Bankruptcy Laws - What Are Your Rights?

Many individuals sometimes find themselves in certain financial situations, which may need legal attention. They may have debts that are extremely high, and have no way to settle them. Some may have debt that has been hanging over their heads for years, and now has gone into a default status. These individuals may find themselves facing several creditors and bad credit.

Bankruptcy laws may be able to provide some individuals relief, once they have filed with the state. It is important to go over all your bills to see if this is the course of action for you. The bankruptcy court will protect all individuals from any creditors during the bankruptcy process; this will allow the court time enough to figure out the individuals bills.

These laws will also protect filling individuals from losing their cars and homes; due to repossession or foreclosure. Individuals usually file a Chapter 7 or a Chapter 13, depending upon their circumstances. Under the Chapter 13 law you may be entitled to keep your property, if your plan meets the requirement under the law. Most people believe they will not be able to own any property once filing bankruptcy, this is not true. Individuals need to make sure they understand the law, before moving forward with the process. If you are considering medical bill bankruptcy, there are special provisions that you will want to ask your lawyer about.

There are some things that are not covered under the bankruptcy laws. Student loans, which were more than 7 years old used to be covered automatically, but under the new law they are only rare circumstance which may allow student loans to be included. If your only debt is from student loans, bankruptcy laws will not help you.

Chapter 7 bankruptcy can be filed every six years, and a Chapter 13 can be filed at anytime. Individual filing for bankruptcy should have lived the greatest portion of the last six months in the district which they are filing.

It is very important for all individuals to become familiar with the bankruptcy filing process before they file; once the papers are filed with the courts, it is usually a done deal.

Know More About the New Bankruptcy Laws

The government has introduced some new bankruptcy laws for those who wish to file for bankruptcy. That means the persons who have higher incomes can not file themselves for a bankruptcy. They have to pay at least some of their debits under this rule. Before filing for a bankruptcy, they have to get their credit analysis as per the new rule. Sometimes, it is very difficult for somebody to signify themselves in a bankruptcy case because new requirements on the lawyers are enforced according to the rule. The difference between old and new rules is described briefly below.

Considering the old rules, one could make a choice of bankruptcy type that is most suitable for him/her. But, according to the new rule, those who wish to file for bankruptcy can be restricted based on the income levels and those with higher income levels can’t simply file for bankruptcy under any personal bankruptcy chapter of their choice.

The modify bankruptcy laws state that initially, the current monthly income of the person will be compared with the average income of a person of the same state. If it is found that the current income of the person is equal to or less than the average income, then one can file for bankruptcy, but, on the other hand, if the income level of the person is found to be higher than the average income in the respective state, then he/she may be restricted from filing a case for bankruptcy.

The actual aim of the government to enforce the bankruptcy laws is to find out if a person has more than sufficient income after spending on definite expenses and making needful payments, and stop such individuals from simply filing for bankruptcy despite generating a decent level of income. One can also test his/her candidature privately by cutting off some debit payments and allowed expenses from his/her present monthly income. If the total income left after this calculation is less than average level income in the state, then he/she can file for bankruptcy without any problems.

Recent Changes to Bankruptcy Laws

Bankruptcy laws continue to change and adapt to the times. As more and more people look to bankruptcy for help with their debt issues, they realize that the laws have changed.

It can be difficult to keep track of bankruptcy laws. We aim to help those who need to file for bankruptcy to complete the proposal that they need to get a successful settlement.

How Bankruptcy Works

Bankruptcy requires you to file a large amount of paperwork, and submit a large amount of information. This highlights the importance of hiring a professional to help you with your bankruptcy filing process. With the process becoming more complicated than ever, you need a professional to help guide you through the process.

Things that have changed

There have been sweeping changes to Georgia bankruptcy laws over the last 10 years. The newest bankruptcy laws went into effect in 2005. One of the biggest changes in the laws has begun to require more information than before. For example, filers must now show 4 years of tax returns, as to the original numbers of 2-3 years of tax returns.

The new laws have also made it more difficult for people to file for Chapter 7 bankruptcy. This is the bankruptcy that liquidates debt. These laws passed as a way to help stop bankruptcy fraud, keeping people accountable for the debts that they have accumulated.

Most of the changes that have been made to the bankruptcy laws are only seen in the behind the scenes work done by the lawyers that write up proposals. The new laws cover everything from the information required to the way that your property will be valued.

What you have to Gain

It is true that recent changes to Georgia bankruptcy laws have made it more difficult for many to file for bankruptcy. While it may cost a little more to hire a lawyer to take care of your proposal, it may be your only chance at success. Lawyers know exactly how to create the proposal that you need to get back on your feet, and can help you to navigate all of these new laws.

As bankruptcy laws change, more and more people lose out on the benefits they may receive from filing for bankruptcy. Some stay away from the process because of pride, while other stay away because they simply fail to understand what they have to gain, thinking it's somehow not for them. If you are considering bankruptcy, take the time to speak to a professional. We aim to make the entire process as pain free as possible. We want to make it simple and easy for you to get the bankruptcy settlement that you need to get back on your feet and get your life in order once again.

Debt Reduction Plans Can Help Secure Your Future

Being in debt is nothing extraordinary in today's society. We all owe money in some way or another, whether it is for credit cards, student loans, house mortgages, or car payments. In fact, people usually don't even think about debt reduction plans, always assuming that they can take care of their debts with absolutely no worries.

However, many people do not have sufficient financial foresight. After a number of years, the debt that they thought would be paid off long before is still waiting for their payments, and the amount is even higher because of the compounded interest. Without an efficient debt reduction plan, you might end up still paying for your debts even through your retirement years.

If you want to avoid being in this situation, you should seriously consider making a debt reduction plan right now. A debt reduction plan is not only meant for people who are already drowning in their debts. It can also be a good preventive measure to secure your future and save you from possible financial problems.

A good debt reduction plan will be able to help you cut your family's expenses to the minimum necessities. While your kids are still under your wing, it is only natural that you will have a lot of expenses. Besides paying for their education and everyday needs, you will also have to take care of their recreational needs such as mobile phone bills and car payments.

Once your kids have all grown up and have moved out of the house, you should naturally have less expenditure. With a good debt reduction plan, you will be able to adjust your spending in proportion to your smaller household.

When your children leave the house, they will typically be taking control of their own finances, which will free you from the obligations of paying for their credit card or phone bills, leaving you with a lot of extra funds. Your debt reduction plan will then help you channel this additional cash into paying for your other debts such as the house mortgage and your own credit card bills.

Speaking of credit cards, there is a very common mistake that people make when making their payments, and that is to pay the minimum amount. If you do this every month, you will practically just be paying for the interest on your actual balance and it will take you several years to pay off your credit card debt.

Know debt management & debt settlement

Many people are taking advantage of Debt Settlement instead of conventional Debt Management because they have not seen debt management offer the benefits sold to them.

U.K. debt settlement is not to be confused with full and final settlement where debt management companies have been known to hold onto client funds in which case the creditors get nothing until they decide to settle. Furthermore, the debt management company usually instructs the consumer not to make any payments to creditors. The intended effect is to scare creditors into settling the debt for less than the full amount. Typically, however, creditors simply begin collection procedures, which can include filing suit against the consumer in court. As long as consumers continue to make minimum monthly payments, creditors will not negotiate a reduced balance. However, when payments stop, balances continue to grow because of late fees and ongoing interest. This practice of holding client funds is regarded as unethical in the U.S. and U.K.

U.S. debt settlement differs slightly. There are several indicators that few consumers actually have their debt eliminated by full and final settlement. A survey of U.S. debt settlement companies found that 34.4% of enrollees had 75 percent or more of their debt settled within three years. Data released by the Colorado Attorney General showed that only 11.35 percent of consumers who had enrolled more than three years earlier had all of their debt settled.[4] And when asked to show that most of their customers are better off after debt settlement, industry leaders said that would be an "unrealistic measure." 

Consumers can arrange their own settlements by using advice found on web sites, hire a lawyer to act for them, or use debt settlement companies. In a New York Times article Cyndi Geerdes, an associate professor at the University of Illinois law school, states "Done correctly, (debt settlement) can absolutely help people". However, stopping payments to creditors as part of a debt settlement plan can reduce a consumer's credit score from 65 to 125 points, with higher impacts on those who were current on their payments prior to enrolling in the program. And missed payments can remain on a consumer's credit report for seven years even after a debt is settled

The Automatic Stay In Bankruptcy

When you file for bankruptcy an automatic stay order is issued. This order is served to creditors and prohibits them from making further collection attempts on the debt. Under this order, creditors cannot contact you; send you notifications regarding your debt or make attempts to take possession of your assets. The automatic stay order is also able to halt any repossession, wage garnishment or foreclosure proceedings.

While creditors may not like the fact they are restricted from making collection attempts they are required to adhere to the automatic stay, by Federal law. There are instances in which creditors may continue to attempt debt collections. If this happens, you need to notify creditors of your case by sending a copy of your "Notice of Filing Bankruptcy" and contact your bankruptcy attorney right away. Creditors that continue to make collection attempts after receiving these notifications could face penalty fines or more serious consequences.

The protection offered by this order does not apply to all debts. Unpaid child or spousal support payments are not protected under the automatic stay, and are collectible as originally determined. Generally, back taxes and ongoing tax debt obligations are also not protected under this order, and the IRS is free to continue collections as they desire. Student loan debts, pension loan payments and criminal restitution payments are also rarely offered protection under the automatic stay order.

Once your debts have been discharged in bankruptcy your debts have been resolved and, therefore, become non-collectible. However, this isn't to say that some creditors may not try to collect in the future. If your debts are discharged in a Chapter 7 case, the debts eligible for the automatic stay become permanent. This means that these debts cannot legally be pursued again in the future by the creditor. After a Chapter 13 bankruptcy, the automatic stay order becomes permanent and creditors cannot make attempts to collect outside of the terms outlined in the original repayment plan. In other words, any remaining debt that was not repaid according to the Chapter 13 plan becomes non-collectible.

Tips For Choosing A Right Bankruptcy Attorney

Nowadays we hear lots of people losing their jobs as unemployment is increasing a lot. We can never say that we will not face the situation as the unexpected happens. We should be ready with the solutions for the life's most unexpected and complex financial problems.

Bankruptcy laws exist to give a solution to the person who is overburdened with debt and want to start freshly. These laws change frequently, in order to get most out of these constantly changing laws, a debtor needs a smart and experienced lawyer who deals entirely with bankruptcy. If you are in financial hardship and have a need of bankruptcy attorney, below are few things to take into account while choosing.

Gather a list of bankruptcy attorneys: Call the local bar association, talk with your friends and neighbors who have already taken the help of bankruptcy attorneys for reference, browse the internet to find attorneys in your area. After collecting a list of bankruptcy attorneys, depending on what type of attorney you need - consumer, commercial, business or personal, choose the best bankruptcy attorney. Call the attorneys personally and talk to them, this will help you to narrow down your choices and helps you in choosing the best attorney.

Consult the attorneys personally: Bankruptcy attorneys provide free consultation for first time, if the attorney charges the fee move on to the next attorney in the list, speak with attorney personally and find out how much experience he has and number of cases they have handled successfully. The bankruptcy attorneys should be able to provide detailed information about the bankruptcy from the scratch. If they don't provide the information confidently for the questions you ask and look unclear, move on to the next attorney.

Find out the amount you have to pay: Ask the attorney about the amount you have to pay fully from beginning to end. Depending on where you live and the type of debt you are in, the bankruptcy attorney will charge you $1,000 to $3,500. While choosing the bankruptcy attorney don't always choose the cheapest one. Find out which attorney is more qualified and who has good experience. Some bankruptcy attorneys will ask you to pay the fee fully in advance before filing the case. Talk to the attorneys in advance and come to a conclusion.

Options with the attorneys: Discuss all your options with the attorneys, make sure that the attorney you choose is ready to work for you, there are several attorneys who file your case without having interest to take up the case for quick fee. You can find out easily whether the attorney you chose is really interested to take up the case by interviewing the attorney.