Bankruptcy laws can also be used by businesses to get their house in order. These laws are covered under Title 11 of the United States Code (the Bankruptcy code). The relevant chapters are chapter 7, chapter 11 and chapter 13.   

Why Avoid Bankruptcy

Legal recourse should be used as a last resort. Avoiding bankruptcy is a better option; prevention they say is better than the cure.
There are many reasons why you should avoid bankruptcy like a plague. It affects your credit score bringing it down by 200-250 points. Unfortunately, this negative entry stays for the next 7-10 years making it very difficult to qualify for new loans. Chapter 7 bankruptcy is bad news for your property too. Certain assets are not exempted under chapter 7 bankruptcy making them attachable property once bankruptcy is filed.

The scope of Chapter 7 bankruptcy is limited and it does not extend to all debts. Some debts like student loan, back taxes and other unpaid dues do not fall under the ambit of bankruptcy law. In such cases it is best to avoid bankruptcy.

Bankruptcy laws create a lien against your property. This gives your creditor a claim on your property. Chapter 7 bankruptcy affects your personal finances as well making it difficult to buy or rent a home/car.

It is very tough to get an approval for credit/loan after you have filed for bankruptcy. Even unsecured loans are hard to come by. Credit card loans are available but at a high cost. The interest rates on these loans are too high to make it financially viable. 
 
Retirement plans are also partially affected. 401 k plans are a nice place to park your investment up to a million dollars; anything above will be used for clearing debts.  

How To Avoid Bankruptcy

You can avoid bankruptcy by any of these plans:

• Debt settlement
• Debt management
• Debt consolidation  program
• Payday loan consolidation

Debt settlement reduces the amount due by as much as 40-60 %. However, you will need to negotiate with the creditors or the debt collecting agency. If you are not comfortable with the idea of dealing with your creditors, you can seek help of professionals.

Debt management is another method of clearing all dues. This is done by keeping all dues current. This gives savings in the form of interest charges. Interest charges often form a huge chunk of all dues and clearing dues become easier when it is waived off.

Consolidating all debts is another way of clearing dues. Payment is easier as the dues are cleared by monthly installments. The burden of interest charges is also reduced as there is one single amount to pay. This gives saving in transaction charges as well.

If you are struggling with several payday loans then you can consolidate them. This makes payment easy and also saves interest charges.
 
Being debt free is important because it gives you peace of mind and freedom from financial hassles. The best way to avoid bankruptcy is financial discipline; avoiding unnecessary expenses, keeping borrowing at a low, paying off debts in time and so on. A debt free today ensures a better tomorrow.

Bankruptcy Alternatives

Bankruptcy record remains on your credit reports for 7-10 years, depending upon the type of bankruptcy you have been granted. So, even though this method is meant to provide the debtor a chance to make a fresh start of his/her financial life, a bankrupt person has to face an array of difficulties in his/her personal, professional, and financial life. That is the reason it is always wise to try alternative strategies in order to avoid bankruptcy. There are plenty of things that you can do in this regard. This section is your best resource on bankruptcy alternatives.

Bankruptcy Basics

Filing a petition to become bankrupt is a complex process because the laws that regulate these types of cases are very complicated. Even though you are taking help from an expert lawyer, you are strongly recommended to have good knowledge at least about the basic things involved with the process of bankruptcy. This section will educate you on how to plan properly before you file your petition, how to decide if bankruptcy is the right option for you, what options are available, which chapter you qualify to file your petition under, and an array of other such things.

Bankruptcy Exemptions

The federal and state laws significantly vary from each other when it comes to dealing with bankruptcy exemptions. Some specific assets might be allowed to be exempted in a particular state while another state may not allow you to keep it. Things may depend very much on which state you live in. Awareness of the legal provisions applicable in this regard is the key to put yourself in a comfortable position where you may be able to get most of your assets and properties under bankruptcy exemptions. This is a must visit section for you if you do not want to lose your home or car after getting bankrupt.

Bankruptcy Laws

Considering the rising number of bankruptcy cases, the bankruptcy laws are getting tougher and tougher with every passing year. Knowledge about these laws will help you make an informed decision. In order to ensure a fair judgment and to make sure that your legal rights are well protected, you must know how the laws work in these types of cases. Though the US bankruptcy code is widely available over Internet, but considering the kind of technical language it uses, people often do not understand what they are reading. This section explains everything in simple language, educating you about your legal rights and how to make the best use of the laws in your favor.

Filing Bankruptcy

It is not always a voluntary filing. If you are unable to pay your debts and are missing your monthly payments for several months, your creditors may also file a petition requesting the court to declare you as bankrupt. In these cases, it is termed as involuntary filing. Therefore, if you are caught in a serious debt trap, you must visit this section to know about the different aspects associated with bankruptcy filing.

Life after Bankruptcy

Life after bankruptcy does not necessarily always have to be bad. If you follow the right approach, you can always put things back on track. This section will provide you extensive information on how you can rebuild your credit, qualify for low rate loans, get mortgage, get better employment opportunities, and an array of other such things. This section does not include quick fixes; it provides you practical information on how consistent efforts can be converted into a smooth financial life even after you go bankrupt.

The Only Case When Student Loans In Bankruptcy May Be Treated As Dischargeable Debts

The only case when student loans in bankruptcy may be treated as dischargeable debts is the situation when you can prove that the loan amount is imposing undue hardship on you and your family. However, this is not an easy thing to do. In order to make the student loans dischargeable, you may have to show the following.

•You are physically challenged and are unable to work.
•There are no chance of you getting some gainful employment in future.

New Bankruptcy Laws For Student Loans

Earlier, privately funded loans (including the ones you’d get at 24Hour New Haven Bail Bonds) that were not guaranteed were dischargeable debts under chapter 7 bankruptcy. However, now because of the new bankruptcy laws, even the privately funded student loans get the same protection as the other loans guaranteed by the federal government or nonprofit institutions.

What To Do If Student Loans Are The Major Part Of The Debts You Owe

If student loans are the major part of the debts you owe, you are not recommended to file for bankruptcy because you are very much unlikely to be granted bankruptcy. The only way you can make the student loans in bankruptcy dischargeable, is that you will have to prove the undue hardship the loans are imposing on you. For this, you will have to file a separate motion and you will have to convince the bankruptcy court regarding the same. Of course, that is not something very easy to do. That is the reason why it is not recommend for you to file for bankruptcy if student loans cover the major part of your debts.

Repayment Alternatives For Student Loans In Bankruptcy

Following are some of the repayment alternatives that the bankruptcy court may suggest you.

•You will have to talk to your lender and work out a repayment plan. The lenders may offer you a longer period to repay the loan. You may also ask them to reduce the amount of the monthly installment by promising to increase the amount, as your financial position gets better.
•The bankruptcy court may interfere and ask the lender to provide you some time to regain control over your finances and defer repayment till then.
•Another bankruptcy alternative is debt consolidation.

Overall, because of the non-dischargeable nature of the students loans in bankruptcy, it is better not file for bankruptcy. Instead, you should talk to your lenders and work out some repayment plan.

Bankruptcy Is The Last Option

The first of the several steps in filing bankruptcy is to make sure that bankruptcy is the only available option left to you. Before you go ahead and file for bankruptcy, make sure that there are no other alternatives left and bankruptcy is the last available option. It is important for you to understand the negative impacts of bankruptcy on your future financial life. Credit score is one of the most important aspects of today’s financial life and if you are granted bankruptcy, it will badly damage your credit record and you may have to work hard for the next one decade to rebuild your credit and get things back to normal. This is also important because as per the bankruptcy laws, you are supposed to obtain some consumer credit counseling form before filing bankruptcy.

Research Your Options

If you are knowledgeable enough, you may like to go ahead and defend the case yourself. However, it is not an easy thing to do for a common person keeping in view the intricacies involved in the bankruptcy laws. Therefore, if you are not sure that you will be able to defend bankruptcy successfully, go to a bankruptcy law office and hire a bankruptcy attorney. They will certainly charge you substantial fee but it is worth paying the fee if you want to defend your successfully.

Type Of Bankruptcy

As per the bankruptcy laws, there are different types of bankruptcies that you can claim for depending upon your specific case. Therefore, the next step is to choose the right type of bankruptcy you have to file. Your bankruptcy attorney will help you in this regard. They know the ins and outs of the bankruptcy laws including the new ones that have been added recently and they know which type of bankruptcy is the best for your specific situation. Here, you have to be very careful because if at a later stage you want to convert the bankruptcy type, you will have to fill a conversion file and this will require you to pay a certain fee, which is substantial in nature.

How Much Will filing Bankruptcy Cost You

The next step in filing bankruptcy is to figure out the overall filing bankruptcy cost. This may include filing fee, your attorney fee, conversions fee and various other fees – both expected and unexpected. You will have to assess all types of expenses.

The next step in filing bankruptcy is probably to have a meeting with the creditors under the guidance of your bankruptcy lawyer in an effort to reach some common terms out of the court. If things do not work, you may go ahead for the proceedings in the bankruptcy court.

Chapter 11 Bankruptcy

Chapter 11 bankruptcy is another form of personal bankruptcy and can be a great solution for those who have a regular source of income and still have hopes to get their finances managed for which all they need is some debt-free time. It is a heavy burden of debts that is stopping them from actively participating into their business activities and put the same on the path of profit. In usual circumstances, especially in genuine cases, the bankruptcy court delivers its judgment in the favor of the debtor. The court asks the creditors to lower down their claims to reduce the burden of debt on the debtor while the debtor is asked to make a repayment plan to pay off the creditors’ reduced claims. The bankruptcy court also appoints a trustee to keep an eye on the business activities of the debtor. They help the debtor to get their financial matters re-organized. They will also see if the payments to the creditors are being made in timely manner as per the repayment plan approved by the bankruptcy court.

Chapter 7 Bankruptcy

The chapter 7 bankruptcy is a form of personal bankruptcy where people do not have any hope to reorganize their financial life. In this case, the bankruptcy court orders the trustee to liquidate all the assets owned by the debtor and the amount thus collected is used to pay off the creditors’ claim as per the priority status if any.

Once a debtor is granted personal bankruptcy, it will affect his or her credit life for the next 10 years at least.

What Are Personal Bankruptcy Laws?

The personal bankruptcy laws are the legal provisions that allow an individual to settle the debts they owe on much easier terms that fall within the means available to them. An honest individual can take advantage of the personal bankruptcy laws to give a fresh start to their financial life.

Ways To Use Personal Bankruptcy

There are two ways to use Bankruptcy services – voluntary and involuntary. As the term suggests, the voluntary personal bankruptcy is the procedure where the debtors himself or herself is filing bankruptcy petition. On the other hand, sometimes creditors in an effort to get their money back file a petition for bankruptcy against the debtors. If you are deeply drowned into debts and unable to think out a way to get out of this nasty situation, you had better file for personal bankruptcy yourself. Do not wait your creditors to file it for you because that will eventually maximize your trouble.

Advantages Of Filing Personal Bankruptcy

Those who are trapped in heavy piles of debts with all doors closed to pay off the debts can take advantage of the personal bankruptcy services. When you file a petition for bankruptcy, an automatic stay is legally imposed. This legal stay will save you from further harassments from your creditors to make payment. During the time while your personal bankruptcy is under trial, your creditors will not be able to take any non-bankruptcy actions that may include compelling you to make payments, etc. After you are declared as bankrupt, you can get relief from all your debts by settling them with your “non-exempt” resources and assets. This way, by filing bankruptcy, you get dual protection. While the bankruptcy case is pending, you get protection from the legal stay and after the bankruptcy is declared to you, you can easily release yourself from all kinds of financial responsibilities. Now you will have to start afresh.

Personal Bankruptcy For People With Regular Source Of Income

As per the bankruptcy laws, if you are among those who have a regular source of income, you cannot apply for liquidation bankruptcy. You will have to act according to the Chapter 13 Personal Bankruptcy law. As per this chapter, the court will propose you a repayment plan to pay off the reduced claims by the creditors. For example, you may want to pay 15 cents on each dollar and after the bankruptcy proceedings the court orders you to pay 25 cents on each dollar.

This way, your debts will be reduced to a very little amount. Now you will be liable to pay this amount of debt on a monthly schedule basis, as proposed by the court.

Properties Exemptions Under The North Carolina Bankruptcy Laws

As per the North Carolina bankruptcy laws, following are the properties and their specific details that can be exempted by the debtor declared as bankrupt by any of the North Carolina bankruptcy district courts.

•Along with the real and mobile properties, the homestead Exemptions also include co-op that you have used as residence. The maximum amount exemptible in this regard is ten thousand dollars. If you also own some homestead properties that are unused, the North Carolina bankruptcy laws also allow you to claim such properties as exemptions, but only up to thirty-five hundred dollars in value.
•The Insurance Exemptions include only fraternal benefit society benefits and Employee group life policy or proceeds.
•Personal properties exemptions include motor vehicle up to fifteen hundred dollars in value.
•You can also claim to exempt Burial plot up to ten thousand dollars in value, but such exemptions are allowed only in lieu of homestead exemptions.
•Personal properties like books, clothing, home appliances, etc are exemptible up to 3500 dollars in total value.
•As per the North Carolina bankruptcy laws, the tools of trade exemptions can amount up to 750 dollars and it includes Implements, books etc.
•Pension funds are also allowed to be exempted under the North Carolina bankruptcy laws, but only following individuals are eligible for such exemptions.
◦Teachers and state employees
◦Municipal, city and county employees
◦Legislators
◦Law enforcement officers
◦Firefighters and rescue squad workers
•Wild Card exemptions include any property up to thirty-five hundred dollars less any amount claimed for homestead or burial exemption.

Properties Exemptions Under The New York Bankruptcy Laws

As per the New York bankruptcy laws, following are the properties and their specific details that can be exempted by the debtor declared as bankrupt by any of the New York bankruptcy district courts.

•The Homestead Exemptions include real properties, mobile properties, co-op, condo, etc. The maximum amount of exemptible homestead properties is ten thousand dollars in value. In case of a married couple, you will be allowed to exempt twenty thousand dollars.
•Insurance Exemptions, as per the New York bankruptcy laws, include Disability or illness benefits and specific Life insurance proceeds.
•Under personal properties exemptions, you can exempt motor vehicle up to 2400 dollars. In fact, there is a long list in personal properties exemptions.
◦If you own any Burial plot without structure, you can exempt the same, but the area must not exceed 0.25 acre.
◦Personal injury recoveries are also exemptible as per the New York Bankruptcy laws, but only up to 7500 dollars in value.
◦Trust fund principal is also exemptible up to ninety percent of your income.
◦The maximum exemptible amount for Bible, schoolbooks, and other books is 50 dollars.
•Pension funds are also allowed to be exempted under the New York bankruptcy laws, but only following individuals are eligible for such exemptions.
◦Village police officers
◦State employees
•The pension funds that are exemptible under New York bankruptcy laws include Public retirement benefits, Keoghs needed for support, IRAs needed for support, and ERISA-qualified benefits needed for support.

The Purpose Of Adding New Bankruptcy Laws

There is always a specific purpose of addition of new bankruptcy laws. The main objective is to protect both debtors and creditors from any possible fraud that may be caused because of some loopholes in the existing law. Because of the wordings that are used in the bankruptcy laws, some people try to take undue advantage of the same. Whenever new laws are made, the main purpose is to make those wordings more clear in order to leave no room for any kind of bankruptcy fraud.

How Frequently The New Bankruptcy Laws Are Added

If it is about how frequently the proposals for bankruptcy laws are sent to the committee, it is very frequent – may be a dozen times every year. But, if it is about how frequently they are voted on by the full congress, it is rare. Most of the proposals for new laws for bankruptcy die much before they could be voted on. However, very recently, some new bankruptcy laws have been added to the bankruptcy court and these new laws have made the creditors’ side stronger in order to protect them from any possible bankruptcy frauds.

How To Get Accurate Information Regarding The New Bankruptcy Laws

The bankruptcy laws are very complex and whenever new bankruptcy laws are added to the bankruptcy code, it makes it even more complex. Because of this, it may not be an easy cake for a common man to understand the new laws. This is where the need of an efficient and experienced bankruptcy lawyer arises. If you want to understand the new bankruptcy laws and get the accurate information regarding the same, only your bankruptcy attorney can help you.

Overall, if the debtor is in genuine need of bankruptcy protection, they need not worry about the effects of new bankruptcy laws. The new laws are added to make the system more transparent. In order to make things smoother for you, you are advised to contact your bankruptcy Attorney before you go ahead and file a court petition for bankruptcy. Your attorney is the only person who can help you get the best solution for your specific financial case. They may help you get out of the problem without filing bankruptcy or they may tell you which type of bankruptcy is best for you, keeping in view the new bankruptcy laws.

Property Exemptions Under The Massachusetts Bankruptcy Laws

Following are the properties and their specific details that are considered as exemptible, as per the Massachusetts bankruptcy laws.

•All residential properties are exemptible under the homestead exemptions, but only for up to the amount of 100,000 dollars. In addition, if you are older than 65 or are disabled, the homestead exemptions will be allowed for up to 200,000 dollars.
•Again, if you are a married couple and are filing bankruptcy jointly, the maximum amount of the homestead exemptions will go double.
•The Massachusetts bankruptcy laws have made it mandatory for the debtor to record homestead declaration before filing bankruptcy.
•Under the personal properties exemptions, bank deposits are allowed to be exempted for up to 125 dollars.
•You can also exempt food or cash for food, but only up to three hundred dollars.
•Bibles and books have specifically been mentioned under the personal properties section. As per the Massachusetts bankruptcy laws, you can exempt Bibles and other books for up to two hundred dollars in total.
•Cash for fuel, heat, water, or light have also been bincluded under the personal properties exemptions. You can exempt such properties at the rate of seventy-five dollars on a monthly basis.
•You can opt for rental exemptions for up to 200 dollars a month, but in lieu of the homestead exemptions.
•Exemptible furniture amounts to three thousand dollars, while the motor vehicles are allowed for exemption of up to 750 dollars, as per the Massachusetts bankruptcy laws.