Bankruptcy

Things Not to do if You are Debating Filing for Bankruptcy

People who are debating filing for bankruptcy frequently think about what they must do to prepare for their case. There are, however, several things that a person should not do when debating proceeding through the bankruptcy process. To provide a better understanding of what actions should not be taken during bankruptcy, this article will review five mistakes that you should avoid when navigating the bankruptcy process. Things to Avoid: Paying Off Creditors The purpose of bankruptcy is that it helps all or some of a person’s debts be dismissed. Certain unsecured debts including credit cards and medical bills are capable of being discharged through Chapter 7 bankruptcy, while a person who files for Chapter 13 bankruptcy will create a new payment plan. Things to Avoid: Maxing Out Credit Cards It might be tempting to make frivolous purchases prior to filing for bankruptcy, but courts will review all of a person’s financial documents. Many of these last minute bills will not be discharged through bankruptcy, which means that a person will still be required to pay the amount. Things to Avoid: Cashing Out Retirement Savings Workers under the age of 59½ are permitted to take a loan against their retirement accounts.     Read More

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Unexpected Benefits of Bankruptcy

Bankruptcy offers a person relief from the pursuit of creditors, but many people fail to realize that there actually a large number of unexpected benefits that arise from bankruptcy. This article will review some of the important but little known benefits that individuals are often able to realize through bankruptcy. Avoid Paying Former Spouses Some Debts Bankruptcy allows a person to discharge some or even all non-support obligations associated with a divorce, which can result in individuals saving a significant amount of money in some cases. Bankruptcy can Reduce the Impact of a Tax Lien In some situations, bankruptcy can result in tax liens being made either entirely or partially ineffective, which can save a person a significant amount of money. Change the Payment Terms for a Loan In many cases, people discover that declaring bankruptcy lets them reduce the monthly payments for a loan. In some cases, bankruptcy can even help a person escape a repayment plan altogether. Erase Judgment Liens on a House Bankruptcy, in many cases, allows a person to avoid judgment liens that have been placed on his or her house, which can prove to be particularly beneficial. Escape Unaffordable Payment Plans Bankruptcy often lets individuals     Read More

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Things to Avoid During the Bankruptcy Process

For people who have a significant amount of debt, filing bankruptcy is often a wise idea. The bankruptcy process not only lets a person eliminate debt, but in many cases a person is also able to obtain manageable payments and begin planning for a better future. Many people discover that a seasoned bankruptcy attorney is able to help them overcome their financial hardships and determine their available legal options. There are some important things, however, that a person should avoid while declaring bankruptcy. Avoid the Accumulation of New Debt Many people feel the temptation to obtain a new credit card or even personal loan during difficult financial times. There is a risk, however, that creditors might view any financial agreements entered shortly before bankruptcy as a sign that the individual did not intend to repay the amount. In some cases, a person might even be charged with fraud. As a result, individuals should avoid obtaining any type of new debt during this time. Avoid Moving or Transferring Assets As part of the bankruptcy process, a person must list all of his or her assets, which includes any assets that were recently disposed. Some people who recently sold or transferred assets     Read More

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Supreme Court Hears Bankruptcy Case

Investors who rely on safe harbor provisions in the Bankruptcy Code should begin to consider new methods to obtain some types of shelter. The United States Supreme Court in Merit Management Group LP v. FTI Consulting Incorporated recently ruled in a unanimous decision that one portion of the safe harbor provision under Section 546(e) does not prohibit a bankruptcy trustee from obtaining clawback transfers that are constructive fraudulent conveyances or preferences when a “financial institution” was acting in the role of an intermediary. This case is important to study because it has lasting implications for many people who file for bankruptcy. What are Clawback Protections? A clawback provision enables a trustee to look at a financial transaction prior to filing for bankruptcy to determine if he or she improperly transferred or gave away property that should have remained part of the estate. If it is determined that real estate was improperly transferred, a trustee is able to claw back the property by undoing the transaction and bringing that property back into the estate. If the property is not exempt, a trustee can sell the property for the benefit of creditors. There are two types of transactions that are covered by     Read More

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Steps to Quickly Improve Your Credit Score

For people who have struggled with debt and/or bankruptcy, their credit score plays an important role in helping them obtain a new car, mortgage, or even a new job. While one of the best steps that people with credit card problems can take is to obtain the assistance of a knowledgeable attorney, it is also good advice to understand the various available ways to improve your credit rating. Ask for a Credit Line Increase Rather Than a New Card Requesting an increase in your credit limit is a better idea than obtaining a new credit card because each time a person fills out an application for a new credit card, a company will check his or her credit. The mere presence of an error on a person’s credit report will not automatically weaken that person’s credit rating. Some of the major factors that can be associated with a person’s credit rating and impact his or her credit score include payment history, amount of debt, age of accounts, account mix, and history of credit applications. Create a Plan to Improve Your Credit Score If the information reflected in your credit report is accurate and you want to take plans to improve     Read More

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Bankruptcy and Co-Signed Loans

Co-signed loans arise when a lending institution does not feel that a person should have sole financial responsibility and requires a more creditworthy person to sign the loan agreement. If you can no longer afford your co-signed loan or are going through the bankruptcy process and are confused about how the process affects your loan, you likely feel confused and uncertain about how to proceed. One of the best steps that you can take in this situation is to obtain the assistance of a knowledgeable bankruptcy attorney. What to Expect if You Default on a Co-Signed Loan The role of a co-signer is to make sure that your loans are repaid. Parents co-sign loans for their children because young adults often have not yet built sufficient credit. In other situations, an adult will co-sign other adult’s loans, which can create complications if a default occurs. In these situations, the financial institution will often attempt to force the co-signer to take over payments. The Effect of Bankruptcy Filing for bankruptcy results in an automatic stay, which is a type of court order directing creditors to stop attempting to collect debts from a person. As a result, declaring bankruptcy offers a form     Read More

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Eliminating Mortgage Liens Through Bankruptcy

Some people are able to eliminate mortgage liens on their house during bankruptcy in a process referred to as “lien stripping.” It is important for people to know that lien stripping for most liens is only available through Chapter 13 and not Chapter 7 bankruptcy. To strip a lien, it is also required that the amount is not a first portion mortgage and that the value of the house is less than the payoff of the first mortgage. The Different Liens and Which Bankruptcy Chapters Apply There are three different types of liens that a person might want to strip, which include the following: Judicial liens arise from judgments in law suits. Statutory liens encompassed tax liens and property tax liens. Voluntary liens encompass deeds of trust, home equity lines of credit, and mortgages. The only liens that can be stripped through Chapter 7 bankruptcy are judicial liens. If a person files for Chapter 7 bankruptcy and wants to keep a house or other asset, he or she will be required to repay all loans secured by the house even if a loan is underwater. In Chapter 13 bankruptcy, every kind of lien can be reduced to the value of     Read More

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VeraSun Energy: A Lesson in Bankruptcy Law

In 2008, the large ethanol producer, VeraSun Energy, filed for Chapter 11 bankruptcy. This petition for bankruptcy received significant focus by lawmakers in Washington who are in the process of introducing a bankruptcy bill that prohibits companies from filing bankruptcy in states of their incorporation. While VeraSun Energy had filed for bankruptcy in Delaware, none of the company’s plants nor the company’s headquarters were located in the state. The bill in question is the Bankruptcy Venue Reform Act of 2018. It is important for companies that are considering filing for bankruptcy to understand the elements of the Bankruptcy Reform Act, which has made some significant changes about where entities are allow to file for Chapter 11 bankruptcy. Details of the Bankruptcy Venue Reform Act of 2018 The Bankruptcy Reform Act of 2018 contains three sections. The first section notes some elements about bankruptcy law which include the following: Bankruptcy law offers a number of locations where a company can file for Chapter 11 bankruptcy. The large number of venue options has resulted in more companies filing for bankruptcy outside of their home state. The process of selecting the best possible location to file for bankruptcy is also referred to as     Read More

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US Supreme Court Agrees to Hear Influential Bankruptcy Case

The Supreme Court of the United States recently agreed to determine the intent of Congress when the section of bankruptcy code was created that determines the discharge of debts associated with dishonest or fraudulent conduct. This case serves as a reminder of the many complicated areas in bankruptcy law. Given these complexities, many people are who are involved with bankruptcy cases have found that it is critical to the outcome of a case to obtain the assistance of a seasoned attorney. The Background of the Case The party that originated the class initiated the case against the owners of a business that the party had recently purchased. The party agreed to pay legal counsel on an hourly basis with fees due each month. As the case proceeded, however, the man became delinquent on his payments. These two parties met numerous times to discuss the matter of payment with the legal counsel even reducing the client’s payment despite continued legal representation. In June of 2006, the law firm alleges that the party received a tax refund payment and used this money to make an investment in his business instead of paying outstanding legal fees. When the payment was not made, the     Read More

Tips for Older Americans to Avoid Filing for Bankruptcy

Medical debt is currently the main cause of personal bankruptcy filings in the United States, and people who are 65 or older comprise approximately 8% of the individuals who file for bankruptcy. There are several reasons why this age group has high levels of medical debt including that the 2008 recession impacted this group significantly and wives who are most often outliving their husbands. Older individuals often also face predatory debt collectors. While bankruptcy is often an option for starting over financially, older clients also see bankruptcy as an opportunity to make themselves happy again. In addition to being complicated, filing for bankruptcy can be an embarrassing process for many older adults. This article will review some of the important tips that an older adult in Oklahoma can take to avoid filing for bankruptcy. Contact Your Creditors A person might be able to negotiate a repayment plan with creditors. As a result, it is often important to contact a supervisor at each company to which you owe money as soon as you notice debts. Providing detailed notes about who you spoke to and what time the conversation occurred can later help in various steps of the repayment process. Decide on     Read More

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