Category Archives: Filing Bankruptcy

American Airlines Seeks Names of Opposition in US Airways Merger

Lawyers representing American Airlines and US Airways filed a motion on Tuesday with a federal court insisting that the Department of Justice release the names of individuals they interviewed before filing a motion to block the planned merger of the two airlines.

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Voluntary Filings in the Bankruptcy Process

In bankruptcy law, there are different types of chapters within bankruptcies, but there are only two ways these types of bankruptcies can be filed- voluntarily or involuntarily. Most bankruptcies filed are voluntary filings in the bankruptcy process. Continue reading

Why File Bankruptcy as a Small Business Under Chapter 11?

According to the U.S. Census Bureau, small businesses employing four employees or less represent about 93% of the total gross income made by all businesses in the United States. The greatest majority of small businesses fail before they ever reach the age of five years old, and many of them are forced into bankruptcy protection. Why should a small business debtor file for bankruptcy protection under a chapter 11 instead of some other type of bankruptcy? Continue reading

Filing for Bankruptcy Protection in 2013 while Living in Texas

Ever since the founding of this great nation, bankruptcy laws have been forever evolving. If you are filing for bankruptcy protection in 2013 while living in Texas, you will find out that Texas bankruptcy laws have evolved also. Continue reading

Should You Stop Paying Unsecured Debt After Decision to File Bankruptcy?

Is it a good idea to stop paying unsecured debt after you make a decision to file for bankruptcy protection? That is one of the biggest questions circulating amongst bankruptcy forum websites today, and the answer seems to suggest the consensus says it is a good idea to stop paying all unsecured debt if you are going to file for bankruptcy protection. Continue reading

Filed bankruptcy two years ago, can I file again?

Many debtors find after they have filed a previous bankruptcy that they need to file a second time. Recently on our bankruptcy forum we had a debtor ask, “Can I file bankruptcy again if I have filed in the past?” This blog will address issues of filing bankruptcy a second time.

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How Bankruptcy Should Effect Your Auto Insurance Premium

A car crash on Jagtvej in Copenhagen, Denmark.

How bankruptcy may effect your automobile insurance.

Technically speaking, your credit or filing for bankruptcy should have no effect on your auto insurance premium. Any type of bankruptcy filed hurts your credit rating by remaining on your record for up to ten years. During that time, some automobile insurance companies use credit reports to assess what they will charge you for their premiums, but should they? Continue reading

Why More Seniors May Be Going Into Bankruptcy

A recent study conducted by the AARP shows that between 1991 and 2007, the number of seniors over 65 years of age filed for bankruptcy protection at a rate that went up 150 percent when younger American’s filings were on the decline. Notice, those years did not include the Great Recession period when many more seniors filed for bankruptcy protection. Here is my take on why more seniors may be going into bankruptcy: Continue reading

When Redemption Runs Out

1955 redemption notice for property in East Du...

1955 redemption notice for property in East Dundry, just south of Bristol (Photo credit: Wikipedia)

In the foreclosure process, most states have a redemption period that must be honored before a homeowner is evicted. When redemption runs out varies from state to state, and there are some states that do not have a redemption period policy.

A blogger on a bankruptcy forum website recently shared concerns about the redemption period in her state and how it would effect them now that the period was ending. She wrote, “I am six months pregnant, spent the last 4 months on and off bed rest. Our redemption period ends today, and I am freaking out that the lenders will be at the home soon to change the locks…What do you think our chances our of having through the weekend to move out? ”

What are the homeowner’s rights after the redemption time has run out?

The redemption period is the time the homeowner is given to redeem a house in foreclosure once the house has been sold on the auction block at the sheriff’s sale. The redemption period usually allotted ranges from 30 days to 6 months in most states. The homeowner must pay the principal, interest, and associated fees to redeem the house, or the homeowner must vacate the home at the end of the redemption time.

If the homeowner does not vacate the home at the end of the redemption period, most states require the homeowner be sent an eviction notice. Once an eviction notice has been served, if the homeowner has still not vacated the property by the end of the time allowed by law, a representative of the authority of the court, usually a sheriff or deputy sheriff, will come and physically remove the homeowner or homeowners and all their belongings from the premises.

What can happen during the redemption time?

  • The homeowner can continue to live in the home until the end of the redemption period. Technically, the homeowners still own the property until the opportunity to redeem has expired.

  • If there is any equity in the home, the homeowner has the right to sell the property up until the redemption time is finished, but the homeowner must pay all the interest, fees, and legal costs for making the sell.

  • The homeowner will still have normal financial responsibilities of running a household, like paying for utilities and insurance.

  • The redemption period can be shortened under certain circumstances if the homeowner vacates the property during this time.

  • Filing for bankruptcy protection can extend the redemption period until the bankruptcy is settled.

What can happen once the redemption time runs out?

  • Whoever holds the sheriff’s sale certificate becomes the rightful owner of the property. The homeowner’s name on the title becomes mute at this point because the former homeowners no longer own the property.

  • The homeowners should vacate the property. They cannot legally remain in the residence.

  • If the owner has not moved out by the end of the redemption period, they then can be evicted through the state laws governing such.

  • The homeowners give up any right to equity in the home if they have not redeemed the home at this point.

If you are facing foreclosure, it is a good idea to know your rights concerning how to legally handle your plight. Consult with an experienced lawyer about your options before you make any decisions on your home you may later regret.

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Can You Be Too Broke To File Bankruptcy?

Can you be too broke to file bankruptcy? This question was raised by an article posted on the CNNMoney website May 7,2012 and titled Too Broke to Go Bankrupt.

The article suggested from recent statistics collected by the National Bureau of Economic Research (NBER) that an estimated number of people between 200,000 and one million debtors would be unable to afford the steep cost of filing bankruptcy this year. NBER reports that a Chapter 7, the simplest and most common bankruptcy filed, will cost more than $1,500 in lawyer and legal fees to file in 2012.

One group of professors from several mid-west universities did research on how bankruptcy filings spiked after people received their tax rebates. They predicted some 200,000 debtors would use their tax refunds to file in 2012. From their research, they concluded that the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 has added a lot of paperwork to the bankruptcy process driving the costs of bankruptcy higher.

Many predicted the 2005 law would slow bankruptcy filings down and make it harder to file. With the Great Recession, those predictions went out of the window as record numbers of people filed between 2008 and 2011. Since the Great Recession ended, the filings have leveled back off to the numbers just before the recession began.

Still the NBER research suggests that those people filing today are the ones that can afford to. One of the research members was quoted as saying, “it ended up being the relatively better off, or middle-class consumers who can actually afford to file, and the people with lower incomes can’t afford to file.”

Although this writer does not doubt the validity of the facts presented by the NBER research group, and where this writer feels there are completely broke people who feel they cannot afford to file bankruptcy because of the higher fees, my question is, “Can you afford not to file?”

The idea behind filing bankruptcy is either to protect what assets you own from creditors, and/or to make a fresh new financial start free from creditor collection activities. If you have assets worth protecting, you can find a way to get the money to protect them. If you cannot financially withstand the onslaught of collection agents and garnishments from your wages, you cannot afford not to file.

If you are a financial hardship case, here are a few ways you can afford to file bankruptcy:

  1. You can file Pro Se in simple no asset Chapter 7 bankruptcy, saving the cost of a lawyer. That would leave you around $300 in legal fees to pay and those can be waived under certain financial hardship cases.

  2. You can seek Pro Bono services from lawyer groups who give their time to help those with hardships.

  3. If you still have a job, you can stop making payments to your creditors because the debts will be discharged in your bankruptcy. A bankruptcy lawyer can help you to determine which payments you can stop making in order to raise enough to cover the costs of filing, including his fee.

Can you be too broke not to file bankruptcy? Not really. Being broke is when most of you should file. Ask a seasoned bankruptcy attorney if he thinks you are too broke to file.

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