New Bankruptcy Law - A Summary of Changes You Should Know About

The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, aka the "new bankruptcy law", became effective October 17, 2005. The law introduces several changes to the existing bankruptcy rules. Some of these changes include the fact that potential bankruptcy filers must meet a "means test". The test determines, whether you are eligible to file for bankruptcy or not.

The term "Creditor" refers to those organizations owed money. "Debtor" refers to the consumer who owes money. "Filer" refers to the consumer filing for bankruptcy.

Here is a summary of the major changes:

"Means Test" for Chapter 7

A creditor may file a motion to dismiss a bankruptcy case, if the debtor's income is greater than the median state income and the debtor can afford to pay $100 per month over a period of five years towards paying down your debts. In this case, a debtor has to file for Chapter 13 instead of Chapter 7.

Mandatory Credit Counseling

Potential bankruptcy filers must undergo credit counseling via an "approved nonprofit budget and credit counseling agency", prior to filing for bankruptcy. Here is the list of government approved consumer credit counseling agencies.

Mandatory Debtor Education

Chapter 13 filers must complete a course in "personal financial management" prior to filing for bankruptcy.

Discharge of Debts

Certain debts cannot be discharged. Debts to a single creditor of more than $500 for luxury goods that were incurred 90 days before filing cannot be discharged. In addition, cash advances of $750 within 70 days are also non-dischargeable.

Proof of Income and Tax Return Filings

Filers must show proof that they paid taxes from the last year. This also provides verification of income. If a filer has not paid taxes for the previous year, they must pay before they can continue the bankruptcy process.

Time between Discharge

If you are filing for Chapter 7 and you have a previous discharge within the last 8 years - you cannot receive another discharge. This time period used to be 6 years.

Fewer "Automatic Stay" Protections

Filers will no longer enjoy some of the legal protections they used to have such as stopping or delaying evictions, driver's license suspensions or child support proceedings.

Attorney Verification Required

Attorneys are responsible for verifying that information contained in petitions and schedules are "well grounded in fact." Attorneys are required to sign petitions to acknowledge this fact.

Eviction Proceedings

Filing for bankruptcy will not stop an eviction proceeding.

Priority For Unpaid Child Support and Alimony

The repayment of unpaid child support and alimony take priority over any other creditor.

Retirement and college savings gain protection

Funds in retirement accounts such as 401K, 403b and IRAs are deemed as assets that are not available to creditors as part of the bankruptcy. Debtors can continue to contribute to these accounts, if they can. Additional accounts that are exempt are college savings funds for children.

Visit http://www.poorcreditgenie.com for in-depth information about the new bankruptcy law and other bankruptcy articles.

The website offers free debt management credit counseling advice and information. Learn the secrets to getting a free government credit report and improving your FICO score.

The website is a consumer’s best friend for all things money.

New Bankruptcy Law - Effects on Natural Disaster Victims

You've heard of the new bankruptcy law, whether you plan to file for bankruptcy or not. The law referred to as "The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005", took effect on October 17, 2005. The law imposes restrictions on who can file for bankruptcy under chapter 7.

Following Hurricanes Katrina and Rita, the United States Trustee's office announced special guidelines intended to lessen the impact of the new law on victims of natural disaster. Many victims of the hurricane not only lost their homes but have no way of meeting the stringent load of paperwork required to file for bankruptcy.

Some of the exemptions made for victims of natural disaster include the following:

Mandatory Credit Counseling - The requirement to undergo compulsory credit counseling is waived.

Paperwork Load - Filers who cannot provide the paperwork needed to file for bankruptcy will not be penalized.

Passing the "Means Test" - Filers have a lot more leeway, when it comes to passing the means test because lost income and other negative financial effects of the disaster are considered as "special circumstances" that may allow a debtor, who otherwise wouldn't pass the "means test" to file for bankruptcy under chapter 7.

Access the summary list of changes per the new bankruptcy law and how potential filers will be affected.

Visit http://www.poorcreditgenie.com for in-depth information about the new bankruptcy law and other bankruptcy articles.

The website offers free debt management credit counseling advice and information. Learn the secrets to getting a free government credit report and improving your FICO score.

The website is a consumer’s best friend for all things money.

Five Steps on How to Find and Choose A Bankruptcy Attorney

If you are like many men and women in the 21st century, you may have found yourself literally drowning in debt. As a result, you may have made the touch decision to file for bankruptcy. In this regard, you may be wondering what steps that you need to take to determine how to find and choose a bankruptcy attorney. Indeed, there are some specific steps you need to take in order to determine how to find and choose an appropriate attorney.

1. The first step in how to find and choose a bankruptcy attorney is to contact the local bar association in your community. While your local bar association will not make any specific recommendations about a particular lawyer, your local bar association will provide you with a list of lawyers in your community that specialize specifically in the practice of bankruptcy law. Because bankruptcy is such a specialized area of the law, it is vital that you obtain a lawyer that is specifically trained and experienced in the practice of bankruptcy law.

Additionally, there are lawyers that specialize in consumer bankruptcy law and commercial or business bankruptcy law. Depending on what type of bankruptcy case you will be filing -- consumer or personal, commercial or business -- will depend on what type of lawyer you actually will want to retain. (There are also lawyers who specialize in agricultural bankruptcies. Agriculture bankruptcies are also specialized and require the assistance of specifically trained attorneys.)

2. The second step in how to find a bankruptcy attorney is to listen to what your friends, family members and colleagues have to say about one attorney or another. In this high-tech age, many people overlook the benefits of word of mouth. In the final analysis, some of the best information that you can obtain about a lawyer even in this age of high-tech communications is through word of mouth. Chances are very good that you know a friend, family member or colleague who has had to go through a bankruptcy. Find out what that person or those persons have to say about the lawyer or lawyers that they have used for their own bankruptcy cases.

3. The third step in how to find a bankruptcy attorney involves doing an Internet search about the specific lawyers that you have on your list of potential attorneys to assist you in your own bankruptcy case. Oftentimes on the Net, you will be able to find newspaper articles, bar association notices and other information about lawyers. By reviewing this information, you will be able to develop a clearer picture about the business and background of particular bankruptcy lawyers that you are considering employing.

4. As you continue to narrow down your list of attorneys, you will reach the step at which you will want to arrange face to face meetings with a few of the "finalists" on your list of potential lawyers. In so many ways, there is nothing more important than meeting with a lawyer face to face before you engage that attorney. You can sum up a lawyer easier when you are able to see and hear them in person.

5. The final step in how to find and choose a bankruptcy attorney involves making the decision to go with a particular lawyer. At this juncture, you will want your new lawyer to provide you with a specific contract that lays out what your lawyer will do for you, what services he or she will provide. In addition, you will want to make certain that the lawyer specifically lays out what he or she will be charging you in the way of fees and how those fees will be paid by you. (In most instances, the fees that are assessed to you by your lawyer must be approved by the bankruptcy court. Therefore, in many instances, you will not pay attorney fees relating to a bankruptcy case up front.)

By following these steps to how to find and choose a bankruptcy attorney, you will be in the best possible position to choose and select a bankruptcy lawyer that will best meet your particular needs. As a result, you will have the best possible chance to truly bring order to your chaotic financial house both in the short and the long term.

Publisher & Author - Billy Baxter - There's a free attorney selection tool along with more relevant bankruptcy assistance, highly informative eye opening articles and up to date news at Billy's site, see it all here at http://www.bankruptcy-aid.com

Bankruptcy Law and How to Get Your Credit Back

Personal Bankruptcy what is it?

Personal Bankruptcy is legal procedures that enables a debtor to for the time being or lastingly avoid paying some of their personal debt unpaid. The US Congress enacted the existing bankruptcy code in 1978, and newly amended it in the spring of 2005.The objective of the legislation is to give relief and structure to those people of society who have gotten themselves so deep into debt they can not possibly pay back. Currently there are 2 forms of bankruptcy that are available for individuals: chapter 13 & chapter 7.

Will you be able to get credit again?

Undoubtedly, the banks have become better at working with people who have filed for personal bankruptcy. You can get a new kind of protected credit card, where a deposit is made to cover the line of credit. This card is the start of the process of credit restoration. Within a couple of years, the banks will start giving you credit again.

What about my creditors?

You might worry about your creditors harassing you, and if they will ever get off your back. They will! By law all activities against a debtor must end when bankruptcy papers have been filed with the government.

Will anybody know that I filed?

Very few people will know that you have filed for Bankruptcy. The file goes into the public record. Credit bureaus will keep a documentation of your filing for 10 years.

Changes made to the bankruptcy laws?

The "Bankruptcy Abuse Prevention and Consumer Protection Act of 2005" was passed by congress in spring of 2005 and will be effective on October 17th, 2005. The purpose of the act was to force people who have enough money to make some of the payments on their debt make those payments instead than steer clear of the debt all together. The major changes are:

Tests are performed to identify the ability of the debtor to pay their debts. The tests are: Is the family earning higher than the average income for their state? If yes, does the family have enough income to pay some or all of their debts?

Debtors wishing to filing for bankruptcy must give the government their most recent tax return.

A minimum 2 year residency is required to take advantage of state exceptions.

Counselling: Debtors must have completed a federally approved credit counselling program within the six months prior to filing.

Child support and Alimony payments were moved to first priority when dividing the income.

Huge amount of Bankruptcy Law quality information on this site – Go there. http://www.bankruptcylaw.infostairs.com

Using an Individual Voluntary Arrangement (IVA)

It is no secret that more and more consumers are finding themselves having trouble with debt, and that many of them will end up being unable to pay their bills. Rates of debt have been rising for a number of years now, and with wages not keeping pace with expenses in many places around the country that trend is only likely to rise.

Many people find themselves in the uncomfortable position of borrowing money just to meet current living expenses like food and clothing, and this can be further exacerbated if those funds come from high interest sources such as credit cards. For many people who find themselves unable to keep up with their bills, an individual voluntary arrangement, or IVA, may be the best option for all involved.

In essence, an individual voluntary arrangement (IVA) allows a consumer to create a plan for repaying his or her creditors. This plan is then submitted to the creditors, and they have the ability to vote yes or no on the proposed plan. If 75% of the consumer's creditors agree to the individual voluntary arrangement, it is adopted. While the exact amounts vary, the adoption of an IVA can result in a 50-95% reduction in the amount of money that is owed. The alternative to the individual voluntary arrangement (IVA) is generally a payment to the preferred creditors. In such a plan, unsecured creditors generally receive no money at all.

If 75% of the consumer's creditors are unable to agree on the individual voluntary arrangement (IVA), any creditors whose debt amounts to 750 pounds or more is able to apply for the bankruptcy of the individual consumer. All these creditors are then allowed to take court action in the county court judgement.

Available Bankruptcy Options

The laws regarding bankruptcy have changed recently, but there are still options available to you if your debt has grown out of control and you have found yourself unable to repay them. Bankruptcy laws give debtors a way to divide their assets among creditors and completely eliminate some debts after the assets have been distributed.

Due to the recent changes, you may have to undergo credit counseling prior to filing bankruptcy, but as a debtor you are entitled to file bankruptcy as a way to reorganize or eliminate your debts.

People wanting to completely eliminate all outstanding debts generally use Chapter 7 bankruptcies. Business can also file Chapter 7 if they plan to liquidate all assets and close permanently. Under a Chapter 7 bankruptcy, an individual may keep certain property such as a home, automobile, tools of trade, and various other properties.

Some property however, may be lost during the bankruptcy proceedings. A trustee will control the debtor's assets during the bankruptcy process and those assets will be divided among creditors as the trustee sees fit. Upon discharge of the bankruptcy, the control of any remaining property is returned to the debtor and all outstanding debts that have not been reaffirmed will be gone.

Chapter 13 bankruptcy is for those who wish to pay all their outstanding debts but have found themselves unable to do so. Chapter 13 allows individuals to reorganize debts and structure payments differently so that the debtor can afford to make payments over time.

In the case of a business wanting to reorganize, Chapter 11 bankruptcy is the appropriate choice. Filing bankruptcy is a way out of debt for many people and businesses. Consult with a professional to make sure that bankruptcy would be the best choice for you before you make any final decisions.

Ken Austin is the webmaster at [http://bankruptcy.creditreliefonline.com] To learn more about different types of bankruptcy [http://bankruptcy.creditreliefonline.com] and bankruptcy options, please visit the bankruptcy resource guide [http://bankruptcy.creditreliefonline.com].

Debtors Prison, A Brief History of Bankruptcy

In Ancient Israel, every 7th year (Sabbatical year) the debtors were forgiven some of their debt and every 50 years (the Jubilee year) all debts were to be discharged, some mortgages released and all indentured servants and slaves were to be released. In the meantime, the family members had the right to make payments on any property or persons that had been seized to satisfy the debt. 

In Ancient Greece and Republican Rome, debtors suffered death, slavery, mutilation, imprisonment or exile. Roman Republic Law allowed multiple creditors to exhibit a debtor in the forum for three days and divide the debtor up into pieces to satisfy the debt. 

Evidence exists suggesting multiple creditors could also seize a deceased debtors corpse and hold it ransom from the debtor's heirs until the debt was satisfied. 

As Rome became an empire, approximately the second century AD, debtor slavery had been abolished, debtor prison continued to exist. The debtor could be held for ransom until friends and family of the debtor paid the debt. 

In the middle ages, the church proclaimed debt and insolvency sinful. Debtors were subject to excommunication while alive or denial of a Christian burial upon death. Punishment of debtors was necessary to assist the land-owning and religious ruling classes in maintaining their power. 

The first bankruptcy laws arose in the late middle ages. The laws provided the protection of fraud against creditors stemming from an inequitable distribution of assets and the protection of the debtor from imprisonment. 

In 1283 authorizing the seizure of debtor's assets to satisfy debt. If the assets seized were insufficient to satisfy the debt, then imprisonment of the debtor was incurred until the debt was paid. 

In 1542 in England, the first known bankruptcy law was passed to give creditors options against debtors who did not pay their debts. Under this law, the debtors were considered criminals. 

In 1570, England passed its second bankruptcy law, among other things; bankruptcy was initiated by the creditor and involuntary for the debtor. Once the debtor's assets were seized, sold and distributed to the creditors the debtor was not relieved of the debt and creditors could continue their collection efforts. 

English debtors prior to 1705 rarely knew forgiveness of debt.

England enacted a statute in which creditors could receive a full discharge of debts, while being able to retain exempt property provided certain conditions were met. 

In 1823 when Charles Dickens was 12 years old, his father was sent to debtor's prison at Marshalsea. Charles started working in a boot factory for 10-hour days to pay for his lodging and help support his family. 

Debtors act of 1869 is an English statute that abolished imprisonment for debt except in certain cases, as when a debtor owed a debt to the Crown or a debtor had money but refused to pay. The statute also made it a misdemeanor to obtain credit under false pretenses or to defraud creditors. 

In America up to the mid 1800's you could go to prison for not paying your debts. In 1898 the Bankruptcy Act allowed both voluntary and involuntary cases. Debtors could keep exempt property and discharge virtually all debts. In 1938 the bankruptcy laws were overhauled by Congress and the law that exists today is the Bankruptcy Act of 1978. Several amendments and changes have been since then.

Original content from bankruptcy home.com can contact at info@bankruptcyhome.com

Is Bankruptcy the Right Option for You?

Types Of Bankruptcy

There are two different types of bankruptcy that can be used in most cases. Each one has a different set of rules and guidelines that you must follow in order to qualify for and get the bankruptcy. If you are considering bankruptcy, it is important to understand the differences in these types of bankruptcy and to choose the one that best fits your needs and the one that you qualify for.

Chapter 7 Bankruptcy

This is the type of bankruptcy that is most often used by individual debtors. It allows for an individual or married couple to wipe out their debt by taking property and liquidating it. The money from the property is then used to pay off the debt that the individual has incurred. In some states, certain property can be retained. Only property that is exempt under the bankruptcy laws is eligible. In most cases, it will be cars and homes that are in good standing with their creditors. In some states, you will lose your home. This is the fastest way to get out of debt but one that is going to wipe you clean of assets.

Chapter 13 Bankruptcy

In this type of bankruptcy, the debtor and creditor work out a plan that allows the debtor to pay off their debt in a payment plan. Most of the time, this process will happen through the paycheck of the individual. As long as the payment plan is in effect, the creditor will not take your home or possessions and you will not lose them. It is a good thing for those creditors that would have lost more if a Chapter 7 were filled and a good thing for the debtor because they can work on improving their overall credit.

Determining which type of bankruptcy is the right choice for you is difficult. If you can afford to pay off the debt through a Chapter 13, it is likely to do the least amount of damage to your credit. A Chapter 7 will remain on your credit report for up to ten years. Nonetheless, it is wise to talk to your attorney about which type of bankruptcy is the right choice for your needs.

Ken Austin is the webmaster at [http://bankruptcy.creditreliefonline.com] To learn more about different types of bankruptcy [http://bankruptcy.creditreliefonline.com] and bankruptcy options, please visit the bankruptcy resource guide [http://bankruptcy.creditreliefonline.com].

Bankruptcy: What's the Difference Between Chapter 7 and Chapter 13?

When consumers contemplate the option of bankruptcy generally, the remedy they are specifically referring to is chapter 7 bankruptcy. The effect of the filing is to discharge someone saddled with debt from having to pay debts no longer secured with a valid lien. It also has the added benefit of serving as a court order to creditors (or their collection agencies) to stop hassling you through telephone calls, letters, and personal contact in an effort to get you to pay the debt. But what, in effect, does that mean for you the borrower?

Chapter 7

Filing for chapter 7 bankruptcy does not mean that immediately all of your debts are eliminated in their entirety. Rather, secured debt must be still be dealt with. It does mean, however, that commonly unsecured debts like credit card bills and medical expenses do not have to be paid back. But getting off the hook here does not come without costs. Rather, filing chapter 7 often means the necessary liquidation (selling off) of most of your personal property. While there are limitations to what can be confiscated by creditors, (such as your home under the homestead protection), expect that creditors will sell off most of your valued possessions to pay part of your debts to them. In addition, your credit rating will be devastated by this filing. In filing chapter 7 bankruptcy, you have essentially proclaimed to the world that you are no longer worthy to be trusted with future credit. That plays out practically insofar as it becomes virtually impossible to get a mortgage for a new home, a car loan, a credit card, and even limits very small forms of credit like appliance financing and at times payday loans. Because of the many drawbacks of filing for chapter 7 bankruptcy, many individuals in need of debt relief look for other options.

Chapter 13

One such option is chapter 13 bankruptcy. Chapter 13 filing means quite simply that you are restructuring your debt by negotiating with your creditors and establishing a plan to pay them off over the course of three to five years. So, this is a formal declaration that you will and have worked with creditors so that they will get their money, only at a slightly slower rate than they might have wanted. By promising to pay off your debts, you are allowed to keep valuable personal property such as your home and car. In a similar way, taking this step can limit some of the damage to your credit score that is incurred with filing for Chapter 7 as opposed to Chapter 13. Typically the arrangement reached with creditors is to have you pay your regular monthly payments, plus an additional amount that over time allows you to get caught up on your payments over time.

There are both benefits and costs to whichever bankruptcy approach you decide to take. On the one hand, filing Chapter 7 offers you the freedom to be rid of the heavy debt that is currently hanging over you, while Chapter 13 offers you only the chance to restructure that debt to be more manageable. But on the other hand, filing Chapter 7 also means the liquidation of almost all your valuables as well as the total devastation to your credit rating, whereas filing Chapter 13 allows you to keep many of your possessions while keeping your credit score intact.

Dan Johnson enjoys writing about bankruptcy.

The New Bankruptcy Law - What You Need To Know

The new bankruptcy law went into effect on Monday, October 17, 2005. And the events of the previous weekend were object lessons in human behavior as it applies to financial matters.

There were reports throughout the country that people were standing in lines for blocks waiting to get into courthouses to file Chapter 7 bankruptcy, which means they can wipe out their debts and start over. Now most people will have to file Chapter 13, which means they will have to pay their debts over time.

The demand to file Chapter 7 before the deadline was so great that the courts had to hand out bakery numbers and vacant rooms were opened to accommodate debtors. There was a report that one man bought a first-class airline ticket to meet with his advisor to file Chapter 7 bankruptcy. Is there any doubt that the ticket was bought with a credit card?

According to Lindquist Consulting, there were more than 200,000 personal bankruptcy filings for the week ending October 15, easily a record high. That's almost triple the number of filings in the week -- also a record. Sadly, the debt situation in the U.S. is out of control.

Here are the key changes that come with the new bankruptcy law...

There is something called a "Means Test." The means test calculates your monthly income less certain allowable expenses like food and housing. If your resulting income is less than the median income for your state, you may be able to file Chapter 7. If not, you will have to file Chapter 13. 

There are expense allowances that are set by the IRS. They're pretty tough. The IRS allows a food allowance of about $200 a month and a housing allowance of about $800 a month. If your actual expenses for food and housing are more than that, too bad. 

Some states -- like Texas -- have an unlimited homestead exemption, which allows you to protect your home from creditors. The new law prevents you from filing in a state that is more favorable to debtors unless you've lived there for at least two years. 

Filers must go through mandatory credit counseling within six months of filing a bankruptcy petition.

There is more paperwork involved, so you it will cost you more to file. Under the old law, a consumer might have paid between $1,500 and $3,500 to file. Because of the increased paperwork, the new fees will probably be considerably more. 

If you purchased luxury items or received a cash advance of more than $500 within 60 days of filing, you will not be able to include them in your bankruptcy filing. They will have to be repaid.

So under the new bankruptcy law there will be a lot fewer Chapter 7 and a lot more Chapter 13 filings. With a Chapter 13 bankruptcy, you're put on a repayment plan. Under Chapter 13, you get to keep most of what you own and you will be under a plan to repay your creditors over three to five years. Your bankruptcy isn't complete until you pay off all of your creditors according to your plan.

Your best bet? Get out of debt and stay debt-free. When you're in debt you have money working against you instead of for you. And that's exactly the opposite of what you want if you want to achieve financial freedom.

Larry Holmes invites you to visit http://www.grailinvesting.com/ Your common sense guide for financial and investment success.

GM Bankruptcy?

If General Motors were to file bankruptcy, it could change the world or would it? Yes a GM bankruptcy filing would change the world. Right now with all the over regulation it is amazing that any company can make money these days. I guarantee such a move would change the world. It would definitely wake up the Unions and the governments over regulation on our economic engine. In fact sometimes it seems we do everything to hold down our economy from screaming forward.

With all the over regulations in this country to start, grow and run a successful small business, medium size corporation or a multi-national conglomerate based in the US. Why do we attack and use regulations to slow down our economic might? Because folks it is the way it is deliberately set up. You see at every level we have placed rules and bureaucracy to slow ourselves.

The largest corporations in the World are constantly being bombarded by rules and regulations put in place by regulators and politicians. So they are forced to move the operations out of the country to reduce costs, raise prices and pay off all the politicians you can find, no matter what side, fund them, as you will need them just to do business in this nation.

It is interesting the talk now after the 3rd quarter loss at General Motors and how they may sell off GMAC. Right now with the housing boom getting ready to pull back and some over extended upside down foreclosures due to job losses in the downturn of the business cycle, that might not be a bad idea actually. It seems GMAC is going to have its own issues.

The Delphi Bankruptcy deal is a problem indeed, I too worry about the under funded pension costs and these out of control health care costs, as for a company like GM these are problematic issues to say the least. It is good that the Union has been cutting a little slack at GM these days. Ford is next and lay offs there will be big indeed.

Indeed a bankruptcy at GM would change the world, but why do we need such a strong signal as a wake up call when it is obvious that we need to fix the problems that are right their in front of us. We all should be thinking here, as all of this effects us one way or another and China is not getting any smaller so we better get on the stick and take care of business in real time. Think on this.

"Lance Winslow" - Online Think Tank forum board. If you have innovative thoughts and unique perspectives, come think with Lance; www.WorldThinkTank.net/. Lance is an online writer in retirement.

Bankruptcy - is This Your only Way Out?

What is bankruptcy, and how does it affect you?

The term bankruptcy literally means "broken bench". In days gone by, when a debtor couldn't pay his/her bills, they would break his/her workbench in two as a warning to other tradespeople and to punish the debtor.

Today, bankruptcy is a tool that can legally help your business to survive or allow you to discharge the debts of your business.

Are your business debts overwhelming you? Are you worried about how you're going to pay your staff and bills next week? Are you seriously starting to think about bankruptcy as a possible solution to your woes? Well, before you take what is basically an irreversible step, be totally clear on what bankruptcy is and how it affects you for now as well as long term.

Bankruptcy is a way of dealing with the debts you cannot pay. It should only be looked at by you as the business owner in a situation where you have made every effort to keep your business floating and pay your creditors, but without success.

Only contemplate it when you believe that you cannot meet your ongoing financial liabilities and you are sure your financial position is unable to be salvaged. Becoming bankrupt is a very serious decision and you must only approach it as a last resort.

If your business is in danger of heading into problems that could lead to its demise, or your financial worries are such that it may lead to your business or personal bankruptcy, then seek urgent advice from an experienced lawyer and accountant as soon as possible.

Why?

Because there may be other options available to you that would avoid bankruptcy and help resolve your financial dilemma.

Bankruptcy may offer you relief from most of your debts but remember, you will be subject to many restrictions and limitations. As well you lose ownership of your property to a court official known as the Official Assignee.

Filing for bankruptcy is not the only way out of your precarious situation. If you can work out an arrangement with your creditors without having to go to court, then do so as you would be much better off. In court, your "dirty laundry" may become revealed for everyone to see and that can be embarrassing.

So what is the best way to AVOID bankruptcy?

Firstly, be clear on your financial situation? Are you insolvent? Insolvency means that what you owe (your liabilities) are more than what you own (your assets). That is, your money isn't coming in fast enough to meet your bills when they fall due.

Secondly, investigate all other options.

Here are 9 alternatives to filing for Bankruptcy: 

Sell off assets If you are getting financially strapped and starting to run into serious money problems then consider selling off assets you may have to clear your bills.

Reduce your costs If things are starting to look precarious, then be realistic. See what you can do to reduce all expenditure and get all non-essential costs out of the way. For example, if you have goods on hire purchase that you cannot afford, then let the goods be repossessed and stop the continuing payments

Budgeting. Budgeting means sitting down with an adviser, such as an accountant, and working out a plan to enable you to live and progressively pay off all debts. A good budget strictly adhered to, would soon pull you "out of the cart" if you are prepared.

Refinancing. You may like to look at refinancing some assets and using the surplus cash to pay off creditors who can cause problems by lodging a creditor's petition for bankruptcy if they are not happy.

Creditor's pool. You can always try and arrange with your creditors to clear up their debts by instalment payments. Here you will need to see all your creditors and create a creditors pool, run by an accountant or solicitor. You will pay a certain amount of money into the pool and that money can be distributed to the creditors until their debts are paid.

Compromise. You can reach an agreement with your creditors on a proposition where their debts can be fully settled. There are a number of ways to agree on a compromise with creditors.

Instalment Order. This is an order made by a Court allowing you to pay back debts in easy stages without the threat of further legal action, while that order is in force. This is probably a good option, because it forces your creditors to accept the arrangement as long as someone the court appoints properly monitors it.

Continue trading. If your business is temporarily insolvent then you should look at ways where it can still continue trading and hopefully generate good cash flow to meet your commitments. If you can, it is good to trade your way out of your financial difficulties. Most businesses can do this unless they are so far gone that recovery is impossible. For you to continue trading it is recommended that you talk to a professional adviser who can act as a guidance counsellor or coach, so you don't get into deeper problems.

Bankruptcy. If you have tried all other actions and they have not been successful or agreed to by your creditors, then you should consider filing for voluntary bankruptcy in order to stop the deterioration of the situation.

If you can avoid bankruptcy in any way at all - do so. 

If all else fails and it looks like you or your business is at the end of the road - talk to an accountant and lawyer immediately.

Best of luck.

Copyright 2005 StartRunGrow.com

http://www.startrungrow.com

StartRunGrow is a global online information organization that specializes in creating, developing and marketing business help information specifically with the aim of "making business easier" for entrepreneurs around the world. For many more free articles, success stories, forms & agreements and more, visit StartRunGrow.com

Bankruptcy Credit Counseling Under The New Bankruptcy Law

Bankruptcy credit counseling is a requirement of the new bankruptcy law effective October 17, 2005. The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 requires court approved bankruptcy credit counseling to be completed by debtors prior to filing for bankruptcy within the 180 days immediately preceding the filing of a bankruptcy petition.

The new requirement for bankruptcy credit counseling prior to filing for bankruptcy may be completed by internet credit counseling, phone credit counseling, or group or individual credit counseling at specific, court approved bankruptcy credit counseling agencies. Under the new bankruptcy law, the U. S. Trustee's Office is responsible for approving bankruptcy credit counselors. The U. S. Trustee's Office may approve a nonprofit budget and credit counseling agency or an instructional course concerning personal financial management if the nonprofit budget and credit counseling agency meets certain stringent requirements set forth in the law.

The new bankruptcy law has made filing bankruptcy more difficult than ever before. The new bankruptcy law was fueled by credit card companies and their high powered lobbyist who wanted to make it harder for debtors to wipe out credit card debt. Bankruptcy credit counseling has been seen by many bankruptcy attorneys as an attempt to delay a debtor from seeking protection in the bankruptcy court. The delay may be just enough time for a creditor to obtain a judgment or collect garnishment funds.

Most bankruptcy lawyers are finding out that the telephonic method of counseling is the easiest for debtors to complete in a hurry. Most telephonic counseling can be completed in about 1 hour.

The maximum amount any bankruptcy credit counseling agency can charge for counseling is set by law. No bankruptcy credit counseling agency can charge more than $50.00 for the credit counseling. Once bankruptcy credit counseling sessions have been completed, debtors are given a certificate of completion from the credit counseling agency to be filed with the bankruptcy court upon filing of the debtor's bankruptcy petition.

BankruptcyHelpOnline.org is the bankruptcy resource solution that makes bankruptcy under the new bankruptcy law easy to understand. For a complete list of court approved bankruptcy credit counselors, visit BankruptcyCreditCounselors.com [http://www.bankruptcycreditcounselors.com/credit-counselors].

Your Credit Report After Bankruptcy-What To Look For

Do you KNOW what is on your credit report? Even if you have just filed bankruptcy it is EXTREMELY important that you KNOW how it is reported on your credit report. It is NOT the credit reporting agencies responsibility to make sure that your credit report is accurate. It is YOURS, and only you can make sure that it is.

After receiving your bankruptcy discharge papers the first thing you will want to do is get a copy of your credit report and make sure that the information reported on it is correct. Did you know that over 90% of the time it is incorrect?

You wll want to make sure that your report is showing the date the bankruptcy was filed and when it was discharged. Make sure that ALL creditors that you included in the bankruptcy are showing that they were and that your balance is $0 and nothing else. Profit & Loss or Charge Offs will lower your credit score. Make sure they report as "included in bankruptcy" with a $0.00 balance.

If a creditor shows any balance other than $0.00 and it was included in the bankruptcy it will lower your credit score. It will by your responsibility to contact the creditor and have them update your credit report to show the correct information. Be prepared, you may need to contact them several times before they get it right. But don't stop until it is.

Did you also know your credit score will go up after a bankruptcy? Why? Because all past due, profit & loss and charge offs will now show a balance of $0 instead of a balance past due.

Did you know that if your credit score is over 500 you can purchase a home and get 100% financing? That's right!! However, you need to realize that you will be paying a premium price in the closing costs and interest rate. If you do some credit repair and wait until the bankruptcy is two years old you can qualify for a Fannie Mae low interest rate loan.

Remember, you are responsible for your own credit report. No one else is going to care about it as much as you. Start working on it now, it's never to late.

Learn how to go from bankruptcy to living a life of financial freedom. At http://www.life-after-bankruptcy.com you will discover step by step how to change your life and finally live debt free and financially free.

Bankruptcy Guide

'Bankruptcy' the term that can raise the goose bumps of almost every individual who hears it and even a nervous breakdown to those who confront it. Bankruptcy stands for the situation when a person runs into huge debts and there is hardly any money left with him to repay those debts. The clouds of bankrupt situation can hover over anybody's life be it a successful business man who has never ever fathomed it or any greenhorn entrepreneur who had thought of going a long way ahead.

There are several reasons behind this insolvency-

Indebtedness-people usually take big loans from the banks and private companies in order to run successfully their business or company. However, since the economy is constantly fluctuating, one might not be able to incur expected results or profits. So, the loan debt with interest rates gets piling on. The loan can also be taken to pay off a bill that you missed paying. The loan is taken instantly in this case without an assessment of the interest rates. This can be cause snags later.

The credit card bills are also a source of trouble. They are charged with good interest and at the end of the month when the expenditure has chewed your month's income; the credit card bill can make you bite the dust.

In the world today where fraud and betrayals are considered to be the bets virtues, any partner or shareholder or director might connive to pitch the company or business to bankruptcy. Here the reasons can be mutual squabbles and vengeance.

Gradual denouncement from the market- the commodity you sell today at price X, may be sold tomorrow by some other company at a much cheaper price Y. This can oust or eject your product from the market replacing it with a relatively cheaper one.

However, where there is a will, there is definitely a way. Just as there are two sides of a coin, there are two aspects attached to everything. When you glare at the negative side of the situation, its positive aspect is lurking behind according to which bankruptcy can be seen a situation that provides you a golden chance to start things afresh.

This is done by filing your application for bankruptcy, in a way seeking help from the government to help you overcome the disaster. Once you forward your application and it is accepted, the government repays most of your debts. This becomes possible by taking hold of your assets and dividing them amongst the creditors in an organized manner. But the debts that are associated with embezzlement or those huge ones that cannot be covered up via one's assets can be problematic. In case of businesses filing for bankruptcy, certain procedure has to be followed up.

Besides this there are a few debt consolidation services that advertise themselves through television, print media etc. Debt consolidation signifies using a loan provided by that service to repay other debts. This loan is comparatively at a lower rate of interest and it often becomes easier for many to repay one loan instead of five to six ones.

In any case, if you are seeking financial aid from the government, banks, services etc., there stands the barrier of qualification. It is that you should be able to prove the service or the bank that your case is authentic and not a fraud. In order to escape future troubles, the government has formulated strict laws and eligibility criterion in this area.

However, in any case it is better to seek the advice of an advisor before seeking help to make up your crisis. This will not just educate you about all the related terms and conditions but also the possible legal and financial consequences. Just keep in mind that help always comes to those who are look for it with a true heart.

Mansi aggarwal writes about bankruptcy Learn more at http://www.bankruptnomore.com

Filing Bankruptcy - Credit After Bankruptcy

So I've filed for bankruptcy, now what?

I've heard from several people who have filed for bankruptcy protection that once they have successfully filed the last thing they want to do is deal with their finances. I recommend that a person places their finances near the top of their priority list once a bankruptcy has been filed.

After all the clean fresh start that many attorneys promise isn't always as easy for many recent bankruptcy filers.

I recommend to any individual that even after they file for bankruptcy that they still seek budgeting guidance from a credit counseling organization. This is typically a free service that is developed to help people budget their daily finances; this can be of great help once a bankruptcy has been filed by providing valuable insight on how to prevent these problems in the future. If a credit counseling agency charges for this service I recommend that you look again until you find help elsewhere. There are several well qualified agencies that offer no cost counseling.

Good credit will be difficult to come by, period. There is a difference between good credit, which offers lower interest rates, no maintenance fees, etc. versus poor or risky credit that is offered to individuals who have a shaky credit history.

Be careful in deciding who to look for when seeking lines of credit, auto purchases, etc. Read all of the fine print and understand that if you borrow x amount of dollars it will actually cost you x amount in the long run.

Save from the start. Don't rely on getting a loan, it can prove to be risky and extremely costly as there are several organizations that love the fact that they can justify higher rates based on your poor credit. Talk to an agency about your budget and then start to save for those rainy day emergencies, such as a vehicle repair, vet bills, etc. The more you save the less you will have to rely on a poor loan that will cost you in the end.

Article written by Rick Munster

Rick is the Media Planner for http://www.DebtReductionServices.com

Bankruptcy - More Signs That You May Be in Trouble

Bankruptcy attorneys all over the country are reporting that their business is up 25-50% over last year. The reason? New bankruptcy legislation is set to take effect later this month, and the laws are much stricter than in the past. That may be the case, but the fact that tougher laws are coming doesn't mean that everyone should rush out to declare bankruptcy. Still, many people are undoubtedly wondering if their own situation warrants such a drastic choice.

Here are a few things to consider when deciding if you should file:

You are writing checks when the money isn't there - This is something that most everyone has done from time to time. Your bill is due on Tuesday, but you don't get paid until Friday. So you write the check, put it in the mail, and hope that by the time the check clears, you'll have your paycheck. There are a couple of problems with this. The time it takes for a check to clear is much shorter than it used to be. Checks can often clear overnight, and if the money isn't there, you can be assessed late fees by both your bank and the payee. As a bonus, we should point out that it's illegal to write a check when you know that the money isn't in your account.

Are you paying for groceries with credit cards? We don't mean doing so when you forgot your checkbook; we mean doing so when your checkbook is empty. Groceries are a recurring expense. You need to eat each and every month, so you should have money set aside for food. If you don't', and you find yourself using your Visa card to buy your milk, you've probably got a serious problem.

Your credit cards are maxed out and you are applying for new ones - When your cards are full, it's time to pay down the balances. If you are applying for still more credit because the cards you have are full, you're in trouble. More credit won't make the problem better; it will undoubtedly make it worse.

These are just a few things that might be warning signs of serious financial trouble. If you find yourself doing one or more of them on a regular basis, it's time to take a serious look at your total financial situation. Now might be a good time to discuss this with either a credit counselor or a bankruptcy attorney. And nothing good comes from waiting, so do it soon.

©Copyright 2005 by Retro Marketing. Charles Essmeier is the owner of Retro Marketing, a firm devoted to informational Websites, including End-Your-Debt.com, a site devoted to debt consolidation, establishing credit and credit counseling.

Bankruptcy - Look for the Warning Signs

The Bankruptcy Abuse and Consumer Protection Act, signed into law last April, will take effect this month and bring with it some of the most sweeping changes in debt law in history. As the new requirements are much more strict, expensive, and time consuming than the old ones, consumers with problem debt are rushing to file now. But many others are wondering if their debt problems are serious enough to warrant the rather drastic decision to file for bankruptcy.

Here are a few things that may help you reach a decision:

You have two or more major credit cards with outstanding balances - Credit cards work best when used for convenience, such as when you don't have cash with you or when it just isn't convenient to pay cash. They work less well when you use them as a funding source, as they represent a fairly expensive way to borrow money. If you have more than two major credit cards with outstanding balances that are high enough that you cannot pay any one of them off right now, you may have a problem.

You make minimum payments only on your credit cards - The minimum payment doesn't even put a dent in your balance, and until recently, the minimum wouldn't even cover the interest accrued during the month. If you are only making minimum payments on your credit cards because you cannot afford to send more, then you may be in over your head.

You are paying one credit card bill with another credit card - Taking a cash advance on a credit card is really expensive. The interest rate is usually higher than for purchases and the cash advance often includes an additional fee. If you are taking a cash advance from one card at 20% interest to make a payment on another at 20% interest, you are probably in trouble.

This list is by no means definitive or complete. Nor should it be construed as legal advice. But if you see yourself doing one or more of the things listed above regularly, it may suggest that your financial problems are quite serious. Now would be a good time to consult with either a financial advisor or a bankruptcy attorney. Financial problems only get worse when left unattended, so don't wait.

©Copyright 2005 by Retro Marketing. Charles Essmeier is the owner of Retro Marketing, a firm devoted to informational Websites, including End-Your-Debt.com, a site devoted to debt consolidation, establishing credit and credit counseling.

Bankruptcy Information - Common Courtroom Terms

Bankruptcy- Bankruptcy Terminology, 45 Terms to Know and Understand

Many debtors and creditors know little of the bankruptcy process. These terms are to help assist individuals in understanding bankruptcy. The terms provided are as defined from the Public Information Series of the Bankruptcy Judges Division.

TERMS & DEFINITIONS

Adversary Proceeding -

A lawsuit arising in or related to a bankruptcy case that is commenced by filing a complaint with the bankruptcy court.

Automatic Stay -

An injunction that automatically stops lawsuits, foreclosure, garnishments, and all collection activity against the debtor the moment a bankruptcy petition is filed.

Bankruptcy -

A legal procedure for dealing with debt problems of individuals and businesses; specifically, a case filed under one of the chapters of title 11 on the United States Code (the Bankruptcy Code).

Bankruptcy Judge -

A judicial officer of the United States district court who is the court official with the decision-making power over federal bankruptcy cases.

Bankruptcy Mill -

A business not authorized to practice law that provides bankruptcy counseling and prepares bankruptcy petitions.

Bankruptcy Petition -

A formal request for the protection of the federal bankruptcy laws. (There is an official form for bankruptcy petitions.)

Bankruptcy Trustee -

A private individual or corporation appointed in all chapter 7, chapter 12, and chapter 13 cases to represent the interests of the bankruptcy estate and the debtor's creditors.

Chapter 7 -

The chapter of the Bankruptcy Code providing for "liquidation," i.e., the sale of a debtor's nonexempt property and the distribution of the proceeds to creditors.

Chapter 7 Trustee -

A person appointed in a chapter 7 case to represent the interests of the bankruptcy estate and the unsecured creditors. (The trustee's responsibilities include reviewing the debtor's petition and schedules, liquidating the property of the estate, and making distributions to the creditors. The trustee may also bring actions against creditors or the debtor to recover property of the bankruptcy estate.)

Chapter 13 -

The chapter of the Bankruptcy Code providing for adjustment of debts of an individual with regular income. (Chapter 13 allows a debtor to keep property and pay debt over time, usually three to five years.)

Exempt -

A description of any property that a debtor may prevent creditors from recovering.

Exemption -

Property that the Bankruptcy Code or applicable state law permits a debtor to keep from creditors.

Exempt Property -

Property or value in property that a debtor is allowed to retain, free from the claims of creditors who do not have liens.

Lien -

A charge upon specific property designed to secure payment of a debt or a performance obligation.

Liquidation -

A sale of a debtor's property with the proceeds to be used for the benefit of the creditors.

Claim -

A creditor's assertion of a right to payment from a debtor or the debtor's property.

Complaint -

The first or initiatory document in a lawsuit that notifies the court and the defendant of the grounds claimed by the plaintiff for an award of money or other relief against the defendant.

Confirmation -

Approval of a plan of reorganization by a bankruptcy judge.

Consumer Debts -

Debt incurred for personal, as opposed to business, needs.

Contingent Claim -

A claim that may be owed by the debtor under certain circumstances, for example, where the debtor is a cosigner on another person's loan and that person fails to pay.

Creditor -

A person to whom or business to which the debtor owes money or that claims to be owed money by the debtor.

Debtor -

A person who has filed a petition for relief under the bankruptcy laws.

Defendant -

An individual (or business) against whom a lawsuit is filed.

Discharge -

A release of a debtor from personal liability for certain dischargeable debts. (A discharge releases a debtor form personal liability for certain debts known as dischargeable debts (defined below) and prevents the creditors owed those debts from taking any action against the debtor or the debtor's property to collect the debts. The discharge also prohibits creditors from communicating with the debtor regarding their debt, including telephone calls, letters, and personal contact.)

Dischargeable Debt -

A debt for which the Bankruptcy Code allows the debtor's personal liability to be eliminated.

Disclosure Statement -

A written document prepared by the chapter 11 debtor or other plan proponent that is designed to provide "adequate information" to creditors to enable them to evaluate the chapter 11 plan of reorganization.

Equity -

The value of a debtor's interest in property that remains after liens and other creditors' interests are considered. (Example: If a house valued at $60,000 is subject to a $30,000 mortgage, there is $30,000 of equity.)

Liquidated Claim -

A creditor's claim for a fixed amount of money.

No-Asset Case -

A chapter 7 case where there are no assets available to satisfy any portion of the creditor's unsecured claims.

Non Dischargeable Debt -

A debt that cannot be eliminated in bankruptcy.

Objection to Discharge -

A trustee's or creditor's objection to the debtor's being released from personal liability for certain dischargeable debts.

Objection to Exemptions -

A trustee's or a creditor's objection to a debtor's attempt to claim certain property as exempt, i.e., not liable for any prepetition debt of the debtor.

Party in Interest -

A party who is actually and substantially interested in the subject matter, as distinguished from one who has only a nominal or technical interest in it.

Plan -

A debtor's detailed description of how the debtor proposes to pay creditors' claims over a fixed period of time.

Plaintiff -

A person or business that files a formal complaint with the court.

Preferential Debt Payment -

A debt payment made to a creditor in the 90-day period before a debtor files bankruptcy (or within one year if the creditor was an insider) that gives the creditor more than the creditor would receive in a chapter 7 case.

Priority -

The Bankruptcy Code's statutory ranking of unsecured claims that determines the order in which unsecured claims will be paid if there is not enough money to pay all unsecured claims in full.

Proof of Claim -

A written statement describing the reason a debtor owes a creditor money. (There is an official form for this purpose.)

Reaffirmation Agreement -

An agreement by a chapter 7 debtor to continue paying a dischargeable debt after the bankruptcy, usually for the purpose of keeping the collateral or mortgaged property that would otherwise be subject to repossession.

Secured Creditor -

An individual or business holding a claim against the debtor that is secured by a lien on the property of the estate or that is subject to a right of setoff.

Secured Debt -

Debt backed by a mortgage, pledge of collateral, or other lien; debt for which the creditor has the right to pursue specific pledged property upon default.

341 Meeting -

A meeting of creditors at which the debtor is questioned under oath by creditors, a trustee, examiner, or the United States trustee about his/her financial affairs.

Typing Service -

A business not authorized to practice law that prepares bankruptcy petitions.

United States Trustee -

An officer of the Justice Department responsible for supervising the administration of bankruptcy cases, estates, and trustees, monitoring plans and disclosure statements, monitoring creditors' committees, monitoring fee applications, and performing other statutory duties.

Unscheduled Debt -

A debt that should have been listed by a debtor in the schedules filed with the court but was not. (Depending on the circumstances, an unscheduled debt may or may not be discharged.)

These terms are for the general public to have a better understanding of bankruptcy and the terminology that accompanies the filing or inquiry of a bankruptcy.

Article written by Rick Munster

Rick Munster is the Media Planner for http://www.DebtReductionServices.com