Tips on How to File Bankruptcy
Bankruptcy is a legal option that individuals and business operators run to whenever their debts seemed to pile very high and that their current standing resources are not enough to cover for all the payment and make the company stay afloat This is definitely the surest thing to occur especially among entrepreneurs who are still starting with their business and whose starting capital was just loaned from a lending company So when does one declare it and how to file bankruptcy? . .Bankruptcy is a process that gives debtors who can no longer pay their debts due to limited monetary resource with two options: elimination of their debts or creation of payment plan, which they will have to pay their debts in parts or whole over a period It will however appear on ones credit report for 10 years . .However not all credits can be discharged once bankruptcy is filed for loans like student loans, government loans, back taxes and other loans can’t be emancipated Filing can be done individually though it is advised that one seek help of a lawyer so that every step is taken with proper guidance Here are steps taken for how to file bankruptcy: . . 1 Start filing by deciding first which bankruptcy option fits: chapter 7 or 13 Chapter 7 is also known as straight or liquidation bankruptcy while 13 is the repayment plan for individuals . 2 Choose whether to have a lawyer or not If you choose to have a lawyer work together with you, then make sure that you directly have contact with him or her This is to ensure that you can go over and discuss your case anytime . 3 Fees for filing vary and you should know those . 4 Refer creditors to your lawyer’s office No creditors should be hanging around or contacting you in whatever way once the “automatic stay” takes effect Violation of which can result to charges against your creditors . 5 Wait and attend meeting with creditors Your lawyer will send you updates on this . 6 After 60 days from the first meeting that you with the creditors, you should expect a notification of discharge else a lawsuit is filed before this day Should there be no lawsuit, a discharge notification on a debt will be sent to you and that will free you from any form of payment of that debt .
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Debtor's Rights - Credit Report
A bad credit report can prevent you from obtaining credit. If you have trouble obtaining credit, it might be because a credit agency has issued a bad report on you. You might be able to obtain a copy of your report and -if it contains false information - get it corrected. Can I see my credit report? If you are denied credit, you are entitled to a free copy of the consumer credit report that formed the basis of the denial. The creditor is required to tell you the name of the credit reporting agency that prepared the report on you. You must request a copy of your credit report from the agency within sixty days of the denial. The three major credit reporting agencies are: Experian, (800) 301-7195 Equifax, (800) 525-6285 Trans Union, (800) 680-7289 When the creditor tells you the name of the reporting agency that furnished the report, call them to find out their address. Then write a letter to the agency requesting a copy of your report. Even if you have not been denied credit, it is probably a good idea to check your credit report for accuracy periodically. They often contain mistakes, and when you want to get a loan, you may not have time to correct them. Because you haven’t been denied credit, the report isn’t free. The credit reporting agency is allowed to charge you no more than $8.00 for a copy of your report. What information is in a credit report? In general, your credit report will contain information about your credit history during the last seven years. It will show: Whomyou have borrowed money from The amount of the debt Whether or not you made the promised payment on time and in full The identity of any creditor who has requested information about you If you file bankruptcy, the information remains on your credit report for ten years. What if my credit report is incorrect? You have a legal right to challenge the completeness and accuracy of any item in the report. Write a letter to the credit reporting agency explaining that some of the information in the report is incomplete or inaccurate. The agency must investigate your claim - without charge - within thirty days. The agency is required to delete any information that is inaccurate or whose accuracy cannot be verified. If the credit reporting agency’s investigation does not resolve the dispute, you have the right to send the agency a brief statement (generally 100 words or fewer) explaining your position. Your statement will become a part of your credit report and will be disclosed to creditors together with the other information in your file. If you believe a credit reporting agency has violated your rights, contact the Federal Trade Commission or see a lawyer who specializes in consumer rights. Henry Dahut. Please Visit Us at www.GotTrouble.com
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The New Bankruptcy Law — How Will It Affect Debt Negotiation?
In April 2005, Congress made sweeping changes in U.S. bankruptcy law that will go into effect on October 17, 2005. It’s called the “Bankruptcy Abuse Prevention and Consumer Protection Act of 2005,” and it means big trouble for Americans struggling with debt problems. What effect will the new bankruptcy law have on the practice of Debt Settlement (also called Debt Negotiation)? Will creditors still be willing to negotiate with consumers seeking to avoid bankruptcy? Will lump-sum settlements for 30%, 40%, 50% still be possible now that this tough new law has been passed? The short answer is “YES.” It will be “business as usual” in the collection industry. People that choose to file bankruptcy will definitely be affected for the worse, as I’ll outline below, but those who choose to privately negotiate their way out of debt will notice very little difference. Creditors will still negotiate. Deals will still be made. And nothing much will change in the world of collections. In fact, a viable alternative to bankruptcy will be needed more than ever. The credit card banks lobbied with millions of dollars to get this law passed. They’ve been working at it for about a decade. Now they are celebrating. These are the folks who think the bankruptcy system has been abused by wealthy individuals, who have defrauded creditors when they could have repaid their debts. The facts tell a different story: 1. During the period from 1995 to 2004, bankruptcy filings doubled, while in that same period, credit card industry profits TRIPLED. 2. Credit card companies have not been held accountable for their targeting of “easy credit” to individuals who could not afford such loans, which in turn has contributed to the wave of bankruptcies over the past decade. 3. For people 60 or older, 85% of bankruptcies are caused by medical bills or job loss. 4. A divorced woman is 300% more likely to file bankruptcy than a married woman. 5. African-American and Hispanic homeowners are 500% more likely to file bankruptcy than white, non-Hispanic homeowners. 6. Approximately half of all bankruptcies are filed because of medical expenses due to lack of health insurance, or lack of adequate coverage leading to uncovered expenses. 7. The median income of bankruptcy filers is $25,000. (So much for the “rich” abusing the system.) The new law was a GIFT to the credit card banks, pure and simple. Some estimates show that it will add another $5 billion to the industry’s bottom line. In other words, the bill is about profits and not much else. Since my whole approach is about avoiding bankruptcy, I won’t go into a detailed analysis of the provisions of the new law. But just to summarize, the net effect is that many (if not most) people seeking relief under Chapter 7 bankruptcy will be forced to file under the Chapter 13 version instead. In plain English, that means that most filers will be forced to pay back a portion of the debt over a 5-year schedule set by the court. One of the worst aspects of the new bill is the use of IRS “allowable” expense schedules for determining your monthly budget. In other words, your actual living expense are thrown out the window in favor of the IRS standards (and we all know how generous the IRS can be!). So if your actual rent is $1,300 per month, and the IRS says it should be $1,045 for your county and state, that’s TOUGH! The court will only allow the $1,045, period. In short, people attempting to file bankruptcy after October 17, 2005 are in for an extremely rude awakening! Goodbye cell phones, cable TV, high-speed Internet access, movies, meals with the family, and anything else beyond the minimum allowable expenses as determined by the IRS and the courts. So what makes me so certain that the banks will be as eager as ever to settle with consumers for 50 cents on the dollar or less? Simple. Two words: Stealth Bankruptcy. Hundreds of thousands of Americans are going to discover the new reality of this tough law, and they are going to forgo the court system of filing bankruptcy in lieu of what I call “stealth bankruptcy.” A stealth bankruptcy is when you move (with no forwarding address), change your phone number, and drop off the radar screen to live on an all-cash, no-credit basis. Many people already choose this path rather than deal with the invasion of privacy that comes with formal bankruptcy. After the new law goes into effect, more people than ever will take this approach. Besides the problem of stealth bankruptcy, there are other good reasons the banks will settle as they always have. Consider these points: A. The creditor doesn’t know whether or not you’ll still qualify for Chapter 7 or Chapter 13 bankruptcy. They still face the risk that you will qualify for Chapter 7 and end up discharging your debt in full, which means they get NOTHING. B. Even if you file Chapter 13 under the new guidelines, the creditor will still only receive 30-50% of the debt on average (much less in some cases). C. Under Chapter 13, it will still take the creditors 3-5 YEARS to recover that 30-50%. D. A lump-sum of 30-50% TODAY is far better than the same amount collected over 3-5 years. Of course, I certainly expect debt collectors to use the new law to harass and intimidate people who don?t know and understand their rights. You can expect them to say things like, “You can?t file bankruptcy under the new law, so you?d better pay up today!” They will bully and threaten as always, but at the end of the day, they will still accept reasonable settlements. After October 17, 2005, it will still be “business as usual” in the world of debt collections. Charles J. Phelan has been helping consumers become debt-free without bankruptcy since 1997. A former executive in the debt settlement industry, he teaches the do-it-yourself method of debt negotiation. Audio-CD material plus expert personal coaching helps consumers achieve professional results at a fraction of the cost. <a href="http://www.zipdebt.com" target="_blank">http://www.zipdebt.com</a>
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