Mirror of Justice

Bankruptcy Law – A Basic Discourse

July 13th, 2009 at 08:53am Under Discrimination Law

The Bankruptcy law is a federal statutory law contained in title 11 of the United States codes. Congress passed the Bankruptcy Code under its Constitutional grant of the authority to establish a uniform law on the subject of the bankruptcy through out the United States. States may not regulate bankruptcy though they may pass the laws that govern other aspects of the debtor-creditor relationship. A number of the sections of the Title 11 incorporate the debtor – creditor law of the individual.

Bankruptcy allows a debtor, who is unable to pay his creditors to resolve his debts through the division of his assets among his creditors. The debtor is forced to resolve his debts through the division of his assets to his creditors.

This supervised division also allows the interests of all creditors to be treated with some measure of equality. Certain bankruptcy proceedings allow a debtor to stay in business and use revenue generated to resolve his or her debts. An extra purpose of bankruptcy law is to allow certain debtors to free themselves of the financial obligations they have accumulated, after their assets are distributed, even if their debts have not been paid in full.

A United States Bankruptcy court supervised bankruptcy proceedings and is where bankruptcy is litigated. These are parts of District Courts of the United States. The congress has established The United States Trustees to handle many of the supervisory and administrative duties of the bankruptcy proceedings. Proceedings in bankruptcy courts are governed by the Bankruptcy Rules which were promulgated by the Supreme Court under the authority of Congress.

There are two types of Bankruptcy proceedings.

* Chapter 7 is called liquidation. Informally called “straight bankruptcy,” the most common type of bankruptcy proceedings liquidation involves the appointment of a trustee who collects the non-exempts property of the debtor, sells it and distributes the proceeds to the creditors. The debtor turns over all non-exempt property or assets to the bankruptcy trustee who then converts it to cash for distribution among the creditors. At the end of the proceeding the debtor receives a discharge of indebtedness or the discharge notice, for all dischargeable debts, releasing him or her from personal liability for those debts.

* Chapters 11, 12, 13, involve the rehabilitation of the debtor to allow him or her to use future earnings to pay off the creditors. Chapter 11 is reorganization. In this chapter the debtors are allowed to continue its operations while paying their debts. In chapter 13, the lawyer and the debtor propose a plan to repay debts over a period of time up to three years.

A trustee is appointed to supervise the assets of the debtor. The debtor can either enter the bankruptcy proceedings or it can be initiated by the creditors. The creditors may not seek to collect their debts outside the proceedings at the most part, after the bankruptcy proceedings is filed. The property declared as a part of the state can not be transferred by the debtor to his property. Furthermore, certain pre-proceeding transfers of property, secured interests, and liens may be delayed or invalidated. Various provisions of the Bankruptcy Code also establish the priority of creditors’ interests.

The latest bankruptcy law is in effect. The landscape has changed for those who are considering bankruptcy. Before the debtor can file a bankruptcy case, they should undergo credit counselling, budgeting and debt managements before the debt is wiped out. Chapter 7 is not allowed to be used by a filer with a higher income, but instead they will be paying the sum of their debt under chapter 13. It will be tougher to find an attorney to represent you in a bankruptcy case because the law imposes new requirements to the lawyers.

The New Bankruptcy Law: Information you Need to Know Before you File

July 13th, 2009 at 02:52am Under Discrimination Law

The new bankruptcy law is in effect, and the climate has drastically
changed for people who are considering bankruptcy. In this article we
will touch on some of the details of the new law, and explain exactly how
these new changes will affect you.

First, let’s touch on the new counseling requirements. According to
the new law, you must complete credit counseling with an agency approved
by the United States Trustee’s office before you can file for
bankruptcy under either Chapter 13 or Chapter 7. Because this counseling is to
decide whether you need to file for bankruptcy, or if an informal
payment plan would be a better alternative for your situation. The counseling
is mandatory for everyone, even for people who know for certain that a
repayment plan is not what they want.

However, you are required only to join in the counseling; you do not
have to go with any repayment plans the agency recommends. But if you are
given a plan, you will have to present the plan to the court with a
certificate showing that you attended the counseling before you can file
for bankruptcy. Once your bankruptcy case is over, you will have to
attend another counseling session focused on learning personal financial
management skills to complete your bankruptcy and erase your debts.

Another major change that comes with the new law effects many people
who want to file chapter 7 bankruptcy. Under the old law, most people
filing could choose between Chapter 7 and Chapter 13,and most people
chose Chapter 7. Because of the new law, many filers with higher incomes
will be prohibited from using Chapter 7.

The first step in determining whether or not you can file for Chapter 7
is to compare your current monthly income to the median income for a
family of your size in the state you live in. In the context of the new
law, your current monthly income is not your income at the time you
file, but your average income over the last six months before you file.

Once you have determined your income, measure it against the median
income in your state. If your income is equal to or less than the median,
you can file for Chapter 7. If it is more than the median, you must
pass a requirement of the new law called the means test. The means test
requires you to determine your amount of “disposable income” by
subtracting different variables from your current monthly income.

If your current monthly income after subtracting these amounts is
under $100, you pass the means test, and will be able to file for Chapter
7. If you income is more than $166.66, you will be prohibited from
using Chapter 7. Those in the middle of these incomes will be able to file
for chapter 7, but will be required to still pay a percentage of their
debt.

Yet another important change caused by the new law is that lawyers may
be harder to find, and possibly more expensive. The new law has added
many complex requirements to the process of filing for bankruptcy that
will make it more time consuming for lawyers to represent their clients
in bankruptcy cases. The end result being that attorney fees for
representation will increase. Also, the amount of time that lawyers must put
into the new regulations has increased and it is likely that it may be
harder to find a lawyer that solely specialized in bankruptcy in the
future. Many experts are predicting that the stress of these new
requirements may drive some bankruptcy lawyers out of the field completely.

Now that you know many of the changes the new bankruptcy laws hold for
your situation, be aware and file with care.

Get the Straight Facts About Bankruptcy Law

July 12th, 2009 at 02:53pm Under Discrimination Law

There used to be a time not that many years ago where one could file for bankruptcy at the drop of a hat, just because they wanted to. In the majority of cases, there did not even need to be a real financial need to do so, but with the very lax bankruptcy laws in place at that time, many people found it easier to file for bankruptcy than to struggle with paying their debts, and many people filed for bankruptcy once every two or three years.

The bankruptcy laws have gotten significantly tougher in recent years, and in fact you may not be approved to be able to file bankruptcy with the new laws. While the bankruptcy laws still vary widely from state to state, there are enough federally mandated laws in place that filing bankruptcy is a significantly more difficult process than it used to be, and requires approval of the bankruptcy judge, which is not granted automatically.

In fact, the procedure for filing bankruptcy is no longer a do-it-yourself procedure. There are places that market a do-it-yourself bankruptcy kit, but the amount of time you will spend to understand the very complex and complicated procedures will leave your head spinning. Your time is much better spent getting your financial life back together, and the money you spend on a good bankruptcy attorney will be well worth the expense, since the bankruptcy attorney will know the procedures, the hurdles, and be familiar with the variations of the bankruptcy law in the state where you are filing.

Another point about a good bankruptcy attorney is that they are in an excellent procedure to advise you as to your best options. More often than not, a debt consolidation service may be a better overall option for you, and debt consolidation does not have the long term negative affects on your credit score that bankruptcy does. You may wish to visit our web site at http://www.debtconsolidationstrategies.com for more information about debt consolidation.

There are some common misconceptions about bankruptcy. It is totally different than declaring bankruptcy in the game of Monopoly, but some of the things that people assume about bankruptcy are totally false, and we will take a look at some of those things here.

While you are thinking about bankruptcy, there are probably people around you who “know” the bankruptcy laws but what they think they know is probably wrong. Some people think they will lose everything in bankruptcy. Not true. This depends on your individual situation and the type or chapter of bankruptcy you file. You may in fact not lose anything at all.

Another myth is that you will never be able to get credit again after filing bankruptcy. Nothing could be further from the truth. Granted, it will be more difficult to get credit and until you have proven yourself again, you will likely have to pay a higher interest rate for that credit, but getting credit after bankruptcy is not a major hurdle.

You need to understand the bankruptcy laws from people like a bankruptcy lawyer who deal with bankruptcy all the time, not take the advice of people who heard this, that and the other thing about it. This is a critical time in your financial life, and the last thing you need is bum advice from someone who thinks they know what they are talking about.

Changes in chapter 7 & 13 in the New Bankruptcy Law

July 11th, 2009 at 08:53am Under Bankruptcy Law

Bankruptcy is provided by Federal Law and all the cases related to bankruptcy are handled in Federal Court. Basically it is a legally declared by the court in which any individual or the organization is unable to pay their debts, expenses, bills to their creditors. Those who are bankrupt can file bankruptcy in a way to stop their creditor to collect debt from them. Chapter 7: Liquidation Bankruptcy & the changes under the new lawIt would be very harder for some people to file bankruptcy now. Especially with higher income level category they are now no longer allowed to use chapter 7. They need to pay partial amount of their debt under chapter 13. Before filing a bankruptcy case all the debtors have to undergo for the credit counseling, budgeting and the debt management.  This law imposes on the lawyers too so it is very difficult to find an attorney to represent the bankruptcy case. Following are the changes in the Bankruptcy Law – •    Under the old law many filers can choose the type of bankruptcy. Most of them were choosing Liquidation (Chapter 7 – Bankruptcy) over Repayment (Chapter 13 – Bankruptcy) because they proved beneficial for most of them. But under the new law, it would not be the case for the higher income group filers, the new law has prohibited from using chapter 7 bankruptcy for them. •    Now the question arises about how you will define your income is high for filing under the bankruptcy. Under the new rules, the first step is to figure out your monthly income against the median income for a household for your size in your state to file in the chapter 7 bankruptcies. If it is less than that then you can file under chapter 7 and if it is not then you have to pass the means test. Another clause or the law in order to file for chapter 7. •    The means test is to be done to calculate your disposable income and to see whether you have enough disposable income after deducting your expenses, debts, payments under chapter 13. If your income is high up to a certain limit  after deducting your expenses, debts and all then you are not eligible for chapter 7 and if it is less than the certain amount then you can file under chapter 7 bankruptcy. •    Now the next step is the counseling from the approved agencies by the United States Trustee’s Office about the credit & debt counseling. Purpose behind this counseling is to see and give an idea about your need to file for bankruptcy. Counseling is required even if it’s a repayment plan or for the debts that you are facing and you do not want to pay. If the agency come up with a repayment plan the agency proposes and you agree on that propose then you can submit it to the court along with the papers that you have completed the counseling process. Towards the end of your bankruptcy case, you will have to attend the last counseling session to learn about the personal financial management. After submitting the proof to the court you fulfilled this requirement. These are the new changes in the bankruptcy law. There are other changes that can affect bankruptcy filers negatively. In short, debtors are at more risk of having their property taken and sold by the trustee or the authenticated person.

Bankruptcy Law & Attorneys – Important Facts To Consider

July 11th, 2009 at 02:53am Under Bankruptcy Law

Bankruptcy law is a federal statutory law contained in title 11 of the United States codes. Congress passed the Bankruptcy Code under its Constitutional grant of the authority to establish a uniform law on the subject of bankruptcy throughout United States. States may not regulate bankruptcy though they may pass the laws that govern other aspects of the debtor-creditor relationship.

Bankruptcy allows a debtor, who is unable to pay his creditors to resolve his debts through the division of his assets among his creditors. Certain bankruptcy proceedings allow a debtor to stay in business and use the revenue generated to resolve his or her debts. A United States Bankruptcy court supervises bankruptcy proceedings and is where bankruptcy is litigated. Proceedings in bankruptcy courts are governed by the Bankruptcy Rules which were promulgated by the Supreme Court under the authority of Congress.

How Do Bankruptcy Proceedings Work?

Informally called “straight bankruptcy,” The most common type of bankruptcy proceedings liquidation involves the appointment of a trustee who collects the non-exempts property of the debtor, sells it and distributes the proceeds to the creditors.

Chapter 11 is reorganization. In this chapter the debtors are allowed to continue its operations while paying their debts. The debtor can either enter the bankruptcy proceedings or it can be initiated by the creditors. The creditors may not seek to collect their debts outside the proceedings at the most part, after the bankruptcy proceedings is filed. The latest revisions of the bankruptcy law are now in effect. Before the debtor can file a bankruptcy case, they should undergo credit counseling, budgeting and debt managements before the debt is wiped out.

Bankruptcy Attorney – Choosing the Right One

Bankruptcy attorneys explain the applications of bankruptcy laws and its applications. If the debtors or their lawyers set off the bankruptcy it is called a voluntary bankruptcy. If the courts initiate the bankruptcy it is called an involuntary bankruptcy. A good bankruptcy attorney will take all the problems away from the bankrupt person or company and deal with every aspect of the bankruptcy.

6 Helpful Tips and Considerations For Finding the Best Bankruptcy Attorney

1. Find a bankruptcy lawyer at the circle of your acquaintances. Keep in mind that bankruptcy law is a specialty, so if your lawyer offers to handle the case as part of your usual retainer, make sure he knows his way around a bankruptcy court.

2. Attorneys must be certified by the American Bankruptcy Institute.

3. Spend a day at a bankruptcy court.

4. What time frame do you have for this bankruptcy?

5. How much access will I have to an attorney during my bankruptcy filing?

6. Because bankruptcy law is a volume business, the time you’ll actually be working with a specific attorney may be small. Don’t hire the cheapest lawyer.

Bankruptcy Law – How the Changes Affect you

July 10th, 2009 at 08:52pm Under Bankruptcy Law

If you are considering bankruptcy, you need to be aware of the recent drastic changes in the bankruptcy laws. It used to be that a person could file bankruptcy almost on a whim, simply to get out from under a huge burden of financial obligations. Then that person would start over, and a couple years later file bankruptcy again. This type of scenario is no longer possible for the most part due to the new bankruptcy law.

The bankruptcy laws still vary from state to state but much of the common foundation within the bankruptcy law is still there in all states. The variations and changes that are state specific are, for the most part, fairly minor points. In addition, one of the effects of the new laws are that if you are going to file bankruptcy, you must do it in the state in which you are a resident, and you cannot go to another state to file bankruptcy just because they may have more lenient laws in some areas.

With the new bankruptcy laws, the person who is considering filing must go through a process known as a means test. The means test can be very complex and the results of that test could mean the difference between filing bankruptcy and even not be allowed to file bankruptcy.

What this means to you is that the court looks at your financial situation with a very fine tooth comb. The court can determine that you do not need to file bankruptcy based on your level of income and that you can indeed pay your financial obligations, which still being able to maintain your reasonable and necessary living expenses. This is where things really get sticky, because while a consumer may consider “reasonable and necessary” to be that beach front condo in Miami, it is highly unlikely that the court would agree with your definition of “reasonable and necessary”.

Another change in the bankruptcy laws is that the consumer who plans to file bankruptcy is now required in almost all states to attend credit counseling sessions. To a certain extent, this does not make sense since the underlying reason that a consumer may be considering bankruptcy would not be financial mismanagement, but could be host of other financial difficulties, like a job layoff, extensive medical debts, an ugly divorce case, and other things that are totally unrelated to financial mismanagement, and in fact, the consumer may be the sharpest person in the world in terms of finances. But that person still needs to attend the credit counseling sessions, this is mandatory.

Because of the many changes in the bankruptcy law, consumers who may have wanted to file under Chapter 7 bankruptcy may now need to file under Chapter 13 or even Chapter 11 bankruptcy. Much of this determines how much of your personal assets can be retained, or perhaps sold out to satisfy your debtors.

One thing that has become clear with the new bankruptcy laws is that bankruptcy is no longer a “do it yourself” process. One mistake in filling out the mountain of forms can cause your bankruptcy application to be dismissed. You should work with a good bankruptcy lawyer who understands the bankruptcy law and also the variations in your state so that you can file correctly with the least amount of personal damage.

The Chapter 7 Bankruptcy Law – the Pros and Cons

July 10th, 2009 at 08:53am Under Bankruptcy Law

It is better to realize as early as possible that going through a bankruptcy claim is not easy. People generally opt for it as their first remedy. You must know the bankruptcy laws well in order to decide.

The bankruptcy law has been crafted in a way to promote provisions that are a part of filling bankruptcy claims. It contains systematized laws that help the debtor to rid himself of any financial obligations that he has to undergo. The Chapter 7 bankruptcy law is in other words called straight bankruptcy. This law deals with the liquidation process. According to this, the one who is filing for bankruptcy has to surrender all his assets except those that are unaccredited or exempted to the lawyer or the trustee in bankruptcy.

The court must appoint a trustee in bankruptcy and he will be given charge of selling the assets or converting them into cash. Once the assets have been converted to cash the creditors are paid with these funds. Under the Chapter 7 bankruptcy law you are discharged from any obligation after a period of four months.

When can you apply the Chapter 7 bankruptcy law? It is applied when the debtor is left with no property to give up or lose. This is one of the most common bankruptcies that are filed in the United States by either individuals or business corporations. You could personally file bankruptcy by abiding with the Chapter 7 bankruptcy law or the court may impose it.

The Chapter 7 bankruptcy law will prompt a business man to sell all his assets and pay what he owes the creditors and finally close down his business. The procedures are very similar for individuals who have been forced to file under the Chapter 7 bankruptcy law, the only difference here is the individual will have no business to close down.

The advantages of filing a claim under the Chapter 7 bankruptcy law first and foremost are that any amount of debt may be cleared and as soon as you get out of the trouble you are in, you get a clean chit. The other advantage is that there is no particular amount of debt to qualify you for filing under the Chapter 7 bankruptcy law. As there is a protection that is granted by this law, the creditors cannot exert any authority over you. It is processed very quickly and you can be discharged from any debts in a short period, say in about four to six months.

The disadvantage of the Chapter 7 bankruptcy law is that you have to give up your whole property. Debts like taxes, child support, housing mortgages, students’ loans and car loans are not discharged under the Chapter 7 bankruptcy law. Along with you the co-signers will also be pulled in and asked to pay for your home loan. This law may be only availed once in every six years.

It becomes difficult to avail other loans because your credit rating gets damaged. Once you have filed for the Chapter 7 bankruptcy law, it cannot be withdrawn.

Tread cautiously if you are considering filing under the provisions that are based on the Chapter 7 bankruptcy law. All you need is to be protected and not end up with added problems.