How To Calculate Your Debt Prior To A Bankruptcy

Posted by on May 25, 2016 in Bankruptcy | 0 comments

Bankruptcy usually occurs when a person or company can no longer pay their creditors and have reached the point-of-no-return, of not being able to get further loans, or generate additional income to help the situation. This is usually a last resort and is fully controlled by the debtor himself.

Quite often a debt review will be instituted whereby the debtor’s household expenses are examined and the debt’s owing are assessed and a plan of action put into effect to pay off the debts. But should the debts be larger than can be covered, the debtor has the choice to file bankruptcy. The creditors are then contacted and given the opportunity to claim assets from the debtor, to cover outstanding debt – according to the laws of the different states.

Chapter 7 Bankruptcy

Chapter 7 Bankruptcy is filed primarily by business owners, sole proprietorship and even corporations. The object of this is so that they can continue to operate the business and avoid being liquidated. A court order is put into place and a court trustee does a debt review of their assets and liabilities. This will enable them to get an extended time to pay off the debts and in many cases have the debts reduced by the creditors and a payment plan put into place.

How to calculate your debts prior to filing:

– Make a list of all your business creditors and the amounts owning to each.

– The list will include credit cards, office rental and leases on vehicles.

– Then make a list of your income from direct sales and

– A list of how much is owed to you, by your debtors.

– If your expenses far outweigh your income or potential income, and you are severely overdue with your payments, it is time to seek help.

Chapter 13 Bankruptcy

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Chapter 13 Bankruptcy is also known as the ‘wage-earner’s plan’ is generally filed by individuals and home owners and even sole proprietors. The difference between the two is that with Chapter 13, the debtor reorganizes his debt and arranges to pay off his accounts, for three to five years under a restructured payment plan. This will prevent him having to liquidate his assets and the order will forestall foreclosure on his home. However, his current debt also has to be paid on time. dallas chapter 13 bankruptcy attorney can help you regarding the bankruptcy.

How to calculate your debts prior to filing:

– Make a list of all creditors and amounts owed to them.

– List all monthly household expenses.

– List all income, including the spousal income and anyone else living in the home who is contributing to the household income.

– List all assets like retirement annuities and policies that can be redeemed.

– Subtract the monthly expenses from the monthly income to see the difference.

If the expenses far outweigh the income and there isn’t any way additional income can be generated, that will be the time to ask the court’s help.

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How To Manage Your Debt After Bankruptcy

Posted by on May 25, 2016 in Bankruptcy | 0 comments

 

A lot of people find it difficult to balance their finances after filing for bankruptcy. Life after bankruptcy means a fresh start, adopting a no-frills lifestyle, rebuilding good credit, paying all your bills on time, building a healthy savings account and focusing on freeing your debt.

 

The most disheartening issue about bankruptcy is that it stays on your credit report for ten years, and you may not be able to get a loan or credit card. Even if you do get a loan or credit eventually, the interest rates and fees will be alarmingly high. You can combat this by keeping on top of your debts and managing your finances after bankruptcy, this will help build your credit and give you a better chance at getting loans or credit cards later on. The following are some debts that arise after bankruptcy and how to manage them:

I) Post-petition debts

These are debts incurred after you file for bankruptcy. Post-Petition debts are not a part of your bankruptcy, and you remain responsible for them, but there an exception. You must continue to pay this kind of obligations. Some Post-petition debts are current utilities, current rent, current home association fees and taxes, insurance.

II) Certain secured debts

These are debts that are secured by a property. We can’t ignore this kind of obligations as the only way we can defend our property is to pay them. Failure to do so will give the lender the right to file a motion that will enable him lift the automatic stay and enforce his rights in the property. Examples of certain secured debts are a mortgage or a car loan.

III) Child or spousal support:

This is an obligation you cannot ignore. Infant and spousal support will not seize if we file for bankruptcy. So you must continue to pay them.

IV) Other Non-dischargeable debts and Automatic Stay

During bankruptcy, you have a brief respite from some Non-dischargeable debts that you owe. Because the auto stay protection may even tend to debts that bankruptcy cannot discharge. However note that once your bankruptcy case closes you will remain legally under obligation to pay the Non-dischargeable debts. Examples of this kind of debts are, student loans, government or court fines or penalties, unscheduled debts.

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V) Voluntary payments on debts

These are debts you decide to keep even though these payments can be discharged by your bankruptcy. This kind of debts include loans from friends or family, medical bills from doctors who which to continue seeing you after you file for bankruptcy, you can make these payments voluntarily, but you are not under legal obligation to pay this kind of debt. But if you choose to make payments in this type of debts, you must use Post-petition income or Non-bankruptcy assets to pay them. Because making this payment with assets that are part of the bankruptcy will make you run into more trouble.

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6 Topics To Talk To A Bankruptcy Lawyer About

Posted by on May 25, 2016 in Bankruptcy | 0 comments

When you are considering filing for bankruptcy, there are a number of topics that will need to be discussed with your lawyer. Read on to learn more about the six most important topics that you’ll need to talk about with your bankruptcy lawyer in order to obtain the best possible results.

  1. Assets

Some of your assets will be exempt from seizure by creditors or trustees during a bankruptcy procedure. A quality bankruptcy lawyer will know exactly which items you can expect to keep and which items you should expect to lose, allowing you to proceed with the appropriate amount of caution. A thorough review of your assets is required before filing, so be sure to discuss this with your lawyer.

  1. The Means Test

If you are still in the process of deciding which form of bankruptcy you are eligible for, you’ll need to discuss the means test with your lawyer. They’ll need to review your income and your pay stubs, so that a determination can be made. Knowing where you stand in the eyes of a bankruptcy court prior to filing is crucial.

  1. Chapter 7 and Chapter 13

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Chapter 7 bankruptcy is for those who do not qualify for Chapter 13. Debtors who are uncertain about which of these bankruptcies they qualify for should bring all of their pertinent financial documentation to their initial consultation with a bankruptcy lawyer, so that a final decision can be made.

  1. Reasons For Filing

Bankruptcy should never be thought of as a magic wand that will cure all of your financial ills. There are certain debts that cannot be discharged, even with a successful filing, so be sure to discuss your personal reasons for considering this option. This provides your bankruptcy lawyer with an opportunity to explain the reality of your situation in further detail.

  1. Track Record

Knowing more about the bankruptcy lawyer’s past track record helps you to make a more informed decision about the legal representative that you choose. A large number of firms have one or two experienced lawyers on staff and will entrust the majority of their caseload to a support staff. Be sure to talk about the bankruptcy’s case history and find out more about their specific plans for handling your problem.

  1. Lawyer Fees

Before cases can be filed, the lawyer’s fees typically need to be paid in full. Don’t sign on the dotted line until you have thoroughly discussed these fees and have come to a firm understanding with your bankruptcy lawyers about how they are going to be paid. A quality lawyer is willing to review the timing of your payments and the timing of your filing, which ensures your adherence to the laws that govern your case.

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