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Taking A Look At Bankruptcy Law

Setbacks are common in life. If your financial situation has spiraled out of control it’s wise that you file for bankruptcy.

Paths of Relief

Bankruptcy laws provide you with two paths for relief: chapter 7 and chapter 13.

Chapter 7 is aimed at helping you to cover the debts resulting from personal loans, credit cards, payday loans and medical bills. This chapter is most ideal for people who own less property. This is because your assets are sold, or liquidated in order to pay creditors as much as possible. If there are any debts that remain after the sale of your assets, they are wiped away leaving you with a clean slate.

For you to qualify for chapter 7 your monthly income must be less than the average income in your state. If you earn more than the average income, you have to pass a stringent means test in order to qualify to file chapter 7.

Chapter 13 on the other hand doesn’t erase debts. Here your debts are reorganized into a repayment plan. It’s good to note that while filing chapter 13 bankruptcy your average monthly income is considered. If you earn less than the average income, you have to repay the debts in no more than 36 months.

If you earn an average or above average income you have to make the repayments in 60 months.

Bankruptcy Exemptions

You have the option of using either federal list or state’s list of exemptions. It’s good to note that while you can mix and match the exemptions, you have to stick to one. To make the right choice you need to find an attorney who will help you out. In addition to helping you to make the right choice of exemptions, the bankruptcy lawyer will also help you in filing your bankruptcy petition.

Depending on the number of creditors that you have, bankruptcy forms can be as long as 60 pages which can be too complex for you. Filing for bankruptcy stops any collection activity by your creditors.

The bankruptcy lawyer will also help you in discussing any issues that might come up during the 341 meeting with your creditors. This helps you to be fully prepared and puts you at a better position of answering any questions that the trustees may ask.


This is what you need to know about bankruptcy law. To increase the chances of winning the case ensure that you hire the best lawyer in your area.

Value Added Services By Bankruptcy Attorney Saves Financial Status

After having gone through a tough financial situation, such as bad loan or credit card non-payment, many people tend to come out of the situation through the support of bankruptcy filing. To the untrained mind, this may seem to be a good solution because the immediately imminent problems seem to have gone away. But, they fail to get proper answers as to the ways in which some benefits can still be bargained. Many people do not remain aware about the possible effects that such a declaration has on their lifestyle in the future. Along with bankruptcy, a number of myths and misconceptions are associated, so that people are not completely aware of the benefits that they can still continue to avail, during their period of filing bankruptcy.

In various parts of the world, such declarations of bankruptcy have become common as people find it an easier route to run away from debtors. But, at the same time, it is very much pertinent that there are after effects, the bankruptcy attorney has been fighting for people to get the best services, whenever they file for such a motion.

• Consulting the experts in financial matters is very important and essential

Firstly, an attorney well versed in the topics of bankruptcy can be consulted about the feasibility of the scenario, both in the present context as well as in later years. If these processes are known to people, they will perhaps rethink about their decision to declare bankruptcy and arrange some minimal amount of money to handle the situation with some grit and determination.

Understanding the clauses under bankruptcy laws

Under the law, a number of clauses have been incorporated to save the person or company filing for bankruptcy. Since the bankruptcy attorney is capable of knowing all these clauses and is well versed in them, such a person can easily advice people about the steps to be taken to ensure safety from the ill effects of such a declaration. Common people will not be very much aware about these laws, but the attorney is surely adept at these matters.

Sorting repayment plans if any

Many repayment plans can be worked out before the bankruptcy is filed. But, these are required to be finalized for the individual person, before such documentation is done. Depending on the financial status, as discussed with the attorney, people can easily take up the repayment plans and do not have to file the documents any further.

Filing paperwork needs to be meticulous

Paperwork has to be very meticulous in filing of bankruptcy, which the bankruptcy attorney can carry out without fuss. Also, such an expert can easily put in the necessary details to make sure that the process is carried out without any objections. At the same time, all the financial figures are filled up correctly, so that clients do not have to run from pillar to post in these dreadful times.

Work done by the financial bankruptcy attorney in law has been of much importance, especially for lower and middle class people, because they cannot afford very high retention rate attorneys. So, with reasonable costs, all these expert services in financial well being can be acquired easily for long term benefits of people.

Personal Bankruptcy Options

The word bankruptcy comes from the Italian words “Banca Rotta” which means bench broke. There are two types of personal bankruptcies; the one you choose is based on your financial abilities and amount owed to creditors. Bankruptcy is simply explained as a person who does not have the ability or capability to pay their debts. Bankruptcy is initiated by an individual (the debtor) and is imposed by court order. In the United State bankruptcy is under the jurisdiction of the Federal Government. Even though the Federal Government has jurisdiction over bankruptcies, state laws often overrule federal bankruptcy laws, particularly in who qualifies for bankruptcy status.

The purpose of a bankruptcy is for the debtor to get relief from their creditor(s). An individual files a voluntary petition to initiate the bankruptcy process. The bankruptcy process includes filing for bankruptcy status and eventual discharge of debts. After filing for bankruptcy, there is typically a waiting period for discharge of debts. During this waiting period the court could order an assessment of the financial abilities of the household or entity. Financial education courses may also be required by the court. This may be required to minimize the risk of a future bankruptcy.

The United States Bankruptcy Code includes 2 types of personal bankruptcies. The following is a brief description of each bankruptcy type:

Chapter 7 is the most common type of bankruptcy in the United States. An individual filing for a Chapter 7 bankruptcy must meet the requirements of the “means test for eligibility”. Eligibility for the chapter 7 bankruptcy allows the creditor to repossess any property used as collateral on debt that will be discharged in the bankruptcy. The bankruptcy trustee may also liquidate any non-exempt property and distribute the proceeds to any unsecured creditors. Exempt property typically includes: (1) clothes, and (2) household goods. Other assets such as: (1) social security payments, (2) unemployment compensation, (3) older automobile with little value, (4) tools used for work, and (5) books are also excluded from liquidation (may vary by state). Some debt may not be discharged by the courts. These include: (1) federal debt, (2) tax liens, (3) student loans, and (4) alimony and child support. Each state sets the limit for how much property can be exempted in a bankruptcy. The Chapter 7 bankruptcy can only be used by an individual every 8 years.

The Chapter 13 bankruptcy allows the debtor to keep all their possessions and assets, but they must accept a payment plan (based on their income) to repay their creditors. The repayment amount is based on the debtor’s income, expenses, value of property, and debt being discharged. The repayment plans usually are for 3 to 5 years but can be paid off earlier if the debtor is able. The Chapter 13 bankruptcy requires proof of regular income and has income limitations. Payments under this bankruptcy type are made to a trustee. The trustee is responsible for payments to the creditors. Chapter 13 bankruptcy does not require repayment to unsecured debt and medical bills.

In a Chapter 7 bankruptcy, the debtor may lose property and assets whereas the Chapter 13 bankruptcy allows the debtor to keep all of their property and assets. The Chapter 7 bankruptcy has no repayment requirement, whereas Chapter 13 has a 3 to 5 year repayment obligation based on various factors. So, which bankruptcy option is better, the Chapter 7 or Chapter 13? It depends on many factors, which may include your employment, income, health, and age. It is always in your best interest to consult a knowledgeable attorney for bankruptcy advice.