Bankruptcy Lawyers Blog

Welcome to the Bankruptcy Lawyer Blog, a resource for people in need of a lawyer. This consumer-friendly blog can be used as a central resource to answer your questions about bankruptcy.

What Debts are Not Discharged Under Chapters 7 and 13?

The following is not a comprehensive list of the non-dischargeable debts under Chapter 7 and Chapter 13 Bankruptcy. Only an experienced bankruptcy attorney in your area can provide you with a comprehensive list.

Debts not listed on your bankruptcy papers
Alimony
Child support and other debts of this nature
Debts for personal injury or death caused by DUI or DWI
Student loans
Any fines or penalties for violating the law including traffic tickets
Federal, state and local taxes (most)
Any debts not discharged in a previous bankruptcy that was dismissed due to fraud

posted by Lynn @ 8:16 AM 0 comments

Sometimes, Bankruptcy is the Only Option

When an individual or company is hopelessly buried in debt, bankruptcy may be the only option. Bankruptcy allows individuals and companies to free themselves from this mountain of debt and start over. Bankruptcy can put you back in control, rather than having your debt control you.

Legally, you are not required to have a bankruptcy lawyer if you will be filing either Chapter 7 bankruptcy or Chapter 13 bankruptcy. However, bankruptcy law is very complex. In many cases, it will be in your best interest to retain an experienced bankruptcy attorney.

In fact, in March of 2005, the U.S. Senate passed a bill that makes it easier for banks, realtors, credit card companies, and other creditors to recoup some money owed to them by entities filing for bankruptcy. So, if you are considering personal bankruptcy, choose a bankruptcy attorney from The Bankruptcy Directory.

A bankruptcy attorney will save you countless hours of worrying and frustration. The bankruptcy attorneys listed in The Bankruptcy Directory are experienced in bankruptcy law and will assist you in deciding which chapter of bankruptcy is right for you. Your bankruptcy lawyer will walk you through every step of the bankruptcy process.

posted by Lynn @ 10:59 AM 0 comments

What is Chapter 11 Bankruptcy?

Chapter 11 bankruptcy is typically used for business bankruptcies and restructuring. It is not commonly used by individual consumers because it is far more complex and expensive to pursue. It allows businesses to reorganize themselves, giving them an opportunity to restructure debt and get out from under certain burdensome leases and contracts. Typically a business is allowed to continue to operate while it is in Chapter 11 although it does so under the supervision of the Bankruptcy court and its appointees.

Federal bankruptcy laws govern how companies go out of business or recover from crippling debt. A bankrupt company might use Chapter 11 of the Bankruptcy Code to reorganize its business and try to become more profitable again. Management continues to run the day-to-day business operations, but all significant business decisions must by approved by a bankruptcy court.

A company's securities may continue to trade even after the company has filed for bankruptcy under Chapter 11. In most cases, companies that file Chapter 11 are generally unable to meet the listing standards to continue to trade on Nasdaq or the New York Stock Exchange (NYSE). However, even when a company is delisted from one of those major stock exchanges, their shares may continue to trade on either the OTCBB or the Pink Sheets. There is no federal law that prohibits trading of securities of companies in bankruptcy.

Investors should be cautious when buying common stock of companies in Chapter 11 bankruptcy. It is extremely risky and is likely to lead to financial loss. Although a company may emerge from bankruptcy as a viable entity, generally, the creditors and the bondholders become the new owners of the shares. In most instances, the company's plan of reorganization will cancel the existing equity shares. This happens in bankruptcy cases because secured and unsecured creditors are paid from the company's assets before common stockholders. And in situations where shareholders do participate in the plan, their shares are usually subject to substantial dilution.

Sometimes, you may first learn about the company's bankruptcy in the news. If you hold stocks or bonds with a broker, your broker should forward information from the company to you. If you hold a stock or bond in your own name, you should receive information directly from the company. You may be asked to vote on the plan of reorganization although you may not get the full value of your investment back. Sometimes, stockholders get nothing back, and they don't get to vote on the reorganization plan. Even when stockholders do not vote, they should get a summary of the disclosure statement and a notice on how to file an objection to the plan.

posted by Lynn @ 9:56 AM 0 comments

What is Chapter 13 Bankruptcy?

Sometimes called "reorganization bankruptcy," Chapter 13 bankruptcy is quite different from Chapter 7 bankruptcy. In Chapter 7, most of your debts are totally wiped out, and, in exchange, you must relinquish any property that isn't exempt from seizure by creditors. In Chapter 13, you don't have to relinquish property, but you must use your income to pay some or all of what you owe to your creditors over time (usually 3-5 years depending on debts and income).

Because Chapter 13 requires you to use your income to repay your debt, you and your bankruptcy lawyer will have to prove to the court that you can afford to meet your payment obligations. If your income is too low or irregular, the court might not allow you to file Chapter 13, and if your total debt is too high, you will not be allowed to file Chapter 13. Your bankruptcy lawyer will explain eligibility to you in more detail.

Typically, before you file Chapter 13 bankruptcy, you must receive credit counseling from an agency approved by the United States Trustee's Office. These agencies are allowed to charge a fee for their services, but they must provide counseling for free or at reduced rates if you cannot afford to pay. There is also a filing fee for Chapter 13, which your bankruptcy lawyer will explain to you at your consultation.

posted by Lynn @ 7:22 AM 1 comments

Can I File Chapter 7 Bankruptcy?

Sometimes filing bankruptcy seems like the only viable solution to rid yourself of the mounting debt you've accrued during the last several years. There are several types of bankruptcy options, but only a certain one or two will be applicable to your financial situation. Chapter 7 bankruptcy is one of the more common types of bankruptcy filed.

Chapter 7 bankruptcy, often called liquidation bankruptcy, cancels your debts, but you may have to let the bankruptcy court sell (liquidate) some of your property for the benefit of your creditors. Chapter 7 refers to the chapter of the federal Bankruptcy Code that contains the bankruptcy law. The whole Chapter 7 process takes about four to six months, costs around $300 (some hire a lawyer and it costs more), and usually requires only one court appearance.

Due to the difficult and intricate nature of bankruptcy law, it is highly recommended that you hire a trained bankruptcy attorney to handle this very serious financial and legal undertaking.

You cannot file Chapter 7 if you already received a bankruptcy discharge in the last six to eight years, or if, based on your income, expenses and debt burden, you could complete a Chapter 13 repayment plan. A Chapter 13 bankruptcy is also called a wage earner's plan. It enables people with regular income to develop a plan to repay all or part of their debts. Under this plan, debtors propose a payment plan to make installments to creditors over three to five years.

To file for bankruptcy, you will fill out a petition and a number of other forms and file them with the bankruptcy court or in your area (if you hire an attorney, he/she will assist you with these forms and file them for you). The forms require some basic information including what property you own; income; debts; property you claim the law allows you to keep through the bankruptcy process (clothing, furniture, etc.); property you owned and money you spent in the last two years; and property you sold or gave away in the last two years.

We have all heard horror stories about how filing bankruptcy will ruin your financial life for at least seven years. Finding and hiring a trained bankruptcy lawyer in your area will certainly help minimize the stress of the whole bankruptcy process, and he/she can advise you on how to recuperate from such a drastic financial measure.

posted by Lynn @ 6:55 AM 0 comments

New Bankruptcy Law

The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, signed on April 20th, has been the cause of more than 11,000 last minute case filings in North Carolina alone. Thousands of people, all trying to avoid the enactment of this law on October 17th, The new law has changed former policies so that it is more difficult for Americans to escape financial obligations through Chapter 7; now people who have an income stream are more obligated to use Chapter 13 bankruptcy, which requires a long-term repayment plan.

posted by Tara @ 5:02 PM 0 comments