The new bankruptcy reform will go into effect in October (I believe it is the 17th). When that happens it will become almost impossible for the average citizen to file a "7". BK attorneys are working almost non-stop to keep up with the rush of people trying to beat the reform deadline.
Whether you are entitled to your tax refund will depend on what type of Chapter of bankruptcy you are filing and whether the bankruptcy exemptions can be used to protect the tax refund. If you are filing for Chapter 7 bankruptcy then you can generally keep the refund if the available state bankruptcy exemptions provide protection for it. If you are in a Chapter 13 bankruptcy you are typically required to turn over the tax refunds during the life of the Chapter 13 case.
A Chapter 7 bankruptcy proceeding is started by filing a petition with the bankruptcy court. The person filing a Chapter 7 is referred to as the "debtor." The debtor is necessary to disclose to the court all of its property and debts and turn over all nonexempt property to the bankruptcy trustee, who then converts it to cash for distribution to the creditors. The debtor then obtain a discharge of all dischargeable debts.
No one ever plans to file for bankruptcy, but if you ever find yourself in a financial bind, filing for bankruptcy to remove most of your debts may be the only alternative you have to start over again and reclaim your life. By filing for bankruptcy, you can protect yourself from creditors that may try to repossess your property and who often make harassing calls to your home. In the United States, individuals that need to declare bankruptcy can file for either chapter 7 or chapter 13 bankruptcy protection. Chapter 7 bankruptcy protection is the typical bankruptcy that everyone thinks of when they hear the word. In chapter 7 bankruptcy, the courts will try to liquidate your assets in order to pay off your creditors. Once all your assets have been sold off, the rest of your debts will be discharged by the bankruptcy court. Chapter 13 bankruptcy is slightly different. Chapter 13 bankruptcy is often called a working man's bankruptcy and is intended for people that have jobs. In chapter 13 bankruptcy, your bills become reorganized and consolidated. You will then have to work out a payment plan for the courts. Once the court has approved your plan, you have a certain amount of time to pay off your debt according to the plan. Should you fail to adhere to the plan, your bankruptcy protection will be nullified, opening you up once again to creditors. In order to qualify for chapter 7 bankruptcy protection, you need to pass what the government calls a means test. In order to pass the means test and meet the qualifications for chapter 7 bankruptcy, you need to earn less than the median income of the state in which you reside. If you earn more than $167 over the median income of the state you do not qualify for chapter 7 bankruptcy. Many people want to qualify for chapter 7 because it discharges most of their debts instead of making them repay it later as in chapter 13. Chapter 7 and chapter 13 bankruptcies can eliminate most debts, but some debts can almost never be discharged by bankruptcy courts. This includes student loan debts, lawsuit awards, spouse and child support, and most taxes. Also before filing for bankruptcy it is important to know how a filing can affect the rest of your life. For one thing, chapter 7 stays on your credit report for up to 10 years. Chapter 13 bankruptcy will remain on your credit report for 7 years. Having a bankruptcy on your credit report will make it difficult to obtain loans, get credit cards, find housing, or even gaining employment.
The advantages of filing for bankruptcy are different depending on which chapter bankruptcy is filed. Chapter 13 is more for home foreclosure and auto loans, it's advantages allow the person in debt to pay their debt back over a longer period of time and keep the things they have worked very hard for. Chapter 7 advantages are that the person in debt can make payments for less than a year and be debt free and most if not all of the unsecured debt owed can be dropped.
If you have a mountain of debt that will force you to file for bankruptcy, there are two types of protection that you can file for with the bankruptcy courts. The first kind of bankruptcy protection is called chapter 7 bankruptcy. Under chapter 7 bankruptcy, your assets will be liquidated and the proceeds from the sales will go towards paying off your debts. Most remaining debts will then be discharged by the courts. The second kind of bankruptcy that you can file for is called chapter 13 bankruptcy. Chapter 13 bankruptcy is more closely related to debt consolidation in that your debts are reorganized and a payment plan is set up between you and your creditors. Chapter 13 bankruptcy is sometimes called a working man's bankruptcy because one of the requirements of filing for the protection is having a job with a steady income. In a chapter 13 bankruptcy filing, you and your lawyer will devise a payment repayment plan that explains to the courts how you will handle your creditors. Most payment plans allow you to make payments for a period between 30 and 60 months after the initial filing. According to current bankruptcy laws, the debtor must prove to the courts that he will be able to carry out the plan for the duration of the time period. Current chapter 13 bankruptcy laws give judges the ability to factor in your living expenses while repaying your debt. However, federal standards are in place that makes it difficult for judges to customize expenditures on a case to case basis. Chapter 13 bankruptcy can also be a punishment for those that have file for chapter 7 bankruptcy fraudulently. Many people prefer to file for chapter 7 bankruptcy because they will not have to repay most of their debts. However, not everyone qualifies for this kind of protection. In order to qualify for chapter 7 bankruptcy, a person must make no more than $167 over the median income of the state. If the courts find out that a person does violate this requirement, the chapter 7 protection can be revoked and changed to chapter 13. Most people that file for chapter 13 bankruptcy will also be required to attend classes that will teach them about money management and personal finance. If you fail to attend the classes or do not pass, your bankruptcy may be revoked, which will erase any protection that you were granted from your creditors. The laws surrounding chapter 13 bankruptcy are quite complex. Should you ever have to file for bankruptcy, hire a bankruptcy attorney who can guide you through the process. Even though your finances may be tight, hiring a bankruptcy lawyer can save you time and make sure that your interests are protected in the wake of your looming bankruptcy.
Chapter 13 bankruptcy is one of two forms of bankruptcy available to private citizens. The other form being chapter 7-the most common form of bankruptcy. Chapter 13 is a restructuring form of bankruptcy. Unlike Chapter 7, it allows the filer to pay off his or her debts over time-thus lessening to severe crush to credit of Chapter 7.
When filing chapter 7 bankruptcy there are statutory limits on inherited property. If the value of your property falls below those limits you may keep it. If it is over the limit you will likely lose the property to the trustees. Another option is to file Chapter 13 and you will be able to keep the property.
Few people look forward to filing for bankruptcy. This is a truly dramatic decision to make in your financial life. It is never easy, but there are times when it is the best option. Bankruptcy Attorneys can help you start a new future. The global economy has been troubled in recent years, and this has led to a series of layoffs in the U.S. and around the world. People are losing their jobs everywhere, and there are millions that are still unemployed. There comes a time when your finances are in such disarray that it is best to wipe the slate clean. Bankruptcy attorneys can help you decide which filing is best for your situation. A chapter 7 or chapter 13 bankruptcy are the two most common bankruptcy types. A chapter 7 filing allows you to wipe the slate clean totally. A chapter 13 is basically a repayment plan that is adjusted to fit your current situation. Legislation in 2005 changed many of the bankruptcy laws, it is important to find bankruptcy attorneys that are experienced with these new laws. The changes in these laws can make a big difference in your case. People do not have as much control over the type of bankruptcy they can file anymore. The court uses a certain calculation to determine your eligibility for filing. You must meet a certain income level before you can qualify for a chapter 7. If you do not, you will be permitted to file the chapter 13 bankruptcy. The new legislation also required filers to undergo some counseling. You must go through this financial counseling six months prior to filing for bankruptcy. Your bankruptcy lawyer can advise you on the different ways to accomplish this. Some classes are available online. There are two main financial counseling sessions that must be completed prior to your final discharge. The first session is prior to filing, and the other session is prior to be discharged. The court wants to be confident that you are ready to make better financial decisions the second go around. You can find bankruptcy attorneys by looking on the internet, talking to family and friends, or a referral service.
Parking tickets cannot be discharged under Chapter 7 bankruptcy. They can, however, be discharged under Chapter 13 bankruptcy. Chapter 7 bankruptcy is known as "liquidation" bankruptcy. This generally means that all of a debtor's non-exempt property may be sold by a bankruptcy trustee, though the laws for property exemption are different in each state. For example, in New York, most debtors are able to keep all of their property. Chapter 13 bankruptcy is a 'reorganization of debts', and allows the individual to keep their property and income while paying off all or part of their debt over a three to five year period. In the case of a Chapter 13 bankruptcy filing, the parking tickets can be considered "unsecured" debts (similar to credit cards and medical bills), and can thus be treated as such for repayment.
There are both advantages and disadvantages to filing for bankruptcy. Chapter 7 is often known as debt liquidation bankruptcy and is a good options for many individuals are couples that are in dire financial straits. As soon as a debtor files for bankruptcy, there is an automatic stay and most creditors must stop their collection efforts. Thus, the debtor can begin rebuilding his credit; financially-speaking, the debtor can start over. It is true that filing for bankruptcy ruins a debtor's credit from a number of years and may cause embarrassment. However, incurring more debt and facing the harassing phone calls, letters and potential lawsuits from creditors can have the same effect. Filing for bankruptcy will allow many debtors to get started sooner on rebuilding their credit in peace.
Use this FREE ""Do it Yourself"" Bankruptcy Site to see filing bankruptcy is the right solution for solving your personal debt problems.Filing bankruptcy is perhaps the most difficult decision you'll ever make! I'm sure you have many questions about filing bankruptcy. Questions like, ""Am I qualified to file bankruptcy"" , ""How hard is it to file on my own bankruptcy"", ""How much does it cost"" and the most important question of all; ""Can I file my own bankruptcy without an attorney?"" Get answers to these questions and over 40 more with our in-depth FAQs. Select the bankruptcy chapters' links on the left.
One of the first steps you must take when filing for bankruptcy is to complete a "means" test. You must submit the results of this means test to the Bankruptcy Court. The means test checks your income in order to determine your eligibility to file for bankruptcy. If your income is below the average for your state, then you can file for Chapter 7 bankruptcy without any problems. However, if your income is above the state average, the calculations for the means test become more complex. The means test looks at your disposable income (the amount left over after paying your expenses). If your disposable income is too high, the Bankruptcy court may decide that you can pay off at least some of your debts, and prevent you from filing for Chapter 7 bankruptcy. You are still able to file Chapter 13 bankruptcy, however.
Although most debtors keep all their property after filing a Chapter 13 bankruptcy, debtors must file exemptions when applying for this type of bankruptcy just like they do when they file for Chapter 7 bankruptcy. Filing exemptions in a Chapter 13 bankruptcy is for the benefit of creditors rather than the debtor himself. The exemptions inform the creditor of how much she is entitled to and allows her to compare the settlement of the case with the settlement the creditor would receive if the debtor filed Chapter 7 bankruptcy instead.Best Interest of Creditors TestU.S. bankruptcy law requires Chapter 13 bankruptcy applications to pass the "best interest of creditors test." Creditors involved in a Chapter 13 bankruptcy must receive at least as much from the bankruptcy as they would if the debtor filed Chapter 7 bankruptcy instead. The bankruptcy trustee performs this test by deducting the debtor's exemptions from the full value of the estate to determine how much the estate would be worth if the debtor filed Chapter 7 bankruptcy. Creditors may receive more from Chapter 13 than they would from Chapter 7, but they may not receive less from Chapter 13.Determining Payment AmountChapter 13 exemptions, or more specifically, the best interest of creditors test, are also used to determine how much the debtor must pay over the lifetime of the plan. To make this determination, the bankruptcy trustee compares three numbers. The best interest of creditors test, or the non-exempt value of the estate minus administrative costs, is one of these three numbers. The total amount of priority claims, such as alimony, child support and back taxes owed, is another number the bankruptcy trustee looks at, as is the debtor's disposable income, or income after payroll taxes each pay period. The bankruptcy trustee takes the biggest of these numbers and divides it by the life of the plan to determine how much the debtor must pay each month.ConsiderationsChapter 13 bankruptcy may be attractive to some debtors because debtors are at low risk of losing their property through this arrangement and there are no income limitations on this type of bankruptcy. However, debtors cant file for Chapter 13 bankruptcy if they have such large exemptions that the bankruptcy will fail the best interest of creditors test. In addition, Chapter 13 bankruptcy negatively affects the debtor's credit for seven years and requires debtors to pay the bankruptcy trustee on a monthly basis.
Yes you can or they will sell it for you * All major financial transactions must be approved by the bankruptcy court. Contact the trustee of the chapter 13 before taking any action, failing to do so can result in penalties and dismissal (with or without prejudice) of the bankruptcy. A chapter 13 is a "debt repayment" action, the BK trustee will not take over nor handle issues concerning real property belonging to the debtor.
Filing Personal BankruptcyIf you are planning to file bankruptcy, you will have options for completing the process. Do it yourself, or hire an attorney to do it for you. You may also be able to simply hire a document preparer, who is not a licensed attorney, to prepare the documents for you. The cost of that would probably be less than the cost of hiring an attorney, although a document preparer also will not be qualified to render advice, and should not.Decide on the Proper Bankruptcy Chapter to File UnderBefore filing bankruptcy, you must decide on the type of bankruptcy to file. There are two types for consumers, being Chapter 7 and Chapter 13. They are distinctly different from one another, and will require different filing and different handling. Chapter 7 bankruptcy is known as liquidation bankruptcy, with the import of that phrase being that in exchange for a release from your debts, you agree to give up your property. Release from debts through bankruptcy is called discharge, and there actually are certain types of debts which cannot be discharged in Chapter 7 bankruptcy. These include student loans, taxes, and domestic support obligations, including child support and alimony. Other nondischargeable debts include fines and court fees. Most people filing Chapter 7, however, are not confronted by nondischargeable debts, and all of their debts are wiped away. This includes credit cards, medical bills, and the personal liability side of secured debts like car loans.Chapter 13 vs. Chapter 7Debts are treated differently in Chapter 13, with that Chapter providing a broader discharge. Chapter 13 bankruptcy is essentially favored by the law, because in Chapter 13, the debtor is making an attempt to repay some or even all debts.Do-it-Yourself Bankrtupcy Filing in Chapter 7Filing Chapter 7 bankruptcy is actually a fairly simple process, requiring submission of a set of documents, payment of a fee, and generally only one appearance at Court. Actually, in Chapter 7 bankruptcy you generally do not appear before a judge, but instead simply attend a meeting which is presided over by a court official known as the trustee. The trustee administers your case from start to finish, and will examine you at the meeting concerning statements made in your filing. In truth, the examination is rote, with the trustee asking nearly all filers the same simple questions. As for property given up in Chapter 7, this will be only so-called non-exempt property, which will not include your home, your retirement account, your clothing and personal items, or even your car in most cases. If you are considering Chapter 7, you can safely assume that you can complete the process with no assistance. There are kits available at bookstores that will provide all required forms. Bankruptcy is a federal process, and forms are standardized nationwide.Using an Attorney in Chapter 13Chapter 13 bankruptcy is eminently more complex, providing more protection for a debtor, but in exchange for a debtor's commitment to repayment of debts under a plan. The plan must be approved by the court, and it is detailed in its contents. Chapter 13 bankruptcy is a common recourse for people facing foreclosure on their homes, as that bankruptcy will allow them to repay arrearages and compel a mortgagor to accept that repayment. If you choose to file Chapter 13, you must expect to need an attorney to represent you in the process. Chapter 13 is far too complicated for a layperson to handle.
Chapter 7 bankruptcy comes with advantages as well as disadvantages. As soon as a debtor files for bankruptcy, there is an automatic stay and most creditors must stop their collection efforts. Thus, the debtor can begin rebuilding his credit; financially-speaking, the debtor can start over.It is true that filing for bankruptcy ruins a debtor's credit from a number of years and may cause embarrassment. However, incurring more debt and facing the harassing phone calls, letters and potential lawsuits from creditors can have the same effect. Filing for bankruptcy will allow many debtors to get started sooner on rebuilding their credit in peace
Why aren't you asking your bankruptcy attorney? It depends on the amount and what the award is for. And the details may depend on what bankruptcy court your 13 is in. You may be able to use the money to prepay your 13 plan and get out of bankruptcy. The money would go to you, not the bankruptcy attorney (unless you owe the attorney money). What claim the trustee would have is the issue.
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