Green Shoots in the Economy - Bankruptcy Increases by 100

In another sign that the average American is becoming increasingly desperate as the current recession deepens, bankruptcy filings are up 100% since the year 2007, according to data recorded by the US Courts. With more economic difficulties and fewer jobs to go around, people just have decreased (or no) income to pay their debts, whether they are credit cards or home loans.

The rise in bankruptcy filings is also occurring despite the banks' and lawmakers' attempts to create a modern version of the debtor's prison. The 2005 bankruptcy reform legislation was created to cut down on the number of people filing for debt relief by making it more difficult to remove debts. If borrowers did not meet the new requirements, they would be forced to pay back a portion of the accounts to their creditors.

Before the 2005 act went into practice in 2006, record numbers of debtors filed bankruptcy under the old laws. Once the new law went into effect, filings fell sharply for a time, but have begun a steady climb from 2006 until the present. And with tens of millions of Americans now unemployed and facing huge amounts of debt, bankruptcy filings are essentially back to where they were before the reform was created.

With the new bankruptcy laws in effect, simple discharges of debt under Chapter 7 filings were supposed to be reduced. A means test was administered to the requirements to file, and if the debtor did not pass the test, they would be forced into a Chapter 13 bankruptcy if they still wanted relief through the court system.

Although the means test may have prevented some borrowers from filing Chapter 7, the high unemployment rate has guaranteed that many people simply do not have any means to pay their bills. For them, discharging their debt may be the only way to avoid collection actions by banks or collection agencies. And with no means to pay their bills at all, they are able to surpass the court's test and file a Chapter 7.

Thus, banks have always wanted to avoid the possibility of borrowers filing for Chapter 7 bankruptcy and being able to discharge all of their debts. Even if the debtors do not have any assets or income, the lending institutions would rather be able to sell the debts or sue the borrowers and obtain judgments and garnishments against them. If bankruptcy is an choice at all, banks would rather that it be a Chapter 13 repayment plan, as opposed to than a discharge.

Without an end in sight for the recession, and with the government rewarding banks for making bad loans to consumers, bankruptcy filings can be expected to keep increasing. Americans do not have jobs or assets, because they are being forced to subsidize banks which keep making poor lending decisions and then claiming the nation's capital and assets for themselves as ordinary people can not keep up.

Autor: Nick Adama

Nick writes daily articles specializing in how you can save your home from foreclosure while there is still time left before a trustee sale or eviction. Learn to defend the bank's attempts to take your home, find a reputable lawyer, delay a sheriff sale or eviction, qualify for a foreclosure loan program, and put together a realistic solution that will let you keep your property from being sold out from under your feet. Visit his site to read more about your options to prevent the loss of a home and understand more about how and why the real estate market has been collapsing for several years now: http://www.yousaveforeclosure.com/

Added: February 9, 2010
Source: http://ezinearticles.com/

Reasons For a Corporation to Consider Filing For Bankruptcy

The marketplace has a significant capacity to reward an entrepreneur who has a genuinely innovative and useful product or service to offer. Certainly, the prospect of monetary success acts as a strong lure for the creative and industrious people who endeavor to open their own businesses. The reality, however, is that few companies are able to achieve extreme financial successes and many do not even remain functional as going concerns beyond the first several years. At times, however, both new and established businesses may find themselves in a position where they are increasingly unable to keep up with financial obligations, and a bankruptcy filing may offer the most suitable option.

There are several forms of bankruptcy protection available to corporations with each being designed to address a different set of concerns and with unique filing requirements and implications. Contrary to popular belief, filing for bankruptcy does not necessarily mean that a business will no longer be able to operate, nor does it necessitate that assets must be liquidated to satisfy the demands of creditors, suppliers, or other parties to whom the company is indebted. Consulting with a skilled and experienced bankruptcy attorney can provide you with valuable insights into the potential advantages and disadvantages of a variety of debt resolution measures.

When to File

Obviously, some struggles are expected during the early years. Even multinational corporations are subject to fluctuations in the global economy and consumer taste, so there is a strong temptation to simply accept or dismiss some financial issues as reasonably typical. But having blind faith that things will turn around or just attempting to ignore a mounting backlog of unpaid bills and other debts will do nothing to improve the situation and will only serve to make things worse and more challenging to overcome going forward.

Generally, if there is a pattern of being consistently unable to make full and timely payments, it should serve as a sign that there are severe problems. To help you begin to form an understanding of some bankruptcy concerns, consider the following business bankruptcy organization:

• Chapter 12 Bankruptcy is available for small farming, fishing, and ranching operations
• Both Chapter 12 and Chapter 13 offer a company the chance to restructure and reorganize the corporate operation and the terms of debt repayment arrangements
• Chapter 7 requires that a company cease operations and sell assets to satisfy creditors, and should be regarded as something of a last resort for a lost cause

Who to Trust

To learn more about what we can do to help your business through this challenging phase, contact the Arizona bankruptcy lawyers of the Harmon Law Office, L.L.C.

Autor: Joseph Devine

Joseph Devine

Added: February 8, 2010
Source: http://ezinearticles.com/

How Long Does Bankruptcy Affect Your Life?

If you have recently filed bankruptcy or are considering filing, you may feel as though your credit will be ruined forever. While bankruptcy does affect your credit, it may not be as horrible as you envision. While it is true that bankruptcy will stay on your record for 10 years, as time passes and you pay your bills on time, its negative effects will decrease over time as you build a positive credit history.

The first year of bankruptcy will be the most difficult. Lenders will note that you have a rough financial past and will be leery to lend you any credit. It is nearly impossible to get an unsecured credit card, although there are a few companies who will issue one depending on your income. While you may be approved for a credit card, the interest rate will probably be very high and your limit will be very low ($250-$500).

Effects on Credit Cards

If you cannot get an unsecured credit card, you will be able to get a secured credit card. Secured credit cards require you to make an initial deposit of at least $200.00 or so, and that is used as your credit limit. A secured card is not a debit card or prepaid debit card, it is an actual credit card and can be used as so. You will receive monthly statements in the mail and be required to make monthly payments. Secured credit cards do report monthly to the major credit bureaus, and they are a fantastic way to improve your credit.

Effects on Car Loan Eligibility

You may be able to obtain a car loan after a year has passed on your discharge. Although you may be able to obtain a loan, your interest rate will be very high and will probably require a large down payment. The longer you wait from your discharge, the better terms you will be able to negotiate with a lender.

Home Loan Problems

Bankruptcy will also prevent you from getting a mortgage loan for two years. After you have taken substantial steps to improve your credit, you will likely qualify for an FHA loan with a down payment as low as 3%.

Bankruptcy does not have to ruin your life. It will affect you for many years, but you can minimize the negative effects by acting financially responsible. Your life will go on, and you will be able to obtain credit cards, home loans and car loans as long as you maintain a good credit rating.

Autor: George Christodoulou

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Added: February 7, 2010
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Ohio Bankruptcy - Is Filing Bankruptcy in Ohio Difficult?

One of the reasons that many people continue to suffer poor credit is the simple fact that filing for Bankruptcy can be far too stressful to handle alone. Filing Bankruptcy in Ohio means filling out large amounts of paperwork, coming up with detailed lists of debts and creditors, and much more. This process can be quite stressful and can be enough to deter many Ohioans from seeking constitutional protections, despite the fact that filing could stop harassment and begin to repair their credit. If your credit score is keeping you from getting needed credit and collections agents are harassing you, filing for Bankruptcy might be the best decision you can make.

While filing Bankruptcy in Ohio on your own can certainly be stressful and confusing, hiring a Bankruptcy attorney makes it much easier. When you hire a professional to help you file, you can easily ensure that all of your paperwork is filled out correctly and on time and that all of your qualifying debts are put into the judgment. Many people filing their own Bankruptcy paperwork miss one or more debts, which means that creditors for those debts may still call and try to collect. Once you file, you may be unable to file again for a long period of time, possibly leaving you with little recourse from missed debts.

Whether you are filing for Chapter 7 or Chapter 13 Bankruptcy, you will find that there are many generous exemptions under Ohio Revised Code Section 2329.66 to help Ohioans retain property. You can file exemptions for your home, your car, your bank account, your clothes, tools of trade, livestock, retirement accounts and much more, which can preserve hundreds of thousands of dollars in personal property and real estate.

Filing Bankruptcy in Ohio doesn't mean allowing your creditors to collect all of your possessions to pay off your debt. In fact, for people whose incomes are in a range anchored to the state median income for a family of like size, you will likely not have to repay the debts at all. For people who are above this line, you may have to pay money when filing Chapter 13 Bankruptcy, but the fees are often considerably lower than what you owe.

If you are considering filing Bankruptcy in Ohio, it is well worth your time to consult with a Bankruptcy attorney. Finding someone who knows all of the ins and outs of filing as well as what you can expect to pay will help you throughout the process. Your attorney can help you file paperwork and can attend your meeting with creditors to help ensure that you are treated fairly.

Eliminating your debts and clearing up your credit is crucial if you want to get out of financial ruin. When you hire a qualified attorney to handle your Bankruptcy, your credit can be back on track in only a few short months, ensuring that you will soon be able to start your history over and make better financial decisions for your future.

Autor: Stephen Marlowe

Stephen Marlowe is a Bankruptcy Lawyer based out of Tipp City, Ohio and writes about Bankruptcy Issues for Ohio Residents learn more about your options for Ohio Bankruptcy when you visit http://debtreliefohio.org/filing-bankruptcy-in-ohio/

Added: February 5, 2010
Source: http://ezinearticles.com/

Ohio Bankruptcy Laws and Exemptions - What Can I Claim?

Understanding Ohio Bankruptcy laws can be rather confusing. The law must be outlined to the letter and is written in legal jargon. Worse yet, the law was rewritten poorly--primarily by credit card lobbyists--in 2005, in such obtuse language as to render some sections, like the infamous "dangling paragraph", nearly meaningless. It can also make filing legal paperwork a nightmare. Without a dedicated Bankruptcy lawyer, it is surprisingly easy to get bogged down in Bankruptcy paperwork, perhaps even enough to make you decide not to go ahead with filing.

If your credit is damaged and creditors are harassing you at every turn, it is in your best interest to speak with an attorney to help you determine if Bankruptcy might be the best option. Your attorney will understand all of the Ohio Bankruptcy laws and will help you quickly understand what filing can and cannot do for Ohioans. If you are looking to clean up your credit but don't know which type of Bankruptcy to file, you attorney can help. Better still, they can help you determine whether you will be able to retain your home, your car, and other valuable possessions--in Ohio, state-specific supplements to the federal law will make all the difference as to which options are right for you: the state's median income for a family of like size determines which Chapter you'll probably file, and Ohio Revised Code Section 2329.66 determines what property you'll keep.

While they may seem overwhelming to look at, Ohio Bankruptcy laws are in place for your protection. One large protection that they offer is that they allow you to protect your assets. There are numerous deductions that are offered per filer when it comes to Bankruptcy. In Ohio, you can claim exemption on $20,200 of a personal residence, $3,225 of a car, $10,775 of household goods, and much more. If you are filing jointly for Bankruptcy, your spouse can make the same exemption on any some property that is held jointly, which greatly reduces the chance that your creditors can liquidate the asset or put a lien on it.

Another important thing to realize when it comes to asset exemptions is that there are many things that cannot be taken by your creditors. Your creditors cannot take your unemployment benefits, health insurance, burial plots, disability assistance, or IRAs, or student loans. They also cannot take most pension or retirement allowances. For people bogged down in debt and living on a meager income, the fear of having retirement or other benefits garnished is enough to keep them from filing. Few people realize that Ohio Bankruptcy laws protect them in such situations.

Bankruptcy law is not designed to cause anyone to go further into debt. While there are repayment options under Chapter 13 for people who have the money and assets to do so, many people are not forced to give up assets or repay their unsecured debts. Bankruptcy is a chance to get a clean slate and to build positive credit. If you are in need of this service, choosing an attorney who focuses on Ohio Bankruptcy laws can offer you just the help you need.

Autor: Stephen Marlowe

Stephen Marlowe is a Bankruptcy Lawyer based out of Tipp City, Ohio and writes about Bankruptcy Issues for Ohio Residents learn more about your options for Ohio Bankruptcy Laws when you visit http://debtreliefohio.org/ohio-bankruptcy-laws/

Added: February 4, 2010
Source: http://ezinearticles.com/

Changes in Bankruptcy Law - How Does it Affect Your Decision?

The global recession has had a domino effect from the governments down to the banks and then down to the individuals, with higher unemployment and more bills than ever before, it seems. So it really is little wonder that more and more people are facing persistent difficult in making ends meet. As such, more people than ever are now considering the possibility of filing for bankruptcy. However, since the changes in bankruptcy law of 2005, many people believe they can no longer file and this simply is not the case.

Following extensive lobbying by the credit card companies, Congress passed a series of changes in bankruptcy law back in 2005. These changes have made it more difficult for people to file for bankruptcy. However, this does not mean that it is now impossible. Absolutely not.

Changes in bankruptcy law have been known as bankruptcy Abuse Prevention and Consumer Protection Acts of 2005. It's a long winded way of essentially making clear that the changes are there to prevent people taking advantage of bankruptcy to abuse finances.

However, most people who would have been eligible before 2005 still are. The biggest changes is the means test. This is a test whereby your case will be established to see whether or not you really are in a position whereby you are unable to afford to pay back your debts. If you have higher than median income from your state then you will also have to go further tests and provide detailed documentation. Essentially, this is to ensure that those who could pay back their debts without resorting to bankruptcy are unable to file as quick way out.

The increased complications in the law, however, have also meant a rise in lawyer fees! However, given the complexity of proceedings you would be well advised to get a lawyer and consider it a necessary expense.

Autor: Jeremy Edwards

Want to know how to manage your debt without losing control? Get the right information on the Changes In Bankruptcy Law before you make the important decision. Find out the facts on Declaring Personal Bankruptcy before you proceed.

Added: February 2, 2010
Source: http://ezinearticles.com/

Basics of BAPCA

BAPCPA, or the Bankruptcy Abuse Prevention and Consumer Protection Act, was passed by the US federal government in 2005. The purpose of this act was to reduce the number of Chapter 7 bankruptcy filings and increase the number of Chapter 13 filings. The reason creditors prefer Chapter 13 over Chapter 7 is that debtors have to partially repay their debts before they are discharged; whereas, with Chapter 7, all debts are discharged.

Presumed Abuse

BAPCPA was created in order to reduce the possibility of bankruptcy abuse. Prior to BAPCPA, anyone could file for Chapter 7 bankruptcy and have their debts discharged. Only an officially appointed trustee could determine "abuse," which, if discovered, would disqualify a bankruptcy candidate. Because officials feared that too many people were abusing the system and eliminating debts that could have been taken care of, all candidates with primarily consumer debts are subjected to a "mean's test" to determine their eligibility.

BAPCPA Amendments

The BAPCPA amends many parts of the US bankruptcy code. The most significant changes follow:

A "means test" is now used to help determine whether or not a bankruptcy candidate is eligible to file for Chapter 7
Chapter 7 filers are now subjected to random and scheduled audits to ensure that their financial documents are legitimate
All bankruptcy candidates are required to attend credit counseling prior to filing
All filers are required to attend financial education programs before their debts are discharged
Filers are now subject to new fees, including: filing fees, attorney liability, increased debt repayment, and increased compliance requirement costs
Exemption rules and requirements are more strict

What Is the "Means Test?"

The means test analyzes a bankruptcy candidate's income to determine their eligibility for filing for Chapter 7. If the means test determines that a debtor's income is greater than the state's median income, after certain deductions, then they are considered abusive under the BAPCPA, and will be ineligible for Chapter 7. Instead, they may opt to file for Chapter 13, which will require them to repay part of their debts before they are discharged.

It is important to note that only candidates with primarily consumer debt are subjected to the means test. If an individual's debt is from other sources, such as medical expenses, they are not suspect.

For more information on filing for bankruptcy, contact the Austin bankruptcy attorneys at the law office of Slater, Kennon, and Jameson, LLP.

Autor: Joseph Devine

Joseph Devine

Added: February 2, 2010
Source: http://ezinearticles.com/