For many people, filing for bankruptcy is the last resort to resolve financial woes. But this should not be so. Bankruptcy is a right of every citizen under the law. And believe it or not, under certain circumstances bankruptcy can be a more viable option than others. If you are weighed down under a mountain of debt, generally the only options open to you are to repay them outright, reduce your expenses and repay or file for bankruptcy. If you choose the first option, you will have to find the money to repay your debts. If your debts have piled up over the years, chances are your income has not been sufficient to sustain your financial obligations. If that be the case, you may resort to borrowing to repay your existing debts but that is obviously not the solution.
As for the second option, it can only work if you make some drastic changes to your lifestyle. If your spending habits continue to exacerbate your financial problems, there is no way you can find the money to repay your debts by yourself. For instance, if you tend to spend a lot on credit you need to reduce or stop doing so altogether. If you always resort to transferring one credit card balance to another as a means of paying, you need to stop doing so and pay off your credit card balances with cash.
It can be clearly seen that the first two options to clear your debts can be painstakingly slow. That is why you should not discount bankruptcy or keep it only as a last resort.
If you choose to file for bankruptcy, there are two types of bankruptcy filings open to you (you only choose one). Chapter 7 bankruptcy is also called liquidation bankruptcy. Under this type of bankruptcy, your non-exempt assets will be sold to repay your debts. Generally, your principal home and some other assets are exempted from liquidation. After all your non-exempt assets have been liquidated, whatever unsecured debts still outstanding are forgiven. This gives you the ability to start afresh financially.
The second type of bankruptcy open to individuals is Chapter 13 bankruptcy a.k.a. reorganization bankruptcy. Under this type of bankruptcy, you are subject to a payment plan to repay all your outstanding debts over a period that can stretch up to five years. Once your debts are paid off, you will be discharged from bankruptcy.
So realistically, bankruptcy provides you with a viable way out of your debt problems in a matter of a few months to a maximum of 5 years. Imagine within a few months from now, you can enjoy a new lease of life financially without any more stress and harassment from creditors. If you wish to discuss bankruptcy, call us at (813) 200 4133 for a free consultation.
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Filed under Chapter 7 (Tampa) by on Jan 12th, 2012. Comment. 
In 2005, the government implemented a wide range of reforms insofar as bankruptcy was concerned. The Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) and Bankruptcy Abuse Reform Act 2005 were passed by lawmakers aimed at protecting consumers and preventing rampant bankruptcy filings as an easy means to absolve responsibility over debts.
With the enforcement of these Acts, there are several regulations you need to adhere to. Here are the main ones:
• Federal tax returns must be current
Before you are allowed to file a bankruptcy petition, you must have your tax returns current even if you have not been able to pay all your taxes. This means that if you have missed out on submitting your tax returns for certain years, you need to make your submissions are done. This is a prerequisite for the obligatory meeting with creditors (called the 341 meeting). You must submit copies of your tax returns to the bankruptcy court, the bankruptcy trustee and sometimes to certain creditors as well.
• Credit counseling must accompany bankruptcy.
You must complete a course in credit counseling within 180 days before your bankruptcy is discharged. The counseling is conducted by approved credit counseling agencies and can be done in person, over the phone or online. Upon completion of the counseling you should be given a certificate of attendance. This certificate is needed to show you have undergone credit counseling.
• Financial management course is mandatory
You also need to complete a personal financial management course recommended by your bankruptcy trustee. The purpose of this course is to equip you with necessary skills in managing your finance in a more efficient manner.
• Provide pay stubs at least for the last 60 days to the bankruptcy court
• Submit annual statement of income and expenses
For Chapter 13 bankruptcy filings, you’ll have to submit an updated statement of income and expenses every year to the bankruptcy court.
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Filed under Chapter 7 (Tampa) by on Jan 3rd, 2012. Comment.
The number of people and businesses filing for bankruptcy in the Tampa Bay area has fallen over the months. But this may not mean people have overcome their financial woes. The reduction in bankruptcy filings may indicate that banks are slowing down on foreclosures, resulting in less people filing for bankruptcy to bail themselves out.
In the year ended September 30, slightly less than 57,000 individuals and businesses filed for bankruptcy in the Middle District of Florida, a region that stretches from Fort Myers to Jacksonville and includes Tampa. This represents a drop of 14.8% over the year. Business bankruptcies fell by 16.7% in the district while personal bankruptcies saw a drop of 14.7%. If you consider only Tampa alone, the percentages are also about the same, but the numbers are understandably lower compared to the whole Middle District of Florida.
Although no one is able to precisely pinpoint the reason for the significant drop in bankruptcies, the fewer foreclosures by banks is one generally accepted reason. Many banks who faked foreclosure documents got into so much trouble that they ceased foreclosure actions until they could make sure their documents were legitimate. The number of foreclosures for October 2011 fell by a hefty 59% year on year according to RealtyTrac, a foreclosure research firm.
In the meantime, other banks simply do not want to have the headache of foreclosing on too many houses. Some of the many problems that come with foreclosure include actions by delinquent homeowner associations, deliberate non-payment of dues by homeowners etc. Some homeowners are of the thinking that they can drag their feet in paying the banks because their neighbors have not paid for many months without any action taken against them.
Other possibility why bankruptcy filings have decreased is that there is less credit card debt these days as banks become more lenient with businesses. Generally of late, banks have been more willing to deal with delinquent businesses. People do not have as much access to credit as they did before the recession and many people are using their cards more sparingly. A recent report by the Federal Reserve shows that in the past three years, credit card use has fallen nearly 19%.
On the national level, last week, the Administrative Office of the US Courts reported that bankruptcy filings had fallen 8 percent nationwide in the fiscal year ended Sept. 30.
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Filed under Chapter 7 (Tampa) by on Nov 17th, 2011. Comment.
In a recent report, the Administrative Office for the US Courts said that the bankruptcy rate has fallen by 8% between October 1, 2010 and September 30, 2011. Indiana State also saw a drop in bankruptcies year on year for the fiscal year ending September 30.
There were 1,467,221 bankruptcy filings throughout the country in the latest year compared to the 1,596,355 million filed the year before. This year, there were 10% less Chapter 7 filings and 4% less Chapter 13 filings whereas Chapter 11 filings fell by a significant 16%. In the latest report on the fiscal fourth quarter, the number of bankruptcy filings fell by 15% compared to the same period last year.
Chapter 7 bankruptcy is where the debtor liquidates all disposable assets to pay off debts while Chapter 13 bankruptcy is a court approved payment plan for individuals to pay off their debts over a period of up to 5 years. And chapter 11 bankruptcy is for businesses to reorganize their finances to repay their debts.
In the state of Indiana, a total of 48,438 bankruptcies were filed last year in the fiscal year ending September 30. This included 983 business bankruptcies. But this year during the same period, the number of bankruptcies came up to 41,199 bankruptcies, including 775 business bankruptcies. The lower number of business bankruptcies is largely due to the fact that banks are now more willing to give time to businesses to pay up their debts rather than initiate bankruptcy proceedings.
The 7th Circuit Court of Appeals, which includes Indiana, Illinois and Wisconsin, said there was a 10% drop in bankruptcy filings overall according to official figures. Last year, there were a total of 161,182 bankruptcy filings compared to 145,018 in the most recent year.
The Northern District of Indiana’s bankruptcy filings fell by 15.7%, from 19,538 to 16,477. Out of these, the number of Chapter 7 filings declined by 16%, while the Chapter 13 filings fell by 13.4%. There was also good news for the Southern District where overall filings went down by 14.5%, to 24,727 from 28,905 a year ago. Chapter 7 bankruptcy filings also fell by 13.8% while Chapter 13 filings declined by 15.5%.
As a result of these improved figures, Indiana’s national bankruptcy rating also improved to seventh in the number of overall filings in the most recent year, compared to fourth the year before. At the same time, Indiana also rose from third to sixth in Chapter 7 filings and dropped from 10th to 11th in Chapter 13 filings.
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Filed under Chapter 7 (Tampa) by on Nov 14th, 2011. Comment.
Wisconsin state’s number of bankruptcy filings has fallen by 9.5% this year. But analysts say they are not jumping for joy yet, at least not until the jobless rate in the state falls significantly. The number of bankruptcy cases in US bankruptcy court in Wisconsin fell to 21,167 year on year, mostly coming from Chapter 7 bankruptcies, according to records.
According to figures from the American Bankruptcy Institute (ABI), the trend in Wisconsin follows that of the nation as a whole. Bankruptcy filings fell by about 10% nationally through the first three quarters of this year to a little more than 1 million.
Economists concur that the downward trend of bankruptcy filings comes just after the worst of the economy which happened about two years ago. Commenting on the national decrease in bankruptcy rate, Jay Mueller, a portfolio manager for Wells Fargo Advantage Funds in Menomonee Falls said, “I don’t think there is a lot to read into it other than to say there is a lag effect between a bad economy and bankruptcy filings.”
However, the number of bankruptcies among certain classes of consumers has not decreased in some states. For one thing, the number of small business owners filing for bankruptcy has not fallen. This has been the case in Milwaukee, for instance.
Small business owners selling specialized services and small luxury items seem to have continued to file for bankruptcy. Demand for specialized services such as repairing hydraulic pumps in off road vehicles and small luxury items that are not necessities like costume jewelry, flowers or boutique clothing appear to have drastically fallen. This has propped up bankruptcy figures among these classes of consumers.
Furthermore, filing for bankruptcy has become more socially acceptable and less of a stigma these days simply because so many people have done it. This has also prompted a continuous flow of bankruptcy filings.
Whether you are a business owner or a wage earner, bankruptcy may be your answer to starting afresh financially. Bankruptcy is your right and can offer you protection from your creditors and elimination of certain debts. If you are contemplating filing for bankruptcy, call us at (813) 200 4133 for a free consultation.
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Filed under Chapter 7 (Tampa) by on Oct 20th, 2011. Comment.
