Among the worst effects of the Great Recession of 2008-09 were mass lay-offs, underemployment, prolonged unemployment and reduced pay. These resulted to financial crisis to millions of Americans and forced majority of those affected to live a more moderate or modest lifestyle.
Doing away with whatever little extravagance millions of individuals enjoyed was not all these people had to let go, however. Due to the mounting bills and debts that they are no longer able to pay, such as mortgage payments, car loans, personal loans, credit card loans, etc., thousands also faced (and actually) lost their home or car because of repossession, while thousands of others suffered stress as they worried about their debts, and the hounding and humiliating tactics employed by collecting agencies to make them pay their debts.
There is a way, though, for debtors to pay and free themselves from debts and have a brand new start at their financial life: Chapter 7 Bankruptcy.
Chapter 7 is just one of the many chapters in the Bankruptcy Code, a law that the U.S. Congress passed in 1978. Otherwise known as Liquidation Bankruptcy, Chapter 7, as explained in detail on the website of Ryan J. Ruehle Attorney at Law, LLC, “offers the near-total liquidation of all debts that an individual may hold, giving those who pursue this option the ability to start their financial life anew.”
The immediate benefit of Chapter 7 Bankruptcy, once it is filed in court, is the cessation of all forms of harassing tactics used by collecting agencies (including phone calls, text messages, emails, letters, etc.). This benefit is called the “automatic stay,” “an automatic injunction that halts actions by creditors, with certain exceptions, to collect debts from a debtor who has declared bankruptcy. Under section 362 of the United States Bankruptcy Code, the stay begins at the moment the bankruptcy petition is filed.” https://en.wikipedia.org/wiki/Automatic_stay
An automatic stay also protects debtors against creditors who may: try to obtain a debtor’s property through a court injunction; request the court to issue a wage garnishment and/or bank account levy order; or, begin or continue any judicial proceedings against the debtor.
Through Chapter 7 Bankruptcy, a court may totally free a person from all of his or her unsecured debts, which includes personal loans, credit card debts, medical bills, past due utility bills, repossession deficiency balances, business debts, personal loans (from friends, family, and employers), student loans (under certain circumstances), money owed under lease agreements (including past due rent), tax penalties and unpaid taxes (due dates of these should be more than 3 years), and collection agency accounts.
There are also debts which cannot be discharged. In fact, unless due to totally reasonable circumstances, these debts will have to be paid even after Chapter 7 bankruptcy has been declared. These debts include spousal and/or child support, taxes, debts owed to tax-advantaged retirement plans, and student loans (with some exceptions).
While Chapter 7 may truly be beneficial, a person will first have to pass a test in order to get protection from this bankruptcy chapter. The Means Test, which is an evaluation method based on an applicant’s personal income, will determine if a person is eligible to file for this chapter.
Life can be unpredictable, and there are certain situations when one find themselves in the throes of financial difficulties. Whether it’s sudden unemployment or a serious medical condition in the family, people can easily lose their capacity to manage debts and other similar financial obligations at the blink of an eye. As a result, the government offers solutions to help individuals facing issues with their finances. By filing bankruptcy, the U.S. federal courts can grant to have a person’s debt be discarded or impose a debt repayment plan that are both aimed to help them regain financial control and stability. One option specifically meant for individuals are delineated under Chapter 13 of the U.S Bankruptcy Code.
A Chapter 13 bankruptcy is also referred to as a wage earner’s plan. When it is granted by the court to a debtor, Chapter 13 enables an individual receiving regular income to restructure their debt payments through a plan that will allow them to repay what they owe in regular installments over the course of three or five years. This new payment scheme is meant to allow for more leeway as an individual settles their debts through enabling them to make more affordable payments over a significant period of time. Unlike a Chapter 7 bankruptcy, those who petition for a wager earner’s plan will no longer have to see their assets or properties liquidated. It also allows sole proprietors to continue running their business and use the profits they earn to meet their regular payments according to schedule.
Anyone who petitions for a Chapter 13 bankruptcy will also be granted by the court with an automatic stay, which is a court order that prohibits creditors from taking any sort of action with regards to the debtor’s remaining balance. This means that debtors will be protected from harassing phone calls, emails, and any other form of contact. An automatic stay will also prevent creditors from filing lawsuits, attempting to repossess or foreclose properties and assets, as well as taking any other legal action against the debtor. Other benefits of filing a Chapter 13 bankruptcy includes the possibility of having the total loan amount reduced and the discharging of particular debts.
According to the website of Gagnon, Peacock & Vereeke, P.C., eligibility for this type of bankruptcy depends on several factors. The most important thing is to know whether one’s situation can be best helped by Chapter 13. For more information, contact an experienced bankruptcy lawyer in your area.
If you are thinking about filing for bankruptcy, then hiring a good lawyer to first learn about anything you need to know regarding bankruptcy, its different chapters and these chapters’ specific advantages and disadvantages, will definitely be a very good start. Afterwards, you and your lawyer can proceed to evaluating your actual financial situation to see if you really need to file a bankruptcy case and, if yes, then which specific chapter will help you best.
Bankruptcy is a legal proceeding where debtors (individuals or business firms) declare their inability to further pay their overwhelming debts, and creditors are either ordered to forgive debtors their debts or are paid by debtors through the liquidation of (debtor’s) certain assets and properties or through a restructuring of the payment scheme to monthly payments extending from three to five years.
Forgivable debts include only those which are dischargeable, such as personal loans, medical bills, and credit card bills. There are also the non- dischargeable debts, which include mortgage, court fines, student loans, and child support among others.
There are different chapters in the US Bankruptcy Code, each designed to address an individual’s or a firm’s financial situation. One of these is Chapter 12 bankruptcy, which is specifically designed for family farmers or family fishermen, to enable them to recover from unmanageable debts.
Family farmers or family fishermen, according to the Bankruptcy Code, may refer to an individual, an individual and his/her spouse, a partnership or a corporation. To be eligible, however, the debtor should, first and foremost, have a regular annual income (though the law makes an allowance for those with seasonal income. This is just to make sure that the debtor will have enough, regular earnings to pay the debt.
Other conditions required by chapter 12, include:
- At least 50% of the farm or fishery is owned by the debtor
- With regard to the amount of death, 50% should be due to farming (for family farmers) and 80% should be due to the commercial fishing business (for family fishermen)
- Gross income that came from farming or fishing operation (for the previous tax year)must have been more than 50%
- The total debt owed does not exceed $4,031,575 for farmers and $1,868,200 for fishermen (these amounts are based on the website of the United States Courts: http://www.uscourts.gov/FederalCourts/Bankruptcy/BankruptcyBasics/Chapter12.aspx. Other sites differ in figures with the US Courts, as well as with each other)
Having a clear understanding of what bankruptcy really is about and how it can really help individuals and businesses regain stability in their financial future can be better understood through the website of Ryan Ruehle.
Hurricanes are some of the most devastating storm systems in existence, leaving a wide swath of rubble and debris in their wake whenever they make landfall. Because of their vast size, high wind speeds, and potential to cause flooding, hurricanes can cause billions of dollars in damage and permanently displace residents of coastal areas.
In the past few decades, several large hurricanes have caused untold damage when they struck the Gulf and Atlantic coasts. Hurricane Andrew, which hit in 1992, had wind speeds of over 175 miles per hour, and caused approximately $45 billion in damage. Hurricane Katrina resulted in even greater losses, flooding large parts of New Orleans and costing the city and surrounding residents more than $105 billion in repairs. According to the website of Williams Kherkher, a third major storm, Hurricane Sandy, crashed into the Northeast coast in 2012, battering thirteen states with floods and power outages.
The destructive power of hurricanes stems from their powerful wind speeds, which are at minimum 74 miles per hour, although higher wind speeds are common. These winds can send debris flying, a danger for residents in the area. If the wind is strong enough, it can break windows and even dismantle entire homes.
The high economic cost of a hurricane like Sandy can be difficult to recover from, especially for families and individuals who were already in financial trouble. Unfortunately, damaging hurricanes can even force some individuals to file for bankruptcy, if they don’t receive the compensation they need from their insurance companies. Flooding can make these situations particularly difficult, since it causes long-lasting damage to homes and property which may not be assessed by an insurance adjuster. The best solution is for individuals to record all damage and file a claim as soon as possible to ensure fair compensation from their insurance company.