What Can You Expect from Your Bankruptcy Attorney?

One of the ways that people get out from under an oppressive debt is through filing for chapter 7 or chapter 13 bankruptcy.  Having debt discharged through bankruptcy can offer many people a great sense of relief.  The process itself however can be quite daunting without hiring a proper bankruptcy lawyer helping your through the process and forms.  When you are seeking an attorney’s assistance with the bankruptcy it is important to find one that offers you: competence, sound legal advice, preparedness, and representation.

Competence

Bankruptcy cases can range from straightforward to utterly complex.  The attorney you hire to handle your bankruptcy should have the skills that you need to have your bankruptcy proceed properly.  Your bankruptcy’s difficulty will range depending on a number of elements including:

  • The facts of your particular situation
  • The chapter of bankruptcy you are filing: chapter 7 or 13
  • The assets that will need to be sold
  • The status of employment and business ownership
  • The involvement of interested parties

Sound Legal Advice

Once you have established a relationship with a bankruptcy attorney a contract will be signed to specific the working agreement between you and your lawyer. This agreement will state what services you should expect that they will provide vs what you are to provide for yourself.  The first thing that your attorney will discuss with you is whether it is in your best interest to file for chapter 7, chapter 13, or another option.  This decision is based on what makes the most sense for you to achieve your financial goals. Your attorney should also brief you on what you can expect throughout the bankruptcy process along with the difficulties of your unique case.

Preparedness

Your attorney is in charge of making sure all of the paperwork that you need is filed and properly and within the timeline provided for your case.  You are required to disclose proper financial information to your attorney including: income, expenses, assets, and information pertaining to your debt.  Once this information has been received it will be processed and the two of you will review the information before it is filed.

You may be asked for more information by the court or the court’s trustee.  If you or your attorney fail to provide this information in a timely manner and you miss the deadline the following consequences may occur:

  • Delay in your bankruptcy proceedings
  • Dismissal of your case

Because of the serious nature of the consequences it is critical that the bankruptcy attorney you hire is diligent with paperwork and following required deadlines.

Representation

After the paperwork has been filed and the court has received everything it needs all debtors will be required to attend a hearing known as a 341 meeting of the creditors.  Depending on your case you or the bankruptcy attorney representing you may need to go to other hearings as well.  Your attorney will advise you when you meet with them on what type of hearings you will be required to attend.  Your bankruptcy lawyer should attend all hearings with you.  Some of these can include:

  • Chapter 13 bankruptcy confirmation hearing
  • Chapter 7 bankruptcy reaffirmation hearing
  • Motion/objection hearings

 

Bohikian Law Group specializes in bankruptcy services including chapter 7 and 13 bankruptcy.  More information can be found at http://bohikianlaw.com.

 

What Is Bankruptcy? Different Types and Why People File

The debts and income an individual or company has will determine what type of bankruptcy they are eligible to file for. Here’s what you need to know.

What Is Bankruptcy? Different Types and Why People File

Bankruptcy is usually seen as such an extreme situation, mostly associated with a failing business being forced to close down than anything else.

But as the amount of debt individuals and families are forced to accrue in order to survive increases, bankruptcy has become more common. A recent study showed a large increase of older Americans filing for bankruptcy, as different combinations of loans continue to put the average household in tens of thousands of dollars of debt.

It’s important to consider before filing: What is bankruptcy, what different types are there, and what could cause someone to file for it?

What Is Bankruptcy?

Bankruptcy is a legal process, an option for an individual, family, or corporation who finds themselves unable to pay off their debts.

The bankruptcy courts will go over your debts and liabilities, and will track your assets as well. Some of your assets may be used as repayment. These debts can be reduced or done away with altogether.

The ideal goal behind this system is to give people a second chance and a fresh start. Debt hangs over your head, and interest means it just continues to grow. It makes it harder to pay off, increases the number of predatory phone calls and voicemails you hear and can bring unmanageable stress into your daily life. Should the bankruptcy process work as it’s intended, you may have a chance at life without this.

How to File for Bankruptcy

The first part of filing for bankruptcy is determining whether it is the right call for you. It’s a huge undertaking, so ask yourself the important questions. How long will you likely have to repay these debts for? Are you legitimately unable to make the necessary payments? Can you compile the necessary information and documents? And are you prepared to deal with any fallout that comes with filing for bankruptcy? It can do significant damage to your credit score. Does your existing debt outweigh that consequence?

Filers will also want to look into a bankruptcy lawyer. It’s possible to file for certain bankruptcy types without one, but at a time when you’re at your most vulnerable financially, find someone who understands how to guide you through the various intricacies of filing.

Before one can file for bankruptcy, United States Courts require you to take credit counseling, and after you file, it requires debtor education courses. Certificates of completion are required before debts are discharged.

With credit counseling courses completed, the next step is to fill out the petition to file for bankruptcy. This and other bankruptcy forms are available on the U.S. Courts website. A bankruptcy attorney can help determine which other relevant forms will need to be filled out, based on what type of bankruptcy the filer is filing for, and how the specific local laws affect the case.

If the petition gets accepted, the case is usually given to a trustee, a party not employed by the courts who can help oversee the case. The trustee will comb through documents to make sure all assets have been accurately collected and that no fraud has been committed. They will also set up a meeting with the creditors wherein the party who filed for bankruptcy must testify under oath.

Bankruptcy Types

With bankruptcy being such a complicated issue that can affect so many different parties, there is much more to it than just “declaring bankruptcy.” Are you an individual or a business filing for bankruptcy, and how do your income and assets impact the plan for repaying debts? The U.S. has an entire court system dedicated entirely to bankruptcy cases, so it’s not afraid to get very intricate with the details.

There are several different types of bankruptcy. The most common ones, though, are likely Chapter 7, Chapter 11, and Chapter 13 bankruptcy.

Chapter 7 Bankruptcy

The most common form of bankruptcy is likely Chapter 7. This is also often known as liquidation bankruptcy. Unable to pay off debts with money, the party must, with the help of the trustee, liquidate their non-exempt assets and divide the money to give to creditors.

Much of the aforementioned process comes into play for Chapter 7 bankruptcy. Anyone who files for it will need to take the credit counseling courses within six months of filing. The relevant forms relating to Chapter 7 will need to be completed providing key information on your situation.

There will be means testing to determine whether someone has a way to pay off a significant portion of that debt with the provided information, including income. If it is determined they cannot, it continues as Chapter 7. If it is determined that they have enough means to pay off most of the debt, they likely won’t be able to file for it and will need to instead look into Chapter 13 bankruptcy (more on that later).

The trustee will set up the meeting the debtor has with creditors, and is able to sell non-exempt assets to pay creditors. The assets that are exempt from this may vary from state-to-state. The equity in your home, as an example, varies in how much is and isn’t exempt.

Debtors will likely need to take debtor education courses prior to successfully being discharged. It is important to note, especially before beginning the process, that not every debt can be discharged. Debt stemming from child support payments cannot be discharged.

Chapter 11 Bankruptcy

Individuals can file for Chapter 11 bankruptcy, but it is primarily known as a bankruptcy option for businesses. With Chapter 11, businesses can restructure their debts and potentially save themselves from going out of business. Huge companies like General Motors have used it to their advantage.

Once a person or company files for Chapter 11 bankruptcy, they become a debtor-in-possession. This means they still have many of the same responsibilities for operating the businesses, and will then work with the trustee for a plan to reorganize their debts. If the creditors and a bankruptcy judge approve, the trustee puts the plan into action.

Though the debtor-in-possession still maintains various responsibilities in running the business, they are also unable to make other decisions independently, such as making expansions to the business.

How can an individual qualify for Chapter 11 bankruptcy? They need to have more debt than would qualify them for Chapter 13 bankruptcy.

Chapter 13 Bankruptcy

Chapter 13 bankruptcy is a bit different for individuals compared to Chapter 7. It is an option for individuals and families whose income makes them ineligible for Chapter 7, and is a bankruptcy plan that does not involve liquidating their non-exempt assets.

Like Chapter 11, it is a way to try and restructure and reorganize debt, but more geared toward people and families as opposed to corporations. Restructuring debts instead of liquidating assets lets people avoid having their houses foreclosed on.

It does, however, last much longer than Chapter 7. Having a trustee liquidate assets can get a debtor discharged in 6 months; in Chapter 13, in addition to providing crucial financial information in their forms the debtor creates a plan to use any disposable income they have left to make monthly payments toward their debt. Depending on the dollar amount going toward those payments, the process to getting discharged could take upward of 3 to 5 years. In that time, debtors are also not allowed to take on any additional debt.

The trustee in a Chapter 13 bankruptcy case will review the debtor’s proposed plan, as well as the information they provided about finances to make sure everything is accurate. If they and the creditors find the plan to be fair and trustworthy, the plan goes into action, and the trustee will divvy the monthly payments up to the creditors.

Why Do People File for Bankruptcy?

The amount of debt the average American has continues to rise exponentially each year. There’s now over $1.5 trillion in outstanding student loan debt alone in the country. With such astronomical debt hanging over so many American households, people look to drastic measures.

Emergency medical situations have put many Americans in tens of thousands, if not hundreds of thousands of dollars in medical debt. Medical debt and student loan debt can be a toxic combination for someone’s bank account, especially if they are also dealing with a loss of their job.

A combo of these three is an extreme, but many feel bankruptcy is still the “extreme” option, a last resort. Filing for bankruptcy can wreck a person’s credit score and take years to recover; for someone to declare bankruptcy, taking the time to build their credit score back up would have to outweigh the difficulties of living under their existing financial struggles and debt.

Bankruptcy and Lehman Brothers

Because bankruptcy among individuals is still seen as a last resort, the term is still thought of more for when businesses run out of money and are forced to shut down. As the anniversary of its bankruptcy declaration approaches, let’s look at the most notable bankruptcy event of the 21st century: The collapse of Lehman Brothers.

Lehman Brothers was an investment bank and global financial services firm who spent the first several years of the 2000s riding high. This can be attributed to what was, at the time, a booming housing market.

More and more Americans were buying houses, thanks to a major increase in subprime mortgages being given out by institutions like Lehman Brothers. Subprime mortgages were the loans offered to prospective homeowners with poor credit, and financial institutions were happy to give them out in the early 2000s when interest rates were historically low. But when the housing bubble burst, the U.S. Federal Reserve raised interest rates several times. People suddenly could not make their monthly mortgage payments; they defaulted and homes went into foreclosure. What was a thriving market turned into a subprime mortgage crisis.

Mortgages were not getting paid, and real estate prices kept falling. This was bad news for lenders, banks and investors who had put quite a bit of time and money into the market. Lehman Brothers began to fail. Mortgage lenders they had purchased were shut down. Their financial leverage of assets to equity was unsustainably high. They liquidated assets, they issued stock, but nothing was able to stop the bleeding. Lehman Brothers filed for bankruptcy on Sept. 15, 2008. Their assets and various businesses were sold off, and the financial services giant was no more.

The Purpose of Bankruptcy

No one ever really wants to file for bankruptcy, but there are times when it can be unavoidable for many.  People will want to file for bankruptcy if they have quite a bit of debt and no way to possibly pay it off during their lifetime.

The main purpose of bankruptcy is to give everyone a fresh start in life without a mountain of debt hanging over their head, while also allowing their creditors to collect at least some of the money that is owed to them.  After paying their creditors the amount that the bankruptcy courts tell them to, they will no longer be responsible for any of their remaining debt to those creditors.

There are six different types of bankruptcy filing options, although, only two of them are meant for regular people.  Chapter 7 bankruptcy will find people liquidating everything that they own to pay off their debts, while Chapter 13 will allow a person to keep their home as they are repaying all their creditors.  However, both options will allow everyone to keep most of their property and assets in the end if they qualify for certain exemptions.

The other four bankruptcy options include Chapter 9, Chapter 11, Chapter 12, and Chapter 15.  Chapter 9 can only be filed by a municipality and basically requests a reorganization process for that area.  Chapter 11 is usually used by commercial organizations as they try to reorganize their assets to pay off debts.

Chapter 12 is the bankruptcy code that farmers and fishermen need to file under if their business is not going well due to circumstances out of their control.  Through this process, a bankruptcy lawyer can help them create a plan to get out of debt within three years, unless the court allows for a longer time frame.

Chapter 15 is for cross-border cases, where the creditor and debtor live in different countries.

Everyone is encouraged to hire a bankruptcy lawyer to assist them through the entire bankruptcy process, so that they can file for the proper chapter of bankruptcy.  After all, the entire bankruptcy system is quite complex and there are many legal terms and phrases that people may not know or understand.  It can be quite easy for a person to get lost in the process, which is why the guidance of a bankruptcy lawyer is always a good option.

Anyone that chooses to not hire a bankruptcy lawyer may find themselves worse than they were before, especially if they need to pay their creditors more than they should in a shorter amount of time.  The goal of bankruptcy is to get out of debt and move on with life, not continue to feel stuck for a longer period of time.

Bohikian Law Group specializes in chapter 7 and chapter 13 bankruptcies in Michigan. Contact us today to find a bankruptcy attorney that will help you in debt relief at http://www.bohikianlaw.com/ today.

Brookstone files for bankruptcy and will close all of its mall stores

Brookstone filed for bankruptcy and will close its remaining 101 mall stores.

The mall and airport seller, best known for massage chairs, quirky gadgets, and travel luggage, filed for Chapter 11 bankruptcy in federal court on Thursday. It was Brookstone’s second bankruptcy round in four years.

The company will keep its 35 airport stores and website open and running while it attempts to find a buyer.

It has secured a $30 million loan to finance operations during the sale. In a bankruptcy filing, Brookstone said it had liabilities totaling up to $500 million and assets between $50 to $100 million.

Brookstone’s CEO said in a statement that its airport and online businesses were successful, but an “extremely challenging retail environment at malls” forced the company to close its stores there.

Unabated traffic losses at malls have plagued brick-and-mortar sellers. Mall vacancies reached a six-year highlast quarter as a wave of stores closed, including Walgreens, Bon-Ton, Sears and Kmart, Best Buy, Kay and Jared, Matress Firm, and GNC.

“They’re trapped in hundreds of these B and C malls, whose traffic has been in serial decline,” said Mark Cohen, the director of retail studies at Columbia Business School. “Where they are in triple-A malls, they’re faced with very high rent.”

The company got its start in 1965 with a classified ad in Popular Mechanics magazine for hard-to-find tools. Brookstone opened its first retail store in 1973 and moved into malls in 1980. It later opened smaller airport stores.

“Brookstone had a unique value proposition,” said Sean Maharaj, a director in the retail practice of consultancy firm AArete. “They had a sophisticated offering. It was more boutique-like and felt a little white glove.”

Best-selling products in Brookstone’s history include the Big Blue Bluetooth speakers, Nap weighted blankets, and Rock & Recline Shiatsu massage chairs, according to a spokesperson for the company. It was a launching pad for popular brands such as Tempur-Pedic, Fitbit, Indiegogo, and Segway.

The company also had a thriving catalog business during those years, selling consumers moderately priced novelty items. In 2006, the last year public filings were available for the company, it circulated close to 60 million catalogs.

“We believe our strength is identifying, developing and selling products that are functional in purpose, distinctive in quality and design and not widely available from other retailers,” Brookstone said in the filing.

In the mid 1990s, Bain Capital, then led by Mitt Romney, took the company public. It operated publicly for close to a decade and then was sold in 2005 to a group of buyers that included a private equity firm in the United States and a Chinese-based retailer.

brookstone mall store

“When the company went private it was probably coming off of the most successful run in its history,” Steven Schwartz, Brookstone’s former chief merchandising officer and interim CEO, said in a phone interview last week.

The two ownership groups did not share the same priorities and Brookstone cycled through around 10 CEOs during the same stretch, Schwartz said. Turnover made it hard to implement a consistent strategy and vision.

“We were an amazing store company, but we didn’t have our eyes on the ball the right way digitally,” he said.

In 2014, Brookstone filed for bankruptcy and was sold to a Chinese consortium for $136 million. At the time, Brookstone operated 240 stores, 70 fewer than it had in 2006.

As the company struggled internally, shoppers found more places online to buy the speakers, headphones, and tech tools they once were only able to get at Brookstone or rivals like Sharper Image.

“The category is Amazon bait,” said Columbia’s Cohen. Smartphones and apps, not gadgets, satisfy many consumers’ hunt for new technology.

“They weren’t able to support the endless procession of new and engaging ideas and categories that a consumer who is curious expects,” he said. “It’s a treadmill that’s difficult to stay on.”

Brookstone was known as a place where shoppers could find innovative gifts, usually for men, Schwartz said. (Its headquarters in New Hampshire are located at One Innovation Way.)

Customers didn’t always know what they wanted when they went into a store, but they would wander around, try out products, and purchase an audio or travel product they found useful and engaging.

Brookstone had difficulty distinguishing itself from new competitors and telling its story online, where it’s harder to shop without knowing exactly what you want. It lost relevancy with many shoppers and fell out of mind.

The company’s troubles were an early sign of legacy retailers grappling with creating a new digital identity, Schwartz said: “We were the canary in the coal mine for the internet and for the digital age.”

Original Source: https://money.cnn.com/2018/08/02/news/companies/brookstone-bankruptcy/index.html

Original Author: Nathaniel Meyersohn

The Truth About Bankruptcy In 2018

Many people these days find themselves in serious financial trouble and things have gotten so bad that they feel that they don’t know what to do anymore. Being in that situation has to be extremely scary as your creditors are not likely going to be understanding when you cannot pay them even the minimum amount due.

 

It gets even worse for you if you own your home and you are not able to afford your mortgage and the bank is threatening to take away your home. There is are not really whole on of things for you to do if you have gotten to the point where you can longer afford make all of your payments. One of the last resorts is a legal proceeding called bankruptcy.

What is bankruptcy

A bankruptcy is a legal proceeding in which you face a judge and you tell them that you no longer have the means to continue to pay your debts. The judge will appoint a trustee and they will evaluate your debts and your income in order to determine if they think your debts should be discharged. Fortunately, if you own your home, a foreclosure can be stopped, and you will not lose your home. However, there are certain debts that are not covered by bankruptcy and you will still responsible for paying them once your bankruptcy has been discharged.

 

Here are a few examples of debts that cannot be discharged by a bankruptcy;

  • Student Loans
  • Tax debts, fines or penalties from the government
  • Court-ordered child support payments
  • Court ordered alimony payments

 

Filing Bankruptcy will temporarily stop the harassing phone calls from creditors wanting their money, but once you have filed bankruptcy, they must immediately cease all forms of contact until after your bankruptcy has been finally decided by the judge. All decisions by the courts are final and when they discharge your case you will ready to start over.

 

However, you might really want to be sure that you think it completely through because you will have poor credit for many, many years once it hits your credit report. Once it is where it normally stays for at least 7 years and it will likely keep you from getting any new credit.

 

There are things that you can consider before taking the bankruptcy route that will not put your credit at risk and that includes finding a lender to request a debt consolidation loan. This will make it possible for you to pay off the debts and stave off foreclosure and bankruptcy.

 

Bohikian Law Group specializes in chapter 7 and chapter 13 bankruptcies in Michigan. Contact us today to find a bankruptcy attorney that will help you in debt relief at http://www.bohikianlaw.com/ today.

Getting Your Financial Future in Order with Bankruptcy

Although we don’t intentionally do it, sometimes we make ill-advised financial moves that lead to bankruptcy. While filing for bankruptcy can provide a reprieve for those who are unable to repay their debts, there are consequences which may affect your future, for instance:

  • Bankruptcy may place some restrictions on your employment or running a business
  • It doesn’t necessarily release from all debts, and your trustee may sell all your assets
  • Your name may permanently appear on the National Personal Insolvency Index (NPII)
  • You must inform a credit provider of your bankruptcy when trying to obtain future credit
  • While bankruptcy lasts for three years and a day, your trustee can lodge an objection to extend the bankruptcy for up to eight years

Do not be discouraged because there is life after bankruptcy. First, a good bankruptcy attorney can help you in initializing a debt management plan and ensure that you attend credit counseling sessions where you can receive free advice on important steps to take in the future to help you abate the damaging impact of insolvency.

There is no denying that bankruptcy can be a daunting and very emotional decision, however, having a bankruptcy lawyer by your side, he or she can help you find various debt relief options that may be available to you and most importantly, he or she can stop creditors from harassing you. It is also your bankruptcy attorney’s duty to help you negotiate, review and sign any reaffirmation agreements on secured property that you want to keep. Your bankruptcy attorney may appear in further court required appearances on your behalf to satisfy the bankruptcy court’s administrative requirements. While that is happening, consider the following ways of getting your financial future in order after filing for bankruptcy:

  • Stick to a budget

If living beyond your means is what may have got you in a bankruptcy pickle, creating and sticking to a realistic budget will help you become extra vigilant about your finances and prevent you from incurring unnecessary debts.

  • Set up automatic bill payments

One of the single, most important things you can do to restore your finances and your credit is making it a priority to pay all your current bills on time and offset any existing bills that you may have accrued in the past.

  • Get a secured credit card

By obtaining a secured credit card, you start depositing a prearranged amount of money into a bank account, which becomes your credit limit. Charging small amounts each month and repaying your debts as agreed is yet another strategy to rebuild your credit rating after bankruptcy.

  • Save

Now that you’re free from most of the debt, it’s up to you to manage your money. Start by building an emergency fund. Also look for financial coaching offered by various financial advisers to help you in managing and keeping your finances in check.

Bohikian Law Group specializes in chapter 7 and chapter 13 bankruptcies in Michigan. Contact us today to find a bankruptcy attorney that will help you in debt relief at http://www.bohikianlaw.com/ today.

When Chapter 13 Bankruptcy Is Better Than Chapter 7

If you’ve reached the point where you’re swimming in debt and can’t pay your bills, you may be wondering which type of bankruptcy is best. You may need a Chapter 7 bankruptcy lawyer or a Chapter 13 bankruptcy attorney. There are differences between each type.

Bankruptcy is never a simple process in the United States. Each type depends on your current income, assets, debts, and future financial goals.

Chapter 7 bankruptcy is a type of liquidation bankruptcy that will clear out any unsecured debts you may have, including medical bills, and credit card balances. To declare Chapter 7 bankruptcy, you must currently have no income or little income. If you make over a certain amount of money, you’ll automatically have to claim for Chapter 13 bankruptcy.

Chapter 13 bankruptcy is a type of reorganization bankruptcy. You must have a regular income and be able to pay back a portion of your debts through a repayment plan. There can be many benefits for filing for this type of bankruptcy than Chapter 7.

Chapter 13 bankruptcy will allow you to catch up on your missed mortgage payments. It may also allow you to clear unsecured liens on your house. This means that you will be able to keep your house, unlike filing for Chapter 7 where you can lose your property. You may also keep your nonexempt assets. How it works it that you pay back all or a portion of your debts through a repayment plan. This plan is based on your current income against expenses, and what types of debt you may have. Therefore, it’s commonly referred to as “reorganization bankruptcy”.

Another benefit is that Chapter 13 will allow you to get caught up with car loans without losing your car, and to pay off other non-dischargeable debts including alimony or child support arrears. In order to hire a Chapter 13 bankruptcy attorney, you must be an individual and not a business. For Chapter 13, you must not have more than $394,7255 of unsecured debt or $1,184,200 of secured debt. While the discharge is a lot longer with Chapter 13 than Chapter 7, 3-5 years versus 3-5 months, you’ll receive a full discharge.

It’s important to note that if you own property, Chapter 13 is a lot better than Chapter 7, as debtors will be able to keep all their property, whereas the trustee in Chapter 7 will sell your property to pay off your creditors. Your liens will also be stripped in Chapter 13, whereas in Chapter 7 they are not, leaving you with future debt loads to pay off in the future.

Before deciding which type of bankruptcy is right for you, you should talk to a Chapter 7 bankruptcy lawyer, or a Chapter 13 bankruptcy attorney, to get the best advice that pertains to your financial situation. You may just discover that you do qualify for Chapter 13 and will be able to keep your house and car!

Bohikian Law Group specializes in chapter 7 and chapter 13 bankruptcies in Michigan. Contact us today to find a bankruptcy attorney that will help you in debt relief at http://www.bohikianlaw.com/ today.

Not All Debts Are Treated Equally When Filing For Bankruptcy

With a struggling economic climate, millions of people file for bankruptcy every year for varied reasons, most notably due to medical expenses, reduced income or job loss. According to US bankruptcy court statistics, personal bankruptcy has increased at an alarming rate and not just as a result of irresponsible spending, but because something like a divorce means taking on a partner’s debt if you had “regrettably” co-signed or opened joint accounts with them.

Filing For Bankruptcy

Unexpected catastrophes can also quickly drain savings that took years to accumulate including mountains of student loans, the rising costs of utility payments, inflation, foreclosure the list is endless. Bankruptcy laws are in place to give people whose finances have collapsed and need a second chance to start over. According to statistics from the American Bankruptcy Institute, nearly 95% of Chapter 7 bankruptcy cases decided in 2016 were discharged, meaning the individual was no longer legally required to pay the debt. But what about the other 4.5%?

If you are contemplating bankruptcy, you should consider discussing your options with an experienced bankruptcy attorney who works on liquidation bankruptcies where most of your debts are discharged or liquidated under bankruptcy law. A bankruptcy lawyer will also help you in compiling all your financial records, including debts, assets, income, and expenses.

The Length of Bankruptcy Process

Once you have filed for bankruptcy, the process usually takes six months or longer to complete, but the good thing is that during this time it triggers the automatic stay that prevents creditors from calling you, suing you, sending you letters, or even repossessing your property.

Items Not Discharged In Bankruptcy

When your petition is accepted, your case is assigned to a court trustee who then sets up a meeting with your creditors that you must attend. But not all petitions are accepted, for example; student loans are not discharged under a declaration of bankruptcy owing to the fact they are funded or guaranteed by the government and students are required to pay them off once they start working.

Another example of a non-dischargeable that can’t be in a Chapter 7 bankruptcy at are debts from a divorce because they are owed to a spouse but not as a domestic obligation. However, they can be included in a chapter 13 bankruptcy provided the debt becomes part of a payment plan, and the overdue payments will be continued and paid in full.

A debt incurred through fraudulent means, including one that was obtained to take advantage of the bankruptcy code, cannot be discharged. Unemployment benefits overpayments that you may be required to repay the excess, tax penalties, fines on speeding tickets and vehicle registration fees will also not be discharged in a bankruptcy.

Also, fees that are considered a priority debt, meaning you owe the federal government or local state in payroll taxes, past tax debts from previous years, current tax liability, any fees or penalties cannot be discharged under a declaration of bankruptcy, therefore, you must make an effort to pay or deal with the IRS directly.

Bohikian Law Group specializes in chapter 7 and chapter 13 bankruptcies in Michigan. Contact us today to find a bankruptcy attorney that will help you in debt relief at http://www.bohikianlaw.com/ today.

 

It’s A New Year and Time for You to Get Your Finances In Order

It’s now 2018 and time to get a new start on your life. If your finances have suffered miserably in past years, it’s now a new year and time for you to get your finances in order. Many people have increasing amounts of debt from mortgages, car loans, student loans, medical bills, and credit card debt. Often it can become unmanageable and you can feel like there is nothing to look forward to.  There is help, there is a way to forgive some or all your debts.  A bankruptcy attorney can help facilitate filing for chapter 7 or chapter 13 bankruptcy.

Filing for the Right Chapter

Without the assistance of a local bankruptcy attorney many people end up confusing the two chapters of bankruptcy. To get back on track in life, you should have a solid understanding of what each one offers to your future, and your finances. It can be a serious condition to have to file for bankruptcy, and both can affect your future.  It’s important to file for the one that’s right for you, so you can get back to good finances in the future.

Chapter 7 Bankruptcy

Chapter 7 bankruptcy is a certain liquidation bankruptcy that is made to rid you of unsecured debts. These may involve credit card debt or medical bills. To qualify for chapter 7 bankruptcy, you must currently have no income, or little disposable income. If you make too much money, you automatically must file for Chapter 13 instead.

Chapter 7 bankruptcy involves selling any property that you own so creditors can be paid back. If you have no assets, they won’t get anything. This type of Chapter 7 bankruptcy is best for low income or no-income people who have few or no assets.

Chapter 13 Bankruptcy

Chapter 13 bankruptcy is best for debtors who have a regular income. They can pay back at least some of their debts on a regular payment schedule. This is the path you’ll take if you don’t qualify for chapter 7. Even if you qualify for chapter 7, many debtors may decide to go the route of chapter 13. This is because there are additional benefits in 13 that 7 doesn’t have.

The benefits of chapter 13 bankruptcy include the ability to catch up on missed mortgage payments without losing your home. You may also be able to remove any unsecured junior liens from your house.  With chapter 13 bankruptcy, you’ll be able to keep your house or property. This will also include non-exempt assets. To qualify for chapter 13, you must repay your debt through a special repayment plan.

The amount you pay back will depend on your current income, expenses, and your type of debt. Therefore chapter 13 is commonly called a reorganization bankruptcy. It’s meant strictly for debtors who can afford to make monthly payments and get caught up on car payments, child support arrears, or alimony debts.

Know Your Rights

It’s important to be aware of your rights if you choose to file for chapter 7 or chapter 13 bankruptcy. Choose the route that’s most pertinent to you. Now you’ll be on your way to financial freedom.

Bohikian Law Group specializes in chapter 7 and chapter 13 bankruptcies in Michigan. Contact us today to find a bankruptcy attorney that will help you in debt relief at http://www.bohikianlaw.com/ today.

 

More Retirees Than Ever Are Filing for Bankruptcy — Here’s Why

Bankruptcy is a growing problem for older Americans — even those who are financially responsible.

Most people think bankruptcy is something they’ll never have to go through. You may think that because you’re diligent about spending less than you earn and avoiding excessive debt, you could never go bankrupt.

However, the number of people filing for bankruptcy is increasing, especially among seniors. People aged 55 and older account for about 20% of total bankruptcy filings — a number that’s doubled since 1994, according to a study from Debt.org. And even financially responsible people go bankrupt far more often than you might expect.

So why do so many people file for bankruptcy? There are many reasons, but the most common is outstanding medical bills.

Petition for bankruptcy forms

Image source: Getty Images.

When medical bills break the bank

Roughly a quarter of American households are struggling to pay their medical bills, according to the Kaiser Family Foundation revealed. And if you think health insurance protects people from crushing medical debt, consider that 10 million Americans with year-round health insurance coverage are struggling to pay their medical bills, according to NerdWallet Health.

Seniors aren’t immune to this struggle either. Many retirees (incorrectly) assume that Medicare is their ticket to low healthcare expenses, but even Medicare has its gaps. For example, Medicare doesn’t cover routine eye care, dental care, or hearing aids, and it also doesn’t cover long-term care — which can be ruinously expensive. In addition, you’re responsible for paying deductibles, copays, and coinsurance, and these costs add up quickly — in fact, the average 65-year-old couple retiring today can expect to pay upwards of $275,000 in medical bills during retirement.

Seniors are especially prone to high medical bills, as they’re more likely to develop expensive health conditions. Although older Americans age 65 and up only make up 12% of the population, they account for 34% of prescription drug usage and 35% of hospital stays, according to the Center for Disease Control and the Department of Health and Human Services — and a single trip to the hospital can cost tens of thousands of dollars.

What you can do to avoid bankruptcy

While there’s no surefire way to avoid health problems and the resulting medical bills, you can take a few steps to protect yourself from skyrocketing healthcare costs.

First, make sure you have an emergency fund that covers three to six months’ worth of expenses. Roughly a quarter of American adults have nothing at all saved in an emergency fund, according to a Bankrate.com survey, but what’s more worrisome is that 32% of soon-to-be retirees aged 53 to 62 have nothing set aside. An emergency fund can help you cover a major one-time expense without taking on a lot of debt or tapping your retirement savings, which can cause you to burn through your nest egg to fast and cost you dearly in future investment gains.

A health savings account is another option for covering medical bills. An HSA allows you to invest pre-tax dollars, let those savings grow free of capital gains and dividend taxes, and then withdraw them tax-free so long as they go toward qualified medical expenses — which can include everything from deductibles to contact lenses to long-term care.

Finally, simply being aware of what you may need to spend on medical expenses can help ensure you’re not blindsided when the bill arrives. Know what Medicare covers (and, more importantly, what it doesn’t), read up on your insurance plan so you know your deductible, copay, out-of-pocket limit, etc., and take a realistic look at your overall health to better plan for any medical expenses you may face down the road. While you can’t predict every health issue, if your family has a history of developing a certain ailment, it’s wise to budget treatment into your savings plan.

Although it’s not fun to think about, bankruptcy is a concern for a growing number of older Americans. As healthcare costs skyrocket, even those who have health insurance and are financially responsible are not immune to the rising medical bills. By being aware of the medical expenses you may face in retirement and preparing accordingly, though, you have a much better chance of avoiding bankruptcy during your golden years.

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Original Post: https://www.fool.com/retirement/2017/12/16/more-retirees-than-ever-are-filing-for-bankruptcy.aspx

Original Author: Katie Brockman

Original Date: Dec 16 2017