Can I Still File Bankruptcy?
Despite the media hype in 2005 and
the rumors now going around, the truth is the vast majority of
people, who could file bankruptcy prior to the law changing in
October, 2005, can still file today. Most people that qualified to
discharge their debts in a
Chapter 7 bankruptcy case under the old
law, still can. There are only a few that may not be able to file a
Chapter 7. They include people who have filed a previous
Chapter 7
in the past 8 years. Also, if your household income is above the
state median for your household size, there are additional criteria
to meet in order to file
Chapter 7.
Some people not eligible for
Chapter 7
are able to obtain relief under
Chapter 13.
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Are My Debts Still
Dischargeable?
The
myth that the right to file bankruptcy somehow ended is false. This
propaganda has been advanced by some collectors in the credit card
industry to make consumers believe that bankruptcy relief is no
longer available, or at least will no longer help them. The truth is
most debts are still dischargeable in bankruptcy. A
Chapter 7
bankruptcy can still “wipe out” most unsecured debt. Examples of
debts that can be discharged include credit card debt,
medical bills, debts owed on repossessed or surrendered
vehicles, and many payday loans. Most bills, even those in
collection, can still be discharged. On the other hand there have
always been some debts that can not be “wiped out” in a
Chapter 7
bankruptcy. Nondischargable debts like IRS taxes, student loans, and
child support can sometimes be included in a
Chapter 13 repayment
plan.
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What Were The
Recent Changes In Bankruptcy Law?
Federal bankruptcy law changed in
October, 2005. The new law has many significant changes. Filing
bankruptcy has become more complicated. More documents are now
required. There are more “traps” or possible errors that people
filing bankruptcy must avoid. Missing a deadline, not fulfilling a
legal requirement, failing to submit documents on time, dishonesty
or omissions can result in case dismissal. Of particular importance
to everyone who files now is the new pre-filing credit counseling
requirement. This new counseling requirement is fairly easy to
fulfill by either telephone or internet and must be completed before
filing bankruptcy. Despite all of the recent changes in the law,
for the vast majority of people filing today the new law will not
significantly affect the final outcome of their case. Most people
will be able to obtain the same results today that they could have
received previously.
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How Can I Get A Copy
Of My Credit Report?
Everyone can obtain a free copy of
their credit report from each of the three credit bureaus once per
year. Go to
AnnualCreditReport.com
to obtain your free copies. This web site will ask you for your
personal information. Then select which report you want first:
Experian,
Equifax, or
TransUnion. You will be directed to a section
of your selected credit bureau’s web site and asked several
additional questions to verify your identity. The questions are
based on information contained in your credit report. If answered
correctly, you will be able to view and print out your report. You
can decline any additional services, such as obtaining your credit
score, which costs money. The credit reports themselves are
absolutely free. Once you have your first report, return and
repeat with another credit bureau. If you are stuck and can’t get a
bureau’s report, try another one. If you do not have access to the
internet you may call toll free 1-877-332-8228 and your reports will
be mailed to you. It is wise to review all three of your credit
reports once each year. If you catch errors on your reports there
are links to correction procedures.
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How Can A Lawyer Help?
Federal bankruptcy laws are
complicated and unfamiliar to most people. Few lawyers are
knowledgeable about bankruptcy law and its many recent changes. Be
sure and choose an experienced consumer bankruptcy attorney who will
spend time with you to learn about your particular financial
situation and then explain to you whether and how a bankruptcy could
work for you. A good attorney will not only thoroughly explain the
bankruptcy process, but will also tell you exactly how each debt you
have will be treated; let you know whether everything you own will
be protected; and answer all of your questions. Working with an
experienced consumer bankruptcy attorney will help you steer clear
of potentially negative outcomes. Picking an attorney you trust and
feel comfortable working with will ensure the best possible result
and provide you with peace of mind.
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What
Are The Advantages & Disadvantages Of Chapter 7?
Chapter 7 is the most common type
of bankruptcy. It is the quickest and often the least expensive way
to handle insurmountable debt. Many people with debt problems
qualify to file under
Chapter 7.
Chapter 7 bankruptcy can “wipe
out” credit card debt, medical bills, and debts from repossessed and
surrendered vehicles among others. The greatest advantage of
Chapter 7 is that you receive a fresh start. The stress of an
otherwise impossible financial situation ends. The disadvantages of
Chapter 7 include that your bankruptcy will appear on your credit
report for up to ten years. The bankruptcy will affect your credit
score although its negative effect will diminish over time. Each
person should weight the advantages and disadvantages for themselves
after obtaining information about what a bankruptcy would look like
given their particular situation. Though it should always be a last
option, most people struggling with debt report feeling a huge sense
of relief when they decide to file bankruptcy.
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What
Are The Advantages & Disadvantages Of Chapter 13?
The advantage of
Chapter 13 Bankruptcy is that
your creditors are stopped from all collection activity to give you
time to catch up slowly month by month by paying an affordable
amount in an organized way. While in a
Chapter 13 repayment plan
you are protected from all collection activities including
garnishment, repossession, and foreclosure. Embarrassing calls from
collectors stop… The disadvantage of filing
Chapter 13 is that your
credit is negatively affected. Also, while in a
Chapter 13
repayment plan you need court permission to incur new debts, such as
replacing a car, or refinancing a home. For many people the
advantages of filing greatly outweigh the disadvantages. Having a
workable plan to protect your home, vehicles, retirement savings,
and other assets while you tackle your financial problems in an
organized manner brings much needed peace of mind. It feels good to
propose a “best efforts” repayment plan and have a financially
feasible solution to otherwise insurmountable problems.
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How Do I Protect My Home
And Assets?
The best way to protect your home
and assets is to make all payments on time with good income, as well
as have adequate savings, and full insurance to cover unanticipated
problems. Unfortunately, real life doesn’t go so perfectly – we are
only human. Sometimes, despite our best efforts, things go awry.
If you find yourself with insurmountable debt and the sense that you
are sinking even though you are doing everything you can, then
filing
Chapter 13 bankruptcy is a good option for you to consider.
Of great concern to most people is protecting their home and the
things they have worked hard for. Most
Chapter 13 bankruptcy
repayment plans allow people to keep everything they own. Working
closely with an experienced consumer bankruptcy attorney, you will
propose a financially feasible repayment plan acceptable to the
court. The
Chapter 13 petition and plan will list all of your
assets, all of your debts, and show how each debt is to be handled.
While in
Chapter 13 you are protected from all collection activities
including garnishment, repossession, and foreclosure – thus giving
you the time you need to resolve your financial problems.
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How Does Home Foreclosure Work?
In Washington State home
foreclosure is a two-step process. When your mortgage becomes 3
months late you are likely to receive a Notice of Default which
requires you to catch up on your mortgage payments within 30 days.
If you are unable to bring the mortgage current in 30 days then a
Notice of Foreclosure is served on you. This second step sets an
auction date for the sale of the home in 3 months. The mortgage
company will not accept partial payment, and the past due
amount (which grows each month), plus fees and costs, must be paid
in full in order to save the home. Mortgage companies offer
workout plans, but many people’s applications are ultimately
denied. Refinancing or selling a home is difficult to complete
while foreclosure is pending. Fortunately a
Chapter 13 repayment
plan can stop a foreclosure and allow a homeowner time to catch up. Chapter 13 can provide complete protection from home foreclosure. If
you qualify, you can save your home through
Chapter 13.
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