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.

The Questionnaire

Since you are using the online facility to hire the online bankruptcy lawyer for your case, it is very important for you to ask lots of questions to them in order to ensure that they are experts and experienced in their specific field. Do not hesitate asking those questions that are important and be very careful of how the answers come up. If you find the answers evasive, it should probably be taken as a red flag, and you should look out for another bankruptcy lawyer. Following are some of those questions that will help you take an informed decision.

•The first thing that you should check with them is the certifications that they possess.
•The next step is to check out the number of bankruptcy cases that they have handled so far. Do not forget to ask that how many of those cases they were able to defend successfully.
•It is also important for you to know that how many cases they usually handle on a monthly or yearly basis.
•If you are looking out for a business bankruptcy lawyer, you should also ask them that out of the total number of cases they handled, how many were business filings.
•Now that you have got an idea regarding the experience and expertise of the attorney, this is the time you should ask questions related to some other aspects. For example, you may ask them whether they will easily be accessible directly during the proceedings of your case.
•Sometimes, especially with the bigger bankruptcy law firms, it is not easy to access the attorneys directly. In that case, you should ask them who exactly will you be working with. What is more, when you get to know about the representative, you should ask the same sort of questions to them as well. If the firm prevents you from interviewing the representative, do not think twice before rejecting that firm.
•Do not forget to ask the online bankruptcy lawyer about the expected time frame for successful handling of your case.

Overall, if you want to hire the right lawyer for your case, it is very important for you to get right answers for all the questions that you ask.

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.

Again, while you are filing bankruptcy, it is very important for you to have a clear understanding regarding the procedure in order to ensure its least negative impacts on your financial life.

Eligibility Criteria To File For Bankruptcy

The bankruptcy laws have set strict eligibility criteria for filing bankruptcy. It is not just that you can file for bankruptcy just because you want to do that. You will have to meet certain standards. The purpose behind the strict bankruptcy laws is just to keep a check on various bankruptcy frauds.

Hiring A Bankruptcy Attorney

Since bankruptcy laws vary from state to state and because of the complexity of their nature, the first thing that you have to do is to hire a right bankruptcy attorney to help with the filing bankruptcy procedure. Only an efficient and expert bankruptcy lawyer will be able to make the best use of the options available to you under the boundaries drawn by the bankruptcy laws.

Choosing The Type Of Bankruptcy You Want To File

Let your bankruptcy lawyers decide for you the best type of bankruptcy you should file for. There are two types of bankruptcy – liquidation (chapter 7) and reorganization bankruptcy (Chapter 11, 12 or 13).

Take Every Record

After you have hired a bankruptcy attorney for filing bankruptcy, you will have to provide him or her with the facts associated with the various kinds of debts you owe and the assets and means available to you. Be very honest with your bankruptcy lawyer and do not try to conceal or manipulate facts. Always remember that a teacher, a doctor and a lawyer are some of the people whom you should never lie to. Therefore, be very prudent in gathering the facts and make sure that you have not missed any important information.

The more bankruptcy information your lawyers will have, the better they can handle the case and defend your bankruptcy claim.

Assess Your Per-Month Expenses

Before you proceed for filing bankruptcy, the first and most important thing that you need to do is to assess all your per-month expenses. You need to do this in a proper manner covering all the small and big expenses; therefore, it is better if you start by making an extensive list for the same. Your mortgage or other rental payments must get the priority in this regard, following the car payment and other such expenses. Here, you should note that you do not have to include the amount of loans and credit card dues. You just have to add all those expenses that you cannot live without.

Assess The Available Means And Assets

Now, the next big thing after filing bankruptcy that you have to do is to assess the available means and assets that you have. You need to assess, if there will be some money left after making payments for all the necessary monthly expenses. Your objective is to calculate if the remaining money is sufficient to pay off the regular installments of the various loans and credit card. If there is a deficit, you should calculate the amount of the deficit.

Talking With The Creditors

If you find that you will have enough money left with you to pay off all the loan installments, your problem is solved then and there. All you have to do is, be organized and manage your finances wisely. However, if the money left is not sufficient to pay off the loans, you should first try to talk with your creditors and ask them to extend the loan tenure or reduce the amount of interest. In usual circumstances, if your case is genuine, the creditors do not mind extending the loan tenure and decreasing the amount of monthly installments.

Filing bankruptcy is a situation you should think of, when you do not have funds to support even your day-to-day expenses.

If things are still under control, and given some time, if the company will be able to get back to its profitable state and pay off all the debts while running its venture smoothly, the best option is to file under chapter 11. It allows the company to continue with its existing venture while repaying the debts to the creditors on the basis of a suggested repayment plan. Alternatively, if the company is not in a position to recover from the debt problems, the only option available to it is to file under chapter 7, which will eventually liquidate all its assets and properties in order to pay off the debts. If it is a genuine case, every company will like to choose the first option where the bankruptcy law provides it a chance to reorganize its business operation. However, here, it is very important for you to understand that the laws pertaining to the same are not easy to be understood by a common man. Only an expert legal professional can help you make the right move. Therefore, the first thing that you have to do in this regard is to hire a good corporate bankruptcy lawyer. He or she will guide you with the step-by-step procedure.

Bondholders And Shareholders

When a company declares insolvency, bondholders are likely to get their money back, but the shareholders in most cases lose all the money invested. Especially, in case of floated bonds, the bondholders do not need to worry at all. But, since shareholders are the persons who technically own the company have no chance at all to recover the money they invested.

Hiring Online

You will be glad to know that now you can hire the lawyers for even corporate cases through Internet. All the major law firms have an active online presence these days. You just have to visit their official website, do some thorough research and hire an online bankruptcy lawyer to handle your case.

However, no matter whether you hire a bankruptcy lawyer online or through manual visit to the law firms, make sure that you have done your research well, and have chosen a lawyer who best suits your specific needs and budget.

The Objective Of Chapter 13 Bankruptcy

The primary objective of the chapter 13 bankruptcy is to protect both the debtor and its creditors. By suggesting the repayment plan, the bankruptcy court protects the creditors and they can expect to get their money back. On the other hand, by allowing the debtor to continue with their business, the court gives them an opportunity to reorganize their finances.

How To Qualify For Chapter 13 Bankruptcy

Following are some of the qualifying criteria for chapter 13 bankruptcy.

•The first and most important thing is the amount of regular income that is guaranteed with the debtor. The income must surpass the reasonable living expenses for the debtor and his or her dependants. This is just to make sure that the debtor will have enough money to pay off the debts that they owe to various creditors on a fixed monthly schedule basis. The good news is that in some cases, the debtor may offer to pay off only a certain percentage of the total amount of debt and the bankruptcy court may approve the same. For example, the debtor may offer to pay 25 cents on every dollar. In most cases, the creditors’ claims are usually reduced.
•Before you file for chapter 13 bankruptcy, you are also supposed to have a meeting with a credit counselor at least 6 months before applying for bankruptcy. The meeting will be a proof that you tried your best to get things back to normal and regain control of your finances, but failed.
•It is better if you have also attended certain money management classes on your expense before filing for chapter 13 bankruptcy.

Overall, we can say that chapter 13 bankruptcy is for those who have a regular source of income and who are not willing to stop their business venture. People with no guaranteed source of income cannot apply for chapter 13 bankruptcy. However, the bankruptcy attorney will give you better suggestions in this regard after studying all the minor and major details regarding your specific case. Therefore, do consult with your bankruptcy lawyer before you go ahead and file for a specific type of bankruptcy.

Filing Under Chapter 7

Filing under chapter 7 means you have planned to put your business to an end. The business is in a hopeless case and you do not want to continue with the current venture. When you file under this chapter through an online bankruptcy lawyer, you are taking a step towards straight bankruptcy. It means if the court gives judgment in your favor, the trustee will liquidate all the assets and properties associated with your business. The money thus received will be used to settle the claims of your creditors on a priority level if any. It means the secured debts will be settled first and then the rest of the amount will be distributed among the unsecured creditors. Here, it is very important for you to understand that chapter 7 also has a provision for certain exemptions on the assets and properties of your business. If you have hired an expert bankruptcy lawyer to handle your case, your business bankruptcy lawyer will be a great help to you in making the best use of those exemptions. You will be able to save more for you so that you could start off a new financial life with less difficulty.

Filing Under Chapter 13

If your business is running into huge debts, but you have the hope that given some time you can still put your business back on the profitable track and pay off all the debts simultaneously, you are recommended to file under chapter 13. The provisions under this chapter allows you to continue with your existing venture while paying off the debts simultaneously as per a repayment plan suggested by the court. The best thing with this chapter is that it also helps you to reduce the overall amount of debts to a much lower amount. A good corporate bankruptcy lawyer will help you in getting a much easier repayment plan.

You are recommended to hire a business bankruptcy lawyer much ahead of time so that you could make sure that which type of bankruptcy you qualify for.

Good Comfort Level

Perhaps the first and important criteria that make a bankruptcy attorney the right choice for you is the comfort level that you have working with him or her. Make sure that you are comfortable discussing your specific bankruptcy case with the attorney you have chosen. You need someone you could rely on. Trust is an essential component that must be there in the communication between you and your bankruptcy lawyer. Here, I must also add that you should not try to hide any specific financial or bankruptcy related information from your lawyer. Answer all his or her questions genuinely and in complete sense. There have been various cases where the debtor withholds some important information because they could not rate it important and at a later stage, further complications were caused because of the missing information. Therefore, the wiser thing is that you should provide all the information to your bankruptcy attorney and let him or her decide whether the information is important or worthless. Always remember that the more information your bankruptcy lawyers will have, the more helpful they will be. Your financial future is at stake, so be very careful.

Interview The Lawyer

Do not hesitate interviewing the lawyer before hiring. Ask all the questions related to their knowledge. Experience, qualification and everything. The more information you have regarding the bankruptcy attorney, you will be in a much better position to decide which bankruptcy attorney is the right choice for you. One of the most important things in this regard is to check whether the bankruptcy lawyers you are interviewing has license to handle bankruptcy cases in your state. You will also have to make very sure that lawyer you have chosen to handle your bankruptcy case has enough experience to handle cases in your state.

Again, since the bankruptcy laws vary from state to state, it is important for you to make sure that bankruptcy attorney you are hiring is aware of the way the various bankruptcy laws are interpreted in your state. Here, it is important for you to understand that the bankruptcy laws are same in all the states. The only difference lies in the way they are interpreted in different states.