Compulsory Rules Made By Bankruptcy Courts For Making Bankruptcy Petitions

There are various debt solutions that can help individuals and organizations overcome disturbing financial difficulties. Based on the financial situations, people need to decide on the solution that’s more ideal for them. Bankruptcy is a legal procedure used by individuals and organizations to declare their incapability to pay off debts. Bankruptcy is one of the most significant debt solutions that can help individuals clear their debt burdens in a methodical way.

Personal bankruptcy is an option available for individuals to legally declare their inability to make debt payments. There are two types of personal bankruptcies, to cater to the needs of different debt situations, namely, chapter 7 bankruptcy and chapter 13 bankruptcy. Chapter 7 bankruptcy is ideal for individuals possessing non-exempt assets. The court takes hold of these assets to make debt payments to the creditors. Chapter 13 bankruptcy, on the other hand is a convenient option for individuals who make a decent income in spite of their severe financial difficulties.

Let us discuss in brief the various rules made by bankruptcy courts to enable you to make an effective petition for personal bankruptcy.

To file for personal bankruptcy, it is compulsory for individuals to submit documents that prove their annual income and monthly expenditures. Some of these documents include a list of creditors, proof of current personal expenditures, photo identification, copy of paychecks, bank records, a pay stub, rental agreements and all other documents proving the income during the last six months prior to the bankruptcy filing. Apart from these tax returns and transcripts from the last 4 years are also required to be submitted.
It has been made a compulsory rule of the court for individuals to complete a credit counseling course before the bankruptcy filing. The course must be completed under a certified credit counselor and the certificate must be presented at the court during the filing.
It is also compulsory to pass a means test to prove that you are actually eligible for bankruptcy filing. The means test is required to prove that an individual’s annual income is not more than the median income for the size of their family in their state.
Once the filing is complete, bankruptcy courts demand individuals to complete a course on Personal Financial Management. Courts have the right to shut down a case if they find out that an individual has submitted the Certificate of Completion without actually completing the course.
The court allows individuals to file for bankruptcy as often as their financial situation requires. However, it is required to maintain a definite time gap between two consecutive petitions in some cases. For example, an individual can file for chapter 13 bankruptcy without maintaining any time gap between two filings in a row. But in case an individual has filed for chapter 7 bankruptcy once, they need to maintain an interval of at least 8 years before they can make another petition.

A knowledgeable attorney can provide necessary information on all the important rules made by bankruptcy courts for successful and effective bankruptcy filing.

How Filing For Bankruptcy Affects Your Credit Score

Those who consider filing for bankruptcy have numerous questions regarding their future, and they wonder if they’re making the right decision for their particular situation. First of all, once a bankruptcy appears on your credit report, it’ll remain there for 10 years. While you might be able to achieve some amount of credit, because you declared a bankruptcy, it’ll negatively impact your overall credit score with the 3 major credit bureaus.

One question in particular that’s uppermost in the minds of those who declare bankruptcy, is their ability to obtain additional credit cards down the road, as well as what their credit rating is for buying a home or any other big purchase. If a person owes thousands of dollars on a credit card, it must be listed on their bankruptcy forms as a debt. These forms are filed under penalty of perjury and if fraud is detected, the bankruptcy process will come to a screeching halt.

Perjury is a federal crime, and you’ll end up having to pay a hefty fine or doing a number of years in prison, if you willing and knowingly falsify any documents that you submit in your bankruptcy case. The Internal Revenue Service takes bankruptcy fraud very seriously, and will prosecute those who commit it to the fullest extent of the law. They have enormous resources at their disposal, and can track down anyone, anywhere regardless of who they are or where they hide.

As for your credit cards, you won’t have to list them on your bankruptcy forms as debts unless you’ve made purchases with them. So it’s up to you whether or not you choose to keep or discard them. If you decide to retain them, you may not have them in your possession very long because your particular credit card company might decide to cancel them as a precautionary measure, since you’ve proven that you can’t manage your spending habits.

While a person can still obtain a credit card even after filing a recent bankruptcy, their credit limit – if the person gets one – will be very low. In addition, the person can expect to pay exorbitant interest rates because (s)he is a much higher risk.

Those particular type credit cards should be avoided entirely, because you’ve proven your inability to manage them properly. The best credit card for someone who has recently filed for bankruptcy is a secure card, and many banks offer them. The way they usually work is you deposit a certain dollar amount, say $200, into an account, and that $200 is your credit limit.

If you use your secure card responsibly, after a period of time, the bank may offer you a regular Visa or MasterCard with a low credit limit at first. As you prove yourself over time by handling your new credit card responsibly, your credit limit and credit score will increase accordingly.

There are those who believe that if you declare bankruptcy, you won’t be able to obtain a loan for a down payment on a home for at least the next ten years. This is simply not true. Usually after only two years, you should be able to qualify for a loan. Even though the bankruptcy filing will remain on your credit report for 10 years, lending institutions will take into account how responsibly you’ve handled your financial affairs since you filed. If they feel you’ve done well, they’ll more than likely offer you a loan based upon your good faith and credit.

Are You Stressed And At The End Of Your Rope? Filing Bankruptcy Might Be The Answer

While the mainstream media keeps reporting a banner recovery year for the US, most Americans are seeing things a little bit differently than the press. Americans are being financially squeezed to the point of no return. Last year, the government increased the payroll tax taking away spending dollars from the middle class. Added to that, Obamacare went into effect at the beginning of 2014 further reaffirming a lack of funds for most Americans. As the press keeps downplaying all of these hits on the middle class, the truth shows in the dismal financial reports of the big-box stores nationwide. It has nothing to do with bad weather, but more like a bad economy. Americans are starting to wake up to the reality that this is not going to end well. Big-time economists like Marc Faber have come out with brazen comments saying that the economy is going to collapse in 2014. Dr. Doom and Gloom also predicted the financial crisis in 2007 and doesn’t seem very far off the mark from what’s coming in near future in my opinion.

For all of those wearing the rose colored glasses and refuse to see the truth that the US is on the verge of bankruptcy and in no way is in any kind of recovery, just need to take a look at the facts. First of all, nationwide housing sales are in a steady decline over the last year. Zero Hedge reported 20% of the buyers under the age of 33 have delayed any home purchases because of the outstanding student debt. Second, student loan debt has now created its own bubble by surpassing $1 trillion. Because there’s no jobs, many young adults are doubling down and staying in school longer so they don’t have to pay on this unsustainable debt. When they finally leave college, they find out their way overqualified to take any job that might be available. Thirdly, in a recent study it came out that 40% of Americans could not come up with $2000 for an emergency. Taking that further, less than 25% of US citizens have enough money saved up to cover six months expenses. These facts show that most Americans are living paycheck to paycheck and on the verge of a bankruptcy filing. Since the market virtually collapsed back in 2007, the two big to fail banks have been using smoke and mirrors to give the appearance of a recovery. The federal reserve, that has neither anything to do with the federal government or any kind of reserves, has been printing trillions of dollars to put liquidity back in the markets showing a phony recovery. For anyone that doesn’t believe it, all they have to do is look up quantitative easing and find out for themselves.

With these times getting darker and darker, the middle-class really needs to take an inventory on what is important in their lives and if necessary file bankruptcy to get out from under debt. While nobody really wants to file for bankruptcy sometimes it’s unavoidable. Many people in the process of filing bankruptcy find themselves overwhelmed with stress but it’s no worse than the anxiety felt prior to filing. It’s common for people to consider the process an emotional one. It’s easy for a bankruptcy attorney to tell their clients not to worry, but to the person it feels like the whole world is crashing down around them. Common feelings include despair, failure, depression and anger. Many couples find themselves fighting about who’s at fault for the financial failure. At this time, they should be working together to get through the problem that many end up getting divorced.

For someone filing bankruptcy there are many ways to eliminate the stress of the process. The first is taking a walk. Many people hate going to the gym so it’s just as easy to take a walk around the block. It’s amazing how fresh air will clear someone’s head and just getting the blood pumping from the walk will get rid of some of that anxiety. Another thing to do is to listen to music. It sounds primal but music relaxes many people. For those that like rock, crank it up. For those that have access to a jacuzzi, hot water will relax the person from the stress of the bankruptcy filing. Sometimes this will make a person be able to relax the tenseness of their muscles and get some sleep. Lastly, do something productive like the laundry, wash your car or any other mindless chore. This will give a person a sense of accomplishment and take their mind off of their financial problems that led to filing bankruptcy. The best news is once the discharge comes in the mail, you can be rest assured that these financial troubles are over and new chapter in their lives is about to begin.