Bankruptcy allows debtors to discharge certain qualifying debts and eliminate their personal responsibility for repay them. After the bankruptcy is complete and the debts have been discharged, creditors are prohibited from continuing any type of collection action on the discharged debts. Actions which are not allowed can include harassing telephone calls, personal contact and letters requesting debt payment.

Debts not discharged

Debts which are not eligible for discharge are listed under the Bankruptcy Code 11 U.S.C. §523. It is important to contact a bankruptcy lawyer prior to filing bankruptcy to discuss your debts and whether or not bankruptcy is a good option. Debts not discharged include the following:

1. Fraudulent Actions

Money the debtor created through fraudulent actions including debts accumulated by the filer to pay for unnecessary luxury goods within a certain number of days from filing for bankruptcy. This is considered fraudulent because the courts will assume the debtor had no intention of paying for them. Debts incurred from larceny, breach of trust or embezzlement are also not discharged.

3. Student Loans

Student loans are generally considered not dischargeable. If a debtor has substantial student loans and has questions about whether they should be included in their bankruptcy they should talk to a bankruptcy lawyer. The court may allow the discharge of the loans but debtor must prove that paying the loans will impose an “undue hardship” to such an extent that the debtor will not be able to maintain even a minimal living standard. This is a very tough burden to prove.

4. Child Support and Spousal Support

Filing bankruptcy will not eliminate the debtor’s financial obligations to pay either spousal support or child support. These debt obligations are considered priority debts, and if the debtor has filed Chapter 13 Bankruptcy, the payments will be added to the debtors Chapter 13 debt repayment plan.

5. Current tax obligations

Some taxes cannot be discharged. For example, taxes due within 3 years from the date the debtor filed for bankruptcy or which were assessed by the IRS in less than 240 days from the bankruptcy filing date may not be discharged. Taxes that were filed within two years of filing for bankruptcy are also not dischargeable. If the debtor has been charged additional tax penalties or fines from tax evasion or fraud these debts are also not dischargeable.

6. Debts from willful and malicious injuries to persons or property

7. Debts for personal injuries

Debts for personal injuries which are caused from the debtor’s operation of a motor vehicle while under the influence of alcohol or drugs are not dischargeable.

Chapter 13 Bankruptcy allows for a broader discharge of debts than Chapter 7 Bankruptcy. Chapter 13 Bankruptcy may allow for the discharge of debts for willful or malicious injury, debts arising from settlement issues in a divorce and debts associated with paying non-dischargeable tax obligations after completing the debt settlement plan. Certain debts may also be discharged if the debtor can prove “hardship”.

Hiring a Bankruptcy Lawyer

Filing a simple, no asset Chapter 7 Bankruptcy may be possible without a bankruptcy lawyer, but most bankruptcies should be filed only after consulting with a bankruptcy lawyer. Bankruptcy laws vary by states. Talk to a bankruptcy attorney to make sure filing bankruptcy is right to solve your financial crisis.

If you have filed for bankruptcy for the first time you most likely have a lot of questions. One common question is, “How much can you keep in your checking and savings accounts before the bankruptcy court will ask you for the funds?”

The answer to this question will vary from state to state, and it will also depend on the type of bankruptcy you file.

There are basically two types of bankruptcies most individuals can file: Chapter 7 Bankruptcy and Chapter 13 Bankruptcy. Chapter 7 bankruptcy, commonly called liquidation of your assets, is normally the simplest and quickest form of bankruptcy. Chapter 13 Bankruptcy, commonly called a wage earner’s plan, enables individuals with regular income to develop a plan to repay all or part of their debts over three or five years.

In Chapter 7 Bankruptcy, you will be asked to make a list of your debts and assets. From that list of assets, the bankruptcy court trustee will collect the non-exempt assets and liquidate them to pay the creditor claims on the unsecured debts you listed.

Exempt assets are either state or federal exemptions that include assets exempt from liquidation or sale of the asset. Secured assets are automatically exempt because they have a lien associated with the debt. Liens are normally not discharged in bankruptcies.

State bankruptcy laws mandate which exemptions you can use in a bankruptcy case- federal or state. Some states allow you to choose, others make it mandatory to use one or the other.

Checking and savings accounts fall under exemption status for any bankruptcy filed. Federal exemptions are found under the federal statutes, Title 11, sub-chapter 522. Under this code, you can have an exemption of $1,150 of any property, and you can add $10,825 more for any unused portion of the homestead exemption.

State exemptions can vary. In either case, it may be important in your checking and savings account where the monies originated. A bankruptcy lawyer can help you determine what is and what is not exempt.

In Chapter 13 Bankruptcy, exemptions may determine how creditors are going to be paid under the bankruptcy plan. The plan is based on your disposable monthly income and your ability to pay back a portion or all of the debts owed to your creditors. A bankruptcy court trustee will distribute the money to the creditors as determined by your plan.

Funds which are not part of the Chapter 13 plan can be used to run your household and pay for your living expenses. Money you can keep includes checking and savings account funds you may have remaining in those accounts. All assets and income must be accounted for during the plan, and you are responsible for meeting your payment responsibilities to the trustee.

Like Chapter 7 Bankruptcy, Chapter 13 Bankruptcy payment plans may adversely affect your checking and savings accounts. Where monies originate from in a checking or savings account may determine how a plan is administered or whether those funds can be used in the plan.

Therefore, how much you can keep before the bankruptcy court asks you for the funds will depend on which state you live, which exemption list you are allowed to use, and what type of bankruptcy you file. Contact a bankruptcy lawyer for more information.

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

One of the questions asked by many who may be facing bankruptcy for the first time is, “Can a bankruptcy court take payments out of your unemployment checks?”

Chapter 7 Bankruptcy and Chapter 13 Bankruptcy are the most common types of bankruptcies filed.

Chapter 7 Bankruptcy, commonly called liquidation of your assets, is normally the simplest and quickest form of bankruptcy.

Chapter 13 Bankruptcy, commonly called a wage earner’s plan, enables individuals with regular income to develop a plan to repay all or part of their debts over three or five years.

In Chapter 7 Bankruptcy cases, unemployment compensation is federally exempt from bankruptcy. Most state laws also exempt unemployment compensation. So to answer the question, under most conditions, the bankruptcy court will not take unemployment compensation from you to pay-off creditors.

In addition, Chapter 13 Bankruptcy cannot be filed for a person who is on unemployment. Chapter 13 Bankruptcy can only be filed by a person with regular income. Since unemployment benefits are considered emergency and temporary funds, you will not be allowed to build a plan on that type of income.

Other logical questions you might ask yourself when it comes to unemployment compensation are, “What if I lose a job after I have filed for bankruptcy protection? Will they still take out payments on my unemployment checks?”

If you lose your job after filing Chapter 7 Bankruptcy, very little changes. You still have to report the change in income, but unemployment compensation is still exempted from bankruptcy in most circumstances.

In Chapter 13 Bankruptcy you have to report the change in income to the trustee, and this could change the bankruptcy, depending on your particular situation. If your new unemployment income is not enough to make the plan payments, there is a possibility the trustee would dismiss the case.

There are other forms of relief such as a discharge for hardship. It allows the filing debtor to discharge their debts without having to convert to Chapter 7 Bankruptcy. The Chapter 13 Bankruptcy discharge for hardship is available under the following conditions:

1. The debtor’s failure to complete plan payments due to circumstances beyond the debtor’s control and through no fault of the debtor;
2. Creditors have received at least as much as they would have received under Chapter 7 liquidation; and
3. Modification of the plan is not possible. Injury or illness that precludes employment sufficient to fund even a modified plan may serve as the basis for a hardship discharge.

The hardship discharge is more limited than a regular discharge in bankruptcy and does not apply to any debts that cannot be discharged in Chapter 7 Bankruptcy.

Some believe there is an advantage for this type of discharge. Once a debtor receives the discharge, they are allowed to immediately file for Chapter 13 Bankruptcy again when their financial situation allows. This characteristic of this form of relief allows a debtor to revisit the Chapter 13 Bankruptcy option when they are better suited to complete the repayment plan.

Bankruptcy laws can be very confusing and complicated. Contact a bankruptcy lawyer if you have questions. If you need relief from the stress of debt and you live in or around the metropolitan area of St. Louis, Missouri, contact us at www.betterbankruptcy.com .We will help you find a bankruptcy attorney in your area who will answer your bankruptcy questions.

Many debtors want to know how soon they can file for either Chapter 7 or Chapter 13 Bankruptcy and what needs to be done. The bankruptcy code was updated in 2005 to make it more difficult for debtors to discharge their debts.

Under the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) debtors will not be immediately able to file bankruptcy without completing some basic legal requirements.

• Means Testing

The BAPCPA outlined some financial requirements which debtors must meet to be able to file Chapter 7 Bankruptcy. Debtors who do not meet these requirements will have to file Chapter 13 Bankruptcy, and instead of immediately discharging debts, debtors will complete a 3 to 5 year debt repayment plan to repay a portion of their unsecured debts.

How do you determine if you can file for Chapter 7 Bankruptcy? The testing examines your income for the last six months, and if it is below the median for your state, you will qualify for Chapter 7 Bankruptcy. If it is not below the median income a series of calculations are completed to determine if you can repay your debts.

Basically the calculations will examine your income, subtract certain allowable expenses and determine if you have at least $100 per month to pay your creditors. The court will also evaluate if you would be able to pay at least $10,000 or 25% of your unsecured debts over a five-year period.

• Complete a Credit Counseling

Mandatory credit counseling was also added under the new bankruptcy laws. Prior to filing for either Chapter 7 or Chapter 13 Bankruptcy you must complete an approved credit counseling course.

• Complete a Financial Management Course

Mandatory financial management training must also be done prior to the discharge of your bankruptcy. This course does not have to be completed prior to filing for Chapter 7 Bankruptcy so it will not delaying filing, but completion of this course is required prior to the discharge of your debts. There are a variety of approved courses throughout the United States.

• Talking to a Bankruptcy Lawyer

One of the most important things to do before filing for bankruptcy is to talk to a bankruptcy lawyer. Bankruptcy lawyers can review your financial situation and determine whether filing bankruptcy is right for you. Bankruptcy is a serious financial decision which should not be done before determining if it is the best financial solution.

How soon after I file bankruptcy will my debts be discharged?

Chapter 7 Bankruptcy is the easiest and fastest way to discharge debts. Unless the Chapter 7 Bankruptcy case is dismissed, converted to Chapter 13 Bankruptcy, or a party of interest in the case files an extension or objection most discharges will occur within 60 to 90 days.

Chapter 13 Bankruptcy does not automatically discharge debts and the debtor will not receive a discharge of qualifying debts until they have completed their 3 to 5 year debt repayment plan.

Many consumers facing bankruptcy often have back income tax issues. Back taxes can be discharged in a bankruptcy under certain federal guidelines. The following is a brief summary of the federal guidelines that must be met before a personal income tax may be discharged in a bankruptcy case:

1. The tax must be due and owed for a period of more than three years, and the due date of the taxes is more than three years before the bankruptcy case is filed.

2. The tax return for the tax debt at issue must be filed more than two years before the bankruptcy is filed.

3. The tax debt issue has been assessed by the taxing authority more than 240 days prior to the filing of the bankruptcy case.

4. The debtor filing the return must not have attempted to evade the paying of the tax nor can the debtor filing be willfully fraudulent in submitting a return.

The only other way you can get federal income tax relief is through what is called an “Offer in Compromise.” OIC is a method for resolving IRS back taxes. Offer in Compromise allows the debtor to negotiate a tax settlement payment (sometimes for less) for an outstanding tax bill owed.

Contrary to what many taxing services may imply, getting an Offer in Compromise is relatively rare. Certain conditions have to exist before a taxpayer will be forgiven any portion of the tax bill including penalties and interest on late payments. Most Offers in Compromise plans allow the  taxpayer to make monthly payments until the tax burden, interest, and penalties are paid in full.

If you cannot get an Offer in Compromise, filing for bankruptcy protection is probably the only viable solution for back taxes. There are basically two types of bankruptcies most individuals can file: Chapter 7 Bankruptcy or Chapter 13 Bankruptcy. Chapter 7 Bankruptcy, commonly called liquidation of your assets, is normally the simplest and quickest form of bankruptcy. It is the bankruptcy you can use to get back taxes discharged if they qualify.

Chapter 13 Bankruptcy, commonly called a wage earner’s plan, enables individuals with regular income to develop a plan to repay all or part of their debts over three or five years. In this bankruptcy, your back taxes, interest and penalties will be included in your plan to pay all or part of them, but only the remainder of the qualifying back taxes will be discharged. Taxes not falling within the federal guidelines can not be discharged, and you will be expected to pay the taxes, interest, and penalties after the bankruptcy is closed.

Bankruptcy laws can be complicated. Contact a bankruptcy lawyer if you have questions about your financial options. If you need relief from the stress of debt and you live in or around the metropolitan areas of Minneapolis or St. Paul, Minnesota, contact us at www.betterbankruptcy.com . We will help you find a bankruptcy attorney who will answer your bankruptcy questions.

Are you thinking about filing for bankruptcy protection? If you are, two questions you may be asking is, “How many hearings are there in a bankruptcy you must attend and who does the talking?”

The answer to the questions depend on which type of bankruptcy you file, whether or not you have hired a lawyer to represent you, and where you live. Federal laws govern most bankruptcy procedures, but the states supplement the federal laws to match its citizen’s procedural needs.

There are two types of bankruptcies: Chapter 7 Bankruptcy and Chapter 13 Bankruptcy. Chapter 7 Bankruptcy, commonly called liquidation of your assets, is normally the simplest and quickest form of bankruptcy for an individual. Chapter 13 Bankruptcy, commonly called a wage earner’s plan, is the second bankruptcy available. It enables individuals with regular income to develop a plan to repay all or part of their debts over three or five years.

After filing a bankruptcy petition, all filers are required to attend a hearing between the creditors and the filer, called The First Creditor Meeting or 341 Meeting. If you miss this meeting, the court may decide to reschedule the meeting, to dismiss your bankruptcy case, or to charge you with contempt of court. Bankruptcy law requires you to attend the hearing if you want to have a successful bankruptcy, and you can attend with or without a lawyer. If you have a lawyer, your lawyer might be required to attend the meeting also, depending on where the bankruptcy case was filed.

The bankruptcy trustee will do most of the talking during a 341 meeting, and he or she might ask you direct questions that mostly can be answered with a yes or no response. You will be sworn and it is possible your answers to the questions might be consider perjury if you intentionally lie.

If you file Chapter 13 Bankruptcy, you might also be required to attend the confirmation hearing which is scheduled for 30 days after the First Creditor Meeting. At the confirmation meeting the Bankruptcy Judge may review and approve your plan of reorganization. As a general rule, you will not have to attend the confirmation hearing unless you have to provide testimony about the value of an asset or the amount owed on a particular claim.

Your bankruptcy lawyer should be able to tell you in advance whether you will have to appear before the Bankruptcy Judge. The Judge will do most of the talking during the hearing, and like the 341 meeting, you will be sworn in if you have to testify. Your lawyer may attend the confirmation hearing with you, and of course he or she will be allowed to participate in any court proceeding, if necessary.

There are various other times you may be required to attend a hearing before the court, depending on the complexity of your bankruptcy. Your creditors can file petitions questioning the proceedings at almost any time. These petitions can force a hearing which you may want or may be required to attend.

Either a creditor or trustee may appeal to the bankruptcy court for a hearing by filing an abuse petition. This type of petition is an accusation there has been some unintentional or intentional abuse of Chapter 7 Bankruptcy law. When these occur, you may be required to attend the hearing. At an abuse hearing, both parties will be required to present their sides before the bankruptcy judge. A lawyer should representing you at these hearings.

In Chapter 13 cases, you may have to appear at a hearing before the judge if you have to modify your plan or if your case comes up for dismissal because you have not made payments.

In any specific case, there could be an indefinite number of hearings you might have to attend in a bankruptcy case, depending on the complexity of your financial situation. Bankruptcy laws can be complicated. Contact a bankruptcy lawyer if you have any questions.

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

Do payments for Chapter 13 Bankruptcy have to be deducted from your wages?

Ross W. Krumm, the Chief Judge of the United States Bankruptcy Court for the Western District of Virginia, recently commented on this issue. He said, “You are responsible to make the payments you have promised to make under the plan. I am going to review with you a number of things on Plan Payments that I want you to remember as you go through your Chapter 13 Plan so that you are clear on what you need to do to be successful.

Make your plan payments to the Trustee on time

If you are not going to be able to make a payment or if you are going to be late, call the trustee and your bankruptcy attorney before the payment due date and inform them. If you do not pay the trustee and do not call, the trustee will bring you to court to explain to the judge why your case should not be dismissed. This will cause you to lose time from work and to incur bankruptcy attorney’s fees that can be avoided by a simple call.

Use Wage Deduct

The best way to make sure your payment is always current is to use wage deduction through your employer. Your employer deducts a certain amount from each paycheck and sends it to the trustee to make your plan payment. In this way you are always current.

If you use wage deductions remember the following:

1. Each time you get paid, check your pay stub to make sure the deduction for your Chapter 13 Bankruptcy payment has been made.

2. If there is a pay period when the deduction does not show on your pay stub, set aside the money from your paycheck that usually comes out and do not spend it until you go to payroll and find out why the deduction did not happen. Contact your bankruptcy attorney.

3. If at any time you are concerned that the wage deduction is not working call your bankruptcy attorney.

4. Hold on to all of your pay stubs and keep them together in a safe place.

5. If there is ever a question about whether you have paid your plan payments the pay stubs will show the trustee that the wages have been withheld by your employer.

6. If you change jobs, the wage deduction will stop. You will need to make direct payments to the trustee on the next plan payment due date after your job change. Continue to make direct payments until you put a new wage deduction in place.

7. If you change jobs, you should call both the trustee and your bankruptcy attorney and inform them so that they can help you put another wage deduction in place at your new place of employment.

8. If you do not currently use a wage deduction but will in the future, make sure you make direct payments to the trustee until you see that the wage deduction has started. That way you will be current at all times.

Consider this advice on Direct Payments

If you are going to pay the trustee directly you must be sure that you know the due date of your payment and that you get the payment to the trustee by that date. Mail your payment early enough so that it gets to the trustee by the due date.

Consider this advice about using Money Orders

If you pay by money order, save all your money order receipts and keep them together. They are your proof of payment.”

Obviously, you have the choice to make direct pay or have the payments taken from your wages. What should be obvious to you as well, the judge talks about a bankruptcy lawyer a lot in his advice.

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

Technically, you must list all your creditors in a bankruptcy case. To knowingly not list them might be considered perjury. Perjury is a crime that can be prosecuted, but in most bankruptcy cases, forgetting to list a creditor often results in the debt not getting discharged or the dismissal of the bankruptcy case.

You are permitted to file an amendment to the list up to a certain period of time during a bankruptcy proceeding if you have forgotten about one of your creditors. A bankruptcy court is not interested in prosecuting you for honest mistakes. If the amendment is filed in time, the omitted creditor will be added to the list, and if there are no assets to satisfy the debt, the debt can be discharged.

Most bankruptcy lawyers are going to advise you to list any person who you think you might owe money, whether you have a legal binding contract or not. A creditor is any company, any person, a family member or friend you may owe money. For all practical purposes, they must be listed. It does not matter which bankruptcy type you have to file; you will need to list your creditors for all bankruptcy types.

There are two types of bankruptcies most individuals can file: Chapter 7 Bankruptcy or Chapter 13 Bankruptcy. Chapter 7 Bankruptcy, commonly called liquidation of your assets, is normally the simplest and quickest form of bankruptcy. It is available to individuals, married couples, corporations, and partnerships. Chapter 13 Bankruptcy, commonly called a 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 over three or five years.

Bankruptcy law is complicated, for example, how to properly fill out a creditor’s list. Most lay people, who are not familiar with bankruptcy laws, might have a very difficult time trying to file bankruptcy without legal representation. Bankruptcy lawyers can help you understand how the laws might apply to your particular situation.

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

If you are thinking about filing for bankruptcy, you have probably heard about the 341 Meeting. This meeting usually causes much trepidation and anxiety in people who are going through the bankruptcy process.

What is a 341 Meeting?

A 341 Meeting or First Meeting of Creditors is a gathering of you (the petitioner), your lawyer, and a bankruptcy trustee who will meet to examine the facts of the bankruptcy case.

The meeting usually occurs 30 – 40 days after the bankruptcy is filed. Anyone who files either a Chapter 7 or Chapter 13 bankruptcy will be required to attend one of these meetings. The main object of this gathering is to give your creditors the opportunity to challenge any aspect of your bankruptcy. It sounds daunting, but the truth is, creditors rarely appear to challenge a bankruptcy.

What happens at a 341 Meeting?

To start, you will be sworn in and then asked some basic questions about your identity. They will then move on to more specific questions about your bankruptcy petition. They want to get you on the record that you are being honest and that you understand what you are doing. Here are some questions you may be asked:

* Did you read the paperwork before signing?

* Are you a resident of the state?

* Did you inventory all of your assets and debts?

* Do you carry insurance on your vehicles?

The 341 Bankruptcy meeting is usually short. It generally takes about five minutes, although you may have to wait in a line if the court has scheduled several 341 Meetings in a row.

Tips for Survival

The 341 Meeting is not an exam that you can fail. Nobody is trying to catch you in a lie or trick you into giving wrong information. This is simply a meeting to collect information. It is important to stay calm and honestly answer their questions.

After the 341 Meeting is concluded, your creditors have 60 days to challenge the discharge of debts. If there are no issues, you will receive the discharge soon after.

Reasons to Look Forward to the 341

*It is short and painless. The questions are routine.

* This is the only occasion you are required to meet with the trustee.

* Creditors rarely show. In the unusual circumstance that they appear, at least you have your bankruptcy attorney there to speak on your behalf.

* You are not alone. If you have any concerns or questions, your bankruptcy attorney is by your side to help. Bankruptcy lawyers have been through many of these meetings and know what to expect.

* It is the last step! After your 341 Meeting, all you have to do is wait to receive your discharge. Now you have made it through your bankruptcy and you can begin to rebuild your credit so you never have to be in this situation again.

Hiring a Bankruptcy Lawyer

If you are considering filing for bankruptcy, or would simply like to learn more about what is involved, you should contact a qualified bankruptcy attorney in your area. He can answer any questions you may have and offer advice specific to your situation.

A reaffirmation agreement in United States bankruptcy law refers to an agreement made between a creditor and the debtor that waives discharge of a debt that would otherwise be discharged in a pending bankruptcy proceeding.

Bankruptcy laws govern both debtor and creditor in the reaffirmation process. One question often asked when filing for bankruptcy is, “Can you change your mind after signing a reaffirmation agreement?”

Bankruptcy statutes give you a “cooling off” period to change your mind about any reaffirmation agreement you have signed. After signing a reaffirmation agreement, you have a right to cancel the agreement within 60 days of the agreement being filed or prior to the court entering a discharge, whichever is later.

If you have signed a reaffirmation agreement and you change your mind, you will have to withdraw your consent. For the reaffirmation agreement to be revoked by the bankruptcy court, you must write a letter to the creditor and provide a copy to the court that informs them you wish to revoke the reaffirmation agreement.

In addition to requiring a “cooling off period”, for a reaffirmation to legally be binding, bankruptcy law dictates your bankruptcy lawyer has to also sign the reaffirmation agreement.  If done, the lawyer is stating in writing that he or she thinks you can afford to make the payments and it is in your best interests to reaffirm. Many bankruptcy lawyers may not think you can afford the contract or it is in your best interests to reaffirm and some may refuse to sign the document.

If you are filing Pro Se, without legal representation, bankruptcy law dictates you must attend a court hearing before a bankruptcy court judge before you are allowed to enter into a reaffirmation agreement. The purpose of this hearing is so the court can be sure you understand what you are entering into with the agreement, how reaffirming will affect your rights under bankruptcy laws, and whether or not you can afford the agreement.

Once you sign the reaffirmation agreement, your lawyer or court signs the agreement to reaffirm, and the 60 day cooling off period passes, you are bound by the agreement. If you do not perform your part of the contract, you have no remedy left. The creditor can repossess or foreclose on the secured assets, and they can possibly obtain a court judgment for any deficiencies the sale of the assets do not satisfy.

What does that mean? They can file a lawsuit against you for the amount they claim you still owe. In the event they are successful, they can take the judgment of the court and possibly garnish wages, bank accounts and other receivables. If you live in a state that does not allow garnishment, they can attach liens to various assets. When you want to sell those assets, you have to satisfy the legal liens against the property.

After you have waived your right to discharge a secured asset under a reaffirmation agreement, your only legal friend left is time. If the statute of limitations runs out for collecting the deficiency, you have escaped the claims, but every state has its own statute of limitations. If you are considering filing another bankruptcy, you must wait eight years. That is a long time to deal with aggressive collection agencies.

Taxes on deficiencies can also come into play. When a creditor writes-off the deficiency as an noncollectable loss, many creditors will report this as income to you. Under certain circumstances, the IRS will collect the taxes owed on the deficiency plus any interest and fees.

If you need relief from the stress of debt and you live in or around the metropolitan areas of Los Angeles or Long Beach, California, contact us at www.betterbankruptcy.com .We will help you find a bankruptcy attorney in your area who will answer your bankruptcy questions.