What are bankruptcy exemptions, and how are they determined? First off, these are only for individuals filing for bankruptcy and not businesses, and they are something that allows you to keep up your standard of living by protecting some of your personal possessions from being taken by the court to pay off your debt.

As I’m sure you are aware, in bankruptcy what often happens is that the court will take away your possessions to liquidate them and pay off your debts. Knowing what the court can take away and what they can’t is very important to determining whether or not you should file for bankruptcy.

If they can take away basically everything you own, then obviously filing is a bad decision. However, if a lot of your things fall under bankruptcy exemptions, then it might be a smart thing to file, and get rid of your debts so that you can start over.

The way it works is, you can sometimes choose between the state and national bankruptcy exemptions, in the case of states who allow national exemptions. Each have their own rules on what can be considered an exemption and what cannot be.

However, often times, you must go with the state exemptions, as certain states (the majority, actually) don’t allow national exemptions to apply to them.

It’s a long story, but for now that’s the way it is, and I will leave it at that. If you live in a state that allows national bankruptcy exemptions, you have to decide on which rules you want to go with, and can’t just take portions of each that apply to you. You have to choose one or the other.

This is basically how it works. First, when you claim something as a bankruptcy exemption, you have to show the value of it right now, and not when you first obtained it, since this is obviously the amount the court will get for it by selling it.

There are only certain things that can be claimed, of course, otherwise why not just keep everything? Since each state is different, for the purpose of this article I will cover the more prominent of the federal exemptions.

First, the equity of the main residence you live in is exempt for up to $17,400, and you can use this money to live somewhere else once you lose your current place. Pension and retirement plans can also be claimed should you claim them, life insurance that is at least $9300, and also unemployment benefits can’t be taken as well if you claim them.

There are quite a few other smaller things, and of course, your lawyer will be able to give you an extensive list, so that you can determine what you will have to lose and what you can keep. Remember, this only applies to chapter 7 bankruptcy, as with chapter 13, the individual follow a court ordered payment plan, and you aren’t discharged of your obligations, as you are with chapter seven.

Your lawyer will be able to help you with bankruptcy exemptions, so while this is an introduction to the topic, it is no substitute for a competent attorney who can explain to you the ins and outs of this somewhat complicated topic.

Bankruptcy is a situation that could not be considered desirable by anyone who has experienced the emotional roller coaster that precedes it. There is a lot of work involved in filing for bankruptcy correctly, and anyone taking a half-hearted approach to this work may well find that, even after being declared bankrupt, they will be in a poor position as regards conducting their future finances. There are, nonetheless, some people who see going bankrupt as simply a way of wiping the slate clean after paying no attention to the conduct of their finances for the previous few years. Among these people, there are many who will actively run up as much debt as they can in the pursuit of a life of thrills, in the full intention of filing for bankruptcy when the credit dries up and the collectors come calling.

The majority of bankruptcy petitions come from people who simply found themselves unable to meet their debts for one reason or another. In some cases, it may have been recklessness with credit that they discovered too late was unsustainable. For others it may be that they lost their job and were unable to meet their monthly repayments, ending up in a position were they had no option but to go bankrupt. Unsurprisingly, the differing reasons for filing have now been recognized in law, and those who file for bankruptcy with the same regularity and lack of conscience with which they wash their hair are now finding that they are unable to take advantage of the protections offered by a bankruptcy.

Those who are unable to pay back their debts now also have legal protection. There is a difference, recognized in law, between customers described as “can’t pay” and those who “won’t pay”. The creation of the circumstances where so many people are in a position where bankruptcy is needed is a topic that excites much conversation. Certainly, there are banks who have lent money irresponsibly to people who, realistically, had little chance of ever sticking to their monthly repayments. Equally, however, there are individuals who took out credit in the full knowledge that they could not pay it back, and with little intention of ever trying. The former may be seeking bankruptcy in order to turn over a new leaf – the latter will simply be doing it to create a force field around their reckless borrowing.

Bankruptcy is not a pleasant state to be in, as it will require the following of very limiting rules that prevent the debtor from enjoying the kind of freedom they once had. But if the individual can use their time in that position to learn a little bit about how to operate without borrowing money, they can become financially continent in a way that will serve them very well in the future. It is not something that should be advised as a valid choice for most people, but for those who are most in need, it provides a valuable safeguard.

Disclaimer: This article is for informational and entertainment purposes only, and should not be construed as legal advice on any subject matter.

It can be pretty stressful when you’re deep into debt and are looking for options.  It doesn’t help any that the terminology can be quite confusing for those unfamiliar with it.  If you’re considering bankruptcy, you may be confused by the various possibilities, including the difference between chapter seven and chapter 13 bankruptcy.  What exactly is the chapter seven bankruptcy law ?

First of all, you shouldn’t worry too much about the specific terminology.  The various types of bankruptcy available to consumers are simply named after the corresponding chapters of the bankruptcy code.  Although there are a number of different types of bankruptcy, there are two major forms: chapter seven and chapter 13.

While chapter 13 tries to establish a payment plan for you, chapter seven bankruptcy tries to eliminate the debt without your having to repay any of it.  This doesn’t always work out exactly this way, since some debt obligations are not usually eliminated.  These include Federal income taxes, alimony, and criminal fines.

However, most people look to bankruptcy when they are facing large amounts of unsecured debts such as medical bills or credit card debt.  These kinds of financial obligations are usually done away with if you successfully file chapter seven bankruptcy.

What are the downsides?  Well, besides the blow to your credit score and your ego, chapter seven bankruptcy may require you to liquidate some of your assets.  Of course, most people who have reached this stage in their financial lives don’t have any significant assets to speak of.  Those who do own a house, for example, are often protected by their state’s homestead exemption.

But isn’t bankruptcy inaccessible to most Americans now because of the recent changes in the bankruptcy code?  No, not really.  A small percentage of people who would have qualified in previous years will now be ineligible because of the new statutes.  The rest will still qualify, though they may have to go through additional hurdles such as tediously documenting their income and attending financial counseling classes.

As always, the specifics of your situation will determine whether bankruptcy is available to you, or whether you even need to consider it in the first place.  Be sure to consult legal advice before making your final decision.

Bankruptcy is often seen as the last resort in solving any debt issues, but I do not subscribe to this. In a related article I will take you through the pros and cons of bankruptcy, and the myths of an IVA which is often touted as the debt solution to take. Please read these and it will become apparent that bankruptcy has been and remains a far more utilised debt solution than the IVA.

The consequences of becoming bankrupt may mean you lose your house, it could prevent you from pursuing certain careers and, for example, prevent you from becoming a company director for the period of time that you are bankrupt.  Having said that, the severity and stigma of bankruptcy has lessened over time and it is now far more acceptable than it used to be. This year some 80,000 individuals will become bankrupt.

Bankruptcy can be a daunting experience. There are however companies such as mine that specialise in taking customers through the bankruptcy process, even attending court with you if necessary. Faced with a statement of affairs of 35 pages which needs to be completed in triplicate can be an unnerving proposition. Advice from an expert as to whether bankruptcy is the right route, and then someone to fill in the forms and help you file them at court and then attend with you is something to be considered, especially when I can help you keep your house and your income.

How do I know if I need to pursue the bankruptcy option?

The easy way to find out is to call an expert debt advisor.  They will, very quickly, get to understand your current financial position and advise the best way to solve your situation. The conversation is completely confidential, free of charge and without obligation. You should choose someone who is not allied to either a Debt management company or an IVA firm such as me I will give impartial advice not the solution which makes me the most commission.

What is bankruptcy?

Bankruptcy means that all your debts (subject to a very few minor exceptions) are written off on the instant you are made bankrupt. If you have disposable income you may be required to pay this to the Official Receiver for a maximum of three years. However part of what I do is to configure your disposable income to reduce as much as possible the potential of having to make income payments. You will generally be discharged from bankruptcy in a year or less. If you have equity in your property or valuable assets you may have to release these to the Official Receiver. Although in the vast majority of cases I have seen this year, with very little if any equity in property, homes can be transferred from the Official Receiver back to the bankrupt or his or her spouse for his fees, of about £400.

If you have ever considered bankruptcy as a way to get out of a debt problem you can do no better than call me today. Below are the details of the local county court.

Derby Combined Court Centre

Morledge
Derby Derbyshire
DE1 2XE

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01332 622600

When faced with a bankruptcy, having the best representation possible should be your first priority. There are many reasons why finding the best bankruptcy attorney that you can afford is important.

The two most important reasons are that, by not having the correct representation, you could still end up owing non-secured debts or may have your bankruptcy denied altogether. These can be powerful consequences that have the ability to affect your financial future for close to a decade. The right representation may mean the difference between a worry-free future or one filled with struggles that you cannot free yourself from.

During the bankruptcy proceedings, creditors could show up and ask the judge to exempt their debt from your bankruptcy. There are many reasons why a judge could decide that you should not receive your bankruptcy or that certain debts should be excluded, however, unless you purposely committed major fraud, most of the claims will be easily debated by a good bankruptcy attorney who has experience standing up for those who file.

After all, the last thing you want is to be accused of fraud just because you lost a job or had unforeseen medical expenses. A good bankruptcy attorney will know how to defend your bankruptcy claim against these accusations and get as much debt as possible included in your bankruptcy discharge.

Furthermore, since a bankruptcy attorney will know the laws regarding bankruptcy and will be very familiar with them, he or she is likely to do a much better job than you when it comes to defending your claim. Since bankruptcy laws can vary by state, it is important to seek local representation from a bankruptcy attorney that is also familiar, not only with federal bankruptcy laws, but with the bankruptcy laws of your state.

This may become an issue if you live near a state line. Many bankruptcy attorneys who live in such an area will be licensed in both states and know the laws on both sides of the state line, so don’t feel as if you have to confine your search to your state, if you can find better representation across the state line.

Remember, this is not a time to try and save money. If getting a better bankruptcy attorney means spending more money, do it! A high dollar bankruptcy attorney may be cheaper than losing your bankruptcy claim. Even if you currently cannot afford a great bankruptcy attorney, it may be worth getting a second job or asking a family member for a loan.

What is comes down to is that the quality of your representation can have an effect on how many creditors successfully contest your bankruptcy — and whether you even get a bankruptcy at all. Once you file for bankruptcy, you cannot file again for several years — even if your bankruptcy claim is denied.

That is the main reason why, if you want to get yourself out of debt, you need the best bankruptcy attorney that you can possibly afford. Settle for less and you may be costing yourself the financial break that you desperately need.