Of course, it is not just happening in Texas. Men and women in households around this country are facing difficult financial decisions in light of our current economy. The questions being raised around the dinner table can range from how to scale back the summer vacation plans and who is going to be responsible for clipping coupons this week to which bills can go unpaid until next month and how to let your youngest child know that the plans to attend her dream college needs to be put on hold. What are the options available to an individual or a family that needs to see some improvement in their financial standing or else face dire consequences?
In an effort to avoid a home foreclosure, many people try to sell their homes and look for a new place to live with a lower rent or mortgage payment. But, with today's housing market, properties can have "For Sale" signs planted in their front yards for months before an interested buyer is found. More and more debtors are turning to debt consolidation services, which promise on those daytime and late-night television ads to lower your monthly payments into one manageable fee. However, what if your situation is so desperate that these options will not be enough to ease your burden? As Texan debtors and others throughout the United States are deciding, filing for bankruptcy protection may be the best option in these troubling economic times.
The recent numbers concerning bankruptcy in our state show what is increasingly becoming a harsh reality for our fellow Texans, particularly in Austin, Houston and San Antonio. Just in the first few months of 2009, court records indicate that approximately 2,672 bankruptcy cases have been filed in Houston. This number shows a 6.2% increase over the 2,515 cases that were filed during the same time period last year. The jump in filings in some of our other major cities is even more startling. In San Antonio, the bankruptcy filings for the first three months of 2009 totaled 1,127, which is a 22.5% increase from the 920 such filings, which occurred between January and March of 2008.
And, the numbers indicate that those living in our state capitol in Austin are also trying to relieve themselves of some of their overwhelming financial burdens. Bankruptcy filings of all types in the Austin area totaled just over 800 in the first quarter of 2009, which is up 25% from the same period last year. Despite data that shows more Texans are struggling to maintain their personal financial standing, our state is still faring better that most others in the country. Last year, Texas ranked forty-sixth in the nation in bankruptcies, even better than our 2007 ranking which placed us at number thirty-nine. Of course, this relatively good news does nothing to lessen the pain of each individual who is facing bankruptcy.
For those who are considering the option of declaring bankruptcy, you should be aware of the state and federal laws that affect such filings in Texas. There are two options available to individuals-Chapter 7 or Chapter 13 bankruptcy.
Chapter 7, the most common approach, is considered straightforward liquidation bankruptcy in which your non-exempt assets are handed over to a trustee appointed by the court and then converted into cash to pay your creditors. In reality, most people who file Ch. 7 have no non-exempt assets to sell and the Ch 7 bankruptcy filing essentially becomes a fresh start for their finances. The federal bankruptcy laws in Texas have deemed it so you can determine if you want to use the federal exemption statutes or the Texas statutes when cataloging the assets that creditors are not allowed to touch.
With Texas having the most generous list in the country concerning what debtors may keep, most bankruptcy filers choose to follow the Texas guidelines. You are eligible for Ch 7 bankruptcy if your income is below that of the median family income in Texas, as determined by U.S. Census Bureau statistics. If it is initially determined that your income is too high to qualify for Chapter 7 bankruptcy, the court can review your income from the past six months and your current expenses to form a decision based on your specific situation.
If the bankruptcy court determines that your financial standing makes you ineligible for a Ch 7 filing, then Ch 13 may be the most appropriate action for you. Under this system, known as debt reorganization bankruptcy, debtors develop a payment plan that will repay creditors over a period of three to five years. If you have some non-exempt assets that you wish to retain even after declaring bankruptcy, you may prefer to file as a Chapter 13 bankruptcy. This also holds true for people who have debts such as taxes or students loans that cannot be cleared through a Chapter 7 bankruptcy.
While a Chapter 13 filing may be seen as similar to working with a debt consolidation service, as both set up regular payments with the intention of bringing you current with your creditors, individuals looking for financial relief should know there are differences in the two options. With Chapter 13, you get the assurance of a court-appointed trustee (who may or may not be lawyers) who works with you to make sure that payments are appropriate and processed correctly. On the other hand, some private companies may be scams out to make a profit by charging exorbitant fees and they may not even result in the credit relief you desire. Such contracts should only be signed after completing extensive research on the company and reading the experiences that others have had.
Filing bankruptcy may seem like a wonderful solution to a financial crisis that has been draining you for years and this is true in many cases. However, you must remember that when you hire an attorney and declare bankruptcy you are affecting your assets, your credit score, and creating a record that is available to the public. It is essential that you have an effective and thorough bankruptcy lawyer who will be by your side as you navigate through the bankruptcy courtroom proceedings and the cumbersome paperwork.
Mistakes can result in losing assets that you consider essential to protect. Federal criminal charges may result if you do not report some of your assets. Why take any chances with your money, your treasured belongings, and even your future? If you may be filing a Chapter 7 or Chapter 13 bankruptcy soon, your first step should be a phone call to an experienced bankruptcy attorney.
Wednesday, June 10, 2009
The Bankruptcy Process - Debt Free in 12 Months
Opting for Bankruptcy is an important decision of your life as it can transform your life forever. It is a decision taken as a last resort to payoff such a debt that has become complex to reimburse through the process of installments. Before going bankrupt, you should know about assets both liquid and fixed lying with you, which can pay off your complete or may be most of the underlying debt.
A fallacy about bankruptcy is that it will penalise you by seizing everything you own ranging from clothes to chattels, which is however so not the case. Under the bankruptcy law, you are protected against your creditors and it offers you another chance to go for a spanking new start in life. As per Insolvency Act Section 283 (2), the debtors are allowed to keep their belongings such as clothes, household goods, furniture, and own conveyance (the vehicle should not be too expensive otherwise you will have to surrender that as well). In case the car is taken, another car is provided of less worth performing the same job. In case of pensioners, you will be entitling for your pensions despite going bankrupt.
This Bankruptcy Law was altered in 2004 in which the obligatory period needed to dole out under the law was limited to one year, which was previously three years. Another positive thing under this law is that it gives a chance to the bankrupts to remodel their lives. As the bankruptcy process has been made so lucid and smooth, the bankrupts can be free from the bankruptcy charge even in three months if the creditors have no objection on that.
The reduction of bankruptcy process from three years to 12 months has brought a sigh of relief to the debtors opting for bankruptcy or planning to go for it as they feel it is a less painful time than it was previously. Since the time the bankruptcy law has facilitated the discharge time to 12 months, most of the bankruptcy cases in UK are settled within 7 months on an average basis. During the process of bankruptcy, if someone is found guilty of cheating or irresponsibility of any kind, the bankruptcy officer has the right to levy the bankruptcy restrictions for a period of 2 years to 15 years under the Bankruptcy Restriction Order.
Prior to the new law, creditors had the authority to wait for as many years as they want before asking for the equity to be released from a property. However, this has been limited to a period of three years. So the axe is likely to fall on you quite sooner.
The trustee can ask the debtors to give some portion of their income to the creditors. It depends upon how much a debtor can afford in this regard. This process is known as an Income Payments Order (IPO), and it remains effective for three years since the bankruptcy date. It means that although the debtor is released from the bankruptcy in 12 months time, he/she still has to pay the IPO for another 2 years.
Being bankrupt is a very painful time in a person's life. It is a last resort to any debt reimbursement method, which usually results in stigma, probable job loss, and embarrassment in front of family, neighbors, and friends as everything is investigated and you have to visit court for legal proceedings as well. Furthermore, everything is also exposed in the newspaper under the law. Going to court for the legal proceedings have a long term effect on a person's credibility and psychology. In order to face the complex procedure of bankruptcy, you should elect a qualified and experienced bankruptcy team to facilitate the whole process in an efficient manner without any hassle.
Despite all the mental and psychological stress a person faces during the bankruptcy process, at least there is a feeling of relief, though it is achieved with the passage of time.
A fallacy about bankruptcy is that it will penalise you by seizing everything you own ranging from clothes to chattels, which is however so not the case. Under the bankruptcy law, you are protected against your creditors and it offers you another chance to go for a spanking new start in life. As per Insolvency Act Section 283 (2), the debtors are allowed to keep their belongings such as clothes, household goods, furniture, and own conveyance (the vehicle should not be too expensive otherwise you will have to surrender that as well). In case the car is taken, another car is provided of less worth performing the same job. In case of pensioners, you will be entitling for your pensions despite going bankrupt.
This Bankruptcy Law was altered in 2004 in which the obligatory period needed to dole out under the law was limited to one year, which was previously three years. Another positive thing under this law is that it gives a chance to the bankrupts to remodel their lives. As the bankruptcy process has been made so lucid and smooth, the bankrupts can be free from the bankruptcy charge even in three months if the creditors have no objection on that.
The reduction of bankruptcy process from three years to 12 months has brought a sigh of relief to the debtors opting for bankruptcy or planning to go for it as they feel it is a less painful time than it was previously. Since the time the bankruptcy law has facilitated the discharge time to 12 months, most of the bankruptcy cases in UK are settled within 7 months on an average basis. During the process of bankruptcy, if someone is found guilty of cheating or irresponsibility of any kind, the bankruptcy officer has the right to levy the bankruptcy restrictions for a period of 2 years to 15 years under the Bankruptcy Restriction Order.
Prior to the new law, creditors had the authority to wait for as many years as they want before asking for the equity to be released from a property. However, this has been limited to a period of three years. So the axe is likely to fall on you quite sooner.
The trustee can ask the debtors to give some portion of their income to the creditors. It depends upon how much a debtor can afford in this regard. This process is known as an Income Payments Order (IPO), and it remains effective for three years since the bankruptcy date. It means that although the debtor is released from the bankruptcy in 12 months time, he/she still has to pay the IPO for another 2 years.
Being bankrupt is a very painful time in a person's life. It is a last resort to any debt reimbursement method, which usually results in stigma, probable job loss, and embarrassment in front of family, neighbors, and friends as everything is investigated and you have to visit court for legal proceedings as well. Furthermore, everything is also exposed in the newspaper under the law. Going to court for the legal proceedings have a long term effect on a person's credibility and psychology. In order to face the complex procedure of bankruptcy, you should elect a qualified and experienced bankruptcy team to facilitate the whole process in an efficient manner without any hassle.
Despite all the mental and psychological stress a person faces during the bankruptcy process, at least there is a feeling of relief, though it is achieved with the passage of time.
Filing For Bankruptcy - Is it the Best Choice?
There are several ways to view Bankruptcy, one widespread idea is that by filing for Bankruptcy the problems and debts that have been worrying you will now be all sorted out and getting on with your life will be easy. This belief can be the reason that a lot of folk are nonchalant when it comes to filing for bankruptcy, for people like that it can become a regular occurrence. Alternatively, there are also many who are quite reluctant to broach bankruptcy as they are often worried about what others will think.
There is no guarantee
The truth is that there aren't any guarantees that once bankruptcy is filed, your life will be entirely free of debt. There are lots of kinds of debt these include fraudulent debts, alimony payments child support, student loans, and large acquisitions of extravagant possessions of more than five hundred and fifty dollars that you won't be able to get clear of so effortlessly. Filing for bankruptcy doesn't make these debts just disappear.
Also, one more choice you must make if you are to file, is whether you will file for Chapter 13 or Chapter 7 bankruptcy. The latter choice is most likely your best option if you want your debts to be totally liquidated. On the other hand, it is only feasible to file for a Chapter 7 bankruptcy once federal bankruptcy laws show that you have the necessary eligibility to file for this sort of bankruptcy.
An additional alternative you might like to think about is Chapter 13 bankruptcy. This is different from the Chapter 7 bankruptcy in that it will help you with reorganizing your debts instead of liquidating them. The benefit of this is that Chapter 13 bankruptcy facilitates making certain that your expenses are reduced this puts you in a much more advantageous situation to pay off your debts.
It is a good idea to bear in mind that prior to filing for any kind of redundancy it is prudent to look into all the alternatives obtainable. You may be eligible for debt consolidation which will decrease your monthly expenses and assist you to get back to financial stability. Don't just choose bankruptcy because it appears to be the easiest way out of your situation. Filing for bankruptcy is an extreme action to take and should only ever be used when all other avenues have been explored.
There is no guarantee
The truth is that there aren't any guarantees that once bankruptcy is filed, your life will be entirely free of debt. There are lots of kinds of debt these include fraudulent debts, alimony payments child support, student loans, and large acquisitions of extravagant possessions of more than five hundred and fifty dollars that you won't be able to get clear of so effortlessly. Filing for bankruptcy doesn't make these debts just disappear.
Also, one more choice you must make if you are to file, is whether you will file for Chapter 13 or Chapter 7 bankruptcy. The latter choice is most likely your best option if you want your debts to be totally liquidated. On the other hand, it is only feasible to file for a Chapter 7 bankruptcy once federal bankruptcy laws show that you have the necessary eligibility to file for this sort of bankruptcy.
An additional alternative you might like to think about is Chapter 13 bankruptcy. This is different from the Chapter 7 bankruptcy in that it will help you with reorganizing your debts instead of liquidating them. The benefit of this is that Chapter 13 bankruptcy facilitates making certain that your expenses are reduced this puts you in a much more advantageous situation to pay off your debts.
It is a good idea to bear in mind that prior to filing for any kind of redundancy it is prudent to look into all the alternatives obtainable. You may be eligible for debt consolidation which will decrease your monthly expenses and assist you to get back to financial stability. Don't just choose bankruptcy because it appears to be the easiest way out of your situation. Filing for bankruptcy is an extreme action to take and should only ever be used when all other avenues have been explored.
Can Bankruptcies Stop Foreclosures?
It is a scary scenario more and more Americans are facing. The rate of foreclosure on properties in the United States is growing at an unprecedented pace. As the world continues to loom in a global recession, some find themselves battling with lenders in an effort to save their homes and wondering, " Can bankruptcy stop foreclosure?"
The good news is, there is bankruptcy protection available to homeowners who are struggling to make ends meet. Chapter 13 bankruptcy is a legal procedure that essentially reorganizes an individual's debts in a way that makes them more reasonable to handle. Most of these debts are repaid - usually at a reduced rate - to a trustee over the course of two to three years. Large and exempt debts such as student loans, taxes, alimony, and mortgages can be worked into the repayment plan, but continue much longer.
Chapter 13 bankruptcy isn't for everyone. However, it can serve as a powerful tool when it comes down to saving a home. In most cases, once an individual files for Chapter 13 protection, a stay is ordered to temporarily halt any foreclosure proceedings. This automatic stay prevents the foreclosure of the home and also stops any collection actions that may be taken against the debtor. This stay is effective regardless of what stage the foreclosure is in. With the stay in place, the homeowner and attorney can map out a plan to save the property.
It is very important to note that anyone can file for bankruptcy without the assistance of an attorney. This, however, is not advisable, especially if a home is part of the debt. An attorney is much better suited to take the necessary steps needed to save the house from foreclosure. While hiring an attorney might be a financial burden, specifically for someone who is already having problems with paying the bills, it is well worth the expense.
The debtor has 15 days from the time of the bankruptcy petition to file a proposed payment plan detailing his or her income and living expenses. Once the petition has been filed and the repayment plan accepted, the debtor must pay the trustee on time every month for the duration of the payment plan. Failure to pay the trustee can result in termination of bankruptcy protection.
In addition, the homeowner is responsible for making on-time payments to the mortgage company. If at anytime the debtor falls behind in payments, the court has the ability to lift the automatic stay thus permitting the mortgage company to move forward with the foreclosure process.
During the bankruptcy payment plan, the debtor must catch up on all past due payments. With the reduction of absence of other debts (credit card, car, etc.), the homeowner usually finds he or she has the ability to make these payments and catch up. It may also be possible to refinance the home after the repayment period in an effort to lower future payments.
If you are behind on mortgage payments and afraid of what the future might bring, contact an attorney today to find out how bankruptcy protection can prevent foreclosure.
The good news is, there is bankruptcy protection available to homeowners who are struggling to make ends meet. Chapter 13 bankruptcy is a legal procedure that essentially reorganizes an individual's debts in a way that makes them more reasonable to handle. Most of these debts are repaid - usually at a reduced rate - to a trustee over the course of two to three years. Large and exempt debts such as student loans, taxes, alimony, and mortgages can be worked into the repayment plan, but continue much longer.
Chapter 13 bankruptcy isn't for everyone. However, it can serve as a powerful tool when it comes down to saving a home. In most cases, once an individual files for Chapter 13 protection, a stay is ordered to temporarily halt any foreclosure proceedings. This automatic stay prevents the foreclosure of the home and also stops any collection actions that may be taken against the debtor. This stay is effective regardless of what stage the foreclosure is in. With the stay in place, the homeowner and attorney can map out a plan to save the property.
It is very important to note that anyone can file for bankruptcy without the assistance of an attorney. This, however, is not advisable, especially if a home is part of the debt. An attorney is much better suited to take the necessary steps needed to save the house from foreclosure. While hiring an attorney might be a financial burden, specifically for someone who is already having problems with paying the bills, it is well worth the expense.
The debtor has 15 days from the time of the bankruptcy petition to file a proposed payment plan detailing his or her income and living expenses. Once the petition has been filed and the repayment plan accepted, the debtor must pay the trustee on time every month for the duration of the payment plan. Failure to pay the trustee can result in termination of bankruptcy protection.
In addition, the homeowner is responsible for making on-time payments to the mortgage company. If at anytime the debtor falls behind in payments, the court has the ability to lift the automatic stay thus permitting the mortgage company to move forward with the foreclosure process.
During the bankruptcy payment plan, the debtor must catch up on all past due payments. With the reduction of absence of other debts (credit card, car, etc.), the homeowner usually finds he or she has the ability to make these payments and catch up. It may also be possible to refinance the home after the repayment period in an effort to lower future payments.
If you are behind on mortgage payments and afraid of what the future might bring, contact an attorney today to find out how bankruptcy protection can prevent foreclosure.
I Have a County Court Judgment - What Does This Mean?
Since the autumn of 2008 and the onset of what is being reported as the country's worst recession since the 1930's, more and more businesses are finding that they have been issued with a County Court Judgment commonly known as a CCJ. The purpose of this article is to explain what a County Court Judgment is, why they are issued and what the ramifications of receiving a County Court Judgment are.
If a creditor of a business is not being paid in a timely fashion, the first action they will normally take is to attempt to discuss the problem with their errant client and agree an acceptable repayment plan. If this strategy does not work and the client continues not to pay, the creditor's next option may be to employ a debt collecting agent. However, if the debt continues to remain unpaid, the creditor can then decide to ask the Court for help in enforcing the payment of the outstanding debt. This Court issued enforcement is called a County Court Judgment.
In order to request the Court to issue a County Court Judgment, the creditor must first apply to the local Court. The creditor will have to provide proof of the debt that they are owed and a record of the actions they have undertaken to try and recover the debt. The creditor will normally use a solicitor to make the application to the Court on their behalf.
Once an application for a County Court Judgment has been made, the Court will approach the person or company who allegedly owes the money (the Debtor) to hear their side of the story. The Court will ask the Debtor to confirm they believe they actually do owe the debt and will ask for details about Debtor's financial circumstances so that a reasonable repayment agreement can be determined. The Court will normally allow at least 14 days for the alleged debtor to provide their response.
If the debtor agrees that the debt is owed, the Court will then issue a Judgment stating that the debt must be repaid and how it should be repaid. This Judgment is called a County Court Judgment. Depending on the financial information the debtor has provided, the repayment may be requested immediately and in full, or at a certain rate per month until the debt is paid. It is worth noting that if the debtor simply ignores the Court's letter requesting they confirm the debt is owed, then the Court will assume that the debt is legitimate and the subsequently issued Judgment will usually demand payment immediately and in full.
Once a County Court Judgment is issued, it becomes an Order for payment which is legally binding on the Debtor and must be paid. The Judgment does actually offer some protection to the Debtor in the sense that as long as the payment terms of the Judgment are met, the Creditor is then not allowed to add further interest or charges to their outstanding debt. Once issued, the Judgment will remain recorded on the business's credit file for 6 years and will not be taken off before that time even if the debt is subsequently paid in full.
So what are the effects of receiving a County Court Judgment? The most significant and immediate effect on a business is that its credit rating will be adversely effected. The Judgment is registered at the Court, listed in the Stubbs Gazette and recorded on the company's credit file. Therefore, having received such a Judgment, a business will find it more difficult to obtain credit in the future. Importantly, the business may also find it more difficult to trade with certain potential clients in the future as the financial stability of the business will be called into question if a credit check is undertaken by them.
Clearly, to avoid the negative effects of a County Court Judgment, a company's debts should be paid before such an Order is issued. However, what happens if the Debtor chooses to ignore the Judgment and refuses to pay? Generally at this stage, the Creditor's next course of action will be to apply to the Court for the creditor business to be closed by Winding Up. This action has very serious implications for a business. As such, the use of winding up petitions and their effect on a business will be the subject of a subsequent article.
If a creditor of a business is not being paid in a timely fashion, the first action they will normally take is to attempt to discuss the problem with their errant client and agree an acceptable repayment plan. If this strategy does not work and the client continues not to pay, the creditor's next option may be to employ a debt collecting agent. However, if the debt continues to remain unpaid, the creditor can then decide to ask the Court for help in enforcing the payment of the outstanding debt. This Court issued enforcement is called a County Court Judgment.
In order to request the Court to issue a County Court Judgment, the creditor must first apply to the local Court. The creditor will have to provide proof of the debt that they are owed and a record of the actions they have undertaken to try and recover the debt. The creditor will normally use a solicitor to make the application to the Court on their behalf.
Once an application for a County Court Judgment has been made, the Court will approach the person or company who allegedly owes the money (the Debtor) to hear their side of the story. The Court will ask the Debtor to confirm they believe they actually do owe the debt and will ask for details about Debtor's financial circumstances so that a reasonable repayment agreement can be determined. The Court will normally allow at least 14 days for the alleged debtor to provide their response.
If the debtor agrees that the debt is owed, the Court will then issue a Judgment stating that the debt must be repaid and how it should be repaid. This Judgment is called a County Court Judgment. Depending on the financial information the debtor has provided, the repayment may be requested immediately and in full, or at a certain rate per month until the debt is paid. It is worth noting that if the debtor simply ignores the Court's letter requesting they confirm the debt is owed, then the Court will assume that the debt is legitimate and the subsequently issued Judgment will usually demand payment immediately and in full.
Once a County Court Judgment is issued, it becomes an Order for payment which is legally binding on the Debtor and must be paid. The Judgment does actually offer some protection to the Debtor in the sense that as long as the payment terms of the Judgment are met, the Creditor is then not allowed to add further interest or charges to their outstanding debt. Once issued, the Judgment will remain recorded on the business's credit file for 6 years and will not be taken off before that time even if the debt is subsequently paid in full.
So what are the effects of receiving a County Court Judgment? The most significant and immediate effect on a business is that its credit rating will be adversely effected. The Judgment is registered at the Court, listed in the Stubbs Gazette and recorded on the company's credit file. Therefore, having received such a Judgment, a business will find it more difficult to obtain credit in the future. Importantly, the business may also find it more difficult to trade with certain potential clients in the future as the financial stability of the business will be called into question if a credit check is undertaken by them.
Clearly, to avoid the negative effects of a County Court Judgment, a company's debts should be paid before such an Order is issued. However, what happens if the Debtor chooses to ignore the Judgment and refuses to pay? Generally at this stage, the Creditor's next course of action will be to apply to the Court for the creditor business to be closed by Winding Up. This action has very serious implications for a business. As such, the use of winding up petitions and their effect on a business will be the subject of a subsequent article.
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