Tuesday, September 10, 2013

What do I have to do first if I am considering bankruptcy?

In April 2005, the Bankruptcy Abuse Prevention and Consumer Protection Act officially amended the U.S. Bankruptcy Code and is now recognized as the uniform federal law that governs all bankruptcy cases. Today, you must take each of the following steps to officially file a bankruptcy claim:
  • Choose and file for a specific type of bankruptcy. There are two types of bankruptcy for individuals or personal bankruptcy — Chapter 7, where your assets are sold off to pay creditors, and Chapter 13, where you can develop an interest-free repayment plan. You must apply for one type or the other, and your eligibility for each is based on your reported income when you file.
  • Arrange for official credit counseling. New laws require that you must work with a licensed counselor for the bankruptcy filing to be legitimate.
  • Attend a meeting of your creditors. In almost all personal bankruptcy cases, this is the only official proceeding you must attend. Informally called a "341 meeting" (named after section 341 of the Bankruptcy Code), it's designed for you to meet directly with your creditors so you can answer specific questions about your overall debts and property. This meeting usually takes place 20 to 40 days after you file the claim.
Call us for more information!  Visit our site at http://www.markcarterlaw.com

Saturday, September 7, 2013

Things NOT to Do Before Bankruptcy

Things NOT to Do Before Bankruptcy

When considering the dos and don'ts before bankruptcy, avoiding actions on the "prohibited" is quite important. Why is this so? Because making poor decisions before bankruptcy may prevent you from getting debt relief.

So, here are some decisions to avoid:
  • Transferring assets out of your name. This raises a huge red flag in bankruptcy court, especially if the transfer occurs right before bankruptcy. Plus, hasty asset transfers may be financially risky or even illegal.
  • Using a credit card for a large cash advance. Some people decide to max out their credit cards before bankruptcy because they fear losing credit later, or because they assume the debt will be swiftly discharged. If someone does this with no intention of paying the money back, it is considered fraud and punishable by law.
  • Paying off a "favorite" creditor. While banks and credit card companies can be seen as faceless entities, it's more difficult when you owe money to someone you know and see regularly. Many people going into bankruptcy try to settle debts with friends or family members as a "favor" to that person. But the court no only frowns on this practice, they may make that person give back the money so other creditors get their fair share.
  • Making large purchases. Even though you may be able to eliminate debt in bankruptcy, buying expensive items outside your price range could put you in hot water.
Don't assume that bankruptcy will spare you from all foolish purchases. Before filing bankruptcy, make sound financial decisions. Rash purchases, financial sleights-of-hand, and sneaky credit tricks will usually come back to haunt you.

Thursday, September 5, 2013

Medical Bills Are Often a Key Cause of Bankruptcy

Medical Bills Are Often a Key Cause of Bankruptcy

People who've experienced an illness or injury and found themselves buried in bills (even if they have health insurance) may consider >filing bankruptcy as a way to get out of debt.

Although people tend to have a lot of questions about filing bankruptcy, bankruptcy was created to help people resolve overwhelming bills so they can move forward.

There are two main types of personal bankruptcy: Chapter 7 bankruptcy (debt discharge) and Chapter 13 bankruptcy (debt repayment plan).

Chapter 7 bankruptcy involves the debt discharge, which eliminates unsecured debts, which are debts not tied to property, such as medical bills, credit cards, utility bills and some personal loans.
A Chapter 13 bankruptcy filing is a little different, because it involves setting up the filer on an interest-free debt repayment plan. This is generally best for people who have unsecured debt and secured debt, which is debt tied to property, such as a mortgage, that they want to keep. Chapter 13 bankruptcy has helped millions stop foreclosure, repay their debts and stay in their homes.

When you or a loved one is injured or ill, what's important is focusing on getting better--not worrying about excessive medical bills.

Need help?  Visit us at http://www.markcarterlaw.com