Are you drowning in debt like so many people are these days? Does it feel like you always have “too much month at the end of the money” every month? You can either soldier on and try to change your fortunes in this tough economy or take the easier route – file for bankruptcy.
How does bankruptcy put you on the road to financial recovery? There are 2 forms of bankruptcy for individuals (as opposed to companies, municipalities, governments etc) and they are called Chapter 7 and Chapter 13 bankruptcy (following the sections in the bankruptcy code that govern them). Each of these bankruptcies work in different ways and both bring benefits.
The most obvious benefit is that bankruptcy wipes you financial slate clean of all your debts. Under Chapter 7 bankruptcy (called liquidation bankruptcy), your non-exempt assets are liquidated and the proceeds are used to pay off your debts. After all non-exempt assets are sold off, the rest of the debts are forgiven so that you can have a fresh start financially.
Under Chapter 13 bankruptcy you are given a schedule to repay your debts over a maximum of 5 years. This gives you some breathing space to finish paying off your debts over time. So whether you file for Chapter 7 or Chapter 13 bankruptcy, your debt problems will soon be a thing of the past.
Another benefit of bankruptcy is Automatic Stay. Automatic stay is a court-ordered prohibition imposed on all your creditors disallowing them to communicate with you in any form while you are under bankruptcy protection. This means an end to all harassment, badgering and hounding from hardline creditors. Automatic stay comes into effect immediately upon the confirmation of your bankruptcy.
In addition, choosing bankruptcy saves you time as it cuts the recovery curve in dealing with your debts. We all know the vicious cycle of debt and repayment that never seems to end because your debts keep increasing even though you try to pay as much as you can each month. All the money you pay is like throwing it into the Black Hole of Calcutta, it never seems to fill it. But bankruptcy can put an end to this vicious cycle and allow you to save not just money but time as well.
Finally, when you file for bankruptcy, you get advice on how to manage your financial affairs through the bankruptcy from your bankruptcy attorney and bankruptcy trustee. Your bankruptcy attorney is your most valuable ally in your fight against debts and your bankruptcy trustee is your arbiter between you and your creditors.
So if you are considering filing for bankruptcy, call us at (813) 200 4133 for a free consultation. Our team of experienced bankruptcy attorneys are at your service.
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Filed under Chapter 7 (Tampa) by on Dec 26th, 2011. Comment. 
What a Bankruptcy Trustee Does in Chapter 7 Bankruptcy
When you file for Chapter 7 bankruptcy, the bankruptcy court will appoint a trustee to oversee your case. The trustee’s overall responsibility is to liquidate non-exempt assets to pay off as much of your debts as possible. It would be to your advantage to understand the role of the bankruptcy trustee so that you can cooperate with the trustee and have your bankruptcy discharged as soon as possible.
The first thing the bankruptcy trustee does is review your bankruptcy petition to see that everything is in order. In doing so, the trustee will examine your assets to determine which are exempted from being liquidated and which are not. So it is imperative that you list all your assets and debts in your bankruptcy petition. If the trustee detects any discrepancies or irregularities, he may dismiss your case.
Sometimes, you may miss out listing certain assets either due to a genuine oversight or because you have received the asset only after filing for bankruptcy. For example, if you are involved in a lawsuit prior to filing for bankruptcy and you are awarded assets in judgment post-filing, this asset may not be listed in your list of assets. In such a case, you need to inform your bankruptcy attorney who will in turn inform the trustee of the asset(s) that are not in your list.
Another major thing the bankruptcy trustee does is to convene the meeting of creditors where the trustee once again reviews the bankruptcy petition and confirms it with your bankruptcy attorney. This is where you get another chance to rectify any errors or insert any missing information into your petition. The best thing to do would be to inform your bankruptcy attorney about any changes you need to make to your bankruptcy petition so that you attorney can liaise with the trustee and make the necessary changes promptly. If you are considering filing for bankruptcy and need a bankruptcy attorney, call us at (813) 200 4133 for a free consultation.
One of the bankruptcy trustee’s main tasks is to determine non-exempt assets by reviewing your list of assets. If you state that a certain asset is exempted from liquidation, the bankruptcy trustee (and any of the creditors) can challenge it. On the other hand, the trustee may review a non-exempt asset and determine that it may not be worth liquidating and hand it back to you.
If the bankruptcy trustee finds no non-exempt asset, he or she will file a “Notice of No Assets” and discharge the case. All non-exempt assets will be liquidated to pay off debts after the bankruptcy trustee deducts his or her administrative fees from the proceeds.
It would not be uncommon to overlook valuable bankruptcy exemptions. In such a situation, the bankruptcy trustee will not educate you about overlooked bankruptcy exemption which is why having a bankruptcy attorney to advise you is so important.
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Filed under Chapter 7 (Tampa) by on Dec 23rd, 2011. Comment.
If you are considering filing for bankruptcy, it is best to take some steps to plan your bankruptcy. Proper planning will keep your debts to a minimum and ensure a smooth bankruptcy process. Here are some things to consider before filing for bankruptcy.
1. When to file for bankruptcy
Since your income level is one of the main factors in bankruptcy, it is important to choose the most appropriate time to file for bankruptcy depending on your job situation. Some people decide to file for bankruptcy because they have lost or are about to lose their jobs. One of the things you may need to do in your bankruptcy filing is take the Means test. The Means test is to ascertain if you have enough disposable assets to pay off your debts and is based on your previous 6 months’ income. Therefore, you should take the Means test and file for bankruptcy after you have lost your job or have quit.
2. How you pay off debts
Obviously, you will want to reduce your debts as much as possible. But if you file for bankruptcy, you should ensure that you do not pay off any debt(s) preferentially i.e. favor one creditor (like a family member). This is because if the bankruptcy trustee discovers preferential payments to a creditor he or she may void the payments and demand the return of the money to the bankruptcy estate.
3. Buying a car
If you buy a new car through a car loan 910 days before filing for bankruptcy, the loan will not be dischargeable. Hence you will have to continue repaying the loan throughout the bankruptcy and beyond. So if you really need a car before your bankruptcy, either buy one in cash or determine that you can keep up with the loan repayments through bankruptcy.
4. Selling assets
If you sell off any assets before filing for bankruptcy, you need to ensure you sell at market value. If the bankruptcy trustee finds you have sold off your assets (like property) below market value, he or she may void the transaction and classify it as an illegal transaction because you did not receive the appropriate value in the transaction.
It is important to discuss these pre-bankruptcy planning matters with your bankruptcy attorney before filing for bankruptcy. Call us at (813) 200 4133 for a free consultation.
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Filed under Chapter 7 (Tampa) by on Dec 21st, 2011. Comment.
Heard of this story? A frog was swimming in a pot of water on a lit stove. He thought he could jump out at any time before the water got too hot so he continued to enjoy his swim. Before he realized it, the water temperature had risen to boiling point but by then it was too late for the frog to save itself as its muscles had been atrophied by the heat. What went wrong for the foolish frog? It had to do with the slowly increasing temperature. The temperature did not rise suddenly but slowly. As it rose slowly, the frog’s body temperature rose together with it, which was why the frog did not notice it was getting boiled until it was too late.
So what’s the moral behind the story? Just this – credit card debt has a way of creeping up on you unnoticed and before you realize it, you are overwhelmed by your debts.
It is very unusual for credit card debt to rise suddenly. It normally rises in stages. The first stage of debt is debt that comes when you overspend on credit. If you are not able to clear your credit card balance at the end of each month or at least within 4 months, you are at risk of getting into even more debt in future.
So you should always spend within your budget and keep your credit card spending to a minimum. Spending on credit should be reserved for necessary times like when you are travelling and cannot carry lots of cash on you.
If you allow your credit card debt to rise above the first stage, you will get into deeper debt where you can only afford minimum payments on your credit cards or you transfer balances from one card to another while your credit spending continues. You need to take some drastic action if you are in this much debt.
The best thing to do is to drastically reduce your overall spending (cash and credit) and use the cash you save to reduce your credit card balances. You may need to negotiate your credit terms with your credit card issuer.
The final stage of credit card debt is when you start skipping payments and you are charged more interest and fees on the unpaid balance. This is the ‘boiling water’ stage and you must do some debt negotiation with your credit card issuers for a lower monthly repayment or waiver of late fees.
If all negotiations fail then the other option is to file for bankruptcy. Bankruptcy is your right under the law and can be your means of wiping the slate clean for you financially. Call us at (813) 200 4133 for a free consultation or further information.
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Filed under Chapter 7 (Tampa) by on Dec 14th, 2011. Comment.
At the 11th hour, Chinese investors Pang Da and Youngman have agreed to buy over 100% of Swedish auto maker, Saab thus saving the debt-ridden company from bankruptcy. The purchase price – €100 million or $142 million. Victor Muller, Chief Executive of Saab said, “After the better part of seven months of agony for the company we have come to a point where we can proudly say that we made it.” As part of the deal, the Chinese companies have also agreed to provide long term funding.
Altogether, Pang Da and Youngman will inject €245 million into the company in a deal including joint ventures and buy up about half of Saab’s shares. In addition, the Chinese will also provide a bridging loan of €70 million to tide the company over during a three-month restructuring that began in September.
Saab had been granted approval for 3 months of renegotiation of debts and funding during which it will be protected from creditors and avoid filing for bankruptcy. Just last week, Saab’s court appointed administrator, Guy Lofalk applied to have Saab’s bankruptcy protection lifted, a move that would have opened the way for creditors to claim against the company and pave the way for bankruptcy. At that time, talks with the Chinese had fallen through after Saab’s owners, Swedish Automobile rejected Pang Da and Youngman’s initial offer of $30.4 million to buy over the company.
In a sudden turn of events, Muller announced the deal was back on track after terms were renegotiated and have become acceptable. At that point, Lofalk withdrew his petition to lift bankruptcy protection.
Under the new proposal, Youngman will buy 60% of Saab and Pang Da will buy 40%. According to Muller, the Chinese had agreed to provide funding to Saab that was “way in excess of the original agreement. It will probably be more like double that amount.”
The new agreement would still require approval from a host of creditors, but Muller has expressed his optimism that they will find the new terms “convincing and compelling”.
This buy over is now the second Swedish company bought by Chinese investors after another Chinese company, Geely bought over Volvo for $1.5 billion in August last year. Initially, there was also concern that the Chinese would move Saab’s operations to China should they become its owners. But now, it appears that they will continue operating in Sweden’s Trollhaettan plant. Geely also has not moved their production to China.
Commenting on the deal, Sweden’s enterprise minister, Annie Loeoef said, “I am glad they have taken a step forward and that the reorganization will continue”.
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Filed under Chapter 7 (Tampa) by on Oct 27th, 2011. Comment.
