Negotiations with creditors have failed. Recovery is imminent and began foreclosure. Your income is not enough to pay your bills, regardless of the level of payments. It may take some time to consider bankruptcy.

   Bankruptcy law developed in response to the violence surrounding the debtors’ prison. Before the nineteenth century, there was a prison for not paying their bills. If a merchant filed a claim, the debtor was incarcerated until his debts were canceled. (Women are not in prison for debt, not because of chivalry but because they have the ability to borrow disorders). The lender is legally responsible for the cost of a stay in prison, including food, but seldom paid. Finally, the debtor to court to enforce this law, and it was quite difficult to sue when in prison. As a result, many borrowers languished in prison years to survive, they could bring their families or, in many cases, simply starving. While some lenders will certainly not against the renewal of debtor’s prison, fortunately, we live in a more enlightened age. Bankruptcy was created to provide a second chance (or third or fourth) to those hopelessly in debt provides a mechanism to delete everything and start supply. As times have changed, but you have the Bankruptcy Code. Not all debts can be eliminated. The method can easily be disqualified if an inappropriate approach are. There are many things that the debtor should know before resorting to bankruptcy.

   The bankruptcy decision

There are two types of personal bankruptcy: Chapter 7 and Chapter 13 Bankruptcy Chapter 7, Chapter named after the bankruptcy code requires full payment of all debts and liabilities breaks all non-exempt. Chapter 13 bankruptcy is essentially a payment plan imposed by the court which provides monthly payments to your creditors,

   In explaining its decision, the bankruptcy is not an easy task. Unfortunately, bankruptcy attorneys are likely to recommend bankruptcy almost every consultation. Too often frightened consumers are encouraged to declare bankruptcy just to avoid certain liabilities. There must be a mistake. Bankruptcy should really be a last resort because the legal system, he wanted to be. A bankruptcy will be on your credit card for 10 years, and although the criteria for loans changing, many lenders will not even consider a candidate who had a bankruptcy. In addition, a Chapter 7 bankruptcy costs more than your property. Before deciding to file for bankruptcy, the seriousness of their situation is really appreciated. On a sheet of paper, make a list of all your assets and their approximate value, which could be sold. On the other hand, you add all your debts. If the debts exceed assets in a large percentage, you can look into bankruptcy. On the other hand, if you think you can improve your situation (you can get a new job or extra income), or if your assets are more valuable, or near, the value of their debts, different approach may be appropriate.

   Negotiate with your creditors

Explain your situation and ask for more time to pay. If the creditors refuse and yet I say to pursue such measures threaten bankruptcy. No creditor wants to hear the “B” word. With bankruptcy as a threat to a very powerful position to negotiate with the creditors is the choice between getting a little each month or probably getting nothing through bankruptcy. Do not try this tactic on secured creditors. You can decide to take possession of his property, to avoid going to court.

   Contact Consumer Credit Counseling

That mentioned in the book, Consumer Credit Counseling is a non-profit group funded by creditors to help consumers negotiate a repayment plan. He is often able to negotiate a better salary the individual because of his constant contact with a variety of creditors. If you can not negotiate a satisfactory agreement, these people a chance. Note that you can with a credit counselor will appear on your credit history.

   Study Chapter 13 bankruptcy

This type of display allows instructions of your debt in a court of law and save on your credit report for seven years only appear if the negotiations or not, there is simply not enough money to make ends meet for Chapter 7 bankruptcy may be your only option salary. Bankruptcy is not necessarily all debts. If your debt is bankruptcy, free application will do little to improve their situation. If a co-signer is used, the debt to the co-signer, unless that person is also registered bankruptcy. Assets in the State’s debts community and also involved in the bankruptcy are provided they are community property. Consider all very carefully before the file.

   Dischargable no debt – accounts that pay, despite insolvency

 Certain types of debts can not be cleared automatically insolvency. You have certain requirements before filling eliminated by bankruptcy. If most of your debts will bankruptcy can not solve your financial dilemma. The only options may be a non-dischargeable debts are eliminated by bankruptcy by granting an exemption to the court for some time because the debt was occurring due or because the creditor. Not subject to debt relief Some debts can not be removed by an exception. These are:

   Loans to current students

This applies to student loans, which was based on the last five years. An extension of the repayment period will be added to this topic. Some dishes are even unloaded payments that are more than five years overdue. So if the student loan was due seven years ago and that the payments were originally within five years, he would still be responsible for the last three years of payments. The court may also pay an exception to a student loan if there is an “undue hardship” for you would be. This rarely granted.


All federal, state and local levels are not dischargeable for at least three years after filing your tax return. Even if you were to cut the tax office brought together more than 3 years, is a tax within 240 days after the filing of bankruptcy judges non-dischargeable. Property taxes are dischargeable if they are late for more than one year but not the lien on your property. The fine line that you can count on the government to increase their taxes thereafter.

   Child Support and Maintenance

This may in special circumstances, which are generally agreements that have not been ordered to be discharged by the court. If one spouse has agreed to provide more than half of the marital debt in exchange for the payment of alimony, the court may discharge all debts owed to joint bankruptcy. Consult an attorney if this situation applies.


Fines or an organism court, the judge or the government or surcharges, fines and restitution, as a rule be rejected in bankruptcy. The same is true of debt as a result of damage or liability caused by driving while intoxicated. Debt for drunk driving should be adjusted to the court and the sentence must be issued by a higher court. Decisions small claims, traffic and municipal impaired driving are downloadable. Consult a lawyer.

   Debts not discharged in bankruptcy

When a bankruptcy dischargeable debts are not found, can not be discharged in bankruptcy later.

   Debts not listed on your bankruptcy petition

If the debt is not contained in your application may be rejected. Many people think bankruptcy keep one or several credit lines with small balances or no balance outside the insolvency of a portion of their loan resources. Another strategy is to reaffirm debts provided that credit is still available. The creditor, faced with the choice between the abolition of fees and keep your credit card, sometimes choose it. Be very careful to reaffirm the debt. You are not required, and you must declare a new agreement in writing any new conditions.

   Other types of non-dischargeable debts can be released immediately if they contradict the creditor must not, when objects of creditors, the debts are assessed by the court. As downloadable or non-downloadable creditor may require that the debt is not discharged if they meet the following to say:

   The debt was acquired by Intentionally fraudulent behavior

Fraud in this case is a dishonest act to credit risk. Imagine someone you are not, or borrow money if you do not have the ability or intent to pay it would clear examples of fraud. Non-disclosure of certain facts may be considered fraud. If you want to make a promise and keep thinking that you provide to do so, it is not a scam. Creditors are generally paranoid and everyone fails, so no excuse for this relief is often used by lawyers creditors.

   Liabilities as a result of false statements in writing arise

To be eligible for a credit application obviously false. The disappointment must be a material fact, and that the creditor relied on debt to be judged non-dischargeable. A misspelled name or minor error would not not dischargeable debt. Income greatly exaggerated or poorly a job title will be considered fraudulent.


If you charge “luxury goods” or services in an amount greater than $ 500 within 40 days before bankruptcy, the debt is likely to be as non-downloadable. The same is true if cash advances are received at least 20 days before the commencement of the bankruptcy proceedings. Many small loads taken to avoid prior authorization, would also be considered fraudulent if you were over your credit limit or obviously unable to pay.

   Receivables from illegal or malicious acts, embezzlement, theft or breach of fiduciary responsibility

   Money on illegal acts such as embezzlement (taking property left in your care), theft (theft), or breach of fiduciary duty that can not be dischargeable. The court is usually a definition of fiduciary responsibility.

   Once you’ve checked your debts and determined what is and what is not releasable, you can determine if bankruptcy can improve your current financial situation. There are several things you need to know before deciding whether to file.

   Excluded property

A common misconception about bankruptcy is that all you have to lose to satisfy your debt. In fact, the court will give you the opportunity many things and important to their well-being, and perhaps even a little more. Although there is a federal exemption law in the states and the District of Columbia allow the use of these states allow a choice between the laws of the state and federal exemption. The states are:






New Jersey

New Mexico







Other states require some exceptions person failed state.

 Here are some examples of things that are free, depending on the state in which the application was filed, can.

   � Personal Effects

� Furniture

� Auto (up to a certain amount of capital)

� Tools of the Trade

� Equity my residence (sometimes the whole house)

� Clothing

� Household

� Books

� Jewellery

An interesting exception is the home exemption. As John Connally, former governor of Texas, declared bankruptcy a few years ago, many people were surprised that he was allowed to keep his huge house worth several million dollars. Texas is entitled to an exemption to keep every person files bankruptcy to a hectare in an urban area or 100 acres in a rural area, regardless of their value. The former governor may have had a very good lawyer, but also many other countries homestead exemptions.

   One strategy is to ruin exempt employees to sell the property of the bankruptcy and turn them into freehold. For example, a Texas company to sell non-exempt assets and use the proceeds to pay off the mortgage on the house in Homestead property. They are certainly a lawyer before such transfer of assets advised, however, because the court could easily see the action as an abuse of the bankruptcy laws.

   Although a certain amount of capital is free, your creditors can often sell the property. Excess capital that you can recover if you have a $ 10,000 car, for example, and you do not have $ 5000 on it and your state exemption is $ 1,200, the creditor may sell the car and give you $ 1200. Some states allow “wildcard” exemption that can be used to cover the difference.

   To find out which claims are dischargeable and what the law allows a plaintiff to maintain a rational decision can be made whether to file for bankruptcy. If you select a file, there are several ways to go about it, and avoid pitfalls.


If you have decided to take action, you can begin. If the process of signing the creditors knocking at the door and recovery, foreclosure, or seizure is just around the corner, it may be useful to introduce the use of emergency to consider getting an automatic suspension. An automatic stay stops creditors from taking any further action until the matter is before the bankruptcy judge. Unlike bankruptcy, which usually contains several pages of information in an emergency application is one long page contains a list of your creditors. The remainder of the application must be filed within fourteen days, or the case is dropped. The court will notice that the current bankruptcy creditors send mentioned, you do not need all the recovery measures. If not stop, send copies of the automatic stay and request that all new measures cease collection. The creditor may require that the automatic stay is lifted, so that you can continue to collective action. Only one owner tried to push a rule rental, unless there is a long-term lease involved expel. If you have a long-term lease which can be rented as a single asset, the owner must be a policeman waiting @ g distribution.

   After the wolves at bay, another decision must be made: whether to accept a bankruptcy lawyer. Lawyers, as we all know, are expensive. In the case of the bankruptcy of a complex list can be very useful. If you have a property or valuables when you try to move money free of non-exempt property when your creditor not to try your dischargeable debts due to fraud or other complication, you can hire an experienced bankruptcy attorney. In the store. Do not be afraid to negotiate. Ask lots of questions and speak several lawyers before making your decision.

   If you have a bankruptcy very easy to have if you can not afford an attorney, invest $ 15 million in a good do-it-yourself bankruptcy book. It will contain detailed information in this chapter. Typing I write forms of bankruptcy. They are reasonably priced and in the simple case of a bankruptcy, can take the place of a lawyer. If your case is complicated, and can not afford a lawyer, you do your own research. Read a consumer bankruptcy manual and then you see a good law library. There are several legal guides devoted strictly business. If you or your attorney have prepared your case, you are ready for formal work.


All relevant documents of the local bankruptcy court available. Check the yellow pages under Government Services (usually at the beginning of the book) to an address or phone number. The court may, within 14 days from the date of submission of an emergency, complete the formal process. When Chapter 7 bankruptcy is filed, the following forms will be sent upon receipt of the court:

   � Statement of Financial Affairs.

� Schedule of current income and current expenditures.

� A list of versions of your debts.

� A list of versions of your property.

� A list of exempt property programs.

� A summary of available programs.

� Memorandum of Understanding on real estate secured loans and what to do with it

  � Declaration of ongoing operations that fulfill the contract to describe such as car leasing.

   � Coverage bankruptcy petition.

� The addresses of all creditors.

� The local forms needed.

Also subject to a fee, usually $ 90, payable at the time of submission. The court accepts payment for a period of four months. The registration fee must accompany the application.

   Once your application has been filed, a meeting of creditors will be held. The court appoints a trustee to preside over the meeting and be responsible for the liquidation of assets. With most smaller bankruptcies, only the registration person and the trustee will be present. The administrator, usually a local lawyer to ask a few questions about the new documents bankruptcy. Call and ask the clerk to the documents you need to bring (usually financial statements or tax returns sometimes). If a large number of properties involved, especially when it comes to non-exempt assets, creditors may seem exceptions protest. You can also try to grill your intention to pay the bill or he lied on his application. Answer truthfully and should be no problem.

   If counsel for creditors is abusive, request a hearing before the bankruptcy court before the process continues. If creditors oppose any exemptions must file 30 days after the meeting of creditors a claim in court. Answer the hearing and the possibility, but you do not have to. The creditor may also try to be a debt non-releasable for fraudulent, malicious or @ or misappropriation or theft. There can not succeed if the objection is raised within sixty days after the meeting of creditors. To defend themselves, you or your lawyer a written response and ready to discuss your case in court.

   Once all conditions are met and your intentions clearer, the court may declare bankruptcy rejected. No formal hearing may be held, unless you choose to reaffirm the debt in this case, the judge will want to be sure you understand what you’ve done. After that time, provided that the creditor no objections, the dischargeable debts are erased.

   Picking Up The Pieces

Bankruptcy was the lowest misfortune that could happen to anyone. Today, however, is common. Bankrupt firms in order. Of contracts or avoid legal decisions people who depend on them to protect themselves against a credit card company that moves too fast.

   Bankruptcy does not automatically refused any credit for 10 years. In fact, many companies do not consider the failure of a responsible manner debt repayment, if no other way. Creditors fear bankruptcy, but also recognize that, when it was said to give someone who is bankrupt, have no other bankruptcy seven years (only occur once every seven years) for s’ care. If you happen to have a good explanation for the failure, such as medical bills, divorce, or some other catastrophic event, the creditor may be willing to forget and to develop credit. Questions from potential creditors about their policy toward insolvency. Your answers are surprising.


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