What is Chapter 13 Bankruptcy?

Chapter 13 is a form of bankruptcy that enables individuals in the United States to pay off their debts when all other avenues of repayment have been exhausted. Enacted by Congress pursuant to Title 11, Chapter 13 bankruptcy seeks to provide individuals with a fresh start financially while also allowing creditors to maximize the amount of money they receive. Chapter 13 is a voluntary bankruptcy filing, and allows individuals with disposable income to a way to pay off their debts.

Under a Chapter 13 filing, an individual undergoes a court-supervised reorganization of his/her finances. This chapter of the bankruptcy code differs from Chapter 7 which offers complete relief of many debts immediately upon filing. Under a Chapter 13 filing, the debtor must still pay off his/her debts, though now the repayment is under the supervision of a federal bankruptcy court.

Debtors who file under Chapter 13 usually have the disposable income necessary to enact a viable repayment plan. They also have unsecured debts of less than $336,900 and secured debts of less that $1,010,650. Payments of debts are usually enacted through payroll deductions.

Under Chapter 13, a written plan meant to last 3-5 years is agreed upon by both the debtor and his/her creditors. Repayment generally begins within 30-45 days of the plan's approval. Payment is generally made to a trustee who then distributes the funds to the various creditors involved with the case. Most debtors who file for bankruptcy also keep an attorney to assist with the many legal ramifications a bankruptcy filing that can occur. With this type of bankruptcy, the individual gets to keep his property and the creditors will receive less money than they were originally owed.
Filing for Chapter 13, or for bankruptcyof any kind, has its advantages and disadvantages. One disadvantage is that a Chapter 13 filing stays on an individual's credit report for 7 years. Though this is less than the 10 years of a Chapter 7, it is still a long period during which almost all credit is denied to the individual. Some advantages of Chapter 13 are the ability to stop foreclosures during the bankruptcy period and the ability to achieve a super discharge of kinds of debts not dischargeable under Chapter 7. Filing Chapter 13 bankruptcy also prevents collection activities against non-filing co-signers during the life of the case.

Chapter 13 bankruptcy is something that you do not want to jump into because it will change the way that creditors view you in the future. You will be considered a high risk investment and may not qualify for much. Most attorneys will offer free consultation for those who are considering filing bankruptcy. During this time you can ask any questions that you may be confusing and they can also guide you to your final decision to file or not to file. It's best to see an attorney that handles bankruptcy cases regularly so they can give you the best advice on which direction is right for you. In the end the decision will be yours to make but it helps to have professional guidance.

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Is Bankruptcy the Best Solution For Your Financial Woes?

In the current economy, the news reports are painting a gloomy picture for the near future with job losses mounting and many individuals and families sinking deeper into debt. Who would have thought that the 2007 housing market collapse would have such far reaching financial effects? Companies that have been in business for decades are closing their doors and laying-off long time employees. One event, the housing market collapse, has resulted in almost catastrophic consequences for thousands of people from all classes, including the rich.

Fortunately, history has shown us the economy has cycles of ups and downs and cycles of stagnation with the current economy being no different. Until that time in which the economy rebounds, people will need to find innovative ways to weather the financial storm. Some will decrease the amount of money spent each month on luxury items such as going out to eat, vacations, movies and other things that can be eliminated to tighten the belt on the family budget.

However, some people will have no choice but to consider filing bankruptcy. In cases where bankruptcy is considered, it should only be the choice of last resort when there are no other options available. People that find themselves overwhelmed by creditor phone calls and the possibility of court ordered judgments, then bankruptcy may be the only option.

Court ordered judgments allow creditors to garnish wages, a percentage of the debtor's paycheck each pay period. Judgments also allow the creditor to levy bank accounts which forces the bank to turn over all funds available the day the bank levy is received. Creditors can also file liens against any property owned by the debtor which when sold, the money will be turned over to the creditor up to the amount of the civil judgment. In some cases, depending on in which state the debtor resides, property can be forced to be sold to pay the debt.

In cases such as these where a judgment can be awarded in favor of creditors, bankruptcy is a viable option. Once a judgment is awarded to a creditor, they can enforce the judgment by any means allowed by the court as stated in the examples above. Garnishment of paychecks and bank levies make it very difficult to function financially since money can be removed from a bank account at anytime since the debtor is never aware when the creditor will submit a levy or garnishment.

Filing bankruptcy takes serious thought and it is recommended to meet with a financial advisor or tax attorney before filing bankruptcy

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An Introduction To Filing Bankruptcy

It is very difficult for most people to declare their bankruptcy. Yet at some juncture of life, law helps those who are unable to repay debts in any way to get help from the government. Before we talk about the morality and immorality of this issue, let us first understand what bankruptcy is.

Personal bankruptcy is a very undesirable situation in life where one finds himself in a nasty trap of debts with a financial situation where you are unable to repay them. These sudden changes in your financial situation can be caused due to a number of reasons like medical emergencies, unemployment, excessive debt, divorce, etc. You may be then in a dilemma regarding what to do or what not to do.

Bankruptcy law provides for the debtor to develop a plan according to which he can repay his creditors, through the division of his assets. This is a nationalized lawful proceeding that helps the people to get rid of their debts. The creditors are restricted from further collection of their debts till such debts are cleared through the bankruptcy act in bankruptcy court.

There are different kinds of bankruptcy you can file, though you can choose only one of them. When you file for straight bankruptcy (Chapter 7 bankruptcy), you need to provide the court with a specific property limit that can help you get rid of your debts successfully. You can choose reorganization (Chapter 11 bankruptcy) if you are a businessperson and are dealing with collective debts. Chapter 12 bankruptcy is meant to help poor farmers get rid of their debts. Finally, wage earner policy (Chapter 13 bankruptcy) requires the debtor to reimburse a minimum portion of the debts with his current income that can help him get rid of his existing debts.

What bankruptcy law does for you is to help save you from further harassment by creditors. You can completely get rid of your debts and also prevent the repossession of your property by such creditors. You will get a new, clean slate to reopen your account. You can undo the wrong decisions that led you to such a crisis situation. In short, it helps you to start your life all over again.

Unlike popular myths, any debtor can file for personal bankruptcy. Bankruptcy is governed by state law. You can easily get rid of those hounding creditors and save yourself from getting any more embarrassment by filing for bankruptcy. There needs to be at least a period of eight years gap before you file for bankruptcy again. This means that life gives you a chance again and again!

Bankruptcy is a serious yet effective solution to solving all your debt problems. It will protect you from losing all your assets but at the same time, you can repay all your debts as well. Bankruptcy is the best way of facing your poor financial situation. You will be admired by the law as well as the society for owning up to your responsibilities and taking hold of the situation. So seek help from bankruptcy attorneys before it gets too late!



About the Author
Marc Dean is a freelance writer. He has done significant research on bankruptcy laws.

Steps On How To File For Personal Bankruptcy

Personal bankruptcy is a very serious decision. One has to carefully weigh his options and the consequences of his decisions before taking this step. Bear in mind that a record of bankruptcy will stay on your personal credit report for at least seven years.

A record of bankruptcy will impose certain limits and restrictions on your future plans. Therefore, being stuck in bad credit doesn't mean you have to think about filing for bankruptcy right away. Consider all other possible options first to recover from bad debt.

Nevertheless, if you made the decision and if you're ready to go through the whole process, here are the steps you should take when filing for personal bankruptcy.

Seek credit counseling. In the past, a person who decides to file for bankruptcy can just fill out an application and submit. However, since the amendment of the bankruptcy law, this decision is not up to the individual anymore.

In order to know if you're eligible for bankruptcy, it is mandatory to first complete a credit counseling course from a government accredited agency. The credit counseling agency would be the one to decide whether you are a candidate for bankruptcy or not.

In case you're not eligible for bankruptcy, rest assured that the credit counseling agency will help you get out of your debts more easily. They can negotiate with your creditors for a more convenient repayment plan and you will receive guidance and support in managing your finances. The good thing about this arrangement is that you can rebuild your credit report without resorting to bankruptcy.

Hire a bankruptcy lawyer. If you are eligible for bankruptcy, you must hire your own bankruptcy lawyer. Preparing the documents needed to start the bankruptcy process is complicated and should only be accomplished by an attorney.

Your lawyer must see to it that all the information on your documents are correct to avoid being accountable. Because of the weight of this responsibility and the many tasks involved in filing for bankruptcy, a bankruptcy attorney may ask a high service fee for his services.

Pass the "IncomeMeans Test Calculation". After submitting your bankruptcy application, you will submitted to the "income means test calculation". Here, your income would be tested as to whether you are capable of paying your creditors or not.

If the result of your "means test" falls below the required capacity, you will be eligible to file for Chapter 7 bankruptcy. If it's beyond the income requirement, then you would haveto file for Chapter 13 bankruptcy.

Chapter 7 Bankruptcy. If your application for bankruptcy chapter 7 is approved, then you are immediately discharged from all your debts to your creditors. However, bear in mind that this will be reflected on your credit report and will remain for a maximum of seven years.

Chapter 13 Bankruptcy. If you filed for Chapter 13 and is approved, you will be subjected to a five-year repayment plan where you must submit a percentage of your salary each month to pay your creditors. The percentage of the salary deduction would depend on the amount of debt you owe and the value of your monthly income.



About the Author
Copyright 2009 New Horizon Business Services, Inc http://www.newhorizon.org NHBS, Inc has been providing consumers and business owners with financing since 1989. Join our mailing list for Free Tips on Rebuilding and Repairing Credit at http://www.newhorizon.org/Info/creditbk.htm . For list of bad credit cards, follow the link http://www.newhorizon.org/Info/unsecured.htm Melanie Mathis is a co-author or Liz Roberts at newhorizon.org

Highlight of bankruptcy personal loans

Using a particular chapter of bankruptcy do guarantee a way forward in payment of your debts but many wonder how one would rise again after they have been reduced to nothing.

There are lenders who offer such individuals bankruptcy personal loans to enable them build their lives again.

It goes without saying that one has to be very careful with this kind of decision given that it is clear to everyone that your credit is really bad.

Start by asking yourself if you truly have to depend on a loan to survive the aftermath of excessive debts that must be all paid of or discharged.

You must be careful not to fall back in to the bottomless pit of debts again and also that creditors who are typically in business will do everything to ensure that you get convinced that this is to the best of your welfare.

If this is indeed a priority, then how much would you afford to take and payback without defaults, given that your paycheck has other expenses to take of?

After making this individual decision, then plan on who is going to be your bankruptcy personal loan lender by seeking this information.

Any of these lenders will need you to demonstrate how swift and perfectly you managed to reconstruct your credit ratings in just a short while, a thing that would boost the approval.

They will require the things that you did to end up in debts such as poor business management, overspending with credit cards and so on.

If your reasons are bad enough, it may not be that easy to convince the lender on approving the personal loans after bankruptcy because one would appear as a high risk borrower.

If by any heavenly sent chance a borrower were able to reveal that these reasons were beyond what any human would control, this would be better of.

One thing that is inseparable with this type of personal loan is a percentage of your next pretax income because it is the collateral needed by the lenders for unsecured personal loans.

Another thing that is rather obvious is the increased interest rates charged on the loans and so it is good to prepare for this.

The bankruptcy personal loans lenders demand a collateral from a borrower like a house if the loan you are looking for is a home equity, car for an auto one.

These are normally classified as secured personal loans and you must have such assets left to your name after bankruptcy to opt for them.

I think it is not really wise to risk more liabilities immediately after surviving a severe debt crisis with other creditors.

It would be much better to come up with a personal financial plan that will help them start their investment planning all over again because the bankruptcy process should basically be a learning experience.

One learns to stay within the limits his or her paycheck can afford while avoiding what is not really necessary for survival.

If you should decide to apply for a bankruptcy personal loan, let it be put to the best financial use possible and then paid back on time.



About the Author
An original article by Esteri Maina on BANKRUPTCY PERSONAL LOANS

Hyundai Assurance Program Pacifies Economic Woes

With plenty of consumers feeling apprehensive about the current economy, Hyundai is hoping to quell some potential car buyers' fears. Many consumers have avoided dealerships like the plague due to economic uncertainly, but Hyundai introduced what may be a solution, giving buyers the ability to return their new Hyundai should they lose their job or are no longer able to make the payments on the vehicle.

Hyundai is allowing new car buyers to return any vehicle their purchase, and be free from any loan obligation. Hyundai will also cover any difference that remains. With no extra fees or charges on top of the sticker price of the vehicle, Boston Hyundai dealers believe that the new program may be just what many buyers are looking for.

Research that Hyundai conducted showed that many car buyers are simply not interested in rebates or the typical incentives. With economic instability and rampant layoffs and job losses, a basic rebate is certainly not enough to encourage car buyers to shop for a car.

Hyundai has stipulated many factors contributing to this new program, such as involuntary job loss, personal bankruptcy, getting transferred, or accidental death. If any of these life changing conditions , Hyundai says the vehicle that is either leased or purchased can be returned. Hyundai dealer Lancaster PA notes that the program is also available to qualified buyers without any regard to health or employment history.

Availability of Hyundai's new program is contingent on the buyer making a minimum of two payments before filing for the benefit. Managing the program is Walkaway USA, which provides auto dealers with financing and insurance services.

Ultimately, the program offers consumers the ability to avoid default while still maintaining their credit rating should an unfortunate, unforeseen life-changing event take place. While it's new to Hyundai and a Birmingham used car dealership, this type of program has been offered at individual dealerships before in the U.S. and Canada. Hyundai is the first automaker to offer such a program nationwide.

It looks like the program will be a solid fit within Hyundai's brand. Already Hyundai's warranties have become popular with consumers, and Hyundai Texarkana believes this new program will also help Hyundai offer even greater value for struggling consumers.

Creating additional customer value beyond attractive vehicle warranties is likely to go a long way in a sales deprived market says Lewiston Hyundai. As the program requires no additional financial commitment to the consumer other than the cost of the vehicle itself, it may be seen as less gimmicky than the standard slew of incentives offered today.

Although Hyundai may become the only automaker to offer this type of program nationally, Walkaway may make it available to individual dealers offering other brands. Until then, Hyundai dealers such as Hyundai Philadelphia will be able to stand out from a sea of incentives from other dealers that have done little to draw customers into showrooms.



About the Author
Joe Kent is a writer for TK Carsites, an automotive website design and marketing firm in Orange, CA, that specializes in working with car dealers nationwide.

Bankruptcy and auto insurance

The economical crisis has forced many simple consumers find ways of dealing with their debts while retaining their assets and living a normal life. One of such options has become filing for bankruptcy. In the last 12 months there was a one-third increase in bankruptcy filings, and this increase was not only due to businesses and companies. Many simple consumers that were regarded as average income households also have taken this risky but sometimes necessary step. But filing for bankruptcy is not that simple and you have to understand the most important aspects and the impact it will have on your credit situation.

Bankruptcy is not necessarily a situation when you or your business has failed or the expenditures outgrown incomes. Bankruptcy has become a tool for regrouping and reorganizing own equities in a way that protects your assets. This is so called Chapter 13 bankruptcy that allows individuals to ensure that they don't lose their assets like homes, cars and personal items when they are in debt.

Chapter 13 bankruptcy, also known as Also known as Individual Debt Adjustment lets a person with an average income to pay out his or her debts in a three to five year period without giving up any of own assets. During this period the person who filed for bankruptcy is legally protected from creditors collecting their bills. When applying for Chapter 7 bankruptcy, the individual in contrast is likely to lose most of assets for settling the bills, except those assets that are considered exempt (and the definition of exempt assets varies significantly from state to state).

Those who want to keep their homes and cars from creditors, Chapter 13 bankruptcy has become a viable option. But it has its own price especially when you consider getting or renewing any type of insurance, including car insurance coverage.

Expect that your car insurance rates will likely to be raised when you file for bankruptcy. Why is that? Simply put, bankruptcy affects strongly your credit rating, and as we all know, credit rating is one of the essential elements when the insurance company quotes your insurance rates.

When you're filing for bankruptcy your credit rating worsens and the record is kept for about 10 years. In this period you can face increased insurance rates from companies that consider your credit rating as an essential part of risk evaluation. You can even encounter some companies refusing to offer or renew your insurance policy after bankruptcy.

Bankruptcy is the same thing for your credit rating, as a traffic accident for your driving record. When you are involved in a car crash, your driving record is modified and that affects your insurance rates. The same thing with bankruptcy. Consider it as an «accident» for your credit history.

Some things to keep in mind after filing for bankruptcy. First of all change your method of payment if your credit card or account has been suspended due to bankruptcy. It's very important to keep your policy active, because getting a new one will cost you much more. And remember, there's no such thing as cheap auto insurance when you have filed for bankruptcy.



About the Author
Amazed by the professional approach with which David Mayer explores the subject of the article? Visit http://www.findyourautoinsurance.com/bankruptcy-and-auto-insurance.html to read more articles from David Mayer in which he shares his point of view on many other topics.