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.

Involuntary Bankruptcy

When the creditors with an objective to recoup the money they have lent to debtors are filing bankruptcy against the individual or organization, it is termed as “involuntary” bankruptcy.

Voluntary Bankruptcy

On the other hand, when the individual or organization that owes huge debts file a bankruptcy petition themselves, it is termed as “voluntary” bankruptcy.

Rehabilitation Or Reorganization Bankruptcy

The reorganization bankruptcy provides the debtor an opportunity to survive insolvency, as they are allowed to carry on with their venture. All they have to do is to reorganize their debts and the available means in a way to partially satisfy their various creditors’ claims. The bankruptcy court may also suggest or demand a repayment plan from the individual or organization that how they are going to achieve this. This type of bankruptcy is also known as Chapter 11, 12 or 13. All of these chapters allow the debtor to continue with their business operations, but they are obliged to pay off their debts partially on a monthly schedule basis. Chapter 11 and 12 provides the liberty to the individuals and the business debtors to reorganize their assets and means in a way to regain control of their finances and make arrangements to pay off the reduced claims of the creditors simultaneously.

On the other hand, chapter 13 bankruptcy rules state that a trustee will be appointed that proposes a repayment plan for the debtors, which the debtors are obliged to follow. The debtors are also required to pay a substantial amount of money to the trustee as fee. The greatest advantage of filing for bankruptcy of this type is that it allows you to remain in the specific business venture you are running while you get enough time to repay the reduced claims of the creditors. For example, if the total amount of debt you owe is $10,000 and the court allows you to pay 75 cents on each dollar, you will only have to pay $7500. What is more, you can repay this amount in monthly installments as described by the proposed plan of chapter 13 or the common arrangements you make with the consent of the creditors. You are supposed to make the repayment from your bankruptcy attorney’s office. Once you pay off all of these reduced claims, the court will issue you a bankruptcy release.

Liquidation Bankruptcy

On the other hand, the liquidation bankruptcy, as the term suggests, leads the debtor to insolvency that involves selling off their assets in order to satisfy their creditors’ claims to the maximum possible extent. The liquidation bankruptcy is also referred to as Chapter 7 of bankruptcy laws. As per this chapter of the bankruptcy laws, a trustee is appointed to review the assets and other financial means available to the debtors. All of these assets are seized and then sold off by them in an effort to pay the creditors the maximum amount of debts as possible. Because of its nature, filing bankruptcy of this type is also termed as “Straight bankruptcy” by many. Find a chapter 7 bankruptcy attorney to get started with the process.

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.

Properties Exemptions Under The South Dakota Bankruptcy Laws

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

•The Homestead Exemptions include real properties up to an unlimited value. Again, if you also occupy mobile homes that are larger than 240 square meters and are older than six months since the date of filing bankruoptcy, such properties are also exemptible under homestead exemptions. However, the South Dakota bankruptcy laws have imposed restrictions in terms of size of the properties. For example, if the homestead properties are located in town, it must not exceed one acre. On the other hand, properties located outside town can be exempted for up to 160 acres.
•Again, if you are Spouse or child of deceased owner, you may also qualify for the homestead exemptions.
•filing homestead declaration is mandatory as per the South Dakota bankruptcy laws.
•Insurance exemptions include Annuity contract proceeds that can be exempted up to 250 dollars on a per month basis.
•The South Dakota bankruptcy laws have also made health benefits exemptible, but only up to the amount of twenty thousand dollars.
•Under the personal properties exemptions, you can exempt books and musical instrument for up to an amount of two hundred dollars.
•Pension funds are also allowed for exemption, under the South Dakota bankruptcy laws, but only the following individuals are eligible for such exemptions:
◦Public employees
◦City employees
•Tools of mechanic and stock in trade are also considered as exemptible personal properties, but only up to two hundred dollars in total value.

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.

Properties Exemptions Under The Missouri Bankruptcy Laws

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

•Homestead Exemptions include all types of real or mobile properties. However, the maximum amount exemptible for real properties are eight thousand dollars while for the mobile properties it is one thousand dollars. You should also note that even if you are a married couple and filing bankruptcy jointly, the amount for homestead exemptions will be the same.
•Insurance Exemptions include Assessment or insurance premium proceeds, Disability or illness benefits, Unmatured life insurance policy and various other specific Life insurance proceeds.
•The Missouri bankruptcy laws have also included child support under the miscellaneous exemptions, but only up to the amount of five hundred dollars on a monthly basis.
•Pension funds are exempted under the Missouri bankruptcy laws, but only following individuals are eligible for such exemptions.
◦Firefighters
◦Teachers
◦State employees
◦Police Department employees
◦Highway & transportation employees
•The Missouri bankruptcy laws also allow employees of cities with 100,000 or more population to exempt the pension funds and benefits.
•Exemptible amount of jewelry is five hundred dollars
•You are also to exempt motor vehicles up to one thousand dollars.
•Burial grounds have also been made exemptible under the Missouri bankruptcy laws, but only up to 100 dollars in value or one acre in area.
•If you are head of the family, the maximum amount for Wild Card exemptions for you will be 1250 dollars; otherwise, it is four hundred dollars.

Properties Exemptions Under The Mississippi Bankruptcy Laws

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

•Homestead Exemptions include real and mobile properties up to the amount of seventy-five thousand dollars. As per the Mississippi bankruptcy laws, there are certain area restrictions as well. For example, you cannot exempt more than 160 acres of homestead properties.
•Insurance Exemptions include fraternal benefit society benefits, disability benefits, and specific Life insurance proceeds. However, proceeds for homeowner’s insurance are exempted up to 75000 dollars.
•Properties that you are using in a business partnership are also exemptible under the Mississippi bankruptcy laws.
•Pension funds are also exempted under the Mississippi bankruptcy laws, but only following individuals are eligible for such exemptions.
◦Firefighters
◦Police officers
◦Highway patrol officers
◦State employees
◦Teachers
◦Public employees – only retirement & disability benefits
•Exemptible pension funds also include ERISA-qualified benefits and IRAs, but the same must be older than one year from the date of filing bankruptcy.
•Any types of tangible properties that you own are also exemptible under Mississippi bankruptcy laws, but only up to the amount of 1000 dollars.
•The amount of exemptible personal injury judgments is also ten thousand dollars.
•Exemptible tools of trade properties have not been mentioned separately and they are covered under the personal property exemptions.
•Wild Card exemptions are also allowed, but they are covered under the personal properties exemptions defined by the Mississippi bankruptcy laws.

Properties Exempted Under Michigan Bankruptcy Laws

Following are some of the properties and their values that are exempted as per the Michigan Bankruptcy Laws.

•Residential properties up to $3500
•Personal properties including utensils, furniture, books and other household appliances – up to the value of one thousand dollars as a whole
•Insurance policies that are exempted include health benefits, society benefits, etc.
•Pension funds that are exempted include ERISA-qualified benefits, IRAs etc.
•Following are some of the individuals who pension funds are exempted as per the Michigan Bankruptcy Laws.
◦Public school employees
◦Police officers
◦State employees
◦Legislators
◦Judges, including Probate Judges
◦Firefighters, etc
•Tools of trade – up to one thousand dollars
•All types of clothing and family pictures are included in the exemption
•Wild card, however is not exempted under the Michigan Bankruptcy Laws
•You can keep all the properties that are exempted as per the Michigan Bankruptcy Laws.

Important Points Regarding The Michigan Bankruptcy Laws

Following are some of the other points that you need to know regarding the Michigan Bankruptcy Laws.

•If you do not want to use the exemptions as described in the Michigan Bankruptcy Laws, the same law also allows you the liberty to choose the federal exemptions statutes.
•Married couples are allowed to file the court petition for any kind of bankruptcy jointly and they can claim a complete set of exemptions individually, but they are supposed to mention it in the bankruptcy forms while they are filing bankruptcy.
•If you want to keep a property that is non-exempted, you will have to pay the value of that specific property to the trustee appointed by the bankruptcy court to handle your specific bankruptcy case.

Properties Allowed To Be Exempted Under the Maine Bankruptcy Laws

Following are the specific ways in which the various types of properties exemptions have been defined under the Maine bankruptcy laws:

•If you are using any real or personal property as residence, the Maine bankruptcy laws allow you to get that property exempted under the homestead exemptions. However, you should also note that the amount in this regard must not exceed 12500 dollars.
•However, the Maine bankruptcy laws have also provided some privilege for people older than 60 or physically or mentally challenged. They are allowed to get properties up to sixty thousand dollars under the homestead exemptions.
•Additionally, the amount for the homestead exemptions will just go double in case a married couple is filing bankruptcy jointly.
•Annuity proceeds are allowed to be exempted under the insurance fund exemptions of Maine bankruptcy laws, but only up to the amount of 450 dollars per month.
•Other insurance fund exemptions include life, endowment, annuity or accident policy, proceeds or avails, fraternal benefit, society benefits, and disability or health proceeds, benefits or avails.
•Un-matured life insurance policy is also exemptible under the insurance exemptions, but it does not include credit insurance policy.
•Pension funds can also be exempted under the Maine bankruptcy laws, but only for Judges, State employees and Legislators. ERISA-qualified benefits are also considered for exemptions.
•One wedding and one engagement ring are exempted – no matter how expensive it is.
•You can also exempt the jewelry products, but the amount must not exceed 750 dollars in value.

Properties Exempted Under Louisiana Bankruptcy Laws

Following are the specific ways in which the various types of properties are allowed to be exempted, under the Louisiana bankruptcy laws.

•Homestead exemptions include all kinds of residential and real properties, but only up to the amount of fifteen thousand dollars. The Louisiana bankruptcy laws also restrict you in terms of area of the property. The properties exemptible under the homestead exemptions must not exceed 160 acres.
•The Louisiana bankruptcy laws specifically mention that the spouse who has received home in divorce can use that property for homestead exemptions.
•The life insurance policies that are older than nine months at the time of filing bankruptcy can be exempted to its full value. However, if the policy has been issued recently within nine months of filing bankruptcy, you are allowed to exempt maximum 35000 dollars under the Louisiana bankruptcy laws.
•Other life insurance exemptions include health, accident, or disability proceeds or avails, fraternal benefit society benefits and group insurance policies or proceeds.
•Engagement and wedding rings have also been included in the exemptible properties under the Louisiana bankruptcy laws, but the amount in this regards must not exceed five thousand dollars.
•No wild card exemptions have been mentioned specifically under the Louisiana bankruptcy laws.
•Public benefits that can be exempted include workers’ compensation, unemployment compensation, crime victims’ compensation, and aid to blind or aged disabled.
•Under the Miscellaneous exemptions, the properties used in a partnership business have not been mentioned, but the Louisiana bankruptcy laws allow you to exempt any properties that are meant for a minor child.