Get Out Of Debt

If you have reached a point in your life where your debt has piled up and you are considering filing bankruptcy, then odds are that life hasn’t been too pleasant for you lately. One of the worst issues you will have at this time is the harassment by creditors, fear of repossessions, and utilities being turned off.

While these issues shouldn’t be the reason for filing bankruptcy one “benefit” (if it can be called that), is the automatic stay. The automatic stay is “automatically” put in place and accomplishes several things including protection against bill collectors, foreclosure, utility disconnections, and being evicted. There are some cases where it isn’t automatic such as when people have recently filed other bankruptcies. Here are some points of relief that the automatic stay can give you during this stressful time:

Foreclosure – An automatic stay will temporarily stop foreclosure. The creditor will probably be able to foreclose eventually if you file Chapter 7, but this will buy you some valuable time to make decisions. Chapter 13 bankruptcy is a better option if you want to keep your house and you can usually file a bankruptcy petition any time before the sale of your house. Utilities – If the utility company is threatening to cut off your water, electricity or gas, the automatic stay could give you up to 20 days of extra time. Once you file bankruptcy the automatic stay will force the utility company to reconnect your service if your utilities have already been disconnected. Wage Garnishments – Garnishments as in the case of child support and alimony will be completely stopped when bankruptcy is filed. Your paycheck will be protected and you will be able to take home a full salary and can also discharge the debt in bankruptcy. Eviction – Some help will be provided, but the new bankruptcy law makes it easier for landlords to evict you. If your landlord already has a judgment of possession against you when you file, the automatic stay won’t affect these eviction proceedings; the landlord can continue just as if you hadn’t filed for bankruptcy. Also if the landlord alleges that you’ve been endangering the property or using controlled substances there, the automatic stay won’t any good. In some cases, the automatic stay might give you a few days or weeks but the landlord can ask the court to lift the stay and the court will probably do so. Repossession – Your car cannot be repossessed while you have an automatic stay but this does not prevent you from having to handle the issue by reaffirming your car loan of returning it. You may be able to save your car with a Chapter 13 Bankruptcy but will have to make your trustee payments. Also, you need to be aware that a creditor can ask a judge to lift the stay so they can repossess.

As you can clearly see, an automatic stay won’t solve all your problems but it does give some temporary relief. It will stay in effect until you complete the bankruptcy and receive a discharge, the judge lifts the stay when a creditor requests it, and the property you want to protect is no longer a part of the estate. Be sure to read further information before you make any decisions about filing bankruptcy so you can be well-informed.

Medical bankruptcy is one of the most misunderstood terms in medical finance. There is actually no “medical bankruptcy”. That being said, medical problems have consistently been one the 3 leading causes of bankruptcy in the United States.

Although there is technically no medical bankruptcy a medical problem can certainly cause you to find yourself in bankruptcy court. Medical problems can be a double whammy; they reduce or eliminate your income and cause you to incur massive debt. In many cases you have virtually no chance of ever repaying this debt, it’s just too large. Many people find themselves in a position of losing their homes and other valuable possessions in an attempt to repay their huge medical bills.

Often, seeking the protection of bankruptcy isn’t something desirable but it’s seen as the only way out. You may think that having health insurance will provide protection against such a financial calamity, however almost 50% of all bankruptcies are caused by people facing massive amounts of medical debt even though they had medical insurance at the time of their accident or illness.

Sadly, there are also a significant percentage of medical related bankruptcies that are filed by people that aren’t really facing huge medical bills. Almost 40% of medically related bankruptcies were filed by people who owed $5,000 or less in medical bills. In many cases this is due to the medical industry being much more aggressive in collection actions than they once were. In other cases people are just not educated about how to proceed in such cases. Once the collection letters begin arriving, fear sets in, and many people just don’t look at all their options.

Yes, filing a chapter 7 bankruptcy can protect your assets and allow you to keep your primary residence if your home falls within state guidelines. These vary by state. Filing for bankruptcy protection however, is can present you with huge problems down the road and will essentially destroy your credit rating. You should carefully consider your other options before considering using bankruptcy as a shield to protect you from medical bills.

You might consider calling an attorney in your state that specializes in such matters. Your first call however should be to your creditors. The first line of defense should be making arrangements for some sort of alternate payment plan. Bankruptcy is a messy business and most creditors would rather avoid is almost as much as you would.

In this current economy, many people are finding themselves in a financial hole that seems like they could never climb out of on their own. Bankruptcy regulations have changed over the last couple of years, so the waters are quite murky as to what you can and cannot do when it comes to filing for bankruptcy. Many people are concerned, overwhelmed and frustrated at their financial situation and they don’t see a good way out of the mess they are in. This is when getting bankruptcy legal advice is a good idea.

Some people start out by trying to buy a book about bankruptcy. They go to the local bookstore, read through a few books and think that they know what the process is all about. Unfortunately, the regulations and laws regarding bankruptcy have changed a lot recently. This makes it extremely difficult for someone to try to start the process on their own. There are many attorneys who are focused on doing bankruptcies only. These are the attorneys that a person needs to work with when they truly have questions about the bankruptcy process.

It is important when looking for bankruptcy legal advice that you are working with an attorney who is experienced in handling bankruptcies right now. You don’t want someone who does bankruptcies on the side or only does a few of them year. You want to work with an attorney who specializes in bankruptcy law so that they can answer all of your questions correctly. You certainly don’t want to work with someone who has to look up the answers to your questions!

When getting bankruptcy legal advice, it is important to think ahead to where you want to be financially in the years to come. Will the bankruptcy harm your credit such that you won’t be able to get back on your feet? You need to make sure to ask your attorney how the bankruptcy will affect your credit score and your ability to get loans in the future. Then you have to weigh your options. You have to decide if you can dig out from under the mess by yourself or if bankruptcy is going to be the only option that works.

Whatever you decide, it is important to remember that you will come through this, and that your financial situation will not be like this forever. Millions of people all around the world are getting back on their feet again. You can do it too.

You’re in serious debt. You owe a number of creditors and have no hope of paying them. The worst part is one of your creditors is the most powerful collection agency in America…the Internal Revenue Service.

A fateful decision…You’ve decided to declare bankruptcy, and while going through your creditors you wonder if the IRS can be included. The IRS has a number of rules and restrictions on including an IRS debt in a bankruptcy. Not only that, but you’re not completely free of IRS collection actions while you’re in bankruptcy.

Let’s go through the life cycle of an IRS debt and a bankruptcy:

Can you include your IRS debt in a bankruptcy? Yes, but your debt has to meet 3 standards. If it doesn’t meet even one of them then you’ve got to figure out another way to pay the debt. The 3 standards are:

1. You can not include any tax debt that is less than 3 years old. So if your tax debt is from last year it can’t be included.

2. You can not have any unfiled tax returns.

3. You can not have any tax returns that were audited because you committed tax fraud.

One down…Let’s say that your IRS debt meets the requirements and you can include it in your bankruptcy; now what? The IRS can’t take any collection action against you while you’re in bankruptcy under the Automatic Stay of Collections.

There is a loophole for the IRS if you’re a serial bankruptcy filer. If you’ve filed bankruptcy and it had been dismissed within the last year the IRS only has to abide by the Automatic Stay for 30 days. If you’ve filed two bankruptcies then the IRS can ignore the Automatic Stay.

Do they ever quit? While the IRS can’t collect from you here’s what they can do: The IRS can perform an audit to determine your tax debt amount. The IRS can send you an annual notice stating your debt amount. The IRS can take any tax refund you would have due and apply it to your debt, or if you have a trustee handling your bankruptcy the refund goes to them to be distributed to your creditors.

An end in sight…What happens to your IRS tax debt after the bankruptcy is discharged. If your tax debt was included and discharged then the debt is non collectible. But wait; remember those 3 standards for including a debt in bankruptcy. Any tax debt that happened because of one or all of those reasons is still eligible for collections. In addition interest and penalties have accrued on that portion of the debt during the time you were in bankruptcy.

The IRS and bankruptcy do not go together, but if you know your rights you can make the decision you need about your debts and be able to get your life back on track.

Now you have the smoking gun…Use it!

Bankruptcy is seen differently by different people, especially depending on their situation. Some may see it as a quick fix to a long building problem while others may not see it as an option at all due to the costs of the attorney. Everyone should understand exactly what bankruptcy is, and if it is a good idea for them in their situation.

In reality, bankruptcy should only be seen as a very last resort, and sometimes it’s hard to tell if you’ve really hit rock bottom financially. Take, for instance, someone that has $100,000 in debt that they cannot hope to pay off any time soon. However, once they bring their case to court to file for bankruptcy, the fact that they own a second home comes to light. They really didn’t consider it because it’s an older home that’s not in great shape that they are letting relatives live in for free. Suddenly their asset to debt ratio looks completely different than what they had assumed, and the bankruptcy is either declined or pushed through on terms that are not at all good for the one claiming.

This is but one example of the many situations where a qualified attorney would’ve actually saved you quite a bit of money simply by looking at things from an angle that you had not considered because you do not deal with bankruptcies all day every day. There are also many situations where, no matter how hard he looked, the layman could not possibly see coming because they arise due to laws and regulations that most simply do not know, nor have the training to understand them even if they were able to look them up. Bankruptcy law was complicated to begin with, but with the legislation passed within recent years, there are now multiple levels of confusing changes that must be navigated. You probably do not stand where you think you do when it comes to your financial situation as seen by the law.

Another issue people face is the type of bankruptcy they plan to file: Chapter 7 or Chapter 13. Put simply, in a Chapter 7, you discharge everything because you do not have the means to pay any or all of it within a certain time frame, and in a Chapter 13, only some of the debt may be discharged, if any, and what is left is generally reduced to an amount that the person filing is able to pay. And even at that, there are certain types of debt that cannot be eliminated through any type of bankruptcy, so if your debt is comprised in large part by these types of debt, a filing is not going to help you at all.

You can file whichever you like, but it is not the one filing who decides which type of bankruptcy is passed. The court determines how much the filer is able to repay, and whether the case constitutes as a Chapter 7 or Chapter 13, regardless of which is initially filed. A qualified bankruptcy attorney knows how to present the case in a light that is much more likely to get the type of bankruptcy passed that you need.