The Evolution of Bankruptcy

The bankruptcy laws that we are familiar with today originally started in England during Henry VIII's rule. The main difference, however, is that the laws were created in order to help the ones extending credit...not those receiving it. The penalties for declaring bankruptcy were also much, much more harsh than they are today. In those days the penalty was either imprisonment or death.

As time went by, the laws evolved and eventually became less and less demanding of the person in debt. Finally, during the 1600's, more credit opportunities became available and also bankruptcy became known as an unfortunate, but necessary, action. Many people in England often fled to the new colonies in order to run from their creditors, thus establishing debtor's colonies. The state of Georgia in the United States was the most notable of these. Eventually these debt fugitives would work the land, make money and finally pay off their debt.

The first official US Bankruptcy Law was established in 1800 but it was only in response to land speculation. It's specific intentions thus caused it to be repealed in 1803. From 1841 to 1867 many bankruptcy laws were created and then repealed, based solely on the fact that the laws were created to assist in solving a crisis of some sort and were not created to last very long. The majority of these laws favored the creditor and as with most bankruptcy laws up until the 20th century, it's main purpose was to assist the creditor in having the funds, land, etc returned.

Also, most bankruptcies prior to the 20th century were involuntary on the debtor's part, and forced by the government. While involuntary bankruptcy still exists today, it is much, much more rare. The Bankruptcy Act of 1898 was the first of it's kind to actually hold some longevity, as it was in place for eighty years. There were, however, issues with this law.

Most notably, there were no time constraints between declaring bankruptcy. Therefore, a debtor could receive credit he knew he could not pay back, file bankruptcy and repeat the cycle as many times as he wished. The 1978 Act also changed bankruptcy in many ways. The biggest change was it created business bankruptcy, better known as Chapter Eleven, and a much more effective individual bankruptcy, known as Chapter 13. The most recent bankruptcy legislation occurred in 2005 with George Bush signing the Bankruptcy Abuse Prevention and Consumer Protection Act. This overhaul made significant changes to chapter 13 and chapter 11 cases of bankruptcy.

Autor: Nick Messe

In the Milwaukee and Waukesha area Michael Burr specializes in bankruptcy and debt relief services. Waukesha Chapter 13 bankruptcy is an effective way to eliminate many types of debt and have a fresh financial start. Contact Attorney Michael Burr directly. He understands what you are going through and can help you get on with your life. - http://www.burrlawoffice.com

Added: November 30, 2009
Source: http://ezinearticles.com/

After Bankruptcy Credit Repair - The Most Frequently Asked Questions

If you are interested in learning more about after bankruptcy credit repair, then you want to read this article. We are going to just discuss the most frequently asked questions about repairing credit after bankruptcy. After reading this article, you should be ready to begin your own credit repair.

When should I start credit repair?

You should start credit repair and immediately after your bankruptcy is discharged. After bankruptcy creditor is not going to happen overnight. It is going to take time to reestablish your credibility. Because of this, the sooner you start the better.

Shouldn't I just stay away from credit? After all that's what got me into this mess!

Life would be easier if you could just stay away from credit. The reality is that credit impacts more than just your ability to buy a new home. Having bad credit can affect your ability to get a new job or to even qualify for insurance. Normal things like shopping online even become impossible. Because of this, most people need to focus on reestablishing their credit quickly.

Okay I get that I need to reestablish my credit. What's the first thing I should do?

The first thing you need to do is to get a copy of your credit report. Most people don't think this is an important step. They don't understand that creditors will routinely fail to report accounts as having been included in your bankruptcy and discharged. Many creditors and collection agencies will continue to report your counts as being open and currently past-due. This means that the damage to your credit continues long after bankruptcy. It is critical that you get a copy of your report and dispute anything that isn't reporting accurately.

Okay I've handled my disputes now, now what?

The next step is to reestablish good new credit. There are two things you going to want to do. The first is to get a secured credit card. This is where you place a deposit with the credit card company and they issue you a credit line against this deposit. The next thing you want to do, is to go down to your bank and get a CD loan. You will open a CD with your bank and they will issue you an installment loan against the CD. These two steps are the quickest way to reestablish new credit. The reason for this is the portion of your credit score is judged by what's called credit mix. What this means is that you want to have both revolving and installment credit. After some time has passed you should be able to qualify for unsecured loans.

Remember, start immediately, clean up your credit report and reestablish good new credit! By taking these steps you will be well on your way to after bankruptcy credit repair.

Autor: Vincent Polisi

Vincent Polisi is the founder of Credit Repair College. Credit Repair College offers video training on all areas of credit repair. To learn more about getting an after bankruptcy credit card or credit card debt settlement please visit them on the web.

Added: November 28, 2009
Source: http://ezinearticles.com/

Who is Qualified For Chapter 7 Or Chapter 13 Bankruptcy?

It might seem somewhat difficult to choose between Chapter 7 and Chapter 13 when filing for bankruptcy. Therefore the need to understand and dissociate both bankruptcies filing is the only way you can end up making the right choice. Foremost, you should ask yourself, what is the ultimate intend of filing for bankruptcy? This central problematic will help you find your way out.

Characteristics of Chapter 7 Bankruptcy

Accounting for 65% of all Consumer Banking filings, Chapter 7 Bankruptcy is the most frequent type of bankruptcy filing. This popular choice can be explain by the fact that it is liquidation or a straight bankruptcy as in most cases, assets would be exonerated within some few months of the bankruptcy lawyer filing bankruptcy appeal. Chapter 7 Bankruptcy is one of the faster ways of starting anew. Under Chapter 7 of the Bankruptcy Code, your creditors have no right to contact you whilst the 'automatic stay' goes into effect or subsequent to exoneration of debts.

Characteristics of Chapter 13 Bankruptcy

This type of bankruptcy filing is a repayable plan for individual debtors, who are willing to start working on debt elimination; by employing any financial income they earn to settle their debts. Under the US Chapter 13 Bankruptcy Code, individual debtors are giving a maximum period of 5 years, within which the creditor should be paid off.

Who should File for Chapter 7?

Chapter 7 Bankruptcy is the best option for individual debtors who:
Owe lots of medical bills or credit card
Rent their home
Have few or no assets apart from clothing, furniture and other supplies
Have low or no income

Who should File for Chapter 13?

Chapter 13 Bankruptcy is recommended to:
Individuals whose unsecured are under the line of $300,000 and whose secured debts are a little more less than $1,000,000.
People who possess lots of property and wish to keep them
Individuals who accumulated debt as a result of illness, job loss, injury, or temporary financial setback
Individuals who receive a steady income

Because of the reinforcement of the Bankruptcy Abuse Prevention and Consumer Protection Act, many individual debtors will be obliged to file a Chapter 13 case given the 'means test'.

Autor: Esther Asante

Esther A. is a specialist in SEO copywriting. She is currently occupying the position of SEO Virtual Administrative Assistant SEO Virtual Administrative Assistant in a US based SEO copywriting company

Added: November 27, 2009
Source: http://ezinearticles.com/

How Much Will a Bankruptcy Cost You?

It has almost become an instinct to ask anyone providing a service, "Ok, ok, but how much is this going to cost me?" Many folks that call in to our office ask that question before any other. And, though this may not be the answer you want to hear, my answer is always, "It depends."

My answer is soon followed up with the question, "Well, what does it depend on?" Everyone's financial situation is different. So naturally, everyone's bankruptcy case and the price for the work will be different. Before you get too frustrated with that answer, here are some points that may help you see why price might not be the most important thing to look for in a bankruptcy attorney.

An attorney's fees for bankruptcy are regulated. The authors of the bankruptcy code wrote it with the average, hard-working American in mind. Bankruptcy attorneys are only allowed to charge a certain amount in order to protect people from having to shop on price. Often shopping on price can lead you to an attorney who isn't willing to do all the work needed for your case. The alternatives to bankruptcy, loan modifications and debt settlement, do not have regulated fees. Perhaps that is the reason that there have been a big rise in debt settlement and loan modification scams.

Be wary of over-the-phone quotes. An attorney or firm that gives you a quote over the phone without looking at your entire financial situation may be hiding something. He may just be giving you the initial cost and be planning on surprising you at the end with hidden fees. It is nearly impossible to be able to determine how much work is involved in someone's case after a short phone conversation.

Most bankruptcy attorneys will talk to you for free the first time. The attorneys that are going to be open and honest with you about how much your bankruptcy will cost will most likely talk to you for free initially; and the best bankruptcy attorneys will have information to educate you on the process before you even walk in the door. Check to see if an attorney has publications, customer testimonials, or a website that can give you as much information as you need.

Don't bet your future solely on price.

Autor: James R Brown

James Brown
Attorney at Law
Castle Law Office
http://www.castlelaw.net

Added: November 26, 2009
Source: http://ezinearticles.com/

Three Major Misconceptions About Bankruptcy

Let's clear the air about something, bankruptcy IS NOT a "gut wrenching" experience that destroys your life and leaves you awake at night. I've heard this ridiculous notion bandied about by the very people who have benefited from bankruptcy in their life. They file bankruptcy, reap the benefits, then turn around and tell others not to file bankruptcy because it will destroy THEIR life. When you ask them how bankruptcy destroyed their life, they're mute-you can hear crickets. Let's get to the bottom of the truth:

Misconception #1 - Bankruptcy will destroy your job (current and/or future).

I can barely contain my laughter. While some employers do a credit check and ask you if you have ever filed bankruptcy, they cannot legally deny you a job because you filed for bankruptcy. Not only that, sometimes the business that you're applying with or working with has also filed bankruptcy in the past. Most people understand that bankruptcy may be necessary to recover from a crisis or financial setback. There is little to no stigma attached to filing bankruptcy. Also, it is illegal to fire an employee because he/she filed bankruptcy.

Misconception #2 - If you file bankruptcy your wife/husband/partner/best friend will turn their backs on you and head for the hills.

Most of the time marriages are in jeopardy because of money issues BEFORE bankruptcy. Creditors harassing and threatening the members of a household can be disruptive. But once you file bankruptcy, creditors can no longer contact you or pursue you for payment. The automatic stay used in bankruptcy stops creditors in their tracks, giving you a break from their calls and letters. This act alone can usually help alleviate debt-related stress in a marriage.

Misconception #3 - Filing bankruptcy will rob you of your peace of mind.

It is not bankruptcy that robs you of peace of mind; it is the constant harassment of creditors seeking payment that can keep you awake at night. Wage garnishments, lawsuits and collection agents all rob debtors of peace of mind. Bankruptcy can restore your peace of mind and help you get back on track with a fresh start financially.

Autor: Reed Allmand

Reed Allmand is constantly looking for ways to improve the financial situation of his clients. You can visit http://www.allmandandlee.com to view more articles like this and find great tips on managing your financial situation. Are you already considering bankruptcy? Take this Free Evaluation to determine if bankruptcy is right for you: http://www.allmandandlee.com/Free-Bankruptcy-Evaluation.php.

Added: November 25, 2009
Source: http://ezinearticles.com/

Can You Get a Loan Modification If You Filed for Bankruptcy?

One of the biggest Myths out there is that bankruptcy stops foreclosure. It doesn't, it only temporarily delays it. The only way to stop a foreclosure is to pay the loan off, which would be through selling the home or refinancing, or getting a loan modification. So the first course of action that most home owners take is run to a bankruptcy attorney to file bankruptcy to save their home from foreclosure. And as expected, most of these attorneys will simply put these home owners into bankruptcy without explaining all their options in full. For some, bankruptcy is a good option, but it's not for everyone. A good bankruptcy attorney who meets with a client that wants to save their home, will tell them to apply for a loan modification first and then consider a Bankruptcy After.

The reason for this is, if a home owners files for a bankruptcy, then it limits them to only specific Loan Modification programs and when a home owner is facing foreclosure they need as many options available to them as possible. As its not a one size fits all solution.

It wasn't until a few months ago that there are now loan modification programs for home owners that have filed bankruptcy. Bankruptcy should always be left as a last resort option. The recent bankruptcy reforms have made it harder to qualify for a Chapter 7 Bankruptcy, which wipes out all of the consumer debts, so more and more home owners are being forced into a Chapter 13 Bankruptcy, which is a repayment plan.

Statistics show that 66-75% of home owners that file a Chapter 13 Bankruptcy cannot complete the plan, so they end up back into foreclosure without the Bankruptcy protection and now they have a black mark on their credit report and are back at square one. The foreclosure will also continue where the lender left off and put the home owner in a position where they will just want to give up and walk away.

Some bankruptcy attorney's would rather have their clients file a Chapter 13 Bankruptcy because they make more money this way, as the plan goes on for 3-5 years and when compared to a Chapter 7 Bankruptcy, that is more of a one time payment to the bankruptcy attorney. In most cases the people that benefit from a Chapter 13 Bankruptcy is the attorney and the trustee.

Autor: Marlon Baugh

Marlon Baugh is a nationally-known mortgage expert. Since 2003, he has specialized in Florida FHA Mortgage Loans for people with Bankruptcies, Foreclosure or with other credit issues, as well as Florida Loss Mitigation. If you would like a Free Copy or to get instant access to the remainder of this Insider Mortgage Report, please visit http://specializedfinancialsolutions.com/lendersexposed.htm or Call 954-678-5796

Added: November 24, 2009
Source: http://ezinearticles.com/

Filing For Chapter 7 Bankruptcy

Filing Chapter 7 Bankruptcy is a process through which the debtor's debts are liquidated. It is simpler and quicker than Chapter 13 Bankruptcy, which is a process by which the debtor repays a portion of his or her debts over time. It is a process through which all of the debtor's non-exempt property is turned over to the bankruptcy trustee, who then sells it or liquidates it to re-pay money to the creditors. In most cases, all of the assets of the debtor are "exempt", meaning they cannot be touched by creditors or the bankruptcy trustee. This is sometimes referred to as a "no-asset" Chapter 7. Most people do not lose property in a Chapter 7 Bankruptcy.

In order to file for Chapter 7, you must first qualify under the new "means test". The means test determines whether or not you make too much money to file for Chapter 7. The calculation under the means test is based on household size and family income. If you are over the means test, you may not be able to file for Chapter 7 bankruptcy. You may instead have to file your case under Chapter 13, which is a repayment plan. The figures for the means test are updated from time to time. You should check the website for your local bankruptcy court and search for the current numbers.

Before filing Chapter 7 Bankruptcy, you must also complete an approved credit counseling course. This course generally costs between $30-$60, but can be waived if your income is low enough. You must also complete a pre-discharge course after your case has been filed. You will not receive your bankruptcy discharge until you complete this course.

After your case is filed, you will have a meeting with your bankruptcy trustee. This meeting is referred to as the Meeting of Creditors, or 341 Meeting. Although this is an opportunity for your creditors to show up and ask you questions, in almost all instances there are no creditors present. Usually you, the trustee and your attorney are present. The trustee will swear you in, tape record you and ask a series of questions. For the most part, the hearing lasts only 5 to 10 minutes. Remember that during this hearing you are under oath and subject to a charge of perjury if you intentionally lie. The trustee may conclude the hearing or may request additional information from you. This is normally the only hearing you ever have.

After the hearing, your creditors have 60 days to object to your discharge. Normally, there are no objections. If there are no objections, you have completed your pre-discharge education course, and the trustee is in agreement, you will receive your discharge approximately 60 days after that hearing. After receiving your discharge, you are not eligible to file another Chapter 7 and get a discharge for 8 years from the date of filing of your first case.

Autor: Edward Lake

Did you like this information on filing for bankruptcy? Is so, visit http://www.squidoo.com/filingChapter7 for more information on filing for Chapter 7 bankruptcy.

Added: November 21, 2009
Source: http://ezinearticles.com/