If you are contemplating filing for bankruptcy, you should make sure you are knowledgeable about the bankruptcy options open to you. One of the types of bankruptcies you can file for is Chapter 7 bankruptcy, also known as liquidation bankruptcy. Under this bankruptcy, your non-exempt assets are liquidated to pay off your debts and when all this is done, any debt left over is forgiven. But there are lots of other factors that come into play which can be confusing at times. Here are some facts about Chapter 7 bankruptcy to clear the air.
1. You will not lose your home
The prospect of losing the roof over your head has caused many a potential filer to avoid Chapter 7 bankruptcy and thereby bypass a good opportunity to wipe the slate clean and start again financially. But under the bankruptcy rules, you will not lose your primary home if it is worth below a certain amount. This also applies to your car. However, if you live in an expensive home, then you may want to consider filing for Chapter 13 bankruptcy (wage earner plan) instead to keep your home.
2. You will not lose your retirement funds
Another exempted asset that is protected under Chapter 7 bankruptcy are your retirement funds like your 401(k) or IRA (Individual Retirement Account). These retirement assets cannot be used to pay off your debts. However, if you have recently withdrawn money from any of your retirement plans to pay debts, then this money is no longer exempted.
3. You will still be able to secure loans
Granted, there will be an inevitable effect on your credit score once you file for Chapter 7 bankruptcy which will last for 7 to 10 years. But this does not mean you will be shunned by banks and financial institutions when you apply for loans. If you stay current on all your loan obligations for 2 years or so, there should be no reason why you cannot secure loans from lending institutions.
4. You can file for Chapter 7 bankruptcy more than once
There is some confusion as to how many times you are legally allowed to file for Chapter 7 bankruptcy. There is no limit in the law with the proviso that you cannot file a Chapter 7 bankruptcy petition within 8 years after your last Chapter 7 bankruptcy.
5. You can qualify for Chapter 7 bankruptcy provided you pass a means test
Due to the nature of Chapter 7 bankruptcy, it can be open to abuse. That is why the government passed the Bankruptcy Abuse and Consumer Protection Act 2005. After this Act was introduced, it is now easy to qualify for Chapter 7 as long as you pass a means test. The means test is to see if your household income falls below the average set by your state.
If you are considering filing for bankruptcy, call us at (813) 200 4133 for a free consultation.
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Filed under Chapter 7 (Tampa) by on Jan 25th, 2012. Comment. 
Can tax debt be eliminated through bankruptcy? Most people would tell you, “No”. But that is not entirely true. The good news is that you can eliminate tax debts through bankruptcy, although not all of it. The question is which tax debts can bankruptcy eliminate and which bankruptcy cannot. To be able to distinguish which tax debts can be discharged through bankruptcy, you should consult a bankruptcy lawyer.
The fact is some tax debts can be discharged through Chapter 7 bankruptcy while others can be dealt with through Chapter 13 bankruptcy. The taxes that cannot be discharged through a Chapter 7 bankruptcy might be able to be paid off through a Chapter 13 bankruptcy without being penalized with interest payments.
There is a timing factor that determines the dischargeability of your tax debts. Generally, if you have been filing and paying your taxes honestly to the best of your capabilities through the years, then the tax debts that are longer than 3 years prior to the date of filing of bankruptcy can be discharged by the bankruptcy court. But your most recent taxes like you current year’s tax bill is unlikely to be discharged.
But the IRS will go through your old tax returns with very thoroughly. And if they do find any dishonesty or discrepancy in your tax submissions, the bankruptcy court will not allow you to discharge your old tax debts.
How you treat your taxes during your bankruptcy process also plays a role. If you fail to file a tax return or file one late during the course of your bankruptcy, you risk having the court throw out your entire bankruptcy case. So if you do not want to see your bankruptcy case dismissed altogether, you should stay current with your tax filings.
If you are living under a heavy load of debt, whether they be tax debts or other debts, consider bankruptcy as a way out. Call us at (813) 200 4133 for a free consultation.ted through bankruptcy? Most people would tell you, “No”. But that is not entirely true. The good news is that you can eliminate tax debts through bankruptcy, although not all of it. The question is which tax debts can bankruptcy eliminate and which bankruptcy cannot. To be able to distinguish which tax debts can be discharged through bankruptcy, you should consult a bankruptcy lawyer.
The fact is some tax debts can be discharged through Chapter 7 bankruptcy while others can be dealt with through Chapter 13 bankruptcy. The taxes that cannot be discharged through a Chapter 7 bankruptcy might be able to be paid off through a Chapter 13 bankruptcy without being penalized with interest payments.
There is a timing factor that determines the dischargeability of your tax debts. Generally, if you have been filing and paying your taxes honestly to the best of your capabilities through the years, then the tax debts that are longer than 3 years prior to the date of filing of bankruptcy can be discharged by the bankruptcy court. But your most recent taxes like you current year’s tax bill is unlikely to be discharged.
But the IRS will go through your old tax returns with very thoroughly. And if they do find any dishonesty or discrepancy in your tax submissions, the bankruptcy court will not allow you to discharge your old tax debts.
How you treat your taxes during your bankruptcy process also plays a role. If you fail to file a tax return or file one late during the course of your bankruptcy, you risk having the court throw out your entire bankruptcy case. So if you do not want to see your bankruptcy case dismissed altogether, you should stay current with your tax filings.
If you are living under a heavy load of debt, whether they be tax debts or other debts, consider bankruptcy as a way out. Call us at (813) 200 4133 for a free consultation.
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Filed under Chapter 7 (Tampa) by on Jan 23rd, 2012. Comment.
When you file for bankruptcy, it is wise to do your due diligence and hired a bankruptcy lawyer. You should also have your records all straightened out as there is a lot of paperwork that needs to be done and everything you declare has to be substantiated. Then your bankruptcy lawyer will advise you on which type of bankruptcy you should file for, either Chapter 7 or Chapter 13 bankruptcy. But whichever bankruptcy you eventually file for, here are some things you can do to make the most out of your bankruptcy.
When under bankruptcy protection, you do not have the stress of dealing with harassing creditors. Sometimes, this reprieve can be a temptation for you to spend more. When you need to spend on credit, you should consult your bankruptcy lawyer first. This is so that the bankruptcy trustee will not have reason to think you are intentionally raking up your debts just to get it discharged eventually. Your spending habits need to change anyway, so when you are under bankruptcy protection is the best time to start. So to make sure you do not unduly arouse the suspicion of your bankruptcy trustee, always consult your bankruptcy lawyer before making special expenses if they are on credit.
This brings me to the next thing to do which is to change your spending habits. What drove you to declare bankruptcy in the first place? It could have been addictive money-wasting habits like gambling or careless spending ways like living beyond your means or lax monetary habits like living without a budget. Whatever the case(s) may be, you have to identify your faults and eliminate them. Have an accountability partner or a financial advisor to help you live within your means and save some money every month. This will help you not only get out of bankruptcy successfully but also stay solvent for life after bankruptcy.
When you exit bankruptcy, there is almost certainly going to be a stigma attached to you either by yourself or by people around you. Sadly, most people in society still frown upon a bankrupt for one reason or another. So if you find it difficult to cope with the stigma of being a bankrupt, you should hire a bankruptcy counselor. A trained counselor will work with you to overcome these issues and help you gain the necessary mindset to become a financially independent person again.
If you need bankruptcy advice, call us at (813) 200 4133 for a free consultation.
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Filed under Chapter 7 (Tampa) by on Jan 17th, 2012. Comment.
Once you file for bankruptcy, you get automatic stay which means your creditors are to leave you alone. However, at times you will still be harassed by a persistent creditor who either ignores the bankruptcy notice or was not informed of your bankruptcy and keeps phoning you or sending demand letters in the mail. Of course, this is illegal. In such a case, you have to take action and stand up for your rights.
What you should do is keep a record of all their attempts to contact you. Keep on file the letters of demand they send to you and the time and dates of their phone calls. These become evidence of law-breaking that you will use against them. The next thing to do is present all these evidence to your bankruptcy attorney. Your attorney will know what to do and how to bring this matter up to the attention of the bankruptcy court. You can initiate legal proceedings against your creditor(s) and sue them for breaking automatic stay and causing emotional harassment. In most cases, you will be successful as long as you can provide evidence.
Although automatic stay applies the moment you file for bankruptcy, there are certain exceptions. These exceptions come in the case of co-debtors. Some of your debts may be in two names such as a housing loan that is in joint names between you and your spouse. You and your spouse are co-debtors in such a case. All consumer debts (like housing loans) can have co-debtors. When you file for bankruptcy protection, your co-debtor may or may not be protected under automatic stay as well.
The difference comes in the type of bankruptcy you file. If you file for Chapter 7 (i.e. liquidation) bankruptcy, you will be granted automatic stay, but your co-debtor is not. However, if you file for Chapter 13 (reorganization) bankruptcy, then your co-debtor is also afforded protection under automatic stay until you are discharged from bankruptcy.
However, there is one exception to this rule in Chapter 13 bankruptcy and that is in the case of tax debt. Tax debt is not classified as consumer debt. So if you and your spouse are liable for the same tax debt listed in your Chapter 13 bankruptcy, then only you are granted automatic stay and the IRS still has the right to seek payment from your spouse, the co-debtor.
So it is not possible to seek legal redress against the IRS (as you could with harassing creditors) if you have tax debts listed in your Chapter 7 or Chapter 13 bankruptcy.
If you need help with tax debts or bankruptcy, call us at (813) 200 4133 (bankruptcy) or (813) 229 7100 (tax) for a free consultation.
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Filed under Chapter 7 (Tampa) by on Jan 13th, 2012. Comment.
One of the most dreaded things anyone can face is the foreclosure of their home. This is because foreclosure threatens our basic need for security. But if debts are mounting and you fall behind in your mortgage payments, it is only a matter of time before your bank takes foreclosure action. Is there anything you can do about it? Yes. You can file for bankruptcy protection.
Depending on your situation, a bankruptcy filing may halt foreclosure proceedings. There are two types of bankruptcies for individuals. The first is Chapter 7 bankruptcy which is where your non-exempt properties are sold to repay your debts. Chapter 7 bankruptcy is useful if you are not behind in your mortgage payments but have run into unexpected financial problems like a huge medical bill that you need time to repay. Should you file for bankruptcy under such circumstances, there is a high chance that your Chapter 7 bankruptcy will stall your mortgage payments until you exit bankruptcy. After the discharge, your mortgage will continue as scheduled. This is how Chapter 7 bankruptcy can affect your mortgage and help you avoid foreclosure to your home.
The second type of bankruptcy for individuals is Chapter 13 bankruptcy or reorganization bankruptcy. Under this type of bankruptcy, your bankruptcy debts are put into a repayment plan that can stretch up to five years. Thus, your mortgage will be included in this plan. When you start repaying your bankruptcy debts according to the plan, you can avoid foreclosure. Chapter 13 bankruptcy will be more useful to you if you have fallen too far behind your mortgage payments and your bank has initiated foreclosure proceedings. But there is a proviso.
The bankruptcy court will only grant your mortgage to be included into your bankruptcy assets provided you are not too far into the foreclosure process. If the bankruptcy judge feels that you owe too much to the bank already and that the foreclosure process has gone on for too long, then he or she may strike out your mortgage from the rest of your bankruptcy assets. In such a case, there may be nothing you can do to save your home.
To decide whether you should file for bankruptcy and discuss how your home can be saved from foreclosure in bankruptcy, call us at (813) 200 4133 for a free consultation.
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Filed under Chapter 7 (Tampa) by on Jan 11th, 2012. Comment.
