During the course of an individual’s life, financial problems can develop that were unintended; these are just things that happen. In some instances, no other solution is feasible besides exploring bankruptcy relief in order to handle devastating debts and tormenting creditors. If you file for bankruptcy in California, you should be aware that there are specific and unique laws that apply in that particular state.

Federally sanctioned supplemental exemptions are permitted under the bankruptcy laws in California, along with the exemptions that are permitted in California State itself. Under California bankruptcy laws, a person must choose from two categories of exemptions. These categories are designated as System One and System Two. Deciding which of the two systems is the best fit, with support from an individual providing bankruptcy help, is up to the debtor.

According to the law in California, the System One option offers a homestead exemption of as much as $50,000 for a single person who is not disabled, as much as $75,000 for families, and as much as $125,000 for senior citizens. In addition, the following personal exemptions are permitted in System One: as much as $2,000 cash in the bank; as much as $2,000 worth of building materials; as much as $5,000 worth of jewelry and heirlooms; motor vehicles valued up to $1,900; burial plots; appliances; home furnishings; personal clothing; health related aids; food; and any money that comes from personal injury or wrongful death claims. Allowances are also made in System One for any kind of insurance claims; pensions; benefits, like unemployment compensation; workers’ compensation claims; health aid claims; tools of the trade, which includes tools, uniforms, equipment, books and manuals required to continue in a trade; and wages exempt at a minimum of 75%.

Under California bankruptcy laws, System One exemptions differ a great deal from System Two exemptions. For all homestead categories a maximum of $17,245 is allowed based on the System Two homestead exemption. The exemption is capped at $1,150 for jewelry and heirloom. Motor vehicles valued at less than $1,775 are exempt, while trade tools with a value of as much as $1,750 are exempt. The total amount of personal benefits permitted to be exempt under System Two is $17,425, although it provides for a wild card exemption of as much as $925. Wage exemption does not exist under System Two, with the only exemption allowed for ERISA-qualified pension benefits.

Due to the complexity of these two exemptions under the California bankruptcy laws, people are well advised to retain a lawyer who specializes in this area of the law for assistance with bankruptcy. The lawyer will evaluate your total financial situation and recommend which of the two systems would work best for your situation when you must file for bankruptcy in this state.

If you declare bankruptcy, this does not automatically mean that you will lose your home especially if you have little or no equity or are renting.

Bankruptcy has significant advantages for someone who is struggling with serious debt. The process generally lasts for just 12 months and you will only have to pay towards your debt if you can afford to do so.

Once you are declared bankrupt, your creditors can no longer harass or chase you for debt so phone calls and letters stop. You will be allowed to keep all of your reasonable household goods such as your TV, stereo, dishwasher and washing machine.

However, for those who are unable to pay their debt, bankruptcy is often considered as last resort because they are worried that they will lose their home.

But for many people their house is not at risk.

Those who rent their property

About 35% of households in the UK rent their property. If you rent and go bankrupt, it is extremely unlikely that you will be asked to leave your property.

As a bankrupt person, you are allowed to maintain control of your expenditure budget including the money to pay in rent. As long as this continues to be affordable and you maintain the payments on time (which you should be able to do if your debts have been taken away from you) then your landlord will not normally have a problem.

There are often clauses in private rental agreements which allow a landlord to ask a tenant to leave the property if they have been declared insolvent or bankrupt.

However, if the tenant is up to date with the rent and can show that this will continue to be paid, most landlords will not wish to upset the apple cart in terms of their rental income by forcing out a tenant.

What happens if you own your home?

If you are a homeowner, the decision about whether to declare bankruptcy or not becomes a little more complicated. Whether or not your house will be at risk very much depends on whether you have any equity in it.

If you have little or no equity in your property, and the house was sold, there would be nothing to gain for your creditors. For this reason the official receiver will not normally want to sell the property if you declare bankruptcy.

However, you must ensure that once you are bankrupt, you immediately buy back the beneficial interest in the property. This means that you regain the title of your house this protecting it from sale at a later date. This process will normally cost about £211.

Homeowners with equity

Generally speaking, homeowners who have equity in their property will want to avoid bankruptcy.

The problem is that the equity is an asset which must be realised for the benefit of the creditors. For this reason, any property you own with equity in it is at risk if you declare bankruptcy.

You cannot escape this situation by simply transferring your house into someone else’s name. Any such transfers which take place within 5 years of you declaring bankruptcy can be overturned by the court.

It is possible for a friend or family member to buy your equity from the court meaning that the equity is simply raised for your creditors without the need for the sale of the house. The property would be then simply returned to you.

The inability to repay personal debt is a serious problem for many people in the UK. The most important first step if you have a debt problem is to get the right advice and consider all of the options available to resolve the problem.

Bankruptcy may sound like a nightmare scenario. However, for very many people it is a very sensible way of dealing with debts and will certainly not result in the loss of their home.

New Bankruptcy Law

Understanding The New Bankruptcy Law Is Important For Those Planning To File

With the downturn in the country’s economic standing, many things have changed.  Beyond a soaring unemployment rate, we’ve experienced a decrease in sales for many different retailers and a change in the way many places do business.  With less money, a good number of people have turned away from places they formerly patronized and turned towards discount stores.  This forced the closure of many other businesses, or at a minimum, price hikes in the places that lost a high portion of their consumers.  Most of the places that lost enough revenue were forced to file for bankruptcy protection.

Along with this insurgence of filing for protection came change from the government in order to help avoid getting into this sort of situation in the future.  When a large number of accidents happen at a signed intersection, transportation officials review the accidents and the roads to see if there was a way that these incidents could have been prevented.  Because they have no control over individual drivers, they typically change the signs at the intersections and erect signals in their place.  Similar to this, when companies and a large number of individuals were forced to file bankruptcy due to their failing financials, the government took it upon itself to review the laws and rules surrounding this protection.  As a result, a new bankruptcy law came out in order to prevent people form abusing this right.

The new bankruptcy law incorporates many changes aimed at ensuring only those individuals and businesses which truly need to file can in fact do so.  It gives stipulations on the level of income that the individual or business must fall under in order to be eligible.  New bankruptcy law provisions require credit counseling, as a way to educate consumers and companies about how they should manage their financials and budget according to their income.  This helps in situations where a person or corporation abused their credit and overextended themselves through fault of their own.  Even when the need to file was due to an unforeseen event or circumstances, the credit counseling helps people plan for these situations in advance.

The above are the most prominent changes in the new bankruptcy law, but there are many more revisions to the law beyond these.  It is hard for the average individual to comprehend the laws as written, and increasingly more complex for one to realize how the changes can influence the outcome of filing.  Those who have filed before need to be knowledgeable of the revisions, as they directly affect their ability to file at all.  Just like people go to a tax professional when their situation falls outside the simple filing forms and methods, those looking to file bankruptcy should go to a lawyer to gain a thorough understanding of the new bankruptcy law.

A legal professional who specializes in this realm knows the ins and outs of the new rules and provisions and how they can and will influence each individual case.

Anyone or any business that finds themselves in dire straits should obtain a free consultation from a legal professional in order to figure out their rights under the new bankruptcy law.  The initial meeting with a lawyer will clear up any and all questions one has about filing, as well as determine if it is the best option for their personal situation.  If it turns out that filing is not the answer, then there is no need to set up additional meetings or retain legal counsel, and no money is exchanged.  In cases where filing for protection under the new bankruptcy law is the right thing to do, then the free consultation will indicate this, and the lawyer can advise the potential client with what their next steps should be.

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You have a house that is rather large, and while you once had the money to pay the mortgage, you now have to declare bankruptcy for that home in Ohio. There are many reasons why you had to declare bankruptcy, but the most prevalent one is because you lost your high-paying job. However, you will find that declaring bankruptcy in Ohio is not an especially difficult process.

About Bankruptcy in Ohio

When it comes to declaring bankruptcy in Ohio, it should be noted that there are several things you should check first in order to truly be considered bankrupt. First of all, there is the matter of how long it has been since you have actually been able to pay your bills. If it is a matter of note being able to pay them for a month, then that is not yet considered bankruptcy.

If you plan on declaring bankruptcy in Ohio, that means that you are unable to pay any of the bills that you have. Some people are able to pay some bills but not others, and this does not make them able to declare bankruptcy. True bankruptcy means that you are unable to pay any of your bills, and that your current income is either nothing or below the poverty level.

So, if you are declaring bankruptcy in Ohio, the first thing that you need to think about is what you can sell in order to repay some of your debt. Some people decided to sell some of their belongings to pawn shops, but you do not necessarily have to do this. First of all, if you still have a considerable amount of money left to pay on your mortgage the bank will repossess your house. This might lessen some of the debt, depending on your financial situation.

Next, the bank might repossess your car too. It really all has to do with how long it has been since you paid your car insurance and other car bills. It also has to do with how valuable you car currently is. For example, a used car in good condition would still be less favorable than a new car in good condition.

Lastly, something that is necessary for you to consider when it comes to bankruptcy is how you lost your job in the first place. While you can find help for getting out of bankruptcy, if you left your previous job on bad terms that might hurt your cause. For more information, search the internet. With the proper research, you are sure to be able to find a way to get a new job, thus eliminating your bankruptcy.

In just a few short weeks, President Bush’s Bankruptcy Abuse
Prevention and Consumer Protection Act will take effect. In a
nutshell, the new law, which goes into effect on October 17,
2005, makes it more difficult to cancel your debts under Chapter
7 Bankruptcy protection. Instead, consumers will find themselves
having to file for Chapter 13 Bankruptcy protection and paying
back their creditors over a five year period.

Here’s a look into some of the major changes that will affect
consumers choosing to file for bankruptcy after the new law goes
into effect -

Qualifying – Chapter 7 or Chapter 13?

To be able to qualify for protection under Chapter 7 bankruptcy,
consumers will have to face a means test. The means test
determines if your household falls above or below the median
income in the state where you reside. Those whose total is
greater than the state median income will not qualify to cancel
debts under Chapter 7 protection and will alternately have to
file under Chapter 13 and pay back your creditors.

The major intent of bankruptcy reform is to require people, who
can afford to make some payments towards their debt, to make
these payments, while still affording them the right to have the
rest of their debt erased.

The amount you have to pay back under Chapter 13 protection will
be greater because instead of a 3-year pay back period, that
time frame is now extended to five years – to ensure your
creditors get paid.

Credit Counseling

Anyone filing for bankruptcy under the new law will be required
to go through mandatory credit counseling. Be careful before
choosing a credit counselor as this field is filled with people
looking to line their pockets while emptying yours.

To find a trustworthy counselor, check to see if there are any
complaints against them or their organization filed with your
local Better Business Bureau. Secondly, find out if they are
certified by the National Foundation of Credit Counselors or the
Association of Independent Consumer Credit Counseling Agencies.
Finally, find out if they have not-for-profit status. Personally
I recommend Consumer Credit Counseling Services as they meet all
three of the above criteria. They can be reached at
1-800-888-2227 and can connect you with a local office.

The Cost Factor

Filing for Chapter 7 protection under the old laws normally cost
under $1,000. You should expect to pay more under the new laws
as filing fees have been increased by $60. Additionally, your
attorney will be required to double check all your financial
information which will take more of his or her time. Also there
is greater liability imposed on the lawyer which may cause their
liability insurance to increase, which gets passed on to their
clients in the form of higher fees. Under the new law, many are
expecting fees to increase between 25-50%.

Why Were the Laws Changed?

The bottom line is that major commercial creditors lobbied hard
for reform. Companies like CitiBank, MBNA, and other credit card
issuers actively contributed proposed amendments along with
generous financial support to reforming the bankruptcy laws -
and in their favor, according to many consumer protection groups.

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