When is Bankruptcy the Best Option?

Is bankruptcy a good option? Take a look at the following video to get a good idea as to when filing bankruptcy(Chapter 7 or Chapter 13) may be the right option for you.

 

How to Know Whether You Qualify For Bankruptcy

This past year was a tough time economically for many people, and 2010 does not appear to be any different. Many people have bills piling up and no means to pay. Unemployment rates and foreclosures are at an all-time high. Businesses are closing, and people are in desperate economical shape. However, how does one determine if it is time to file bankruptcy or not? How do you know when enough is enough? There are various factors determining if bankruptcy is suitable for a person or not. Here is an outline of what aspects needed to qualify.

Chapter 7 Requirements

If you are someone who was recently unemployed and has no other means of income, then you may qualify for Chapter 7 Bankruptcy. The way it is determined is via a Means Test. It is a tool administered by the courts to see how your income compares to other families of same size and location. For instance, if your income is lower than the average median income in your area and no other means to pay your bills and creditors then the courts may approve you under Chapter 7 rules.

Once accepted, the courts will assign a trusted appointee who compiles a list of all of your non-exempt assets. These non-exempt assets are sold to pay off creditors. The rest of your debt is dismissed by the courts. As a result, many people are much more relieved after the process is complete. For it leaves a clean slate to start fresh without the constant worry of past financial mistakes looming overhead.

Chapter 13 Requirements

If your application is rejected due to exceeding the income requirements for a Chapter 7 filing, then Chapter 13 is suitable for you. Additionally, if you have debt legally unreleased by the courts and personal and/or business assets then Chapter 13 would be the best plan to follow. For in Chapter 13, courts will establish a repayment schedule to pay off your debts in an average of 3-5 years. Therefore, Chapter 13 is for someone who has a steady means of income, and assets available.

Chapter 13 will stop your home from going into foreclosure. For once Chapter 13 Bankruptcy is filed the foreclosure process stops. However, it is temporary. You must bring the past-due payments current over a reasonable time. If not, you shall lose your house. Thus, do not think you are completely off the hook. Keep making your regular mortgage payments as explained by the courts and/or attorney. Repaying your missed mortgage payments is part of the process.

Filing for bankruptcy is not a simple process. The emotional ties people have towards monetary belongings are taxing. These emotions easily arise during these times, and the best way to handle the procedure is with support. You need to inform your family and friends what is unfolding. Find yourself a reputable attorney with experience in Bankruptcy law. Do research online to gather as much information about it before proceeding forth.

By Tony Mandarich and Reda Abouleish

Check out an Arizona Bankruptcy Attorney or a Scottsdale Bankruptcy attorney today.

What You Need to Know Before Filing Bankruptcy

Some people have a misconception when it comes to Bankruptcy. They do not have a clear understanding regarding what preparation must occur before filing. Does Bankruptcy mean you still owe debts? What requirements must unfold before filing? Here is a basic guideline regarding what to do before signing any Bankruptcy paperwork.

Provide Thorough Lists of Property and Assets

When filing for Bankruptcy, it is common to wonder what will happen to your home, cars and businesses during the process. Will the courts take your belongings away? Will the courts obtain control of your accounts and monetary items? The court will do nothing if you provide a thorough list of all property and assets. For the listed items are protected under Bankruptcy law. On the other hand, if you fail to provide a complete list of belongings, the left out items are unprotected and courts may take seize of those items at any moment. Therefore, be meticulous and list everything to ensure law protects the items.

Be Prepared for Your Credit Report to Remain in Shambles

Filing for Bankruptcy does not mend your damaged credit report. Your credit report will continue to exhibit a negative mark. Do not be fooled by myths that claim otherwise. In addition, Bankruptcy shall stay on your credit report for 10 years. Hence, evaluate if Bankruptcy is the right option for you before tinkering with the process.

Fibbing Leads to Case Dismissals

During any court proceedings, if a person is caught cheating, stealing and/or lying then, most likely, the case will result in dismissal. Therefore, why should filing Bankruptcy be any different? Be honest. Do not hide facts or misrepresent yourself. Do not leave out information regardless if the information is seemingly insignificant. For what may be insignificant to you may be pertinent to the courts. Provide the courts with ample information. Consequently, if you have legal representation, be upfront with him/her. The more you give your Bankruptcy attorney, the more prepared he/she shall be while in court.

Do Not Accumulate New Debts

Do not build any new debts while undergoing the process. If you purposely accrue new debts, thinking filing for Bankruptcy will avert from forcing to pay it back, a jail cell will be your next stop. It is illegal to proceed forth thinking in this manner. Thus, do not think about it. It will only get you into legal, and further financial, trouble.

Silence Bill Collectors

As soon as you file for bankruptcy, then creditors, including tax collectors become quiet. They are not permitted to contact you for any purpose and the harassing phone calls and letters stop immediately. The protection is permanent discharged debts. Keep in mind, Bankruptcy does not halt you from enduring criminal or governmental regulatory proceedings.

Bankruptcy Filings are Brutal

It is not an easy, simple process to undergo Bankruptcy filing procedures. There may be court dates to attend, additional information requested by the courts, and legal requirements difficult to comprehend. Your life may be shook up for a while. As a result, do your research and find someone who is a Bankruptcy expert able to handle and manage your case until the end.

by Tony Mandarich

Check out an Arizona Bankruptcy Attorney and a Scottsdale Bankruptcy Attorney today!

What Homeowners Should Know to Stop Foreclosure- Speaking Your Lender’s Language

Financial literacy is the means of empowering consumers to make informed financial decisions through exposure to accurate and timely information. In no other area is the void of accurate information more evident that in the area of foreclosure.

The national foreclosure rate is at the highest level since the Great Depression. Families fall behind on the mortgage payments because of illness, job layoffs, business failure, divorce and marital problems, and bad money management decisions. Foreclosure and the loss of the home is the usual result. Foreclosure is financially and psychologically devastating to the stability of the household.

This article provides information to expose homeowners to the financial principles of loss mitigation. Loss mitigation is essential to asset protection because it provides the borrower with information necessary to make good decisions. Learning the programs or “tools” available as an alternative to foreclosure is the key to preserving home ownership.

For example, If I told you that the mortgage servicing industry reports average loss of $20,000 to $30,000 per foreclosure, then you may be inclined to believe that foreclosure is not an efficient and cost effective means of collections for the lender. According to Vic Draper, President of Universal Default Services, “33% of all mortgage defaults that go to REO never made contact with the borrower!” The lender does not want your home and will work out a financial alternative if you speak their language.

[Read more...]

Why Bankruptcy May Not Be Your Best Option

You are in a position of needing to consider bankruptcy based on your current financial situation. Hopefully you have learned some lessons along the way in getting to this point, like about how do strike deals, when to get statements in writing from partners or customers, how to plan more carefully for the needs of your company so that you do not grow too fast. Whatever the reason, you got to this point and are now considering filing for bankruptcy.

You need to be fully aware that filing bankruptcy should be your absolute LAST course of action, and only taken after you have thoroughly exhausted all other alternatives. There are probably more excellent reasons to NOT file bankruptcy than there are good ones. While bankruptcy may be your only viable option, you need to ensure that you have exhausted all other viable options first.

Be aware that filing bankruptcy is going to be a huge red flag on your credit report for the next 7 to 10 years. There is nothing you can do about it, and that red flag is going to cause you to be turned down for loans and financing, or if you do get approved, the interest rate that the lender will quote you because he is “taking a chance” on you is going to be astronomically high. That means that it is going to take you longer and will also cost you more to get back on your feet, so consider your options carefully.

[Read more...]

Chapter 13 Bankruptcy – Stop Mortgage Foreclosure

Yes, you can save your home!

Using the chapter 13 can strategically help you cure your mortgage default, protect your equity and eliminate your other debts to help you right the ship.

Several years ago, we saw a boom in mortgage lenders offering low adjustable rate mortgages (ARMS) 100% to 110% mortgage loans, and no money down mortgages.

Today, we have seen these ARMS increase from 5% to 8%, 9% or more depending on the lender. Homeowners are being bombarded with a mortgage payment that is almost double than it had been previously before the interest rates have started to rise.

What is a homeowner to do? With the soft real estate market, homes have not appreciated in value, or not enough to allow homeowners to refinance and use some of their equity to help with the higher rates. [Read more...]

Considerations Before Filing Bankruptcy

Financial difficulties can occur in anyone’s life. When you think financial difficulties are more than you can handle, don’t let bankruptcy become your first thought. Bankruptcy should be considered as a last resort, not just the first thing that pops into your head when the going gets tough. Instead, consider these options.

One of the first steps in avoiding bankruptcy is to make budget. If you have laid out a plan for your incoming money, you will be less likely to spend it on unnecessary items. You will therefore make the money last longer and work harder for you. Setting up a budget is crucial to help regain control over your finances. If you already have a budget setup, review it ruthlessly and start cutting wherever and whatever you can so you can return to profitability.

Another option to bankruptcy is to consider exactly what your debt is. Perhaps you have purchased a home that is more than you can afford or maybe you have too much vehicle debt. If either of these is true, you may need to consider downsizing. If you are paying out more than 40% of your income on a house loan, it is definitely time to consider selling your house and buying a less expensive one. The same applies to vehicles — maybe this is not the time to be making payments on a Lexus when payments or paying off a late-model Toyota or Chevy makes more financial sense to keep more money in your pocket and your creditor’s pockets each month.

Not only do you need to consider what type of debt you have, you also need to consider what items you can sell to increase your savings. Often, selling items you no longer use can help with the month to month struggles you might be experiencing. Maybe you have a lot of old books or CD’s laying around that you no longer use. Selling off a few unwanted items can help free you from some financial burdens.

[Read more...]