Settlement Attractive

Why do we need to compare debt settlement and bankruptcy in the first place? A personal can never be at an advantageous position if he is bankrupt. If you do not have any money left in your account then you have to declare this fact. By declaring bankruptcy, investors will stop coming your way. Similarly, organizations do not trust the employees who have been declared bankrupt at any stage of their professional careers. Debt Settlement and bankruptcy are compared when we loan takers are looking for a suitable way to reduce their credit card bills.

Unsecured liabilities and recession problems

Getting financial assistance without depositing any assurance is the key definition of the term unsecured liability. It is quite simple to understand this point. Why does the bank give you a credit card without taking any collateral? This is because credit cards have restricted spending limits. The loan taker does not decide how much he can spend. The bank has a close look at his financial state and then decides his spending limit. For instance, a marketing manger will have a spending limit of one hundred thousand dollars. However, a clerk will not be able to spend such a high sum on credit.

As you do not need to deposit anything for a credit card, you do not have the fear of losing anything. However, you are always concerned about the secured payables. This is because you have deposited a guarantee. This guarantee will only be returned to you if you pay the bank on time. Delays will spoil the situation. It is always important to compare debt settlement and bankruptcy.

The recession situation and unsecured payables

Have you paid your credit card installment? Do you have a record of the payment that has been made and the amount that is left unpaid? Most of us do not maintain such a record because we do not expect any problems to be created. When it comes to debt settlement and bankruptcy, even a small wrong move can push you towards a zero balance. Even your settlement company can accuse you that you have not paid your bills. How do you prove that you have cleared all your dues? You need to maintain your payment receipts so that you do not face problems.

Are you confused about what to choose between debt settlement and bankruptcy? If you are thinking intelligently then this confusion should not be there in the first place.

Eliminate Debt

If you are a small business owner, you should acquire as much knowledge as you can about small business bankruptcy. If you find yourself in debt, overcoming it can be a huge challenge. Good news however is that various debt relief services, debt relief experts and online debt help advice, recommended by the professionals, will provide you with whatever assistance you require. Different avenues to seek debt relief are:

Forums- There is many forums and communities online, which aim at running small businesses. If you follow theses forums, you will come across s a lot of information that is exchanged. What's more, you might find official debt relief services online in these forums. These are information specific to your cause and how small business bankruptcy can be avoided, because they come from small business owners like you.

Business forums that focus in small businesses only can be easily found. You can browse most of such forums without creating an account, however joining the ongoing discussion is always better. So, take out your time to create a free account. The message boards mostly have specific folders for each topic. You can find debt relief services as a separate folder or in any Finance related folder. There will be posts that will list the companies that help prevent small business bankruptcy. If unable to find such posts, you can create a message asking for guidance.

Networks- These are debt relief organizations with the sole purpose of helping people with different debt relief services. These organizations are mainly founded for consumers, but can also help small business owners like you. These networks are valuable as they provide debt help tips and recommend professional companies and programs against small business bankruptcy.

The debt relief networks recommend programs that focus on consolidation or settlement. A company is minutely tested and its dealings monitored, before being recommended by a network. Thus you have the peace of mind that you are dealing with a legitimate organization.

Debt settlement is much more desirable than going bankrupt. Maximum consumers can wipe off at least 60% of unsecured debt and at the same time avoid the undesirable consequences with bankruptcy filing. If your unsecured debt is $10k or more, you can opt for a debt settlement, and can opt to fight against small business bankruptcy, especially if you have a thriving business.

Eliminating credit card debt has never been so easy for consumers with balances over $10,000. A professional debt settlement company will be able to eliminate credit card debt by 60% on average. They also provide free debt counseling. Try the following link to locate legitimate debt settlement companies in your state and see how they consistently eliminate consumer credit card debt.

Recovering From Bankruptcy

Having to file for bankruptcy is not a walk in the park or a fun thing to do. It is a long process and usually occurs after months and even years of hardship. Constant struggle with debt, trying to pay bills, trying to improve income, or whatever other reasons have occurred that led to this point. The process isn't impossible to do on your own, however hiring a lawyer to make sure its don't correctly would not be a bad idea.

Another thing you should consider is how you will recover. Bankruptcy is a way of starting over, or at the least trying to start over. First you have to try and improve your financial situation, mainly income versus cost. If you file for bankruptcy and your cost are still greater than your income then you have a serious problem.

Hopefully its not long after you file for bankruptcy that you are able to start the road to recovery, managing to pay your regular bills on time and even start saving. Eventually, and especially after you are out of debt, you want to try and re-establish your credit. This is very important; unfortunately it is also very difficult to do. You can start out with a low balance credit card, if you can get approved for one, use it on some cheap items, and pay the card on time. This process could take a year or even longer until your credit is repaired. Another idea is to use a credit repair company. They do all the work for you and within 6 months your credit will be fixed.

The road back from bankruptcy requires a lot of work, patience and a smarter route than what got you in trouble in the first place. Many people don't think of it but credit repair is one of the most important parts of starting over after bankruptcy, you should look into it.

Filing Bankruptcy

If you are in a financial situation where you cannot afford to pay off your debt, and you are struggling financially, you might find yourself asking the question, "Can I file for bankruptcy for free?"

Filing for bankruptcy is an expensive process as there are three main fees you need to pay. The first fee is for credit management classes. The new bankruptcy law states that if a person wants to file for bankruptcy they must first go to financial management classes to try and sort their finances out without having to declare bankruptcy. The second cost involved is paying for an attorney. This can be very expensive and is probably the most expensive cost involved regarding bankruptcy. The last cost is the filing costs that you need to pay to the court. These fees are usually around $300.

Corporations have to have an attorney when filing for bankruptcy but individuals do not. The problem with representing yourself is that if you make a mistake like forgetting to submit a document then you could affect your rights as a debtor. It is always recommended to have legal assistance. If you cannot afford legal advice you should contact your state and local bar office as they might be able to offer pro bono services to you so you will not have to pay.

The classes for financial management cost around $50 and this is very difficult to get around, however it can be done.

The main fee of filing for bankruptcy can be avoided, but it is only waived for a very small percentage of people. Your financial status will be interrogated before they will make a decision. There is a section in the bankruptcy code that allows these costs to be waived. If you want to request a free filing you can do so by filling out the applicable forms that can sometimes even be downloaded off the internet from your state and local agencies.

Keep in mind that filing for bankruptcy can have a negative effect on your credit rating, but this may be your only option. You will need to rebuild a new credit rating from the ground up. Steer clear of services that offer to remove your bankruptcy filing from your credit rating, this may be illegal and could have severe consequences.

So yes it is possible to file for free. The process is difficult and you should really try and get free legal assistance if you cannot afford it.

Bankruptcy Loans

Bankruptcy is the single worst type of indication to have on your credit record. When you file bankruptcy, you are basically saying to the financial world that you are more than willing to run away from the financial and contractual obligations of your loan agreements and leave them standing, holding the proverbial bag. For the most part, your credit is shot for the next seven to ten years when it comes to borrowing money in the conventional and traditional fashion. However, there are lenders who have a different mindset about loaning money to those who have recently been discharged from bankruptcy proceedings, and they are writing loans for these folks in record numbers - not long after the smoke settles and your previous lenders are counting their losses.

Your New Appeal To Lenders

While many lenders think it is just good commonsense to avoid lending to the post bankruptcy crowd, others see it as a golden opportunity, especially if you have a history of working in one place for a long period of time, or in a particular field with very few breaks in employment. The reason for this is that you are prohibited from filing bankruptcy for a number of years, and if you are working, the lender assumes that should you fail to repay the loan that is extended to you, a simple default judgment is all that would be needed in order to garnish your paycheck. Lending to you is less risky to some lenders than loaning money to someone with slightly damaged credit.

And best of all, you are a borrower that has no other debts, which strengthens the belief that the lender has that you will repay your loan because you have little or nothing else to do with your disposable income. Short term loans, therefore, are pretty easy to obtain in the months following bankruptcy; you can make your application look even better by pledging collateral in the form of a lien against your home or vehicle, or by applying with a cosigner backing you up and agreeing to pay if you do not.

Tips For Post Bankruptcy Loans

So while it may be possible to take out loans in the immediate period following the discharge of your bankruptcy, it is always wise to start small. Borrow only a few thousand dollars or less, and make your payments on time. You certainly want to avoid over-extending yourself financially while you are attempting to improve your credit, and you do not want to appear to be applying for too many loans at once. It is best to approach a lender who has a record of loaning to people whose credit situation is just like yours, like those online lenders who specialize in post bankruptcy financing. That way, turn downed or not, you will not inflict too much damage to your already fragile credit report just by applying for a loan.

Settlement Market

Laws are made to protect the rights of everyone. This is how a balance in a society is maintained. A law which helps one party while putting the other in jeopardy makes it an imbalanced law. Same is true with the bankruptcy laws. Previously the law supported the debtor which in many cases if not proven a fraud would end up with the creditor losing. The amendments in chapters 7 and 13 of the bankruptcy code have brought about changes as to how things will be interpreted in the future. This is how new bankruptcy laws has led to a massive debt settlement market.

The changing economic situations in USA led to the revision of the bankruptcy code. Many people got away from paying even a single cent to their creditors and got to keep their assets as well. The current wave of economic entrenchment raised the concerns for the safety of the financial institutions as people suffered losses due to recession and in return they simply filed insolvency. This completely shifted the financial burden on to the banks while the debtor walked away clean to get a fresh start.

The changes in the code now clearly mentions that no matter if you file a bankruptcy under chapter 7, 11 or 13, you will be liable to pay at least some part of the debt to your creditors with an exception of a few rare circumstances. The amendment also has a clause that you might be declared bankrupt and still be made to pay the entire amount even after all your assets are liquidated.

This is how new bankruptcy laws has led to a massive debt settlement market. People have realized that getting a poor credit rating for filing insolvency and still having to pay the debt is a cost too high to pay. On the other hand it is very convenient to get a debt settlement. Those who play it right get huge reductions in their accumulated credit card bills and also get to save their credit score from a major damage. This step is also favorable for the banks as the processing time for a settlement is shorter in comparison to a bankruptcy case and they do get something to continue business as usual. With mass awareness and better information masses are turning towards debt settlements to get financial freedom.

Basics of BAPCA

BAPCPA, or the Bankruptcy Abuse Prevention and Consumer Protection Act, was passed by the US federal government in 2005. The purpose of this act was to reduce the number of Chapter 7 bankruptcy filings and increase the number of Chapter 13 filings. The reason creditors prefer Chapter 13 over Chapter 7 is that debtors have to partially repay their debts before they are discharged; whereas, with Chapter 7, all debts are discharged.

Presumed Abuse

BAPCPA was created in order to reduce the possibility of bankruptcy abuse. Prior to BAPCPA, anyone could file for Chapter 7 bankruptcy and have their debts discharged. Only an officially appointed trustee could determine "abuse," which, if discovered, would disqualify a bankruptcy candidate. Because officials feared that too many people were abusing the system and eliminating debts that could have been taken care of, all candidates with primarily consumer debts are subjected to a "mean's test" to determine their eligibility.

BAPCPA Amendments

The BAPCPA amends many parts of the US bankruptcy code. The most significant changes follow:

• A "means test" is now used to help determine whether or not a bankruptcy candidate is eligible to file for Chapter 7
• Chapter 7 filers are now subjected to random and scheduled audits to ensure that their financial documents are legitimate
• All bankruptcy candidates are required to attend credit counseling prior to filing
• All filers are required to attend financial education programs before their debts are discharged
• Filers are now subject to new fees, including: filing fees, attorney liability, increased debt repayment, and increased compliance requirement costs
• Exemption rules and requirements are more strict

What Is the "Means Test?"

The means test analyzes a bankruptcy candidate's income to determine their eligibility for filing for Chapter 7. If the means test determines that a debtor's income is greater than the state's median income, after certain deductions, then they are considered abusive under the BAPCPA, and will be ineligible for Chapter 7. Instead, they may opt to file for Chapter 13, which will require them to repay part of their debts before they are discharged.

It is important to note that only candidates with primarily consumer debt are subjected to the means test. If an individual's debt is from other sources, such as medical expenses, they are not suspect.

Bankruptcy Law

The global recession has had a domino effect from the governments down to the banks and then down to the individuals, with higher unemployment and more bills than ever before, it seems. So it really is little wonder that more and more people are facing persistent difficult in making ends meet. As such, more people than ever are now considering the possibility of filing for bankruptcy. However, since the changes in bankruptcy law of 2005, many people believe they can no longer file and this simply is not the case.

Following extensive lobbying by the credit card companies, Congress passed a series of changes in bankruptcy law back in 2005. These changes have made it more difficult for people to file for bankruptcy. However, this does not mean that it is now impossible. Absolutely not.

Changes in bankruptcy law have been known as bankruptcy Abuse Prevention and Consumer Protection Acts of 2005. It's a long winded way of essentially making clear that the changes are there to prevent people taking advantage of bankruptcy to abuse finances.

However, most people who would have been eligible before 2005 still are. The biggest changes is the means test. This is a test whereby your case will be established to see whether or not you really are in a position whereby you are unable to afford to pay back your debts. If you have higher than median income from your state then you will also have to go further tests and provide detailed documentation. Essentially, this is to ensure that those who could pay back their debts without resorting to bankruptcy are unable to file as quick way out.

The increased complications in the law, however, have also meant a rise in lawyer fees! However, given the complexity of proceedings you would be well advised to get a lawyer and consider it a necessary expense.

Laws and Exemptions

Understanding Ohio Bankruptcy laws can be rather confusing. The law must be outlined to the letter and is written in legal jargon. Worse yet, the law was rewritten poorly--primarily by credit card lobbyists--in 2005, in such obtuse language as to render some sections, like the infamous "dangling paragraph", nearly meaningless. It can also make filing legal paperwork a nightmare. Without a dedicated Bankruptcy lawyer, it is surprisingly easy to get bogged down in Bankruptcy paperwork, perhaps even enough to make you decide not to go ahead with filing.

If your credit is damaged and creditors are harassing you at every turn, it is in your best interest to speak with an attorney to help you determine if Bankruptcy might be the best option. Your attorney will understand all of the Ohio Bankruptcy laws and will help you quickly understand what filing can and cannot do for Ohioans. If you are looking to clean up your credit but don't know which type of Bankruptcy to file, you attorney can help. Better still, they can help you determine whether you will be able to retain your home, your car, and other valuable possessions--in Ohio, state-specific supplements to the federal law will make all the difference as to which options are right for you: the state's median income for a family of like size determines which Chapter you'll probably file, and Ohio Revised Code Section 2329.66 determines what property you'll keep.

While they may seem overwhelming to look at, Ohio Bankruptcy laws are in place for your protection. One large protection that they offer is that they allow you to protect your assets. There are numerous deductions that are offered per filer when it comes to Bankruptcy. In Ohio, you can claim exemption on $20,200 of a personal residence, $3,225 of a car, $10,775 of household goods, and much more. If you are filing jointly for Bankruptcy, your spouse can make the same exemption on any some property that is held jointly, which greatly reduces the chance that your creditors can liquidate the asset or put a lien on it.

Another important thing to realize when it comes to asset exemptions is that there are many things that cannot be taken by your creditors. Your creditors cannot take your unemployment benefits, health insurance, burial plots, disability assistance, or IRAs, or student loans. They also cannot take most pension or retirement allowances. For people bogged down in debt and living on a meager income, the fear of having retirement or other benefits garnished is enough to keep them from filing. Few people realize that Ohio Bankruptcy laws protect them in such situations.

Bankruptcy law is not designed to cause anyone to go further into debt. While there are repayment options under Chapter 13 for people who have the money and assets to do so, many people are not forced to give up assets or repay their unsecured debts. Bankruptcy is a chance to get a clean slate and to build positive credit. If you are in need of this service, choosing an attorney who focuses on Ohio Bankruptcy laws can offer you just the help you need.

Ohio Bankruptcy

One of the reasons that many people continue to suffer poor credit is the simple fact that filing for Bankruptcy can be far too stressful to handle alone. Filing Bankruptcy in Ohio means filling out large amounts of paperwork, coming up with detailed lists of debts and creditors, and much more. This process can be quite stressful and can be enough to deter many Ohioans from seeking constitutional protections, despite the fact that filing could stop harassment and begin to repair their credit. If your credit score is keeping you from getting needed credit and collections agents are harassing you, filing for Bankruptcy might be the best decision you can make.

While filing Bankruptcy in Ohio on your own can certainly be stressful and confusing, hiring a Bankruptcy attorney makes it much easier. When you hire a professional to help you file, you can easily ensure that all of your paperwork is filled out correctly and on time and that all of your qualifying debts are put into the judgment. Many people filing their own Bankruptcy paperwork miss one or more debts, which means that creditors for those debts may still call and try to collect. Once you file, you may be unable to file again for a long period of time, possibly leaving you with little recourse from missed debts.

Whether you are filing for Chapter 7 or Chapter 13 Bankruptcy, you will find that there are many generous exemptions under Ohio Revised Code Section 2329.66 to help Ohioans retain property. You can file exemptions for your home, your car, your bank account, your clothes, tools of trade, livestock, retirement accounts and much more, which can preserve hundreds of thousands of dollars in personal property and real estate.

Filing Bankruptcy in Ohio doesn't mean allowing your creditors to collect all of your possessions to pay off your debt. In fact, for people whose incomes are in a range anchored to the state median income for a family of like size, you will likely not have to repay the debts at all. For people who are above this line, you may have to pay money when filing Chapter 13 Bankruptcy, but the fees are often considerably lower than what you owe.

If you are considering filing Bankruptcy in Ohio, it is well worth your time to consult with a Bankruptcy attorney. Finding someone who knows all of the ins and outs of filing as well as what you can expect to pay will help you throughout the process. Your attorney can help you file paperwork and can attend your meeting with creditors to help ensure that you are treated fairly.

Eliminating your debts and clearing up your credit is crucial if you want to get out of financial ruin. When you hire a qualified attorney to handle your Bankruptcy, your credit can be back on track in only a few short months, ensuring that you will soon be able to start your history over and make better financial decisions for your future.

Christmas Credit Card

Does the following scenario sound familiar to you? The Smith family has had a difficult year financially. John Smith lost his lucrative career as a result of cutbacks to middle management at a previously thriving construction company and has been working two jobs in retail for several months. Jane Smith recently re-entered the workforce after twelve years of staying home to raise children in order to help make ends meet. As the year comes to a close, Mr. and Mrs. Smith realize that bankruptcy is inevitable and decide to have one more wonderful Christmas before confronting the legal steps that will need to be taken. The credit cards come out of the wallets to make this holiday the best one yet. Tickets are purchased for the entire family to attend the Houston Texans' final game of the season. The girls get new iPods and cell phones. The Smith's only son, true to his Texas roots, receives new gear to help him prepare for upcoming tryouts for his high school's football team and a used truck to drive to the games.

The Smiths have no reason to worry because all of the mounting credit card bills will just be included in the bankruptcy settlement, right? In reality, this family may learn a hard lesson about the consequences of their spending practices.

If you are feeling overwhelmed by the debt that you are carrying and you believe that bankruptcy is your best solution, please know that some of the credit card debt you have accumulated may not be dischargeable. Section 523(a)(2) of the federal Bankruptcy Code addresses the problem of credit card binging. This clause exempts from discharge "debt that was obtained if an individual made material and false representations about his financial condition." This may mean that a person submitted fraudulent information on the credit card application or knowingly made purchases for which he knew he would not be able to pay. The latter issue is the more common situation, and the exemption that describes the scenario involving the Smith family.

A credit card company is going to use Section 523(a)(2) to challenge the discharge of your debt if one or more of the following circumstances exist:

1. An increase in credit card usage shortly before filing for bankruptcy
2. The use of the card for recent vacations or travel
3. Using the card while unemployed or otherwise without reasonable ability to repay
4. A large balance at the time of filing

One specific point in the Bankruptcy Code, Section 523(a)(2)(C), deserves special attention from all of those shoppers who are determined to find the perfect gift regardless of cost. Consumer debts owed to a single creditor that total more than $500 for luxury goods or services within ninety days of filing for bankruptcy will be considered non-dischargeable. And, by luxury items the law is not referring to fur coats and yachts. Instead, luxury goods are defined as "goods or services reasonably not necessary for the support or maintenance of the debtor or a dependent of the debtor."

What does this mean for people who overindulge with their spending during the Christmas season? If you spend thousands of dollars in December knowing all along that you plan to file for bankruptcy once the New Year rolls around, your plans for debt relief may be delayed. If you know that you will not be able to pay for the bills you created during Christmas, you will have to wait at least four to six months into 2010 to file for bankruptcy. In the meantime, you will be expected to make regular payments to your creditors. The bottom line is that you should not view an intended declaration of bankruptcy as an excuse to make everyone happy with the expensive gifts under the Christmas tree.

When it comes to issues of bankruptcy, Texans are in a better position than many others in our country. In 2008, our state ranked forty-sixth in the country for number of bankruptcies filed. While residents of the Lone Star State are proud of being the biggest and best in so many areas, this is one ranking for which we should take pride in being nowhere near the top. However, this relatively good standing does not mean that there are not thousands of Texans who are struggling to pay their bills every month. With the pressure to be a good consumer from the moment that the doors open on Black Friday until the exchanges are made and the clearance items are tagged the day after Christmas, the end of the year only makes already difficult situations even worse.

If you believe that you may be a candidate to file for Chapter 7 bankruptcy, which essentially offers a fresh financial start to those who qualify, make sure that you do not at this point begin to create debt that cannot be discharged. The time to consult with an experienced bankruptcy attorney is now. You need to receive solid legal advice concerning your financial options and any spending pitfalls to avoid while the paperwork is being drafted. Once you know where you stand, try to relax and enjoy the rest of the holiday season at home with family and friends and not at the local mall. Your credit rating and your legal counsel will thank you for it.

Bankruptcy

Chapter 7 bankruptcy is a proceeding to find all of the debtor's assets. If any are found, they are sold by a designated trustee and proceeds are distributed to any creditors that the debtor is indebted to repay.

To be eligible to file Chapter 7 bankruptcy it needs to be determined by conducting a means test which was regulated together with the 2005 amendments of the bankruptcy code.

In most cases, all assets are considered exempt, so there's no asset to liquidate and there's no money paid to creditors. The Chapter 7 bankruptcy is generally the quickest form of bankruptcy and is available to individuals, couples, corporations and partnerships.

The case is first started by visiting the court clerk and obtaining the petition, schedules and statements for all of your finances. The forms will give you detailed instructions and what to list. Make sure you list everything on your credit report including your assets and debts, along with your financial history. This can be very time consuming but necessary when filing for bankruptcy. Don't forget you must also pay the filing fee which can be over two hundred dollars to the court clerk.

Make sure that you have every creditor listed in the schedules with an accurate creditor name, telephone number and mailing address. You must list all of your debts, even if the debt is non dischargeable such as a foreclosure or if you intend to repay the debt. The schedules must list all of your real property, any time shares obtained for buying property, and the real value of any property.

After you list all of your debts and creditors you must then decide what you want to have exempted. These items include everything that will give good quality of life including washer and dryers, refrigerators and dishwashers. Once you decided on these items you can then sign the documents.

Once the documents are signed they are then filed with the bankruptcy court clerk and are notified of any hearings or proceedings that are scheduled before a judge if there is a response from any creditors.

For most cases, the debtor and the creditors rights are valid only on the day of filing. All other additions or inclusions that creditors have are excluded in bankruptcy proceedings.

What is Involved?

Bankruptcy is debtor protection provided by the federal government to help businesses and individuals repay their debts or eliminate them by means of liquidations or reorganizations. The Bankruptcy code is divided by chapters and that is how bankruptcies are referenced. A Chapter 13 bankruptcy is a bankruptcy where debt repayment plans are reorganized in a manner that allows the debtor the ability to repay those debts; however, that type of bankruptcy isn't ideal for everyone and they made need to file a Chapter 7 bankruptcy. A Chapter 7 Bankruptcy is a liquidation bankruptcy where the debtor is only allowed to keep a certain amount of property, as described below, and all the other assets belonging to the debtor is sold off in an attempt to repay the creditors, the companies and people the debtor owes. A person is only allowed to file a Chapter 7 Bankruptcy every 8 years.

When a person files a bankruptcy petition, a Bankruptcy Estate is created. The Bankruptcy estate contains everything that the debtor owns and all of their equitable interests. This is then under the control of the Bankruptcy Trustee. The chapter 7 trustee is an individual appointed by the courts to administer the estate and is entrusted to try to find and liquidate all the assets of the debtor's and repays the creditors as much as they can from the sale of the assets.

Before the decision to file a Chapter 7 petition is done, a Disposable Income Test and a Means Test should be done to determine if the debtor meets the requirements necessary to file. The Disposable Income Test is used to determine whether the debtor has enough income left over after paying necessary monthly expenses, to pay off at least a portion of their unsecured debts. If the disposable income adds up to more than the statutory amount set for the debtor's location, they will fail the means test and cannot file for Chapter 7 bankruptcy. The Means Test is the method used to determine if the debtor makes more than the median income level for their geographic location. If their income is less than the median amount, they are allowed to file; however, if they do make more than the median amount, then the Disposable Income Test must be used.

At the same time the Bankruptcy Estate is created, an automatic stay is put into place to protect the debtor from any other collection efforts by their creditors. This protects the debtor from creditors proceeding with lawsuits, garnishments, and even initiating foreclosure proceedings against the debtor. Creditors cannot send the debtor collection letters or assess other charges and fees to their accounts. This is good for both the creditors and the debtors. The debtor no longer has the stress of collections while the creditors can be reasonably assured that an effort will be made to pay each and every creditor an equitable distribution of the assets rather than one creditor having the ability to take all the assets. This Automatic Stay remains in effect until the bankruptcy is dismissed or discharged.

An individual debtor under Chapter 7 is allowed to keep some of their assets through exemptions allowed under the Bankruptcy code. Exemptions are statutorily defined properties that an individual debtor may protect from administration in the bankruptcy estate. Some states offer their own exemptions though and the debtor is allowed to choose to use their states exemption laws or to use the federal exemption laws. In Indiana, the homestead exemption is currently at $7,500 for an individual filing and $15,000 if filing as a married couple. A debtor is also allowed to keep up to $8,000 in personal property or $16,000 is filing married. Indiana has scattered the statutes pertaining to all of a debtor's possible exemptions all over the place. Some are under title 34, some under title 27, and yet you should always look for any other possible exemptions under § 522 of the Federal Code. There are exemptions of varying amounts for whole life insurance policies, automobiles, business partnership property exemptions, exemptions for crime victims' benefits, unpaid wages still due to the debtor, earned income tax credits, health aids, jewelry, household goods, tools of the trade like uniforms, personal injury claims, retirement accounts, and government benefits like Social Security. There are many exemptions available depending on your state and your circumstances. It is the duty of the debtor's bankruptcy attorney to find all those exemptions applicable.

One of the primary concerns for the debtor is, "How long will this take?"

There is a deadline of 15 days after filing the petition to file certain financial "schedules" with the court-documents declaring your assets, liabilities, expenses, income, and a statement of your affairs. These schedules are typically filed with your initial petition. About 15 days after a petition is filed, the courts will mail the Notice of Commencement of Case to the debtor and to all of the creditors listed in the petition. This notice will inform the debtor of the date set by the court for the meeting of your creditors, and the deadlines for your creditors to object to your case and file their claims against you. Within 30 days after filing a petition, or before the meeting of creditors (also called a 341 meeting), you are required to file a Statement of Intention whereby the court is informed if the debtor intends to keep their secured property that serves as collateral for their secured debts, or if the debtor plans to surrender the property. A debtor can reaffirm the debts and continue to make payments on those debts if they wish to keep the property or it can be sold for fair market value. Within 45 days after the Statement of Intention is filed, the debtor must surrender or keep the property as indicated in the Statement.

Sixty to ninety days after filing the bankruptcy petition, there will be a Meeting of the Creditors or 341 Meeting as it is typically called. The trustee will ask the debtor to testify under oath as to the accuracy of the statements in their petition. It is vital that the client, debtor, attends the 341 hearing. If the debtor is not there, the petition will be dismissed. Within 45 days after filing, evidence of any payments received from any employer within 60 days of filing, an itemized statement of monthly income, and an estimate of any increase income or expenditures expected over the next 12 months must be submitted.

Within 60 days of the 341 hearing, the trustee and any creditors must file any objections they have to any of the exemptions in the petition. Creditors can object to the discharge of a debt if the debt was obtained through fraud or theft, personal injury claims from a DUI or DWI, or assigned debt through a divorce. Another debt that cannot be discharged is a federally backed student loan without typically being permanently unable to repay it typically due to indigency or handicap. Orders for child support or alimony cannot be discharged as well. Creditors can also object to the discharge if it is found that there was any bankruptcy fraud, spoliation of necessary records, failure to explain losses, or failure to respond to interrogatories. Proofs of claim must be filed within 90 days after the first date set for the 341 hearing if they wish to share in the payments from your case if any assets are available for liquidation even though there typically are not any assets to divide in a Chapter 7 bankruptcy.

It is important to address certain times for the debtor, such as the 341 meeting again. The trustee will be asking some questions of the debtor like, "Have you paid off any debts to family members recently?" or "How did you get your unsecured debt?" It is important that the debtor is prepared to answer questions pertaining to their finances going back at least 180 days and that they bring any financial documents that may help to explain their situation and a copy of their most recent tax return. They should also bring their identification and social security card. The trustee is trying to make sure there has not been any preferential transfers (paying off one creditor to benefit them more than another creditor) or fraudulent transfers (transfer of assets to another without consideration to hinder, delay, or defraud creditors). If it is found that there has been a preferential transfer, the trustee is entitled to take that money back from the preferred creditor to more equitably divide among the other creditors. If it is found that there has been any fraudulent transfers, the petition may be dismissed and the debtor may not be allowed to file for bankruptcy and even be sent to prison. Make sure your debtors are honest in the preparation of their bankruptcy. It is also important to include certification of debtor counseling in the petition by the due date so the case isn't dismissed. Debtor counseling is a new requirement since the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 went into effect. This certification is often overlooked by debtors especially if they had filed previously before the BAPCPA. After all, the purpose of bankruptcy is to give the debtor a fresh start, so that counseling may be the first time they were ever given any tips to stay out of debt.

Debt Relief

The recession has sent most Americans looking for debt relief. Most of the people have just heard grandpa stories regarding the great depression. But now they are getting an actual taste of what it is like to be in an economic downturn.

Along with the folks looking for debt relief there is a surge in the solution providers too with all sorts of false promises. The gullible victims of the credit card tirade need to know what are the genuine means for them to get out of trouble. Watch out for scams. Most small time advisors may lead you into scams. In such a confusing scenario, what is most important is how much of correct and authentic information you have before taking a decision.

Bankruptcy and Debt settlements have emerged as the top most choices for debt relief. Before you take a call, you need to get your facts right. Here are a few basic questions about bankruptcy that you need to ask yourself before making any kind of decision on debt relief.

1. What is meant by bankruptcy? It is a procedure that is mandated by federal law to provide protection to US citizens looking for debt relief.

2. What is the protection given to me by bankruptcy? Bankruptcy provides two types of protection, the first for your current assets, and the second, for your future earnings.

3. I am so deep in debt that I will loose my home. Will bankruptcy save my home? Many state laws provide homestead protection, that can be either unlimited or up to a given limit. You will loose your home only if your state provides no homestead protection at all.

4. Do I go in for Chapter 7 or Chapter 13? Chapter 7 is a straight bankruptcy. You will be permitted this if your current assets are so bad that you can not pay off the debt in any manner. Chapter 13 revised will block portion of your future earnings, if you have any, to overcome debt in 3 to 5 years.

5. What will happen to my credit? You will take 8 to 10 years to revive your credit score.

When You Most Need it

Most credit card users in US are in dire straits. The recession has blown the wind out of their sails. You had planned out everything so well. You bought your dream house and dream car. After that your credit card helped you out to get all the things that you required. You were to get the much awaited rise in your salary and well deserved promotion. What went wrong thereafter?

Your company ran into rough weather due to the recession. The company had to go on a job cutting spree. You could not even save your job. The promotion and the rise in salary remains a fantasy. The struggle to get debt relief seems to be endless. You have tried all the tricks in the trade. However nothing seems to help you. You tried out the debt counselors. The advice seems to be very sound but it is very difficult to practice. The debt counselor's advice was not very practical. It is due to the sheer size of debt that has accumulated in your account.

Your friends advised you to file bankruptcy. You are really not sure what it means. It is a legal procedure and sounds quite complicated to you. Here are some words of wisdom to help you out. First of all bankruptcy is the ideal option for anyone in your state. A large number of people think that they will loose everything they have. There could not be a bigger myth about bankruptcy than this. To put your mind to rest, bankruptcy is a procedure by the government to help out people who are in financial trouble. It also allows you protection to some of your current assets. Each state has laid down a limit for protection of home equity in case of bankruptcy.

There has really never been a more advantageous time for consumers to try and eliminate unsecured debt. Creditors are very concerned about collecting and most have government money to make eliminating some of your debt financially feasible.