admin on December 20th, 2008
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Bankruptcy filings have increased by 30% over the last year according to statistics from the US Bankruptcy Courts. As of November, over 1 million people have filed for bankruptcy. Although bankruptcy is not the end of the road for the person or corporation filing, it does represent a near final option for many facing financial distress.
Many of those filing bankruptcy this past year have been a direct result of the worsening US economy. Individuals and corporations file for bankruptcy to seek protection from creditors. Bankruptcy can provide a debtor some breathing room while assets are sold to pay creditors or a reorganization of finances is made to repay debts.
The three most common forms of bankruptcy are Chapters 7, 11 and 13. A Chapter 7 bankruptcy provides the filer with a “fresh start” as all debts are satisfied and limited to what can be obtained from the liquidation of the filer’s personal assets. A Chapter 13 bankruptcy is a filing process that will allow a consumer to re-organize debts to repay creditors and possibly maintain possession of various assets to include a primary residence. The Chapter 11 bankruptcy is used by companies seeking to reorganization finances whether assets are liquated or maintained.
The bankruptcy courts expect the growing trend of bankruptcy filings to continue while the nation’s economy is expected to continue to slide as the federal and state governments scramble to cure the financial markets.
admin on November 18th, 2008
Bankruptcies are on the rise as Americans adjust to dealing with record-high consumer debt, reduced credit and job losses. Generally through tight economic times, the American homeowner was able to tap home equity to manage finances. However, declining home values and the decreased ability to borrow money has many homeowners struggling to simply hold unto their homes. Many Americans, under financial stress, have managed their daily finances with high-interest and penalty-laden credit cards. This behavior, coupled with the historic financial times, has created an economic environment prone to increased bankruptcy filings.
The bankruptcy filing rate has increased on average 8 percent per month over the last two years. These filing statistics are split between chapter 7 and chapter 13 filing petitions and have grown by 34 percent over the last 12 months. The Chapter 7 bankruptcy provides the petitioner the ability to clear all consumer debts. Although the assets of the petitioner will be sold to pay any outstanding debt, the petitioner is able to receive a “fresh start” with their financial lives. The Chapter 13 bankruptcy will re-organize consumer debts to be repaid by the debtor and allow a homeowner to keep their home while repaying defaulted and delinquent debts. As the economy continues its downward spiral, the number of foreclosure notices continue to grow and more restrictive borrowing guidelines surface, the Americans consumer will be left with few choices outside of filing for bankruptcy.
admin on June 9th, 2008
Also referred to as a Wage Earner’s Plan, Chapter 13 Bankruptcy allows individuals with a regular income to create a repayment plan. This plan is designed in order have you pay back some or all of the money that you owe. Unlike other types of bankruptcy, with this Chapter you can often save your homes from foreclosure. The repayment plan with Chapter 13 Bankruptcy takes place over three to five years, but you do need to be eligible to file for this particular chapter of bankruptcy.
First, if you are applying for Chapter 13 Bankruptcy, you need to have a regular source of income as a result of regular wage work, self-employment, social security, disability, child support, alimony, royalties, the renting out of possessed property/properties and/or the selling of a property. You are also required to have disposable income in order to pay a portion of your income to your creditors.
Next, you need to have debt that falls within a certain set of limitations. When it comes to unsecured debt, people who want to file for Chapter 13 Bankruptcy need to have debt that is less than $307,675.00. Secured debt may not exceed $922,975.00 if you are trying to maintain eligibility for Chapter 13 Bankruptcy. It is important to note that periodically these amounts are changed. They are adjusted in order to reflect the changes that take place when it comes to the economy and the consumer price index of the United States of America.
In order to be eligible for Chapter 13 Bankruptcy, successful candidates cannot have been involved in a bankruptcy petition that was dismissed over the last 180 days due to your willful failure to make an appearance before the court and the judge or your inability to comply with the terms and conditions that were presented to you as a part of the bankruptcy plan. Those who apply for Chapter 13 Bankruptcy must have, within the last 180 days prior to filing for bankruptcy, undergone Credit Counseling with an approved and recognized credit counseling service provider. Some exceptions to these terms exist for those who experience emergency situations.
