Getting a fresh start in bankruptcy is usually the single most important event in any person’s financial life. Yet, despite the importance of planning and properly executing a bankruptcy, we have found that a number of people make the same mistake over and over again when preparing to file for bankruptcy. Some of the most common are:

• Refusing to consider bankruptcy until it’s too late: This is a pretty easy one to figure out, but it’s also a surprisingly common mistake made. Too many people convince themselves that they’re not really in financial trouble, or at least not in as much trouble as they actually are. It’s far easier to get things under control if you seriously consider bankruptcy as soon as you realize that your finances have become too much for you to handle.
• Using a home equity loan to “pay off” debt: This just isn’t a very good option for most people. First, you’re basically borrowing secured debt to pay off unsecured debt-not a good idea. You’re also putting yourself in danger of losing your home if you can’t continue making payments on the home equity loan. Then you’d be in even bigger financial grief than you already are!
• Using a retirement account to pay off debt: Using a 401(k), IRA, or other qualified tax deferred retirement account to “get out of debt” just isn’t the wisest thing to do. First of all, it puts your future financial security in jeopardy-which can really hurt you in the long wrong. Consider the fact that, while you may have no problem getting a new or second job right now, later on when you’re retirement age it may not be quite as easy as it is now. While age discrimination is illegal, do you really want to take that risk? Also keep in mind that by cashing out a retirement account now, you will be taxed on that income which could take a bigger chunk out of your funds than you’re prepared for right now.
• Not hiring an attorney to represent you: While law doesn’t require you to do so, it’s definitely a good idea for most. Hiring an attorney with experience practicing bankruptcy law will give you a knowledgeable advocate on your side that will make sure you take all proper steps during the bankruptcy process.
• Failing to list all your creditors: All I can say on this one is-don’t do it! You must disclose all of your creditors on your bankruptcy filing. If you don’t do so, any debt you leave off (especially intentionally) will likely not be discharged along with the debt you did disclose. Additionally, you could risk having your bankruptcy case dismissed by the judge if it’s determined that you knowingly left any creditors off your petition. “Always list every debt; even if you think it is non dis chargeable, it may be discharged anyway. Even include last month
  
  

There is little doubt that most people and businesses are glad to see 2009 pass, but what does 2010 hold in store mainly when it comes to bankruptcy filings?

The 2009 calendar year saw the bankruptcy filings of companies that were once thought impermeable to such a development. We can expect to see more pre-packaged bankruptcy filings this year by large businesses. This type of bankruptcy has always been around, but it was turned into an art form in 2009. The basic idea is to put the screws to the creditors while threatening a bankruptcy filing. Those creditors that don’t agree to the deal being offered are then washed away in bankruptcy while those that agree come out the other side with some interest still in the company, often an equity interest. The second trend we will see in 2010 is the continuation of huge bankruptcy filings. The difference is you and I will not recognize many of the names. These companies will be behind the seen entities. The number on industry where this will occur is in commercial real estate. Everyone from mall owners to brokers to, well, anyone associated with the industry is going to be in big pain. 2009 started the commercial real estate market implosion, but 2010 will see the biggest bloodletting.

The third development will be the constantly “hidden” second great depression. People say we were saved from a great depression, but this isn’t true. The key is the banks. More banks failed in 2009 than 2007 and 2008 combined. The government is just doing a good job of keeping the news under wrap. Unemployment is another reason for filing bankruptcy well; the reported rate is just over 10 percent. In truth, it is closer to 20 percent. The official rate does not include people who are working part time or haven’t had a job in a year. All of this will lead to more personal and business bankruptcy filing.

Economic hope in 2010, the good news is we’ve become stabled from a confidence stand point. That is important because it means people will go out and spend at least a bit on things. Regardless, the panic of 2009 has ended and one can expect a bit of stability in 2010. Will there be a recovery? Technically, we are already in one, but the effects won’t be felt by people like you and I until the end of 2010 or early 2011. Still, that is better than where we were in January 2009.

If you are feeling weighed down by the debt that you are carrying and you believe that bankruptcy is your best solution, please know that some of the credit card debt you have accumulated may not be dis-chargeable. Section 523(a) (2) of the federal Bankruptcy Code addresses the problem of credit card binging. This clause exempts from discharge “debt that was obtained if an individual made material and false representations about his financial condition.” This may mean that a person submitted fraudulent information on the credit card application or knowingly made purchases for which he knew he would not be able to pay. The latter issue is the more common situation. A credit card company is going to use Section 523(a) (2) to challenge the discharge of your debt if one or more of the following events exist:

• High usage of credit card before filing for bankruptcy
• The use of the card for recent vacations or travel
• Using the card while unemployed or otherwise without reasonable ability to repay
• large balance at the time of filing

One precise point in the Bankruptcy Code, Section 523(a) (2) (C), deserves special thought from all of those shoppers who are determined to find the perfect gift regardless of cost. Consumer debts owed to a single creditor that total more than $500 for luxury goods or services within ninety days of filing for bankruptcy will be considered non-dis-chargeable. And, by luxury items the law is not referring to fur coats and yachts. Instead, luxury goods are defined as “goods or services reasonably not necessary for the support or maintenance of the debtor or a dependent of the debtor.”

If you spend thousands of dollars in December knowing all along that you plan to file for bankruptcy once the New Year rolls around, your plans for debt relief may be postponed. If you know that you will not be able to pay for the bills you created during Christmas, you will have to wait at least four to six months into 2010 to file for bankruptcy. In the meantime, you will be expected to make regular payments to your creditors.

When it comes to subjects of bankruptcy, Texans are in a better position than many others in our country. In 2008, our state ranked forty-sixth in the country for number of bankruptcies filed. While residents of the Lone Star State are proud of being the biggest and best in so many areas, this is one ranking for which we should take pride in being nowhere near the top. However, this relatively good standing does not mean that there are not thousands of Texans who are struggling to pay their bills every month. With the pressure to be a good consumer from the moment that the doors open on Black Friday until the exchanges are made and the clearance items are tagged the day after Christmas, the end of the year only makes already difficult situations even worse.

If you believe that you may be a candidate to file for Chapter 7 bankruptcy, which essentially offers a fresh financial start to those who qualify, make sure that you do not at this point begin to create debt that cannot be discharged. The time to consult with an experienced bankruptcy attorney is now. You need to receive solid legal advice concerning your financial options and any spending pitfalls to avoid while the paperwork is being drafted. Once you know where you stand, try to relax and enjoy the rest of the holiday season at home with family and friends and not at the local mall. Your credit rating and your legal counsel will thank you for it.

You may learn a hard lesson about the consequences of your spending practices; the bottom line is that you should not view an intended declaration of bankruptcy as an excuse to make everyone happy with the expensive gifts under the Christmas tree.

People filing for bankruptcy have one major concern that is whether they can keep their property if they file for bankruptcy. In the majority of circumstances all of the assets of the person can be protected in a bankruptcy through the use of bankruptcy exemptions. There are many types of protection available, viz. Wildcard protection. You also have the provision to protect your funds in checking and savings accounts if some portions of the wildcard is unused.

These are either California Code of Civil Procedure (CCP) 703 or 704. We cannot “mix and match” from the two. There are some similarities between these exemption lists, but also some major differences. Therefore, expert legal guidance is imperative for any person filing bankruptcy. The failure to correctly plan for the bankruptcy filing and use the correct exemptions can actually cause some people to lose property that they could have been protected. When filing for bankruptcy in California you may only use one of the two bankruptcy exemptions. If you do not own a home or have very little equity in your home, then generally you will select the protections of 703.

Advantages of Mortgage refinancing: Mortgage refinancing allows you to amend your mortgage to improve your current needs. If you refinance, you have the aptitude to start from the very beginning with a new mortgage. You can change your term, payoff existing debt or significantly lower your monthly commitments and can be a great bankruptcy substitute too.

Refinancing is endow with a prospect to correct a mistake you made in taking out your existing mortgage or simply make a good mortgage even better. Either way, you’ll increase your short and long-term monetary precautions and increase the probability that hard times won’t put you at risk of losing your home.

Is your small business firm on the threshold of financial failure? The proprietor has to know precisely when to make that call. This is not an easy decision and a business owner should first tire out all other options. After the verdict to close the firm, actions have to be taken such as hiring a bankruptcy public prosecutor and filing for bankruptcy.

While most small-business owners begin their new ventures with a dream of huge success in the market, many comprehend that there are momentous risks to starting and running a business. Although some small businesses succeed, others inevitably fail and must find a way to repay debts owed in a financially responsible manner. Poor financing is another reason small businesses fail, falling right behind poor management. Sufficient funding is vital to the success of small businesses.

A bankruptcy discharge releases the defaulter from personal accountability for certain specified types of debts. In other words, the non payer is no longer legally required to pay any debts that are discharged. It serves as a breather for defaulters, who can start afresh to pay back the debt. Certain exceptional debts that are deceitful or illegal proceedings, alimony, student loans, child support and taxes are not dis-chargeable thus remains payable.

The discharge is a permanent order barring the creditors of the nonpayer from taking any form of collection action on discharged debts, as a matter of fact any means of collection including legal action and communications with the debtor, such as telephone calls, letters, and personal contacts. The bankruptcy discharge varies depending on the type of case a debtor files: chapter 7, chapter 11, chapter 12, or chapter 13.

• Chapter 7: A bankruptcy judge endows the discharge as soon as the time for filing a complaint expires. The discharge can also be granted when the time set for filing a proposal for the release of a substantial case expires. This typically happens after four months of the date the defaulter files the case in a bankruptcy court.
• Chapter 11: Bankruptcy the discharge is granted to the individual by the court, with immediate effect, when all the payments under the plan have been completed by the debtor.
• Chapter 12: Bankruptcy is for family farmer or fisherman and the discharge takes place four years after it is filed.
• Chapter 13:On the whole is debt adjustment for individuals with regular income. The debtor usually gets three to five years to pay of debt. Due to this, the discharge takes place four years after it is filed.

How does the debtor get a discharge?

The debtor will automatically receive a discharge, unless there is lawsuit relating objections to the discharge. The Federal Rules of Bankruptcy process set for the clerk of the bankruptcy court to mail a copy of the discharge order to all creditors, the U.S. trustee, the trustee in the case, and the trustee’s attorney, if any. The debtor and the debtor’s attorney also receive copies of the discharge order.

What can the debtor do if a creditor makes an effort to collect a discharged debt after the case is over and done with?

If a creditor attempts to collect debt on a discharged balance due, the debtor can file a proposal with the court, reporting the action and asking for the case to be reopened to address the matter. The bankruptcy court will often do so to ensure that the discharge is not violated. The discharge represents a permanent statutory ban prohibiting creditors from taking any action, including the filing of a lawsuit, designed to collect a discharged debt. A creditor can be allowed by the court for violating the discharge ban. The normal permit for violating the discharge ban is civil contempt, which is often punishable by a fine.

Can the discharge be invalidated?

The court may cancel a discharge under certain circumstances based on allegations that the debtor: obtained the discharge fraudulently; or failed to explain any misstatements discovered in an audit of the case or fails to provide documents or information requested in an audit of the case. Typically, a request to cancel the debtor’s discharge must be filed within one year of the discharge or, in some cases, before the case is closed. The court will decide whether such allegations are true and, if so, whether to cancel the discharge.

May an employer terminate a debtor’s employment solely because the person was a debtor or failed to pay a discharged debt?

The law provides express prohibitions against discriminatory treatment of debtors by both governmental units and private employers. A governmental unit or private employer may not discriminate against a person solely because the person was a debtor, was in debt before or during the case, or has not paid a debt that was discharged in the case.

Bankruptcy can bring relief to individuals with financial crisis, but it does have a lot of disadvantages as well! It hampers the credit report; once bankruptcy is filed it remains on the credit report for the next ten years. During this period of time it is difficult to get credit from the banks, even though one gets the credit, the interest level is very high.

Following are some of the advantages and disadvantages of filing a chapter 7 bankruptcy which is among the most commonly filed:

Advantages:

• Debt amount is not specified
• Any wages earned after bankruptcy can be kept by the debtor
• Any unpaid balances due after assets have been distributed are discharged
• Most cases are discharged within 3 to 6 months

Disadvantages:

• The non exempt property is sold by the trustee
• It only temporarily stops foreclosure
• All debts are not discharged.Ex (Child support, taxes, student loan)
• Trouble for the Co-signers
• Once filed, withdrawal is difficult
• Damages credit rating
• Can be filed every six years

Filing bankruptcy offers certain advantages and it may be the right choice however, before deciding to file bankruptcy you should be familiar with the advantages and disadvantages of chapter 7 bankruptcies

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Bankruptcy is by far the best option to get out of financial crisis as the bankruptcy laws protect the individuals from getting any more threats from the creditors.Inspite of this they are extremely concerned about their credit ratings. People struggle and try to stay as current as possible. It nearly takes a decade to build up a good credit score.

Although the creditors are willing to work with the debtors, they probably will destroy the credit score, by showing multiple late payments. Filing for bankruptcy actually improves the credit score because the balances on the outstanding debts are wiped out or discharged.

Bankruptcy stays on the file for nearly 10 years, so it is very difficult to obtain credit from any bank or creditors and even though he gets a credit, the interest level is very high.

Lenders look at the way you have paid your bills in the past as an indication of how you will pay your bills in the future. A bankruptcy is an adverse rating in this respect, but creditors can also see how your credit was before the circumstances which caused the bankruptcy. If you had a good credit history and paid your bills on time before the bankruptcy, you may find that it is easier to re-establish credit than if you were perpetually behind on your payments and had judgments against you.

Many people go to the bankruptcy lawyers to get an idea of how bankruptcy laws work. They are well aware that once bankruptcy is filed there will be no threatening calls from the creditors, which is an added advantage, but they are equally concerned about their credit report and try their best to keep their credit reports up to date.

Bankruptcy is one of the most complex or specialized area of law. As the issues are not always simple or apparent, a lawyer should be chosen in such a way that he can work according to the consumer