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Chapter 7 Bankruptcy Laws

Chapter 7 is one of the bankruptcy laws that can be used to file a petition if the borrower has an excessive amount of debt and has no way to repay it. The law is for individuals wishing to file for bankruptcy. This law allows a trustee to keep some property belonging to the debtor as a security for the payment. Also, the creditors can no longer take necessary action to collect the debt from this individual unless it is relation with the necessary lien. Most popular instances where the debtor files for a Chapter 7 case are medical expenses and credit card debts.

As soon as the debtor files a bankruptcy case, an injunction is passed, after being assigned a case number, to stop the creditors. This is known as automatic stay. After a month, the administrative trustee’s office appoints a trustee to deal with this case. The trustee has to raise as much money as possible by liquidating all the assets belonging to the debtor at that time. This amount will be given to the creditors as per priority. It is the duty of the trustee to keep records about the debtor and report any fraudulent activities. It depends on the trustee’s judgment to decide whether the individual is truly liable or not.

As mentioned, the property that is kept as lien can help in exemption of certain amount. An attorney can determine the value of these assets and also advice on which of the assets will be placed under a trustee so as to make a proper lien amount. The creditors can then file a complaint within 60 days after the trustee meets the individual to decide about the assets. The trustee has to file the objections, by the individual, for any exemptions within 30 days after meeting with the individual. If the creditor has any objections, a trail will follow. An attorney can provide the best advice in such instances where the creditor’s objection resulted in a trail.

Usually, most of the chapter 7 cases are discharged without any objections, but specific debts will not be discharged as easily. An attorney can provide proper guidance regarding the kind of debts that might create problems. Creditors have the option of applying to re-open the case in case they are not satisfied with the discharge.

The new bankruptcy bill passed by President Bush might make some major changes in the Chapter 7 law. This bill narrows the possibility of filing for bankruptcy, as the debtor cannot file under Chapter 7 for all kinds of debts now. The federal court will decide the chapter under which a particular case can be filed as also if a case can be filed under Chapter 7 or not.

Chapter 7 Bankruptcy Law

Under the grant of authority given by Article I, Section 8, of the United States Constitution, Congress enacted the “Bankruptcy Code” in 1978, which is codified as title 11 of the United States Code. From October 17, 2005, the courts must charge a $220 case filing fee, a $39 miscellaneous administrative fee, and a $15 trustee surcharge, which must be paid to the clerk of the court upon filing. However, individual debtors may pay in installments with the court’s permission.

To qualify for relief under chapter 7 of the Bankruptcy Code, the debtor can be an individual or business entity. This eligibility is discussed under U.S.C 11 subsections 101(41), 109(b). An individual may not be a debtor unless he or she has received proper credit counseling within 180 days before filing. If the ‘current monthly income’ of the debtor is more than the state median, the Bankruptcy Code requires application of a ‘means test’. With the petition, the debtor must also file with the court schedules of assets and liabilities, current income and expenditures, unexpired leases, a statement of financial affairs and a copy of the tax returns. Also, debtor must provide a list of all creditors and claims, the source, amount, and frequency of the debtor’s income, a list of all of the debtor’s property and a detailed list of the debtor’s monthly living expenses.

Under the U.S.C. 11 Section 362, the ‘Automatic Stay’ on collection action is put so that creditors may not initiate or continue lawsuits or demand payments. U.S.C. 11 section 721 and 726 discusses the role of the impartial trusty who administers the case, operates the business of debtor and liquidates the debtor’s nonexempt assets. The trustee holds a meeting of creditors between 20 and 40 days after the petition is filed. At the meeting, the trustee puts the debtor under oath, and both the trustee and creditors may ask questions. The debtor must cooperate with the trustee and provide any documents that the trustee requests.

A discharge given according to U.S.C 11 section 727, releases individual debtors from personal liability for most debts and prevents the creditors owed those debts from taking any collection actions against the debtor. The court may revoke a chapter 7 discharge on the request of the trustee or creditor, if the debtor obtained the discharge through fraud.

Chapter 7 Bankrupt

When people refer to bankruptcy, the most common connotation is that any debts that have been incurred would be abandoned and cancelled. This situation is actually true if a person files for Chapter 7 bankruptcy.

A person or individual who files for bankruptcy could use either Chapter 13 or Chapter 7 bankruptcy. Choosing between Chapter 13 and Chapter 7 is not just a simple decision. The bankruptcy court would have to look into the person or individual’s situation first before making a decision as to which type of bankruptcy should be used.

The Chapter 7 bankruptcy is usually awarded to persons or individuals who have no sources of regular income. Chapter 7 actually functions to alleviate and relieve people of their debts. This then gives the person or individual the opportunity to start fresh without any financial debts to think about.

When a person or individual files for Chapter 7 bankruptcy, the bankruptcy court then assigns a trustee who functions and serves as the channel between the bankrupt individual and the debtors. This trustee then keeps an eye on everything. He also checks and sees if the whole bankruptcy plan is working out as designed.

However, bankrupt individuals must also give up and renounce their belongings and properties to the trustee assigned by the bankruptcy court. These are later sold. The money is then used to pay off their debts. These individuals, however, have the opportunity to keep a part of the value of their homes, as well as keep their cars or some personal property. Most of their debts are cancelled out though.

If you think that filing for bankruptcy is a good way to get out of a dire financial situation, then think again. Bankruptcies are actually reflected on your credit report for a period of ten years. This also affects your credit rating by bringing it to a much lower score. This could prevent you from acquiring loans and the like.

Chapter 13 Relief

You can file for bankruptcy under chapter 13 if you are unable to pay off your debts to creditors. Most people, at some time in their lives, may find themselves in situations when they are unable to pay their debts because of expensive medical bills, marital problems, or extended credit limits.

The problem becomes worse if you have creditors at your door demanding payments that you cannot make, and threatening you with adverse circumstances or lawsuits if you don’t pay up. In such situations, you can file for bankruptcy under chapter 13 to seek relief from the court of law. The court can grant you the permission to pay your debts, wholly or partially, in installments spread over a period of three years. In some cases, the court may also give you five years to discharge your debts.

Once you obtain a stay from the court, the creditors can no longer harass you in any way. This is because the only way they can contact you is through the court, so you will get relief from their incessant demands to pay the loans due to them.

The court provides you with a docket number to protect you from your creditors. Once you show them the docket number, they can no longer harass you or get you summoned by the court to dispossess you of your property.

You may be indebted to both secured and unsecured creditors. In most cases, the unsecured creditors receive only 10 percent of their debts. For instance, if you owe someone $2,000, you will be required to pay only $200 spread over a period of three to five years. This means that you will have to pay just a few dollars in each installment.

Even in such cases, if there is some change in your income and you want readjustment in your payments, you only need to inform the court and the necessary amendment is usually granted. You must, however, be ready to pay additional court fee and the fee of your attorney.

Chapter 13 Refinancing

Chapter 13 of the US bankruptcy code comes to the aid of the people who, on account of some untoward circumstances, are unable to pay off their debts. Such individuals can approach the court, and the court, if satisfied with the genuineness of the case, can permit them to pay off their debts, partially or wholly, in installments spread over a period of 3 years. In some cases, the period can be up to five years.

Yet seeking the help of Chapter 13 has its consequences. Consider a situation where you are unable to pay off your debts and approach the bankruptcy court to obtain relief. Your chapter 13 reports will remain in your credit record for seven years, and this will affect your credit ratings drastically. Lenders will be reluctant to extend you a loan till the expiry of at least two years since the filing for bankruptcy.

Obtaining finance is difficult but not impossible. The best option is to improve your credit report. For this, it is important that you get a copy of your credit report and ensure that everything is in order. For example, if after filing for bankruptcy, you pay your bills on time and pay your installments too, this will improve your credit report.

It is also important for you to note that if you refinance before the 37 months of bankruptcy, you’ll have to first pay the unsecured debts that you filed for in the bankruptcy court. So it is best that you wait past 37 months to avoid the possibility of paying back debt.

Also, if you need refinancing within one year of filing for bankruptcy, you can get it from an FHA mortgage. For this, you’ll have to prove that you have been paying your trustee payments and mortgage payments regularly each month. You can even contact your bankruptcy attorney for guidance. Remember that refinancing is difficult but not impossible—there is always a way out, provided you look hard enough.

Chapter 13 Law

Chapter 13 bankruptcy law contains procedures to discharge the debts of individuals or couples who have a regular source of income and are sincere in their intention to pay off their financial liabilities. The law places limits on secured and unsecured debts, which are approximately $269,000 and $870,000, respectively. While secured debts have to be paid in full, those unsecured have to be discharged according to the income of the debtor. It may, however, be noted that incorporated businesses are not covered under this law.

According to chapter 13 bankruptcy law, the debtor can file an application in the bankruptcy court. In the application he has to list his financial assets and liabilities, with a plan of discharging the same. Once the application is admitted, he is required to pay the petition filing fee and administrative charges to the court. The payment is to be made to the court clerk. Chapter 13 also provides for structuring the payment of court fees into installments, to a maximum limit of four.

In case the debtor and his spouse want to file a joint petition, they don’t have to pay double the filing and administrative fees. The lists of the assets and liabilities of the spouse have to be submitted to the court. After the court accepts the payment plan, it gives a docket with a number to the debtor, which protects him against any harassment from the creditors. The docket, however, does not protect the debtor against the demands of secure payments like taxes and mortgages.

Chapter 13 law provides for structuring the payment plan in installments to be paid over a period of three years. In certain special circumstances, the period can be extended to five years with the permission of the court.

The court appoints a trustee who coordinates between the court, the debtor, and the creditors. He also facilitates the process of payments. The debtor makes the payment of the installments to the trustee, who in turn disburses it to the creditors according the schedule arrived at in the court. The trustee keeps 3 to 10 percent of the payment as his service charges. The trustee convenes meetings between the debtors and the creditor, along with his attorney. The creditors are allowed to seek clarifications regarding their payments.

Chapter 13 Bankruptcy

Chapter 13 of the United States Bankruptcy court provides relief to debtors who want to discharge their debts but are unable to do so because of financial constraints. The reasons may vary: unemployment, marital problems, medical expenses, or extended credit limit. If you find yourself in a situation such as this, it can be a harrowing experience. You may have to face the persistent and sometimes threatening demands of creditors. You may also face lawsuits.

Given this scenario, the best option is to file for bankruptcy under chapter 13. If satisfied with your case, the court can permit you to pay your debts, partially or wholly, in installments spread over a period of three years. In some cases, the time period may also be extended to five years.

You can be granted relief under chapter 13, subject to certain conditions. The foremost is that once you file for bankruptcy, you should never absent yourself from attending the proceedings of the court. Also, your unsecured and secured debts should be less than $269,250 and $807,750, respectively.

You cannot file for bankruptcy if during the preceding 180 days, a prior bankruptcy petition filed by you was dismissed because you willfully failed to appear before the court, or that you had refused to comply with its orders. Also, the court may dismiss your petition if the creditors have already applied for permission to hold liens on your property and the court has already granted permission to them. It is important to point out here that corporate bodies or partnership businesses are not eligible to seek relief under this chapter.

To file for bankruptcy, you have to submit an application form, duly signed by you and your attorney, along with a filing fee. Once the court is satisfied with your submission, you will be allowed to pay off your debts under its supervision and protection. This means that your creditors will not be able to harass you to pay their debts. Once the court grants you its protection, you will be assigned a docket number. This is your security against any type of harassment by your creditors.

Chapter 13 Bankruptcy Laws

Chapter 13 is a bankruptcy law under which a petition can be filed by an individual or company. Chapter 13 dictates that the debtors repay the debt amount from their monthly earnings in installments. The court decides the time within which the decided amount has to be repaid to the creditors. Most of these will be for a maximum period of five years.

Employees and firms who have a steady income, in spite of all the debts incurred, can file a bankruptcy under this law. Since this law does not require any assets to be secured as liens, most people prefer this to the Chapter 7 law. This allows the debtor to keep a mortgaged home or car even while he’s paying his creditors from the monthly salary.

As in the case with Chapter 7 law, the automatic stay injunction is sent to all the creditors soon after filing the case and receiving the case number.

The debtor has to provide the details regarding the method of repayment. This might mean paying the creditors with the entire net income, other than absolutely necessary for basic needs, for about 3 to 6 years. The court will decide the amount that will be required for such basic needs. If some of the assets are not completely exempted, then that amount also has to be repaid within the given time slot.

As in the case of the Chapter 7 law, the individual gets to meet the trustee to provide the trustee with the details of income and the proposed plan to pay back the creditors within a given time frame. The trustee needs to make sure that the case is not fraudulent and that the plan provided by the individual will meet the creditors debt within the specified time limit.

The creditors can object to the plan provided by the individual before the final hearing in the court or even before the meeting with the trustee. Creditors can file their claim within 90 days after the individual’s meeting with the trustee.

The payments can start 30 days after filing the case till the end of the plan term. All the details will be taken care of by the attorney. However, the payments must be made without fail to avoid the dismissal of the case in court. Current payments must also be taken care of simultaneously to avoid leaving the case pending. This might result in the asset being taken away after the specified term finishes. A discharge order at the end of the term has to be sent by the court to confirm the absolute discharge from the case.

US Passport

When you are traveling outside the USA, you must have your passport with you. A passport issued by the US Department of State certifies you as a citizen of your country, when requesting permission to enter other countries.

If you have never been a possessor of a US passport or your last US passport has been expired for more than 12 years, or your recent US passport has been stolen, lost or damaged, then you must apply for a new US passport. If a person is applying for the first time, then he needs to do so in person.

International travel is considered a right that cannot be denied to any citizen. Even so, not very long ago, people who held views associated with communism, like Paul Robeson and W.E.B. Dubois, were denied a US passport. However, the U.S. Department of State cogently maintained that they have the right to screen people and revoke their passports if necessary. For the same reasons, US passports to Libya, Lebanon and Iraq are still denied.

In order to strengthen US security goals, biometric technology has been extended to US passports. This is done by including certain physical characteristics of the applicant, for example fingerprints or retina scans, and analyzing their distinguishing traits.

A contemporary US ‘e-passport’ has been proposed which will be a unique combination of both tighter security features and a novel design. It will have a computer chip attached to it, containing important data. This design will capture the essence of hope and success for the citizens of the USA.

1031 Tax Exchange Opportunities

The best thing about Section 1031 is that its benefits are available to large, medium, and small investors. The general misconception is that this section only provides opportunities to defer taxes on capital gains for owners of large commercial properties. But the fact is that if one has a qualified intermediary, then all kinds of investors can benefit from this section.

There is no dearth of real estate firms that provide an exhaustive list of 1031 properties. These firms generally also provide the services of a qualified intermediary. There are “simple gains” calculators available on the Internet that can help one to calculate the capital gains tax one would be able to save through the tax exchange transaction of a real estate property. Over the last one and one-half decades, there has been a phenomenal growth in transactions that qualify under the tax exchange laws. The IRS has also tried to make things easier by simplifying this law and plugging loopholes. Those who have lost out on the opportunity of utilizing this provision to save taxes can attend any of the seminars, which are regularly held in various cities to explain how to avail the opportunities under this section.

Prior to 1990, this section was quite complex and difficult to understand. But now, an individual can easily make out how this section operates. It is still advisable, however, that before you go for exchange you should consult your attorney or a qualified intermediary. There are certain issues pertaining to the partnerships, tenants-in-common, and transaction between spouses that need to be taken care of before you make a final decision.

However, large numbers of properties are now available in the markets that qualify under this section, and there are several firms that are exclusively dealing with the sale and purchase of such properties.