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How Repossession Works

Repossession is the action of regaining a possession, usually a financial institution taking back on object that was either used as collateral, rented or leased, for which payment remains due.  If you are facing repossession of your home or car, you may want to consider declaring bankruptcy to save them.

Filing for bankruptcy will temporarily stop any repossession process, which you may be facing.  Even if your items have already been taken from you, your bankruptcy filing may be able to get them back if you act quickly.

If you file a chapter 13 bankruptcy you most likely will be able to keep both your car and home.  If you file a chapter 7 bankruptcy you can probably keep both for a little while, but in the end you will likely have to end up liquidating them.  This all comes down to what state you live in and what the laws say about liquidating your assets for bankruptcy.

The chapter 7 bankruptcy is a short term solutions, for saving your property.  Most likely you will have to give it up, but with a bankruptcy discharge, you can start over again and start getting your financial life in order.  With a discharge you won’t have to worry about having any creditors calling you or people harassing you, you will have to use cash though to purchase items for the first few years, you won’t be approved for credit.  It you do get approved for any credit, make sure that you can afford the payments, most of them come with a high interest rate.

If you are advised to file for a chapter 13 bankruptcy, you can stop the repossession and foreclosure and hopefully it will save you from losing your home at all.  With chapter 13 you do make arrangements and come up with a financial plan that you submit to your creditors, on how you will pay back the debts you owe them.  During the time frame that you are paying your debt back, creditors are not legally allowed to continue collection efforts or start any new ones.

The main benefit from choosing a chapter 13 over a chapter 7 is to save your home and car(s) from repossession.  Consulting a bankruptcy lawyer in your home state is very advisable here.  They can assist you in figuring out if you would be more qualified for chapter 7 or chapter 13.  They can also help you save your car and home, if the law allows it.

Bankruptcy isn’t always the best solution though, if you have other options for paying your bills and getting your repossessed items back.  If you are in a financial crisis though it may be your only means, for saving your home and car.  If you do declare bankruptcy, you must be able to get your finances back in order so your property doesn’t get repossessed again.  This is because you can only declare bankruptcy every 8 years, so if your facing repossession again, you won’t be able to declare it again, very soon.

How to file chapter 13 Bankruptcy

Chapter 13 bankruptcy is a repayment plan for all your debts.  It is away to reorganize what you owe, get lower interest rates and have 3 to 5 years to pay them back.  The reason some people like to file this bankruptcy instead of chapter 7, is because you will get to keep your assets.

Step by step How To File for Chapter 13 bankruptcy

1. You must attend a approved credit counseling class under the United State Trustee’s Office.  You cannot do anything else until you get a certificate that says you have taken the class.
2. File with court

• The certificate for the credit counseling class
• Federal tax return for previous year
• list of assets and liabilities
• current income and expenditures
• contracts of un-expired leases
• statement of financial affairs
• a debt repayment plan (this is what you will accomplish in credit counseling class)
• Evidence of payment from employers
• statement of monthly net income and any anticipate increase
• Record of any interest that you may have in federal or state qualified education or tuition accounts.

3.  Now you must provide information to the Chapter 13 case trustee:

• A copy of tax return for most recent tax year
• Tax returns filed during the case
• Tax returns for prior years that had not been filed when case began

Bankruptcy Forms:

• A list of all creditors and the amounts and nature of their claims
• the source, amount and frequency of your income
• A list of all your property
• Detailed list of monthly living expenses

4.  When the filing is done you will be appointed an impartial trustee to administer the case.

5.  After 20 to 50 days after you file the your trustee will hold a meeting of creditors.  This is where you meet with all you creditors and answer any questions they may ask.

6.  Unsecured creditors will file their claims with the court within 90 days of the creditors meeting

7.  After the meeting you, the trustee and creditors will go to court to hear the repayment plan.

8.  The court will then decide if your bankruptcy is approved.

Chapter 7 Vs Chapter 13 bankruptcy

If you are swimming in credit card debt and missing payments bankruptcy may be the right option for you.  There are several types of bankruptcy you can file for the main ones are Chapter 7, chapter 11 and chapter 13.  If you are an individual (not a major company) then you going to want to look into Chapter 7 or chapter 13.

Chapter 7
Chapter 7 bankruptcy is the first option that most individuals look at.  It used to be one of the easiest bankruptcies to get approved for, though now under the new bankruptcy laws, it can be a bit more difficult.

Under chapter 7 bankruptcy you must take a means test, which will add your gross income and assets and deducting your liabilities and expenses in the last six months.  Then those numbers are compared with the average median income, in your area.  If you meet the requirements you can then file for chapter 7, if not you will have to look into chapter 13.

If your receive a Chapter 7 discharge you debts are wiped out by the court except:

-debts that automatically survive bankruptcy-Child support, tax debts and student loans.

-debts that the court has declared non dischargeable because of the creditors objection-debts incurred by your fraud or malicious acts.

Chapter 13

With chapter 13 bankruptcy you will not be wiping away your debts, instead you will be devising a plan to pay them back, possibly at a lower interest rate and over a longer period of time.

Before you can file you must take a credit counseling class. You will receive a certificate at the completion of your counseling sessions. You must file this certificate with the court, along with a packet of forms listing what you own, earn, owe and spend. Also needed will be your federal tax return for the previous year and proof that you filed both federal and state tax returns for the past four years.

Chapter 7 or chapter 13

A bankruptcy attorney can really help you with both chapter 7 and chapter 13.  With chapter 7 they can help overcome the new bankruptcy laws and with chapter 13 they can help you devise an appropriate repayment plan

Usually most individuals will try to file on chapter 7 so they can get their debts discharged it also takes less time than chapter 13.

The main problem with chapter 7 is that the laws are much stricter now and with out the help of a bankruptcy lawyer, it will be much harder to be approved.  Chapter 13 is much easier to get approved for.

Finally with Chapter 7 you may loose most your assets to the court to satisfy your creditors, with chapter 13 you have more control and can keep more assets.  This is because chapter 13 is a repayment plan over 3 to 5 years, instead of just a clean slate.

How Bankruptcy Can Help Avoid Foreclosure

If you are in real financial trouble, you may be looking into bankruptcy and foreclosure.  If you have exhausted all your options of trying to avoid foreclosure with your lender, filing for bankruptcy may be the right solution for you.  When you start missing your mortgage payments, you are in a period know as pre-foreclosure, this is the time you need to consider all your options and make some smart decisions quickly.

Usually if you are in Pre-Foreclosure you will have about 4 months until the bank completely forecloses on you.  Use this time wisely and start looking into alternative options.  If you have tried negotiating with your lender, a short sale or deed in lieu of foreclosure and none of these options have worked, it is time to look into bankruptcy.

Filing for bankruptcy can possibly avoid or delay foreclosure on your home.  For instance when you file for chapter 7 or chapter 13 bankruptcies, the court will issue you an “Automatic Stay.”  This is an order for relief, where you creditors must cease collections on you right away.  If your home is scheduled for foreclosure sale, it must be postponed, while you await the bankruptcy proceedings.

Of course it would be great if it all works out this way, but of course there are exceptions to the automatic stay.  A lender can obtain the courts permission to lift the stay, if this happens you may only have a couple months before the house will be sold.

The other exception is if the foreclosure notice has already been filed.  The Automatic stay can’t do much if you are past the pre-foreclosure stages and have already been foreclosed on.  For instance if you have received a three month notice of default and then file for bankruptcy after two months have already passed, the three month would elapse after you’d been in bankruptcy for only one month.  Therefore you will loose any time that you thought bankruptcy would buy you.

Chapter 13

Filing for chapter 13 bankruptcy can help you eliminate the payment on your second or third mortgage.  If your first mortgage is secured by the entire value of your home, you may no longer have any equity to secure the later mortgages.  This will allow chapter 13 to discharge the second and third mortgages and recognize them as unsecured debt.  Which under Chapter 13 usually does not have to be paid back.  You will want to hire a local bankruptcy attorney to make sure this gets done correctly.

Chapter 7

Filing for chapter 7 bankruptcy won’t make your foreclosure go away, but it can buy you time.  It can give you an extra two or three months, before your house can be sold on you.  This time can be vital, for securing a new living situation and saving up money.  Filing chapter 7, you can live in your home free while you waiting for your bankruptcy discharge.  Chapter 7 can cancel your debt that is secured by your home; including the mortgage, as well second mortgage and home equity loans.

In conclusion, if you’re running into some financial hardship, don’t ignore your problems and wait for the last minute to do anything.  If your facing foreclosure, bankruptcy is something that can help buy you time, but don’t just file with out a back up plan.  You have to have some sort of idea on what your going do after filing for bankruptcy and what steps you can take to have more secure future.

How To Get A Loan After Bankruptcy

After bankruptcy most people are relieved, they no longer have to carry the stress of their financial burdens around with them.  A few years after bankruptcy you might be thinking, if it is possible for you to get a loan.  You probably heard several times before you filed for your bankruptcy, that you would never have a car or a home in your name again.  This is inaccurate information; you can get a loan after bankruptcy.

There are firms and people out there that specialize in giving loans to people who have bankruptcy on their record and or bad credit.  There are some instances, were if you filed bankruptcy you will have to wait until the case is dismissed or the creditors are paid to get a loan, but that isn’t always true.  At all comes down to what type of bankruptcy you filed for.

For instance if you filed for Chapter 7 bankruptcy, you must wait two years before getting a loan.  Now lets say you filed for Chapter 13 bankruptcy, you basically have to wait until the creditors have been paid; after your bankruptcy discharge is complete.  This is why it is important to have a knowledgeable bankruptcy attorney, tell them what your future plans are, so they can help you file the most suitable bankruptcy for you.

If you are trying to file the bankruptcy on you own you should know the basics of both chapter 7 and chapter 13. Chapter 7 also called “liquidation” bankruptcy cancels your debts. You may have to liquidate some of your property for the benefit of creditors.  To apply for a Chapter 7 you should get a list of everyone you owe money to and what property you own.  The best route is to talk to a lawyer and show them the list, they can help save some of your property if it is on the exempt list.  Any non-exempt property will be turned over to help pay your debts.

A Chapter 13 is known as the reorganization bankruptcy, this is where you will repay some or all of you debts, with little or no interest.  With this bankruptcy you come up with a plan, on how you are going pay your creditors back.  You have to have a steady income and usually put most your paycheck towards the accumulated credit.  You will need to really prove to the court that you can do this.  You secured debts cannot be more exceeding $922,975 and your unsecured debts cannot be more than $307,675.

Before you can file fore either bankruptcy you must go to a credit counseling class. After you class you and your attorney will meet with your creditors and discuss how you will pay them back.  The creditors have 30 days to disagree with your proposal and 90 days to talk with the court about you and your bills.

The major difference between the two chapters is that with chapter 13 you keep your vehicle, your home and other possessions that you own.  You must find out which one you are more likely eligible for though.  You may not necessarily get approved for the one you want, another good reason to talk to a local attorney.

Bankruptcy Alternatives

Before jumping and filing for bankruptcy, make sure you have explored all other options.  In a financial crisis bankruptcy may seem like an easy solution, but there are alternatives to look at.  Keep in mind that bankruptcy stays on your record for 7 years after you file, so if you can pay off your debt in those years in may be a better option.  In this article we look at alternative options to filing bankruptcy.

One of your main options is to reorganize your debt.  There are many methods for consolidating your debt.  Debt consolidation is basically replacing your multiple loans, with one single loan, usually secured on property.  This loan can reduce your monthly outgoing interest payments, because you will just be paying one loan over a long period of time.

Try selling off some of your personal pricier items.  www.craigslist.com is a free classified website you can use to post personal things you want to sell, like an online newspaper.  If you calculate how much debt you have, go through your home and see what is in there you can sell.  Selling off your things that got you in debt in the first place might not be ideal, but it is better than going bankrupt.  Or think of the bigger items you can sell, house, cars, and large appliances.   You can move into a smaller house and if live somewhere with a bus system, you can get around quite easily.

Try working more; ask other members of the household what they can contribute.  You might have to temporarily get a second job or even ask for a raise at your current one.  It would be better to go up and ask you boss for a raise, then to declare bankruptcy.  The job market is hard out there, so if you have one and your spouse doesn’t, maybe you can recommend them to your boss.  Working together will be less painful, then waiting 7 years, for credit again.

Try talking or writing to your lenders and creditors, be very honest with them.  Tell them you are going to declare bankruptcy, if they cannot help you.  All banks and creditors want to get paid, sometimes they will let you pay back a tiny fraction of what you owe, or even lower your monthly interest rates.  Be blunt with them; ask them what can they do for you and that you need their help.  Don’t try to play any of their games and if they do offer you something, read the fine print, they may off you a lower interest rate for a set time and then double it, causing you to be in trouble again.

Learn about bankruptcy and your local laws.  Bankruptcy varies depending on what state you live in.  You want to be familiar with the process and what happens, in case it does come down to this option.  Some states you can declare bankruptcy and not even notice.  Try to get a local bankruptcy attorney, you may think you can’t afford one, but many will work ‘pro bono’ (free) for people who really need help, but can’t pay.

If you done everything listed and still have no options try taking our free case evaluation, to see what can be done for you.

Bankruptcy 101

Before filing for Bankruptcy to try acquire as much knowledge and information about the process.  First off realize that the process can be quite complex and finding quality legal advice is an excellent first step.  Bankruptcy lawyers that understand the workings of the legal system are the best sources for advice.  A local attorney can help you figure if bankruptcy is right for and if so what type you should file under.

Figure Out if Bankruptcy is Right For You
While it may be easy for an individual to believe that bankruptcy is their main option that is not always case.  Filing for bankruptcy can seem like the easy way out, especially when you have a lot of debt.  This can hold very true for some people, but having knowledge of the whole bankruptcy process can give you options you never knew about.  It is important to understand that bankruptcy is not designed to fix all of your debt problems.  It was put in place fore people who have extreme finical situations and have no ability to pay back the debts they have incurred.

Before Filing for Bankruptcy
It is important to learn about the bankruptcy process, the so-called pros and cons, before you actually file.  Spending time doing online research, join bankruptcy forums to hear about peoples different experiences.  Look into alternative bankruptcy options and talk to debt consolidators. Learn about what life after bankruptcy will be like.  Bankruptcy can be considered as a debt relief option, but it should be considered very carefully before you decide on taking it.

Filing For Bankruptcy
You should take it account how much overall debt you have, versus your yearly take home income.  If your debt is significantly more than you can handle and will take you an unreasonable amount of time to pay off, filing now may be the right option.  Also if you have tried debt relief programs and they have not been able to help, it is time to talk to a bankruptcy lawyer and see what they can do for you.

When you file for bankruptcy, and you receive a discharge you debt will be taken care of and you won’t have to pay back most creditors.  After you file for bankruptcy it can take seven years for it to come off your credit report.

Types of Bankruptcy
If you come to the conclusion that bankruptcy is the best solution for your debt problems, then it is time to start looking into the different types of options.  In most individual cases, a chapter 7 filing is the most common “consumer” bankruptcy.  With chapter 7 you liquidate assets to repay debtors.

Chapter 13 is another form that may work, this is known as the “reorganization” bankruptcy.  It allows indebted individuals to reorganize their debts in an attempt to repay creditors.  You must show a plan to repay them and have proof of a steady income.

Finally keep in mind that with bankruptcy, whichever option you choose will have repercussions.  Do your research and talk to knowledgeable people in the field, before filing.  Proper research, planning and analysis are necessary to find the correct answer for you personal situation.

Steps To Understanding The Bankruptcy Code

Learning about the bankruptcy code and why it was established are two things people might want to understand before filing bankruptcy.  Assorted chapter of bankruptcy like chapter 7 and chapter 13 are taken from the bankruptcy code, which was established by the US congress.

Much of the bankruptcy laws established are to protect people who are having financial problems.  Read below if you would like to find out what the bankruptcy codes are and what it all means to you.

First and foremost these laws were put in place so that there was one uniform law about bankruptcy, which would be found though out the US.  The laws from the bankruptcy code are designed to protect the consumer who is in debt from further problems.

There are four main types of bankruptcy laws that are taken from the bankruptcy code.  You will recognize these laws as chapters.  Chapter 7 is one of the laws that can be found in the bankruptcy code under the heading chapter 7.  These different chapters provide information for people who are in debt.  The bankruptcy code chapters will tell you the various ways that the law can work to keep you safe from unreasonable hassles.

While US government has provided the framework for these laws of the bankruptcy code, each state has the right to pass other laws that will work in accordance with the bankruptcy code.  They won’t change any of the laws, possible just add in factors that pertain to their specific state.  Also the sates can only provide other laws that are compatible with their state’s laws.  The states themselves don’t have the power to govern how the bankruptcy code works.

Although different states can’t vary the basic rules of the code, they do have the right to interpret how bankruptcy claims are filed and acted on in their respective states.  This is one of the main reasons you need to have a bankruptcy lawyer, preferably in your state or who is very knowledgeable of your state laws.  Finding any old lawyer may put you at risk of loosing your bankruptcy discharge, especially if they don’t know the bankruptcy laws in your state.

There are many new laws that you can find when looking through the bankruptcy code.  For instance one of the new laws that you will find is the altered state of the debtor-creditor relationship.  If there is a major change to be done to the bankruptcy code, it will have to be passed by congress.  For instance when the rules of chapter 7 changed, congress had to approve it.

Bankruptcy was established and put into place to address those that are in financial trouble and for creditors to get their money back.  The bankruptcy code has been placed with the consumer’s best interest in mind, so handle the laws with respect. Be responsible and work on your financing, set a budge plan so life after bankruptcy will be pleasant and you won’t have to try and file again.  Bankruptcy is here to help and if you respect the laws of the code, it can relieve some of the financial stresses in your life.

Life After Bankruptcy

A lot of people have built up fear in the word bankruptcy. If you hear that your friend has filed bankruptcy, first thing that may come to mind, is oh they will never get approved for credit again. Sure bankruptcy can be a hard thing to go through, because it means you’re in financial trouble, but there is life after bankruptcy. The main thing to keep in mind after filing for bankruptcy, is all the things you have learned and not to repeat the harmful ones. Here we look at what happens after bankruptcy:

Rebuilding Credit
After bankruptcy there are many things you can do to rebuild your personal and financial status. Everything takes time; especially rebuilding credit, but start slowly and work at it, you will succeed. Many banks will have secured credit cards you can get approved for, where deposits are made by you to cover the line of credit. Some credit cards come with very high interest rates, so they are not recommend for a compulsive shopper, but for someone who has learned from they’re past financial errors. This credit cards can be useful for rebuilding credit, just put a small amount on them and every single month pay it off, even if it is 50 dollars, it will slowly help your credit score.

A chapter 7 or chapter 13 bankruptcy can have long term effect on your credit rating, where most credit your are given will be at a higher interest rate, so this is a good time to practice will power and save up for the items you want to purchase. Any future credit granted, you should repay promptly, this is key to the rebuilding phase. You will see your credit score go up every month if you take care of your bills in a timely matter.

Piece of Mind
One main thing that will be better after bankruptcy is that you won’t be receiving all of those harassing phone calls from creditors. This piece of mind is enough to never make you late on a payment again.

Friends and Family
You may be worried about what friends and family think of you, but it shouldn’t be a concern unless you personally told them about it. Even though bankruptcy is a public record, how many of friends do think read public records.

How it Affects Your Spouse
If you are married in a non community property state your spouse will not be affected by the bankruptcy. In community property states you or your spouse can sign for a debt. So therefore the debt will become the responsibility of both people. These are issues you will have deal with after bankruptcy.

Of course your relationship may have been affected by bankruptcy, since you and your significant other have been going through the hard times together. As you rebuild your credit also work on repairing your relationship if needed seek counseling. But know in the end that you have grown as a personal and life and bankruptcy should improve for you with out the weight and stress that all the debt was bringing you.

Why to Hire a Bankruptcy Attorney

Filing for bankruptcy can be a difficult decision, knowing all your bankruptcy options and what the drawback may be will empower you to decide if bankruptcy is right for you.  Finding a bankruptcy attorney is something that is highly recommended.  Sure you can read plenty of “how to file bankruptcy on you own” articles and information, but nothing can replace having a bankruptcy lawyer on your side.

One of the top reasons for hiring a lawyer is because with the new bankruptcy lawyers, filing isn’t quite as easy as it used to be.  Having an attorney who knows the bankruptcy system, the better off your chances are of successfully filing bankruptcy.  Even if you don’t get denied bankruptcy on you own without a good bankruptcy attorney you could end up owing all non-secured debts (credit card bills).

There are several bankruptcy chapters you can file such as Chapter 7, chapter 11 and chapter 13.  The attorney you hire will be able to tell you which one you will most likely qualify for and benefit from.  The attorney will be able to inform you and what needs to be down if your home is going into foreclosure.

When you file for bankruptcy creditors can set a meeting up with you and ask several questions about what you owe them and why you are filing bankruptcy.  This would also be an imperative time to have a bankruptcy attorney on your side.  They can monitor the question and make sure you don’t get backed into a corner.  When you head to court in front of the judge, a good bankruptcy lawyer, should be able to dispute debts that you owe and creditors are insisting you still pay, even if the bankruptcy goes through.  You don’t want to end up filing for bankruptcy and still owe a bunch of creditors, when it is all said and done.

Creditors may also claim fraud against you just because you lost your job or had unexpected bills to pay.  This would be the exact moment you would want a bankruptcy attorney to take a level headed approach in defending you and get as much debt included in your bankruptcy discharge.

Make sure when hiring an attorney, you find a local one in your state.  This will be benefit you greatly because the bankruptcy laws can vary from state to state.  So finding an attorney, who is most knowledgeable in your state laws, can only best for you in the end.  If your hiring a lawyer from another state, possible next to your state, make sure they are up to speed on the laws where you live.

Remember you are hiring a bankruptcy lawyer to benefit you.  You don’t have to go through this whole process alone.  Also your not going through it for nothing, you don’t want to attempt to handle everything on your own and then have your bankruptcy be discharged.  A good bankruptcy lawyer will get your out of debt and relieve your financial burdens.  Yes it does cost money to hire a bankruptcy attorney, but it is money well spent that is actually going towards your financial freedom.  Most bankruptcy lawyer, will give you a free case evaluation; if you still have hesitations, take the this approach and make sure you feel comfortable working with the attorney.