walmart-amazon-retail-cnnbusiness-orig.cnn-business","videoImage":"//cdn.cnn.com/cnnnext/dam/assets/180517155735-walmart-shopping-cart-large-169.jpg","videoUrl":"/videos/business/2018/09/21/walmart-amazon-retail-cnnbusiness-orig.cnn-business/video/playlists/business-retail/","description":"Between a flurry of acquisitions, strong digital sales and an increased international presence, Walmart is going toe-to-toe with Amazon in the online retail battle.","descriptionText":"Between a flurry of acquisitions, strong digital sales and an increased international presence, Walmart is going toe-to-toe with Amazon in the online retail battle."},{"title":"This fashion giant is under siege by imitators. Here's why it's legal","duration":"07:04","sourceName":"CNN Business","sourceLink":"http://www.cnn.com/business","videoCMSUrl":"/video/data/3.0/video/business/2019/03/18/supreme-legal-fakes-orig.cnn-business/index.xml","videoId":"business/2019/03/18/supreme-legal-fakes-orig.cnn-business","videoImage":"//cdn.cnn.com/cnnnext/dam/assets/190315104957-gfx-supreme-legal-fakes-large-169.jpg","videoUrl":"/videos/business/2019/03/18/supreme-legal-fakes-orig.cnn-business/video/playlists/business-retail/","description":"Streetwear brand Supreme is loved by celebrities and valued at $1 billion. But overseas it's waging war against "legal fakes," companies that are legally imitating the brand in countries from Spain to China.","descriptionText":"Streetwear brand Supreme is loved by celebrities and valued at $1 billion. 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Here's how Sears first became the largest retailer in America."},{"title":"Why Walmart wants robots, not workers, stocking shelves","duration":"01:17","sourceName":"CNN","sourceLink":"","videoCMSUrl":"/video/data/3.0/video/business/2019/04/09/walmart-robots-retail-jobs-sd-orig.cnn/index.xml","videoId":"business/2019/04/09/walmart-robots-retail-jobs-sd-orig.cnn","videoImage":"//cdn.cnn.com/cnnnext/dam/assets/190409162702-walmart-shelf-scan-robot-large-169.jpg","videoUrl":"/videos/business/2019/04/09/walmart-robots-retail-jobs-sd-orig.cnn/video/playlists/business-retail/","description":"Walmart is adding thousands of robots to its stores to scrub floors, scan shelves and sort boxes. But will the new tech help or hurt employees?","descriptionText":"Walmart is adding thousands of robots to its stores to scrub floors, scan shelves and sort boxes. But will the new tech help or hurt employees?"},{"title":"Costco is succeeding despite retail woes","duration":"01:52","sourceName":"CNN Business","sourceLink":"http://www.cnn.com/business","videoCMSUrl":"/video/data/3.0/video/business/2018/12/13/costco-success-retail-woes-orig.cnn-business/index.xml","videoId":"business/2018/12/13/costco-success-retail-woes-orig.cnn-business","videoImage":"//cdn.cnn.com/cnnnext/dam/assets/180628165515-costco-retail-sales-large-169.jpg","videoUrl":"/videos/business/2018/12/13/costco-success-retail-woes-orig.cnn-business/video/playlists/business-retail/","description":"Many retail brands may be struggling, but Costco is thriving thanks to deep discounts and a popular food court.","descriptionText":"Many retail brands may be struggling, but Costco is thriving thanks to deep discounts and a popular food court."}],'js-video_headline-featured-1jiymoq','',"js-video_source-featured-1jiymoq",true,true,'business-retail');if (typeof configObj.context !== 'string' || configObj.context.length

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Forever 21 files for bankruptcy. It will close US stores ...

What Is Bankruptcy? – The Balance

Bankruptcy is a federal legal process designed to helpindividuals, spouses, and companies get a financial fresh start by discarding or making arrangements to repay unmanageable debt. It can also be a way for companies to end business and liquidate assets in an orderly way.

The desired outcome of mostbankruptcy cases filed by individuals is a discharge. A discharge is an order from the bankruptcy court permanently prohibiting any creditor from attempting to collect a debt against you. It's also known as a bankruptcy injunction.

Although the discharge is permanent, it is not all-inclusive. Some debts are not dischargeable.For example, most tax debts, child support, and spousal support cannot be discharged.

As the bankruptcy discharge is a very powerful remedy, it is only given to honest debtors that disclose all of their property and debts.

The bankruptcy courts are subunits of the federal district court system. As a result, there is a bankruptcy court in each federal district of the United States. However, depending upon the population of a district, there may be multiple courthouses in different cities. Bankruptcy courts are supervised by bankruptcy judges that are appointed to 14-year terms by federal judicial committees.

There are six type of bankruptcy, known as chapters:

Bankruptcy can have long-term financial and legal consequences. If you're thinking about filing for bankruptcy, then it's wise to consult a lawyer who specializes in this area. If you can't afford a lawyer then check with the American Bar Association to find out if you qualify for free legal help.

In the vast majority of bankruptcy cases, atrustee is automatically appointed when the case is filed. The trustee administers the bankruptcy case by reviewing the documentation of the debtor.

In a Chapter 7 case, the trustee will attempt to sell any non-exempt property to pay creditors. The trustee also has the obligation to be vigilant for fraudulent conduct and failure of the debtor to disclose information. They owe a fiduciary duty to the creditors of a debtor and must collect as many assets as possible to pay creditors.

As bankruptcy is a federal system codified by Congress into the United States Bankruptcy Code, bankruptcy fraud falls under the domain of the federal government. Specifically, bankruptcy fraud, which includes false oaths, failure to disclose debts or assets, and other fraudulent conduct, is a federal crime. Committing bankruptcy fraud can lead to you losing your discharge and could very well land you in jail.

Although the federal government keeps a watchful eye out for bankruptcy fraud, any creditor of a bankruptcy debtor can file a complaint against the debtor. The complaint may seek to deny the debtor a discharge for bankruptcy fraud. In addition, the complaint may seek a judgment by the bankruptcy court that the debt owed to the creditor is non-dischargeable in bankruptcy. A debt may be non-dischargeable under the bankruptcy laws or because the credit was obtained by fraudulent means. Bankruptcy is certainly not a safe haven for the unscrupulous debtor.

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What Is Bankruptcy? - The Balance

What Is Chapter 7 Bankruptcy? – The Balance

Are you having difficulty keeping up with your bills? Imagine how liberating it would feel if you could just call up a magic genie from a bottle and wish for no debt. Unfortunately, it's not quite that easy, but there are some federal laws that can help you manage or eliminate that debt.

You may have previously seen references to Chapter 7 or Chapter 13 bankruptcies, and you have no idea what either is, much less how they're different. Hopefully, we can demystify these terms.

Chapter 7 is also called straight bankruptcy or liquidation bankruptcy. It's the type most people think about when the word "bankruptcy" comes to mind. In a nutshell, the court appoints a trustee to oversee your case. Part of the trustee's job is to take your assets, sell them and distribute the money to the creditors who file proper claims. The trustee doesn't take all your property. You're allowed to keep enough"exempt" propertyto get a "fresh start."

Before a case is filed, you'll have to gather all of your financial recordslike bank statements, credit card statements, loan documents, and paystubs. You'll use that information to fill out thebankruptcy petition,schedules, statement of financial affairs, and other documents that will be filed with the court.You can download copies for free from the website maintained by the U.S. Courts. Your attorney will use bankruptcy computer applications to produce them.

Broadly, these documents include the voluntary petition for relief, the schedules of assets and liabilities, declarations regarding debtor education, and the statement of financial affairs. These documents require you to open up your financial life to the bankruptcy court. They include a listing of all of your property, debts, creditors, income, expenses, and property transfers, among other things.

Once completed, you'll file it with the clerk of your local bankruptcy court and pay a filing fee. If you're interested in finding your local court, visit the federal court locator page, choose "Bankruptcy" under "Court Type" and add your location in the bottom box.

Almost every individual debtor who wants to file a Chapter 7 case has to participate in a session with an approved credit counselor before the case can be filed. This can be in person, online or over the telephone. The rationale behind this requirement is that some potential debtors don't know their options. A credit counselor may be able to suggest alternatives that will keep you out of bankruptcy. You can get more information about this requirement on thewebsite for the U.S. Trustee.

A debtor must also successfully pass the means test calculation, which is another document that must be completed prior to filing for bankruptcy. This test, which was added to the Bankruptcy Code in 2005, calculates whether you are able to afford, or have the "means" to pay at least a meaningful portion of your debts.

The means test compares your income with the median income for your state. If you fail the means test, you can only file Chapter 7 bankruptcy under very specialized exceptions. Your alternative would be to file a Chapter 13 repayment plan case.You can learn more about the means test and the numbers used in the calculation from the U.S. Trustee website.

After a Chapter 7 bankruptcy is filed, the court will issue a document giving notice of a debtor's meeting of creditors. This notice is also sent to all of the creditors that are listed within the bankruptcy documents. During the meeting of creditors, the bankruptcy trustee will ask the debtor various questions about the bankruptcy, such as whether all of the information contained within the bankruptcy documents is true and correct. The trustee may ask other questions about a debtor's financial affairs. If the trustee wishes to investigate the bankruptcy further, they may continue themeeting of creditors on a future date.

It is important to note that at the meeting of creditors, as the name suggests, any creditor may appear and ask a debtor questions about his bankruptcy and finances. In reality, however, the only creditors who appear regularly are car creditors (to ask what you intend to do about your car payments) and the IRS (to ask when you're going to pay back those non-dischargeable taxes).

If you have any nonexempt property, the bankruptcy trustee has the ability to seize and sell the property. Exemptions refer to federal or state statutes that allow you to protect certain types of property when you file bankruptcy. For example, exemptions exist to protect retirement accounts, such as a 401(k) plan. Any assets that the trustee can recover are distributed to creditors.

Before most debtors can receive a discharge, they will have to take a course in financial management. This class is likely taught by the same group that you used for the credit counseling. Plan to spend about two hours in person, online, or on the telephone.

If the trustee and the creditors do not object to the debtor's discharge, the bankruptcy court will automatically give the debtor a discharge at some point after the last day to object. The last day to file a complaint objecting to a debtor's discharge is 60 days after the first session of the meeting of creditors. If no complaint is filed, the discharge is usually entered several days later.

The discharge prevents creditors from attempting to collect any debt against youpersonally that arose prior to the filing of the bankruptcy. Thus, for all intents and purposes, the discharge effectively wipes out debts. However, it is important to note that not all debts are dischargeable, including certain taxes and child or spousal support obligations. Furthermore, a bankruptcy discharge is personal. This means that a creditor can still collect on a discharged debt from a co-debtor that did not file for bankruptcy. A creditor with collateral may also be able to use that collateral to satisfy some of that outstanding debt.

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What Is Chapter 7 Bankruptcy? - The Balance

Bankruptcy: Chapter 7 vs. Chapter 13 | Experian

If you're in serious debt and can't keep up with repaying loans and credit card bills, Chapter 7 and Chapter 13 bankruptcy are the two most common programs you can use to reduce or eliminate your debt. (In case you're wondering, Chapter 11 is only for businesses.)

Chapter 7 bankruptcy is known as a liquidation bankruptcy. Most of your property is sold and used to pay off your debts. Chapter 7 bankruptcy is generally meant for people with limited incomes who do not have the ability to pay back all or some portion of their debts.

Chapter 13 bankruptcy is referred to as a reorganization bankruptcy. Your property is not sold when you file for Chapter 13 protection, and if you successfully complete a court-mandated repayment plan, you may be able to keep your property.

After completing the repayment plan in which you pay your creditors a portion of the outstanding debt over a fixed period of time, any remaining unsecured debtssuch as credit cards and medical billsmay be "discharged." When debt is discharged, it means you're no longer required to pay back the debt.

Here is a quick reference guide to Chapter 7 and Chapter 13 Bankruptcy.

An important difference between Chapter 7 and Chapter 13 bankruptcy is what happens to your property and possessions.

Most of your property will be sold and used to pay off your debts (for that reason, chapter 7 bankruptcy is often chosen by people who don't own a home). Some of your personal property is exempt from being sold, but there are limits on the value of exemptions.

There are federal exemption rules, as well as state exemption rules. Some states allow you to choose whether you want to use the federal exemptions or your state's guidelines. Other states may insist that you use the state exemption level. Married couples that file for bankruptcy together can typically double the value of exemptions.

Examples of property and value limits mandated by federal Chapter 7 rules include:

*See below for more information.

You can retain up to $23,675 of equity in homes, mobile homes, co-ops or burial plots. If you do not use all of this exemption, up to $11,850 can be used for other property.

If you have less than $23,675 ($47,350 for married couples) in equity in your home, your court-appointed bankruptcy trustee may decide to not sell the home, as there will be no proceeds to pay off your debts after applying your exemption. But that does not prevent your lender from foreclosing on the property.

If your equity exceeds the limit, the house may be sold. You will receive your exemption amount, and the rest of the proceeds will be used to pay off debts.

Personal property can include appliances, book, musical instruments and pets. You are allowed an exemption of $600 per item and a total exemption of $12,625.

Retirement accounts include all savings in a 401(k) or 403(b). The total exemption can be up to $1,283,025 in Individual Retirement Account (IRA) savings.

None of your assets are sold when you file. With a Chapter 13 bankruptcy, you agree to a court-approved repayment plan of your debts. Depending on your income, your repayment period may be three years or five years.

If during the repayment period you catch up on back payments on secured assets (car, home) and are on time with current payments, you will be able to keep them after the repayment plan is finished.

Unsecured debts, including credit card debt and medical debt, can be "discharged" using either Chapter 7 or Chapter 13.

If you qualify for Chapter 7, your unsecured debts will be wiped out when the court approves your filing. This can take a few months.

With a Chapter 13 filing, you must continue to make payments on your unsecured debts during your repayment plan, as instructed in your court-approved plan. If you successfully complete your repayment plan, any remaining unsecured debts may be discharged.

Chapter 7 bankruptcy is typically for people with limited income who do not have the ability to pay back all or some portion of their debts.

If your household income is below the median level for your state, you are eligible for Chapter 7.

If your household income is above the median, you must pass a "means test" that assesses whether you have enough disposable income to be able to pay back some of your debts. Disposable income is income you have left over after covering essential living costs.

If you are deemed to have the means to repay at least some of your debts, you will be required to use Chapter 13 bankruptcy.

To be eligible for a Chapter 13 bankruptcy repayment plan you must have:

Certain debts can't be wiped out in Chapter 7 or Chapter 13. This includes mortgages, and car and student loans.

If you file for Chapter 13 protection, you may be able to have the balance of certain secured loans reduced. For example, in a Chapter 13 "cramdown," your court approved repayment plan may reduce the balance on your car loan to the depreciated value of the car. That can make repayment easier.

Unsecured debts, such as credit card balances and medical debt, can be "discharged" in both types of bankruptcy. In a Chapter 13 bankruptcy, your unsecured debts will only be discharged after you complete the repayment plan.

If you were already behind on debt payments before you filed for bankruptcy, your credit scores may not fall much more once you apply for bankruptcy protection. But typically:

For the 7 or 10 years that a bankruptcy is listed on your credit reports, there will bea negative impact on your credit scores. As time goes by, however, the impact of the bankruptcy on your scores will decline.

During this period you can also begin to rebuild your credit by making on-time bill payments and managing your debts smartly.

You should consider hiring a lawyer who specializes in consumer bankruptcy to help you decide your best bankruptcy option and assist you in petitioning for Chapter 7 or Chapter 13 bankruptcy protection.

You will need to complete a series of official bankruptcy documents. If you are applying for Chapter 13, you will also submit a proposal for repaying your debts. A court-appointed bankruptcy trustee will review your plan, and contact your creditors, before approving a final repayment plan.

Your petition for bankruptcy must be filed at a U.S. Bankruptcy Court. There are more than 90 U.S. Bankruptcy courts in the U.S. Find a local U.S. Bankruptcy Court here.

There is a filing and administrative fee when you file for Chapter 7 or Chapter 13. It costs $335 to file for a Chapter 7 bankruptcy and $310 for a Chapter 13. You can ask the court for permission to pay the fees in four monthly installments. You can also apply to have the fees waived.

If you hire a bankruptcy lawyer, you will also be responsible for paying the lawyer's fees. If you do hire a lawyer, the total cost will likely be somewhere between $1,500 and $4,000 depending on whether your file chapter 13 or 7 and the complexity of the case in general.

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Bankruptcy: Chapter 7 vs. Chapter 13 | Experian

U.S. Code: Title 11. BANKRUPTCY | U.S. Code | US Law | LII …

Amendments

2005Pub. L. 1098, title VIII, 801(b), title X, 1007(d), Apr. 20, 2005, 119 Stat. 145, 188, substituted Adjustments of Debts of a Family Farmer or Family Fisherman with Regular Annual Income for Adjustment of Debts of Family Farmers with Regular Annual Income in item for chapter 12 and added item for chapter 15.

1994Pub. L. 103394, title V, 501(d)(39), Oct. 22, 1994, 108 Stat. 4147, struck out item for chapter 15, United States Trustees.

1986Pub. L. 99554, title II, 257(a), Oct. 27, 1986, 100 Stat. 3114, added item for chapter 12.

Table I

This Table lists the sections of former Title 11,

Bankruptcy, and indicates the sections of Title 11,

as revised by Pub. L. 95598 which cover similar

and related subject matter.

1(1)(3)

Rep.

1(4)

101(12)

1(5)(7)

Rep.

1(8)

101(8)

1(9), (10)

Rep.

1(11)

101(9)

1(12), (13)

Rep.

1(14)

101(11)

1(15), (16)

Rep.

1(17)

101(17), (18)

1(18)

Rep.

1(19)

101(26)

1(20)(22)

Rep.

1(23)

101(30)

1(24)

101(31)

1(25), (26)

Rep.

1(27)

101(34)

1(28), (29)

Rep.

1(29a)

101(38)

1(30)

101(40)

1(31)

Rep.

1(32)

101(24)

1(33), (34)

Rep.

1(35)

102(7)

11(a)(1)

109(a)

11(a)(2)

502(j)

11(a)(2A)

505(a), (b)

11(a)(3), (4)

Rep.

11(a)(5)

721

11(a)(6)

Rep.

11(a)(7)

363

11(a)(8)

350

11(a)(9)(14)

Rep.

11(a)(15)

105

11(a)(16)

Rep.

11(a)(17)

324

11(a)(18)

303(i)

11(a)(19), (20)

Rep.

11(a)(21)

543(b), (c)

11(a)(22)

305(a)(2)

11(b)

Rep.

21

303(h)

22

109(b)

22(a)

301

22(b)

303(a)

23(a)

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U.S. Code: Title 11. BANKRUPTCY | U.S. Code | US Law | LII ...

California governor rejects PG&E’s $13.5 billion plan to get out of bankruptcy – CNN

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findNextVideo(currentVideoId) {var i,vidObj;if (currentVideoId && jQuery.isArray(currentVideoCollection) && currentVideoCollection.length > 0) {for (i = 0; i 0) {videoEndSlateImpl.showEndSlateForContainer();if (mobilePinnedView) {mobilePinnedView.disable();}}}}callbackObj = {onPlayerReady: function (containerId) {var playerInstance,containerClassId = '#' + containerId;CNN.VideoPlayer.handleInitialExpandableVideoState(containerId);CNN.VideoPlayer.handleAdOnCVPVisibilityChange(containerId, CNN.pageVis.isDocumentVisible());if (CNN.Features.enableMobileWebFloatingPlayer &&Modernizr &&(Modernizr.phone || Modernizr.mobile || Modernizr.tablet) &&CNN.VideoPlayer.getLibraryName(containerId) === 'fave' &&jQuery(containerClassId).parents('.js-pg-rail-tall__head').length > 0 &&CNN.contentModel.pageType === 'article') {playerInstance = FAVE.player.getInstance(containerId);mobilePinnedView = new CNN.MobilePinnedView({element: jQuery(containerClassId),enabled: false,transition: CNN.MobileWebFloatingPlayer.transition,onPin: function () {playerInstance.hideUI();},onUnpin: function () {playerInstance.showUI();},onPlayerClick: function () {if (mobilePinnedView) {playerInstance.enterFullscreen();playerInstance.showUI();}},onDismiss: function() {CNN.Videx.mobile.pinnedPlayer.disable();playerInstance.pause();}});/* Storing pinned view on CNN.Videx.mobile.pinnedPlayer So that all players can see the single pinned player */CNN.Videx = CNN.Videx || {};CNN.Videx.mobile = CNN.Videx.mobile || {};CNN.Videx.mobile.pinnedPlayer = mobilePinnedView;}if (Modernizr && !Modernizr.phone && !Modernizr.mobile && !Modernizr.tablet) {if (jQuery(containerClassId).parents('.js-pg-rail-tall__head').length) {videoPinner = new CNN.VideoPinner(containerClassId);videoPinner.init();} else {CNN.VideoPlayer.hideThumbnail(containerId);}}},onContentEntryLoad: function(containerId, playerId, contentid, isQueue) {CNN.VideoPlayer.showSpinner(containerId);},onContentPause: function (containerId, playerId, videoId, paused) {if (mobilePinnedView) {CNN.VideoPlayer.handleMobilePinnedPlayerStates(containerId, paused);}},onContentMetadata: function (containerId, playerId, metadata, contentId, duration, width, height) {var endSlateLen = jQuery(document.getElementById(containerId)).parent().find('.js-video__end-slate').eq(0).length;CNN.VideoSourceUtils.updateSource(containerId, metadata);if (endSlateLen > 0) {videoEndSlateImpl.fetchAndShowRecommendedVideos(metadata);}},onAdPlay: function (containerId, cvpId, token, mode, id, duration, blockId, adType) {/* Dismissing the pinnedPlayer if another video players plays an Ad */CNN.VideoPlayer.dismissMobilePinnedPlayer(containerId);clearTimeout(moveToNextTimeout);CNN.VideoPlayer.hideSpinner(containerId);if (Modernizr && !Modernizr.phone && !Modernizr.mobile && !Modernizr.tablet) {if (typeof videoPinner !== 'undefined' && videoPinner !== null) {videoPinner.setIsPlaying(true);videoPinner.animateDown();}}},onAdPause: function (containerId, playerId, token, mode, id, duration, blockId, adType, instance, isAdPause) {if (mobilePinnedView) {CNN.VideoPlayer.handleMobilePinnedPlayerStates(containerId, isAdPause);}},onTrackingFullscreen: function (containerId, PlayerId, dataObj) {CNN.VideoPlayer.handleFullscreenChange(containerId, dataObj);if (mobilePinnedView &&typeof dataObj === 'object' &&FAVE.Utils.os === 'iOS' && !dataObj.fullscreen) {jQuery(document).scrollTop(mobilePinnedView.getScrollPosition());playerInstance.hideUI();}},onContentPlay: function (containerId, cvpId, event) {var playerInstance,prevVideoId;if (CNN.companion && typeof CNN.companion.updateCompanionLayout === 'function') {CNN.companion.updateCompanionLayout('restoreEpicAds');}clearTimeout(moveToNextTimeout);CNN.VideoPlayer.hideSpinner(containerId);if (Modernizr && !Modernizr.phone && !Modernizr.mobile && !Modernizr.tablet) {if (typeof videoPinner !== 'undefined' && videoPinner !== null) {videoPinner.setIsPlaying(true);videoPinner.animateDown();}}},onContentReplayRequest: function (containerId, cvpId, contentId) {if (Modernizr && !Modernizr.phone && !Modernizr.mobile && !Modernizr.tablet) {if (typeof videoPinner !== 'undefined' && videoPinner !== null) {videoPinner.setIsPlaying(true);var $endSlate = jQuery(document.getElementById(containerId)).parent().find('.js-video__end-slate').eq(0);if ($endSlate.length > 0) {$endSlate.removeClass('video__end-slate--active').addClass('video__end-slate--inactive');}}}},onContentBegin: function (containerId, cvpId, contentId) {if (mobilePinnedView) {mobilePinnedView.enable();}/* Dismissing the pinnedPlayer if another video players plays a video. */CNN.VideoPlayer.dismissMobilePinnedPlayer(containerId);CNN.VideoPlayer.mutePlayer(containerId);if (CNN.companion && typeof CNN.companion.updateCompanionLayout === 'function') {CNN.companion.updateCompanionLayout('removeEpicAds');}CNN.VideoPlayer.hideSpinner(containerId);clearTimeout(moveToNextTimeout);CNN.VideoSourceUtils.clearSource(containerId);jQuery(document).triggerVideoContentStarted();},onContentComplete: function (containerId, cvpId, contentId) {if (CNN.companion && typeof CNN.companion.updateCompanionLayout === 'function') {CNN.companion.updateCompanionLayout('restoreFreewheel');}navigateToNextVideo(contentId, containerId);},onContentEnd: function (containerId, cvpId, contentId) {if (Modernizr && !Modernizr.phone && !Modernizr.mobile && !Modernizr.tablet) {if (typeof videoPinner !== 'undefined' && videoPinner !== null) {videoPinner.setIsPlaying(false);}}},onCVPVisibilityChange: function (containerId, cvpId, visible) {CNN.VideoPlayer.handleAdOnCVPVisibilityChange(containerId, visible);}};if (typeof configObj.context !== 'string' || configObj.context.length 0) {configObj.adsection = window.ssid;}CNN.autoPlayVideoExist = (CNN.autoPlayVideoExist === true) ? true : false;CNN.VideoPlayer.getLibrary(configObj, callbackObj, isLivePlayer);});CNN.INJECTOR.scriptComplete('videodemanddust');

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