We all like choices. We like to choose different kinds of foods, different kinds of pets, and different kinds of homes and cars. If you are in a financial crisis, you also may want several bankruptcy choices. What type of bankruptcy you should choose will depend on your financial situation.

There are three different bankruptcies a business or an individual can use to protect themselves from various creditors.

1. Chapter 7 Bankruptcy, commonly a “liquidation bankruptcy”, is the simplest and quickest

   form of bankruptcy. It is available to individuals, married couples, corporations, and partnerships. A trustee is appointed by the court to gather and sell your non-exempt property, and he will use the proceeds from the sale in order to pay your creditors. Most Chapter 7 bankruptcy cases are “no-asset” cases, and the debtor will not have assets for the trustee to sell.

2. Chapter 13 Bankruptcy, known as the wage earner’s plan, is the second bankruptcy

   available to individuals. It enables individuals with regular income to develop a plan to repay all or part of their debts. Under this chapter, debtors propose a repayment plan to make installments to creditors over a three to five year period. If the debtor’s current monthly income is less than the applicable state median, the plan will be for three years, unless the court approves a longer period “for cause”. If the debtor’s current monthly income is greater than the applicable state median, the plan generally must be for five years. Payments may not ever exceed a period longer than five years. During the plan, creditors may not start or continue collection proceedings against the debtor.

3. Chapter 11 Bankruptcy, used primarily for business bankruptcies, is similar to Chapter 13

   Bankruptcy but allows the trustee to run the daily business operations of the business. In Chapter 11 Bankruptcy, unless a separate trustee is appointed for cause, the debtor, as debtor in possession, acts as trustee of the business.

The type of bankruptcy you can file may be determined by you or may, under some conditions, be determined by law. Filers who wish to file Chapter 7 Bankruptcy must first pass the Means Test. Debtors whose income is below the state’s median income are not subject to the means test.

A Means Test calculator is provided to the debtors who are above the median income in their state, and it includes a formula designed to keep filers with higher incomes from filing for Chapter 7 bankruptcy. Although a complicated formula, the bankruptcy means test is rather generous and many debtors have no trouble meeting its requirements.

Debtors who cannot pass the Means Test will be required by law to file Chapter 13 Bankruptcy. Business proprietors, if they qualify, can choose to file any of the three types of bankruptcy choices, but they may be limited in their ability to file Chapter 11 Bankruptcy.

Contact a bankruptcy lawyer to determine what type of bankruptcy is right for you. If you need relief from the stress of debt and you live in or around the metropolitan area of Toledo, Ohio, contact us at www.betterbankruptcy.com .We will help you find a bankruptcy attorney in your area who can answer your bankruptcy questions.

Bankruptcy Requiem

I hear the advice of the debt management team, I review bankruptcy in the forums as it is seen, and I long for the days where easy credit made me beam. Yes, I am a credit addict.

I robbed Peter to pay Paul, I paid the minimum call, and I maxed my cards one and all. Yes, I am a credit addict.

I have heard the telephone ring, I have used the answering machine, and I have stressed over its meaning. Yes, I am a credit addict.

I watched my scores plummet, I was refused credit because of it, and I suffered from anxiety through all of it. Yes, I am a credit addict.

When stress took its toll, I no longer was on a roll, but I managed to establish a goal. Yes, I am a credit addict.

I contacted a bankruptcy attorney, I gave up my credit history, and now I no longer suffer misery. Yes, I am no longer a credit addict.

Addiction to spending and easy credit has been the downfall of many consumers in the past. In 1980, the federal government passed a special law which allowed national banks to ignore state usury limits and peg the rate of interest at a certain number of points above the Federal Reserve discount rate.

In addition, certain chartered organizations like small loan companies and installment plan sellers had their own rules. In most states, the laws do not have enough teeth to regulate credit card debt. In many cases, filing bankruptcy may be the only way a person can relieve themselves of exorbitant debt.

Law passed in the 1980s may allow you to put $10,000 on your credit card, allow the company to attach a 24% APR to it and with a 2% minimum payment, your minimum payment will never reduce your debt. If you pay $200 a month for the rest of your life, at the current federal maximum rate, you will never pay off the $10,000 of credit card debt.

Charging large sums on your credit card does not make you a credit addict. In fact, many Americans use their credit cards to make ends meet, and if you are in a tough financial position you may only be able to pay the minimum payments. Does this mean you are financially bankrupt?

As a general rule of thumb, you are financially bankrupt if your current sustainable income will not pay all of your living expenses, pay interest on outstanding loans, and reduce some of your principal on those loans while paying on them for five years.

Bankruptcy laws can be complicated and you may need assistance from a bankruptcy lawyer. If you need relief from the stress associated with debt and you live in or around the metropolitan area of Omaha, Nebraska and Iowa, contact us at www.betterbankruptcy.com .We will help you find a bankruptcy attorney in your area who can answer your bankruptcy questions.

All of us gamble. When we walk out on the sidewalk, we gamble a car won’t veer and hit us. When you drive a car, you are taking a risk. When we sleep at night we take the risk an airplane won’t drop out of the sky and hit our home killing us, but there is a risk. When we start a new business, there is also a risk. In fact, there is a 50% chance of failure.

The definition of gambling is taking a chance. By that definition, we are all gamblers because we all take risks and chances. Sometimes we gamble by choice, other times we don’t. Gambling by choice is when we choose to wager on games. In these types of games if you win, someone else loses, and the odds favor the house. Even at a casino, your win can be someone else’s loss, but when everyone loses, the house still wins. The house just wins bigger. 

Gambling on life’s circumstances is a whole lot like gambling in a casino, the only difference is what you stand to lose. In life, your loss can be physical, emotional, spiritual, or financial. When we take risks and make the wrong decisions, we lose. Others can benefit by our loss. For example, if you get fired, another person may get promoted to fill your position. If you get divorced, you lose your spouse, but they may become someone else’s spouse. 

When does the house win because of everyone’s loss? Rarely, but certain local governments who finance retirement accounts may gain the full extent of their investment when the insured dies and they have no beneficiary. If local governments succeed in their recent quest to pass their obligations of retirement accounts to the private sector, the loss of all the public employees’ retirement accounts will be a huge gain for the public coffers. In this case, the full loss of the union’s retirement accounts is a win for the local governments. 

Taking chances and risks are part of life. It doesn’t matter whether we are a politician, public employee or self-employed. The risks we take can come back to haunt us. Gambling, even on life’s circumstances, can cause us to go bankrupt. 

If you have made choices that have caused you financial hardship, there may be help. Bankruptcy may be an option to help you recover, to protect your assets, and to help you have a fresh financial start. 

Bankruptcy laws can be complicated and you may need the help of a bankruptcy lawyer. If you need relief from the stress of debt and you live in or around the metropolitan counties of Bergen and Passaic, New Jersey, contact us at www.betterbankruptcy.com .We will help you find a bankruptcy attorney in your area who can answer your bankruptcy questions.

Creditors use wage garnishment as a legal maneuver to get money owed to them. If the creditor sues the debtor and the court issues a judgment from the lawsuit, a creditor can use the judgment to legally force an employer to withhold a certain percentage from the debtor’s paycheck for debt repayment. How does bankruptcy affect wage garnishments? 

If a debtor files for bankruptcy a judge will order all collection actions to cease, this is called an automatic stay. The automatic stay, applicable to all bankruptcy filings, automatically stops lawsuits, foreclosures, utility shut-offs, evictions, repossessions, garnishments, attachments, and debt collection harassment. All creditors will have to go through a US Bankruptcy Court trustee in order to deal with their debtors. 

Wage garnishments may also be prevented without having to file for bankruptcy. This personal bankruptcy question was posted on the internet in April of 2011,“If you file Chapter 13 bankruptcy can they garnish your check? My stepson is considering Chapter 13 bankruptcy and he is about to be discharged from the Army with early retirement and disability. He thinks the slate is just wiped clean and his credit only affected for 2 years. Is he right or has he been misinformed?” 

The debtor’s stepfather in this personal bankruptcy illustration may be the one misinformed. Unlike active duty pay, military retired pay cannot be garnished for commercial debts (i.e. credit cards). Military retirement pay can, however, be garnished for alimony, child support, IRS Tax Levies, and debts owed to the government. Disability pay is another matter, but it also is exempt from garnishment for a commercial debt. The military handles an automatic stay in bankruptcy proceedings like any other employer. 

Other forms of income that cannot be garnished for commercial debt include Social Security Retirement, Social Security Disability, and Supplemental Security Income. Like military pay, this type of income can be garnished for certain tax obligations, child support, alimony, certain debt to federal agencies, but not to exceed 15% of any given monthly benefit. Federal law prevents any income from being garnished for more than 25%. 

Another form of collection similar to garnishment is called an attachment. Winning a lawsuit can also attach a judgment against a debtor’s wages. Attachments are generally not ongoing, but it is an order from the court requiring the employee’s check or asset to be attached as payment for the debt. 

Since all wages can be garnished, and since filing for bankruptcy is a federal proceeding, all employers and governments may be affected by an automatic stay. As long as the stay is executed in the bankruptcy proceedings, garnishments will cease. 

Bankruptcy laws can be complicated and you may need a bankruptcy lawyer to review your financial situation and help you decide if bankruptcy is right for you. If you need relief from the stress of debt and you live in or around the metropolitan area of Tuscan, Arizona, contact us here today at www.betterbankruptcy.com .We will help you find a bankruptcy attorney in your area who can answer your bankruptcy questions.

Bankruptcy filings have been declining since the beginning of 2011, but for the third time in the past 90 days, I have had a cashier try to short change me. This has never happened to me in the last 64 years. Was it an accident, a sign of the times or a result of our poor economy? 

Cash strapped businesses are hiring desperate minimum wage employees. Could these employees be attempting to increase their pocket change by stealing from me? For example, the other day a cashier took my $20 and neatly placed it on the cash register. The bill was $2.07, and I handed her a dime for the 7 cents. She rang up the order and handed me back 3 cents and thanked me. 

“I gave you a $20 bill plus a dime,” I objected. She replied, “Oh, that is right,” as she quickly lifted the $20 bill from its hiding place (right by the cash register drawer). Was it a inadvertent mistake? I probably would have thought so, if she had not smiled. I understand common mistakes, but I told her if it happened to me the next time I came in, I would have to report her to her manager. She did not say a word and she did not seem disturbed about what she had done. 

This year I have medical problems, two major operations and two heart attacks. I did not work for 18 months, and my savings evaporated. It is hard to make a living wage, and I can understand the temptation to cheat others. I hope I never would, but in a desperate situation, you never know. 

Are some Americans so desperate they are willing to steal extra money from their customers and risk not only their jobs, but breaking the law? Maybe so, not surprisingly, individuals who are willing to cheat the government are on the rise. The bankruptcy system has seen an increase in bankruptcy filers attempting to commit fraud, causing the US Bankruptcy Courts to increase their investigative efforts to identify the offenders. 

Recently a wife and husband from Iowa were sentenced to two and four years respectively in federal prison for defrauding a US Bankruptcy Court in Florida. The couple sold assets to their family in Iowa, moved to Florida, and filed for bankruptcy. Florida bankruptcy laws allowed the couple more favorable bankruptcy exemptions. When they returned to Iowa, they retrieved their assets from their family. 

Bankruptcy fraud is a crime. Common criminal actions under bankruptcy laws which may be illegal include: concealment of assets, concealment or destruction of documents, conflicts of interest, fraudulent claims, false statements or declarations, and fee fixing. Falsifying bankruptcy forms is also considered perjury and is illegal. Although the new bankruptcy laws are more favorable for the debtor, they were not intended to allow criminals to defraud the bankruptcy system. Filing for bankruptcy allows the debtor to start over. When you try to hide assets from the bankruptcy process, it is cheating 

If you are in a desperate financial situation, do not resort to stealing and other types of unethical behaviors. Do not do what the cashier did. Take advantage of the bankruptcy process which can allow you to start over and have a fresh financial start. 

If you are considering filing for bankruptcy, you may need to consult with a bankruptcy lawyer. Debts can cause stress and bankruptcy laws can be complicated. If you live in or around the metropolitan areas of Buffalo or Niagara Falls, New York, contact us at www.betterbankruptcy.com . We will help you find a bankruptcy attorney in your who can answer your bankruptcy questions.

Before the new Federal Trade Commission laws were changed in October of 2010, the success rates for debt settlement companies were very poor. It is estimated that up to 70% of the debt settlement companies fail in their attempts to settle debts owed by debtors. What happens to the upfront fees paid by the debtor if the debt settlement option fails? The debtor maintains their debts.

Stricter laws have been implemented for debt settlement. For example, under new debt settlement laws, companies cannot receive up-front money and they can only receive up to 15% of the money negotiated as a settlement commission.

Debt settlement may be a good option for some debtors but before using a debt settlement company, you may want to consider:

• When you are in financial trouble, you usually don’t have a lot of cash to service debt. Adding only 15% to any bill can be devastating to some. The average debt settlement is usually up to 50%, and if that is what the debt settlement is, you still are paying up to 85% of your original debt. That means you are still exposed to a debt you might not be able to pay, and in addition, your credit score most likely will suffer for the additional exposure. Unless a negotiator is a lawyer, what incentive does a creditor really have in settling a debt with people who are not on the contract?
• You might have to pay income tax on your forgiven debt. Most creditors who settle a debt for so much on the dollar write the rest of the money not collected off their income tax. They are required by law to report the write-off amount to the Internal Revenue Service (IRS), and the debtor responsible for the write-off is credited with income received. IRS taxes are not exempt in bankruptcy proceedings, and the IRS has almost unlimited power in collections. Do you really think settling for pennies on the dollar is worth an IRS tax debt you cannot pay?
• Debt settlement can take a long time and you are exposing yourself to lawsuits during the negotiation process.
• If a debt settlement company suggests debt consolidation, you are often exchanging an unsecured loan for a secured one.

So, what is the alternative to debt settlement? Increasing your income or improving your money management abilities may help, but filing for bankruptcy protection may be the only other option for many debtors.

Debt settlement can increase your expenses and your tax liabilities. It can also expose you to lawsuits. Filing bankruptcy can provide protection from these risks.

Bankruptcy laws can be complicated and you may need a bankruptcy lawyer to help you understand them. If you need relief from the stress of debt and you live in or around the metropolitan area of Houston, Texas, contact us at www.betterbankruptcy.com .We will help you find a bankruptcy attorney in your area who can answer your bankruptcy questions.

 Insider trading is the trading of stocks by shareholders who have “insider” knowledge not available to the public. The employees and key directors of a corporation may trade their stock as long as they can prove they did not use information only known by employees of the company. Think of the 2001 Enron scandal, many of the directors who caused the collapse of Enron were eventually convicted of insider trading, conspiracy, and wire tapping. 

A recent article posted on a bankruptcy forum compared insider trading with the actions of a bankruptcy petitioner who sells their assets to family or friends, or attempts to hide their assets to defraud the bankruptcy court. 

Fay and Gerald Schuerer, a couple from Iowa, were sentenced to prison in 2011 for defrauding creditors of more than $350,000 in property. The Schuerers were found guilty of bankruptcy and mail fraud. They sold their assets to family and friends for $380,000 and then moved to Florida where they filed for bankruptcy. After their assets were discharged, the Schuerers moved back to Iowa and repossessed their assets. 

It is the trustee’s responsibility to report and investigate fraudulent activity. If the trustee finds fraudulent activities they can sue, not only the debtor, but anyone else who is involved in perpetuating the fraud, and it is up to the accused to prove to the court they did not have knowledge of the debtor’s intent to defraud. Most states allow the bankruptcy court to investigate a debtor’s transactions for a period of 12 months. 

Family members who are convicted of knowingly participating in fraudulent activities can be sent to jail. These cases are harder for a bankruptcy court to prosecute, and most bankruptcy courts focus on the fraudulent activities of the debtor, but family members should be aware of the potential consequences of their illegal actions. 

Bankruptcy fraud is a crime. Common fraudulent actions can include: concealment of assets, concealment or destruction of documents, conflicts of interest, fraudulent claims, false statements or declarations, and fee fixing. Falsifications on bankruptcy forms can also constitute perjury. The new bankruptcy laws, which are more generous to honest debtors, were never intended to allow criminals to defraud. 

If you need relief from debt and you live in or around the metropolitan area of Wichita, Kansas, contact us at www.betterbankruptcy.com .We will help you find a bankruptcy attorney in your area who can answer your bankruptcy questions.

What are your bankruptcy alternatives if you are facing a financial crisis and you are unable to file Chapter 7 bankruptcy?

This personal bankruptcy story was posted on the internet in August of 2010, “I have 4 credit cards that are probably charged off by now. I also have a personal loan which is about to be charge off with the bank, but I am current with my car loan. I have two other credit cards with low credit lines which I am currently paying a minimum payment. What can I do to avoid being sued? My net income is $1,560 per month, and I am barely make ends meet? I filed Chapter 7 bankruptcy 5 years ago. What other options do I have?”

Chapter 7 bankruptcy, commonly called a “liquidation bankruptcy”, is generally the simplest and quickest form of bankruptcy. Individuals, married couples, corporations, and partnerships can file Chapter 7 bankruptcy, but for this debtor, it is probably not an option. Under updated bankruptcy laws, Chapter 7 bankruptcy cannot be filed unless the debtor was discharged from the previous Chapter 7 bankruptcy more than eight years ago.

Although this debtor has filed a Chapter 7 bankruptcy within the last 8 years and cannot file Chapter 7 bankruptcy again, she can file Chapter 13 bankruptcy. A Chapter 13 bankruptcy can be filed within four years from the date of a Chapter 7 bankruptcy discharge.

Chapter 13 bankruptcy is available to individuals. It is considered a “wage earner’s” plan, and it allows individuals with regular income to develop a plan to repay all or part of their debts over a three to five year repayment period.

If the debtor’s current monthly income is less than the applicable state median, the plan will be for three years, unless the court approves a longer period “for cause”. If the debtor’s current monthly income is greater than the applicable state median, the plan generally must be for five years. In no case may a plan provide for payments over a period longer than five years. During the plan, creditors may not start or continue their collection efforts.

For those who qualify, there are advantages for filing for Chapter 13 bankruptcy including: saving your home from foreclosure, rescheduling secured debt payments, providing protection for co-debtors, consolidating your loans under one plan, keeping non-exempt property, and extending certain tax obligations, student loans, or other such qualifying debts. Debtors, including the one in our illustration, may also use bankruptcy to stop lawsuits.

Filing bankruptcy allows a judge to issue an automatic stay which will stop all collection actions, certain lawsuits, foreclosures, utility shut-offs, evictions, repossessions, wage garnishments, attachments, and debt collection efforts.

Filing Chapter 13 bankruptcy may not be as inexpensive, simple or fast as filing for Chapter 7 bankruptcy, but for this debtor, it may be the perfect solution for her to stop the debt collection efforts and lawsuits, restructure her debt payments and allow her to keep certain possessions.

If you are facing a lawsuit, contact a bankruptcy lawyer. Attorneys can help you eliminate the stress associated with debt. If you live in or around the metropolitan area of Columbia, South Carolina, contact us here today at www.betterbankruptcy.com . We will help you find a bankruptcy attorney in your area who can answer your bankruptcy questions.

It has been said “there is nothing new under the sun,” but when it comes to bankruptcy stories, all bankruptcy stories are unique. Each new story is woven from the bankrupt’s own financial cache laden by unequaled experiences but clothed in similar circumstances.

This personal bankruptcy story was posted on the internet in April of 2011,

I am in a pretty unique situation. I have debt of $70,000 in a student loan, $17,000 in judgments which are currently being garnished from my check, and I have around $10,000 in other debts (credit cards, medical bills). I own a Honda Accord and one 3 year old computer. I was in school and tragedy struck. I had to drop out. Four years later I am trying to get back on my feet. I work a $12/hr job, 40 hours a week. I have a child, but thankfully I have not fallen behind on child support payments. I have tried to get back into school, but I am stuck in a vicious cycle of not having enough money to pay for classes and not being able to get student loans. Low credit scores have also made it impossible for me to get my own place, so I sleep on friend’s couches. I live in Pennsylvania, and my rent is $600 per month. Will filing bankruptcy eliminate my student loan debt? Can I file for bankruptcy without hiring a bankruptcy lawyer? Is it worth it? I need a fresh financial start.

The debtor has a student loan he cannot easily repay, his paycheck has been garnished, and he has credit debt, unpaid medical bills and a recurring child support payment. Is filing for bankruptcy the right answer for him? Is it the best financial decision?  Talking to a bankruptcy lawyer may help him make a more informed decision.

He asked if his student loan debt can be discharged. Unless a filer can prove hardship, the loan will not be discharged. The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 made all student loans much harder to discharge and classified private student loans as a non-dischargeable debt.

Is it easy to file bankruptcy? Bankruptcy laws are complicated, and every filer has a unique situation. Bankruptcy attorneys can answer any questions you might have pertaining to your financial situation.

He wants a fresh financial start. Filing for bankruptcy is a legal process that is designed to protect both the creditor and the debtor and allows honest individuals or businesses to start over.

If you need relief from the stress of debt and you live in or around the metropolitan area of Birmingham, Alabama, contact us at www.betterbankruptcy.com . We will help you find a bankruptcy attorney in your area who can answer your bankruptcy questions.

Many people are struggling with insurmountable debt. In 1980, the Federal government passed a special law which allowed national banks to ignore state usury limits and peg the rate of interest at a certain number of points above the federal reserve discount rate. Although this particular law has not been completely repealed, in 2010, Congress re-regulated certain rules in the 1980 law pertaining to the credit industry.

Under the new laws, credit card companies had to notify customers 45 days in advance before they made any changes to the interest rates. Prior to the rule change, many credit card companies raised their the interest rates on all of their card holders. The fine print in the agreements sent to their customers stated the company could raise interest rates after a promotion date expired. The credit card companies believed if they increased rates across the board and they had previously notified their customers, the move would protect the companies against the new rule changes.

As a result of the credit card company’s new policies, even consumers with good credit and who fully paid their bills on time had their interest rates increased. In fact, they raised the interest rate on my credit card to 19%. I received the card at a very low interest rate for a year’s period, but when the year past, they hiked up the interest rate just before the new rules went into effect. They did this despite the fact I had a good credit rating, I had never been late with my payments and I had paid my bill completely each month.

The federal APR allowed is 24%, but because of the 1980 laws, you might have a card with an interest rate as high as 29%. These usury type interest rates are allowed because the 1980 laws allows groups, especially chartered organizations like small loan companies and installment plan sellers, to have their own rules. Credit card companies took advantage of the 1980 laws. These exorbitant interest rates can negatively impact middle Americans, even those who make six figure incomes. The high interest rates have completely ruined the financial situation of lower income families who have not been able to keep up with the interest payments on their balances.

This personal bankruptcy story was posted on the internet in April of 2011, “My credit card debt is about $51,000. I also have a 2nd mortgage in collections paying $500 a month. The total amount we pay out monthly for our credit card debt is about $900 and with the 2nd mortgage $1400. We make about $112,000 a year, but we are struggling each month to keep our commitments. Do you think bankruptcy would be a better option? I know bankruptcy can stay on your credit report for 7 years but our credit is already ruined. Do you think it will repair itself quicker if we just stick it out with our current situation?”

This debtor makes a high salary and is considered “middle income”, but he is having difficulty paying his credit card bills. Is bankruptcy the best option for him? Filing for bankruptcy is always an option, but each individual has to decide for themselves whether they should file.

One way of determining whether you should file for bankruptcy is to determine if you are completely bankrupt. As a general rule of thumb, you are completely bankrupt if your current sustainable income plus any cash reserves will not pay all of your living expenses, pay interest on outstanding loans, and reduce some of your principal on those loans while paying on them for five years. Paying off debts for five years is chosen because five years is the maximum legal number of years a United State’s Bankruptcy Court allows an individual to work their way out of bankruptcy protection.

Bankruptcy laws can be complicated, and common sense indicates you might need a bankruptcy lawyer to help you understand how they may apply to your financial situation. If you need relief from the stress associated with debt and you live in or around the metropolitan area of Cincinnati, Ohio and Kentucky, contact us here today at www.betterbankruptcy.com .We will help you find a bankruptcy attorney in your area who can answer your bankruptcy questions.