Bankrupt Loans » Bankruptcy

Archive for the ‘Bankruptcy’ Category

ÿþFiling for Chapter 11 Bankruptcy Instils Hope For Corporations In Financial Difficulty

Thursday, July 9th, 2009

Chapter 11 bankruptcy is especially suited to companies who somehow find themselves in financial turmoil and left with no alternative but to file for bankruptcy. When corporations file for Chapter 11 bankruptcy, it enables the bankruptcy court to order creditors to stop pursuing the corporation for the debts that are owed.

Financial Mismanagement

The reason most corporations find themselves filing for Chapter 11 bankruptcy is usually because they have not managed their finances very well causing debts to mount up to unmanageable levels. The corporation is therefore left in an unstable position and unable to pay it debts. When a corporation files for this type of bankruptcy, the court will appoint a trustee who will look at the debts and assets that the corporation has and will attempt to give some relief to the creditors as quickly and efficiently as possible.

Corporations seeking Chapter 11 bankruptcy are required to go through the same procedures that apply to individuals who file for bankruptcy under Chapter 7 and Chapter 13.

The difference with Chapter 11 bankruptcy and other forms of bankruptcy is that a company can be forced by its creditors to file for bankruptcy and further to this, once the process has started, the court will take control of the finances of the corporation and assist the creditors in retrieving what is owed to them. The main advantage for a company filing for Chapter 11 is that they can continue their operations as normal. The advantage to the creditor is that unsecured debts will at least be partially paid back instead of discharged completely as is the case with Chapter 7 reduncancy.

The basis of this kind of bankruptcy is that it assists creditors with increasing their chance of reaching a satisfactory resolution in their quest to retrieve their money and the corporation can also work at creating revenue whilst their finances and assets are handled by the court.

There are other downsides to filing for Chapter 11 bankruptcy and if a corporation s debts amount to more than their assets it will mean that the company shareholders will not receive any money until the bankruptcy process is complete. What this means for shareholders is that the rights they had over the corporation s assets are taken away during the bankruptcy process. All shares will effectively be frozen until a satisfactory resolution has been reached and the corporation s creditors have been reimbursed.

The reasons that a corporation might want to file for Chapter 11 bankruptcy are many.

It may be the easiest way out for most companies and This type of bankruptcy is not without its critics and many are passionate against permitting corporations to escape when they file bankruptcy. However, this form of bankruptcy is still prevalent in the corporate world. Even larger companies are not immune to the perils of financial mismanagement and big names such as K-Mart and WorldCom have recently been forced to file for Chapter 11 bankruptcy.

Posted in Bankruptcy | No Comments »

ÿþFiling For Bankruptcy: The Best Last Resort to End Your Debt Worries

Wednesday, July 8th, 2009

Bankruptcy can be looked at from several angles, but the common belief is that by filing for bankruptcy you will have your debts taken care of and once the process is complete your life will be back to normal and you can relax. This perception can cause many people to get blasé about filing for bankruptcy and for them it becomes a way of life. On the other hand, a lot of people are much more reluctant to go down the bankruptcy road in fear of what others will think of them.

No Assurance

The fact is that there are no assurances that once you have filed for bankruptcy your life will be completely debt free. There are many types of debt such as student loans, child support, fraudulent debts, major purchases of luxury items over five hundred and fifty dollars, and alimony payments that you will not be able to get rid of easily. Don t think that by filing for bankruptcy these debts will simply vanish.

In addition, another decision you need to make if you are to file for bankruptcy is whether you will file for Chapter 7 or Chapter 13 bankruptcy. The former option is probably your best bet if you are after absolutely liquidation of your debts. However, it is only possible to file for Chapter 7 bankruptcy once federal bankruptcy laws, when implemented, prove that you have the eligibility to file for this type of bankruptcy.

Another option you may wish to consider is Chapter 13 bankruptcy. This differs from Chapter 7 bankruptcy in that it will assist you with rearranging your debts rather than liquidating them. The advantage to this is that Chapter 13 bankruptcy helps make sure that your payments are reduced putting you in a much better position to repay your debts and once again regain financial stability.

It is usual when filing for bankruptcy under Chapter 13 that it can take between three and five years to rid yourself of your debts completely.

In addition to this, there are quite a few steps involved with Chapter 13 bankruptcy before the process is complete. You will be allowed to keep certain assets and in fact these assets will be protected under the regulations that govern Chapter 13 bankruptcy. However, as is the case with Chapter 7 bankruptcy, you need to meet several requirements before you will be eligible to file for Chapter 13 bankruptcy.

You need to remember that before you file for any kind of redundancy it is advisable to look into every option available to you. You could be eligible for debt consolidation which will reduce your monthly outgoings and help you to get back on track. Don t simply opt for bankruptcy as it seems like the easiest solution to your situation. Filing for bankruptcy is a drastic measure and should only ever be used as the last resort.

Posted in Bankruptcy | No Comments »

ÿþWhy Somebody Might Perform a Bankruptcy Search

Tuesday, July 7th, 2009

Did you ever wonder what a bankruptcy search involves and why somebody might be interesting in running such a search? To put it simply, a bankruptcy search is a search process used by a loan company or company providing other financial services, when you apply for credit with them.

All companies of this nature are going to need to view your whole credit history. You need to always keep this in mind, but also remember that this particular type of search is going to expose essential information about your credit history and your attitude towards money. If these companies see that you have filed for bankruptcy in the past and especially if this has happened more than once, they will automatically think you are careless with money or that your earnings have never been sufficient to cover your debts.

It is likely that these companies will not approve your credit application or approve any other application for financial assistance. Bankruptcy should never be taken lightly and you really need to think about it before you consider it as an option. Many people who owe a lot of money and who are constantly being chased by creditors may think that bankruptcy is their only way out, but the future needs to be considered also. You need to know that your credit history will be substantially affected and bankruptcy stays on your credit record for approximately seven years. That is a long time and you really need to weigh up all the alternative options before you commit yourself to bankruptcy.

How They Do It

When a company or authoritative individual processes a bankruptcy search they use a number of different methods. The most common method is to use a system specialising in bankruptcy searches. These automatically allow them to enter a name and the search results will tell them if this person has ever filed for bankruptcy in the past.

These searches are completely legal and financial institutions and loan companies have a right to see this information especially if you are asking them to lend you their money. Your credit history says a lot about who you are and whether you are likely to pay the money back in a timely manner or have problems with repayments.

It is essential that you realise just how bankruptcy could affect your life in the future and more importantly how you plan to arrange your finances in the future. Once you have all the facts it might make you think twice before filing for bankruptcy. For some bankruptcy is indeed the best option, but you need to look at the big picture and look at your individual situation. Bankruptcy should really be used as the last resort when there are no alternative solutions. Having your credit record marked for seven years is a long time, but it might make you think twice about your finances and getting them into order.

Posted in Bankruptcy | No Comments »

ÿþWhy Filing Bankruptcy Is Not Always The Best Option

Monday, July 6th, 2009

If you have found yourself in extreme financial difficulty, owing large amounts of money to creditors, and you see no clear way out, you may see filing bankruptcy as the only option open to you. However, in the majority of cases there are often much better choices available than opting for this extreme measure and this is what you need to realise before you make such a drastic decision. You need to know that when filing bankruptcy your credit report will be adversely affected for approximate seven years and in some cases as much as ten years.

Obtaining New Credit

This black mark on your credit record can have devastating results on your ability to obtain credit in the future and your overall credit history report. When you fill out an application for financial assistance most creditors will ask you if you have filed for bankruptcy in the past. Even if you filed for bankruptcy ten years ago you still have to declare this. When a creditor sees your credit history after filing bankruptcy things will get very difficult for you.

Another more sinister factor about filing bankruptcy is even though your credit report will be clear of the details of your bankruptcy after ten year, federal records will still contain this information for the rest of your life and unfortunately anybody can access these federal records. It is also common practice for employers to check out your credit record to make sure that you have not filed for bankruptcy in the past. This can also have a drastic effect on your chances of employment on account of filing bankruptcy. This is why you should really think about the consequences beforehand.

Even insurance providers will look at your credit report to ascertain whether you are a trustworthy customer. Most insurance providers have access to the same systems as financial institutions and can easily call up this information from a database. When they find they you have filed for bankruptcy these insurance providers will be less willing to insure you and if they do you will be subject to paying higher premiums as a result.

Filing bankruptcy can also have an effect on your ability to locate good accommodation. Many rental companies will check out your credit history before they are prepared to lease you an apartment. If they find you have filed for bankruptcy they will probably be reluctant to sign over a lease.

The expense of filing bankruptcy is another large pitfall. Bankruptcy law has changed in such a way that you will now pay more for filing bankruptcy. Also, it is likely you will need to hire the services of a bankruptcy lawyer which will only increase costs further. On top of this you will also need to pay filing fees and these can total two thousands dollars or more.

It makes a lot of sense to look into the alternative options to filing bankruptcy. There are lots of options including debt consolidation which may offer an easier and less painful way out of your financial hardship. Explore all avenues before you decide to put yourself through the drastic process of bankruptcy.

Posted in Bankruptcy | No Comments »

ÿþWhat You Need To Know About Chapter 7 Bankruptcy

Sunday, July 5th, 2009

You need to come to a few big decisions before you can file for bankruptcy and the most important of these is whether to file for Chapter 13 bankruptcy or Chapter 7 bankruptcy. The most common of these two options is Chapter 7 bankruptcy and before you decide to choose this option you need to learn a few things about it so that you are sure it is the right choice for you.

Chapter 7 Bankruptcy

Also referred to as liquidation , this kind of bankruptcy is the common choice for most people. This type of bankruptcy will eliminate your existing debts, but you need to remember that the bankruptcy court has the right to sell or liquidate a portion of your property in order to satisfy the debts that you owe to your creditors.

This option is so common because more often than not the person owes so much money to creditors that it is not feasible to file for bankruptcy and then expect the debt to be totally forgotten. It is often the case that the individual will have to give up a number of their assets such as their car and even their home in order that the court can recover some of the debt that is owed to creditors.

The process of filing for Chapter 7 bankruptcy can be very complex but if you have done your research and have a general idea of what you are doing any problems you face should be minimal. The first thing you need to do is look closely at your debt. Work out to the exact amount how much money you and who your creditors are. Next, you need to study all the alternatives and ensure there are no other options available to you. For example, could you get another job or save some money in order to avoid going bankrupt? If the answer is no to this and other options then your only option is to then file for bankruptcy. Bankruptcy should only be used as the last resort to solve your financial crisis.

Now you need to be certain that you are in fact eligible to file for Chapter 7 bankruptcy. Once you have worked this out and are eligible then you can start completing the relevant forms and arranging a meeting so that you can learn everything you need to know about the process and the next steps you need to take. You ll need to also wind up any secured debts and file any motions or objections as necessary.

The next stage is getting your discharge and the process is almost complete. If you are not totally comfortable with dealing with this process alone then you may wish to find somebody to give you some assistance. You can find some excellent professionals who are well versed in the bankruptcy process and who will ensure you are doing it right and indeed it is the right option for you.

Posted in Bankruptcy | No Comments »

ÿþBankruptcy Lawyers: Allow The Professionals to Assist You

Saturday, July 4th, 2009

Even just thinking about filing for bankruptcy can leave you with a terrible feeling in the pit of your stomach and you will have nightmarish thoughts of losing your home and every dream you ever had of a comfortable life will seem to shatter before your eyes. The fact is you are not alone. Millions of others are in the same situation and experiencing the same nightmares as you.

There is real hope for your situation, but this relies on using an experienced bankruptcy lawyer to guide you through the bankruptcy process. A bankruptcy lawyer will ensure that your bad financial situation doesn t necessarily mean you have to live out your nightmare scenario. In fact, a the best bankruptcy lawyers will and have in the past helped people to get through the heartache of bankruptcy each day and are experts in their field.

Bankruptcy situations that relate to individual cases are usually better handled by specialist bankruptcy lawyers. This applies even if you have started the process yourself or you are forced by your creditors to file for bankruptcy. If you have started the proceedings yourself then you are probably hoping that by filing for bankruptcy you will be able to rid yourself of all of your debts. If alternatively, your creditors forced you into initiating the bankruptcy proceedings then their goal is for the process to recover the money and repay what is owing to them.

It doesn t matter whether you were to one to initiate the bankruptcy process or were forced by your creditors; expert bankruptcy lawyers will assist you with the process and make it as bearable as possible. Once you have hired a lawyer they will assess your financial situation and will only suggest bankruptcy if that is the only hope of a positive solution to the situation you are in.

Your bankruptcy lawyer will also be able to give you advice on whether you should file for Chapter 13 bankruptcy or Chapter 7. Your lawyer should be an expert in both areas and therefore be able to suggest the best plan of action. If your situation is so bad that you are at risk of losing your home or car then your best option is to hire a bankruptcy lawyer who will hopefully be able to stop such extreme circumstances from happening.

If you really have no other option, but to face bankruptcy then you need to start looking for a bankruptcy lawyer now. Even if you are not sure what your options are a lawyer will be able to give you a definite answer. If your financial position seems severe to the extent of foreclosure then this really is the best action you can take. Speaking to a bankruptcy lawyer today could really help to save your finances. The whole process of bankruptcy is very complex and much too complicated for the typical person to understand. Therefore, it makes perfect sense to consult the professionals and let them find the best solution for you.

Posted in Bankruptcy | No Comments »

ÿþThe Complexities of Bankruptcy Law

Friday, July 3rd, 2009

Bankruptcy law is constantly evolving although most of its rules and regulations are mostly not affected by this constant stream of changes. Did you know that a lot of states actually have their own individual bankruptcy laws in place? These laws help to decipher the ways people file for bankruptcy, but if this conflicts with the federal law then federal law takes priority. What this means to you is that you will not have any advantage if you file for bankruptcy in another state than the state in which you normally reside.

Different Chapters

Let s take a close look at the current bankruptcy laws. The law consists of three main areas within which business and individuals are grouped. The Chapter 13 bankruptcy law is relevant to individuals with restricted resources with which to settle their existing debts and it would take them between three and five years to settles these debts.

Chapter 7 is a more extreme bankruptcy law. Under this law, the individual needs to clear debts that would not be possible to pay off otherwise. This is much more serious than Chapter 13 as the process required the individual s assets to be liquidated in order to settle the existing debts.

However, the current bankruptcy laws require, in spite of the varied Chapters you can use to file for bankruptcy that a number of financial obligations must be met and can t be discharged when you file for bankruptcy. If your debts fall under this heading then you would get little benefit by filing for bankruptcy as the current laws are going to make bankruptcy less of a viable option in assisting you with your debts.

However, it s a good idea to research as much as you can on the complexities of the current bankruptcy law so that you can learn how to put these laws to good use and to your advantage. However, this is often tougher than it appears and the majority of people who file for bankruptcy will find the journey hard going.

Therefore, it probably makes a lot more sense to seek the help of a professional who is experienced and qualified in the area of bankruptcy law. This would normally be in the form of a bankruptcy attorney who specialize in this area and who will assist you in plotting the best course of action to suit your situation.

The fact is that filing for bankruptcy is a very drastic decision and it should only be considered after you have exhausted all over options for paying or clearing your existing debt.

It is a much better option to consider using financial assistance from debt consolidation companies or receiving counselling from a debt specialist than automatically opting for bankruptcy. If these avenues have been explored to no avail then you need to hand over the reins to somebody (it could even be you) who understands the complexities and consequences of filing for bankruptcy and the laws that govern the process.

Posted in Bankruptcy | No Comments »

ÿþKnowing When The Time Is Right To File For Bankruptcy

Thursday, July 2nd, 2009

A lot of people think that a right time to file for bankruptcy does not exist. This is the reason many don t make the effort to get bankruptcy information and check out their options when things start to get difficult. These people are of the belief that bankruptcy shouldn t ever be a consideration for anyone. The unfortunate truth is that things do sometimes go terribly wrong and it doesn t matter what you do. You try and try to balance your expenses and pay your bills, but it is impossible to do it all and eventually you find yourself in a bad situation. A recession can be catastrophic for many people and nobody is immune to the perils of redundancies, reduced salaries, and increasing debt. You might suddenly find that you have so much debt you can t see a way to pay them all on time and if things get really bad you may need to look at bankruptcy as an option. Of course this will damage your credit scoring, but when you have no other options you need to jump in at the deep end. Researching bankruptcy as much as you can will help you make the right decision. It is not an option to be taken lightly and you need to know the effects of your decision.

Obtaining the Correct Bankruptcy Information

Prior to contacting a bankruptcy lawyer, you ll need to find out as much as you can and read a lot of bankruptcy information. The more you can read the better and there are plenty of resources available offline and online. Doing this will mean you don t need to visit an information centre where you ll be given lots of bulky and sometimes confusing information on bankruptcy. It would be a much better option to simply visit a lawyer and ask them for the bankruptcy information. However, this will cost you a little money. Lawyers charge for their time by the hour so if you lack any spare money to pay for this your better option is to carry out research yourself. You don t need to worry. There is a wealth of information available and it won t cost you much, if anything, to carry out your own research.

Working On Your Bankruptcy Petition

If you make the decision to file for bankruptcy once you have read as much bankruptcy information as possible, you need to work on the petition you will submit to the court. It may be necessary to hire a lawyer now and get some assistance preparing your petition. A lawyer will know the procedure well and will save you a lot of time and energy going over all the paperwork. However, you might feel that you can deal with the paperwork yourself in which case you can visit a local bankruptcy court and obtain the relevant forms. You will need to complete these forms and submit them to the court.

Posted in Bankruptcy | No Comments »

ÿþPersonal Bankruptcy: A Very Worrying Thought

Wednesday, July 1st, 2009

In the majority of cases, just thinking about personal bankruptcy is enough to scare somebody so much that they will panic and be afraid to face their financial problems. Unfortunately, statistics show that approximately five people out of every thousand have found themselves declaring personal bankruptcy and even more worrying, this figure is on the rise. In addition to this, reports from research agencies show that the main reason that people are filing for personal bankruptcy is because of excessive spending causing excessive debt. If these same people then experience the financial burden of unplanned and unforeseen circumstances this can throw their finances into complete turmoil.

The Typical Bankrupt Person

There are many reasons why a person might file for bankruptcy. Losing a job or paying for divorce proceedings are common as is the death of a spouse. All have the potential to spell disaster for your finances. The typical person that chooses to file for bankruptcy is usually someone who has graduated from high school, is a blue collar worker, and is also the head of the household (although they are probably in the category of lower middle income). At the same time this person is also going to have stretched their finances too far and will have relied heavily on credit in the past.

Laws currently exist that work to protect both the creditor and debtor and such laws are in place to make sure that those debtors who are honest suffer as little as possible due to their financial mismanagement. The same law also offers protection to the creditor and helps them to recover any monies owing to them.

If you are considering filing for personal bankruptcy there are two choices available to you. The first is that you can choose to file for Chapter 7 bankruptcy. The second option is Chapter 13 bankruptcy and both differ quite substantially. Chapter 7 bankruptcy requires each of your assets (that are not exempt) to be liquidated and the proceeds of these assets will be dispersed amongst your creditors to satisfy the debt owing to them.

Chapter 13 bankruptcy is a slightly gentler option in that it does not require any liquidation of assets. It does however require you to reorganize your debts in such a way that you are able to pay off the debts over a timescale of between three and five years.

However, fear exists amongst many financial analysts who regard personal bankruptcy as a real thread to the health of the economy and there is good reason for this. The number of individuals who file for personal bankruptcy is increasing causing a worrying trend. In turn this has led to some dramatic measures being taken.

Only recently, in March 2005, the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 was introduced and this forces individuals who file for personal bankruptcy to go through a number of tests on the state of their income and to adhere to stricter regulations before they are permitted to declare this type of bankruptcy.

Posted in Bankruptcy | No Comments »

ÿþCommon Bankruptcy Questions

Tuesday, June 30th, 2009

There are a lot of commonly asked bankruptcy questions. Unfortunately, this is not surprising as bankruptcy is one of the most difficult issues anyone can face. Bankruptcy should always be the very last resort and only be considered if you are crippled with heavy debts, receiving call after call from creditors , and you are desperate to find a way out.

Prior to starting the bankruptcy process and the bureaucracy of the paperwork, you need to ask yourself a few questions that get raised often and which you are going to need to have the answers to.

Who Will Find Out I Am Bankrupt?

This question is one of the most commonly asked of bankruptcy questions. You want to know exactly who needs to know about your situation once you have filed for bankruptcy. You might be planning to apply for jobs in the future or you may wish to apply for a loan. You ll need to know what information people are able to obtain and whether they can see you have filed for bankruptcy.

If you have a lot of large clear and free assets, a letter will be sent to each of your creditors informing them of your intention to file for bankruptcy. Don t worry about this; this letter will put a stop to the phone calls chasing you for money. When you file for bankruptcy, this information is made public allowing anybody access to it if they wish to see it.

What Assets Can I Keep?

One other common bankruptcy question you might want to ask is which of your assets you are allowed to keep. The good news is that you ll no doubt be allowed to keep a lot of your assets and belongings. However, you should bear in mind that you do owe money and that some of your assets will be used to cover the money that you owe to your creditors.

When you file for bankruptcy a note of your assets will be made. Any assets belonging to you at the time of bankruptcy will be taken into consideration. If they have a resale value greater than the sum you owe on the assets (taking away any exemptions), they will be signed over to your bankruptcy trustee and used to cover your debt. This means that a lot of the hard work will be done for you and you can rest assured that the payments to your creditors will be dealt with efficiently.

What Happens To My Earnings?

If you are in employment when you file for bankruptcy, any money you earn will be paid to you directly. However, this is only for the present time until you have bills that need to be paid.

These are simply a few of the bankruptcy questions that are asked. It is worth spending some time to learn as much as you can about bankruptcy so that you can be sure it is the right choice for your situation.

Posted in Bankruptcy | No Comments »