Why Should I File for Bankruptcy?
Why Should I File for Bankruptcy?
Financial problems these days are very common and you shouldn’t be ashamed of admitting your too far into debt. Outstanding debts can occur in a variety of different ways. You could be swamped with overwhelming medical bills, laid off from work, or worse. Financial troubles loom everywhere, but luckily theres still one way out If your in too deep. Knowing when and when not to file a bankruptcy can sometimes be tricky, but maybe I can help. If your just overwhelmed with debt and can no longer pay then bankruptcy is definately an option for you. When you file a bankruptcy to wipe your debt completely clean its called a ‘discharge of debt’. Discharging your debt will start you over with a clean slate. It doesn’t matter if you file a Chapter 7 or a Chapter 13 bankruptcy both will wipe most, if not all, of your debt out. If you can no longer pay your mortgage and your house is up for foreclosure then bankruptcy is a viable option for you. A bankruptcy can help stop the sale of your house, but it will not wipe out the debt owed on your current mortgage. What a bankruptcy will do for your mortgage is help create a repayment plan for the payments your behind on. A bankruptcy can also help keep your car and various other pocessions from being repossed. If your car has been repossed already by the bank, a bankruptcy can force the bank to give you back your car. Unfortunately this is only the case if you file the bankruptcy quickly enough after your car is repossessed. Any debt you own for these items will then be consolidated into a ‘bankruptcy plan’. A bankruptcy plan means, that a bankruptcy trustee will be directly responsible for your debt, and all your payments will be paid to them instead of to the finance company. A bankruptcy plan is made to be in your best interest. If you plan to file a bankruptcy because of medical bills then that may be a good option. Whether you were in the hospital for a major illness, or from a car wreck, or whatever, sometimes your medical bills can pile up to an exponential amount. If you can no longer afford to pay these bills then a bankruptcy can dramatically reduce your medical bill debt. One of the major reasons people file bankruptcy is because loss of work. People easily become comfortable with their spending habits at the income their making. Sometimes the unthinkable occurs and you lose your job. The bills can quickly pile up. Often times this is compounded with medical bills also since a lot of people can no longer work because of medical reasons. If you have an incredible amount of debt, don’t be afraid to ask for a little help. Filing a bankruptcy can repair your financial burdens and get you back on your feet.'<a href="http://nicholasf.wordpress.com/2007/12/16/why-should-i-file-for-bankruptcy">Why Should I File for Bankruptcy?</a>' was brought to you by Legal Forms Bank .Biz where you can download 'do-it-yourself' <a href="http://www.legalformsbank.biz">legal forms online</a>. They help average people just like you to file for <a href="http://www.legalformsbank.biz/bankruptcy.asp">Personal Bankruptcy</a>.
Source: www.ArticlePros.com
Shouldn t you be able to discharge your student loans in a bankruptcy?
Many students today leave college and graduate schools with mounting bills before they ever commence their employment life. In many cases these student loans can amount to an excess of $200,000. The monthly payments new graduates face can be as significant as $1,200 per month. Couple that payment with the uncertainty of the US and world economy and the situation truly appears to be grim. Many of today s young professionals and working class amass large unsecured debt through credit card purchases just to get by. They do not earn even as much money as the median person in their state. Many have purchased homes with current fair market values worth many thousands of dollars less then their mortgages, and in many cases fall behind on their payments. What are their options negotiate with their creditors? If these debtors can not afford to commit to the massive payments, then negotiation is not an option. Their only true salvation is a chapter 7 bankruptcy. The debtors certainly can get some relief from filing for bankruptcy. If they have incurred massive credit card debt, medical bills, or even judgments for failure to pay debts, those all can be wiped out as unsecured debt. If they can not afford their home, they can always walk away from it. Even if the bank can not recoup their money and obtains a deficiency judgment against the debtor, that judgment is not secured as the mortgage was, it can also be stripped. However, many young debtors largest concern and most significant payment comes in the form of their student loan. What happens to that debt? Currently, a student loan is not secured in any collateral, but it is considered a priority debt, and can not be wiped out quite so easily. In order for a debt to be discharged, it first must be classified as a consumer debt. The debt must have been incurred for a personal, household or family purpose. For example, most courts have held that taxes are not consumer debts within the meaning of the Bankruptcy Code. Debts incurred in the production of income are generally not considered consumer debts. Compass Bank v. Meyer (In re Meyer), 296 B.R. 849 (2003). Other courts, including two courts of appeals, have adopted the ”profit motive” test. Baskin v. G. Fox and Co., 550 F. Supp. 64 (D. Conn. 1982). Under this test, a debt is not a consumer debt if it ”was incurred with an eye toward profit.” In re Booth, 858 F.2d 1051, 1055, (5th Cir. 1988). If a debt is incurred partly for business purposes and partly for personal, family or household purposes, the term ”primarily” in the definition suggests that whether the debt is a ”consumer debt” should depend upon which purpose predominates. Presumably, this determination would normally turn on the purpose for which most of the funds were obtained. In re Booth. Under this test, courts have concluded that student loans may or may not be consumer debts, depending in part on the motivation for obtaining them. In re Stewart, 175 F.3d 796 (B.A.P. 10th Cir. 1997). The court held a student loan classification depends on facts; in the case, classification of a portion of medical school loans as consumer debt was not erroneous. If a court determines that a student loan is a consumer debt, which in and of itself still will not provide grounds to discharge the loan. A court must find pursuant to Section 523(a)(8) of the US Bankruptcy Code, that the student loan qualifies as an undue hardship which allows the court to discharge an otherwise nondischargeable priority debt if excluding the debt from discharge will necessitate an undue hardship on the debtor or the debtor’s dependents. Such a judicial decision is discretionary with the bankruptcy judge in determining whether payment of the debt will cause undue hardship on the debtor, thus defeating the ”fresh start” concept of the bankruptcy laws. The most widely used test for evaluating the dischargeability of a student loan under section 523(a)(8) states that the debt is dischargeable if three conditions are met: 1. The debtor cannot maintain, based on current income and expenses, a ”minimal” standard of living if forced to repay the loans; 2. There are indications that the state of affairs is likely to persist for a significant portion of the repayment period; and 3. The debtor made good faith efforts to repay the loans. Brunner v. New York State Higher Educ. Servs. Corp., 831 F.2d 395 (2d Cir. 1987) The Supreme Court has stated that section 523(a)(8) is ‘’self-executing” and that ”[u]nless the debtor affirmatively secures a hardship determination, the discharge order will not include a student loan debt.” Tennessee Student Assistance Corp. v. Hood, 541 U.S. 440 (2004). In other words, student loan debt remains due until there is a determination that the loan is dischargeable. Underwood v. United Student Aid Funds, Inc. (In re Underwood), 299 B.R. 471 (Bankr. S.D. Ohio 2003). To demonstrate the current criteria used by the Bankruptcy court to discharge a student loan, the district of Massachusetts has set a high bar. The debtor was a 32 year old unmarried woman who suffered from relapsing, recurring Multiple Sclerosis. The debtor’s currently monthly income totaled $ 1101. The court found that the debtor’s minimum expenses exceed her income. The debtor would have to give up her telephone and her gas money to become even marginally solvent. The court also found that the debtor had made Herculean efforts to both find work of a type she could perform and actually work despite facing daunting physical obstacles. Finally, the court found that the debtor’s current condition, which had worsened since she first became symptomatic, would continue to impair her ability to find employment that would improve her financial status. The court reasoned in part that it had been able to observe many of the debtor’s symptoms first-hand. Denittis v. Educ. Credit Mgmt. Corp. (In re Denittis), 362 B.R. 57 (First Circuit for the District of Massachusetts 2007). As a further example of how precarious a debtor s situation must be, the same court as above denied the debtor s motion to discharge her student loan. The court held the educational loans were not dischargeable under 11 U.S.C.S. 523(a)(8) because the debtor’s prospects for increasing income over time were promising and, by slightly cutting her expenses, she could make the minimal payments towards her student loan obligations under the Income Contingent Repayment Plan. Brunell v. Citibank (SD) N.A. (In re Brunell), 356 B.R. 567 (1st Circuit, 2006).The forgoing article on bankruptcy relief from student loans was drafted by Attorney Michael Goldstein, a <a href="http://www.goldsteinandclegglaw.com/bankruptcy_blog">Massachusetts Bankruptcy Attorney</a>.
Source: www.ArticlePros.com
How To Keep A Bankruptcy List To Make Your Bankruptcy Problems Private
Nowadays, you see many commercials on TV trying to convince you that your credit score will determine just about every aspect of your future They tell you that you may not be able to get the job you wanted, the car you were dreaming about, or even the right spouse if you don’t have the right credit score Okay, so maybe they don’t mention the spouse, but I’m sure that will be coming up in the future commercial . .They make it seem like your whole world is going to come crashing down if you miss a few payments and have a negative credit rating So I can just imagine what they would say about someone who declares bankruptcy Not only will your credit be damaged, but your name and financial information may end up on some sort of bankruptcy list for everyone to see Is it really that bad? . . .Well, the truth is that bankruptcy is a big deal, and it should be treated as such Also, your bankruptcy filing will become a matter of public record, which means that people may find out about it and do some digging Are you going to be blacklisted when you try to apply for a job and make any kind of financial transactions? No, I don’t think so . .That’s not to say that bankruptcy won’t have its negative consequences After all, you just had your debts wiped out, and this will make creditors think twice (or three times) about giving you a loan But you will be able to gradually improve your credit score, especially if you are willing to pay higher interest rates In fact, some lenders even seek those who have just filed for bankruptcy because they don’t have any other debts to worry about! . .The bottom line is that you must do what is best for your family and your financial future, and you’ll only know this if you look over your situation carefully and discuss things with a bankruptcy lawyer Otherwise, don’t worry about being put on any kind of bankruptcy list Do what you need to do for your family, and don’t worry about what other people think .
Source: www.rsstnx.com
