Credit card deals after bankruptcy - this confuses many people

Should you file for bankruptcy? Do you need to have absolutely no money in order to file for bankruptcy? Does bad credit have anything to do with bankruptcy? Is there a difference between personal and business bankruptcy?

Below you can find some basic information regarding bankruptcy. There is much more to know, so be sure you have all the facts before filing.

• Filing for Chapter 7 bankruptcy or “straight bankruptcy” means you will be liquidating all or specific parts of your property, depending upon your situation. For example, you owe a great deal of money to creditors but have no solid way to pay.

Filing for this type of bankruptcy means someone will come to your property, take it over, and it will subsequently be sold or otherwise transformed into equity that can pay your creditors. You must be completely unable to pay, otherwise you will find that you will not qualify, even if you are struggling a great deal.

• Chapter 11 bankruptcy is much different and gives you a chance to be able to pay on your own. By creating a plan and reorganizing your finances and payments, you find middle ground through which you can pay off creditors without losing something such as property.
• Chapter 13 bankruptcy, also known as the “wage earner” chapter, has very specific guidelines that you must meet at the time you file in order to qualify. The magic numbers regarding Chapter 13 bankruptcy are $269,250 for unsecured debts and $807,750 for secured debts. Both debt amounts must be of a certain kind and must not be over those amounts.

By creating a repayment plan and adjusted budget that has been court approved, you can then begin to pay back your creditors and still keep your property. A trustee assigned for your case will collect your payments and keep watch over your finances.

This person will turn the money over to the creditors and make sure you stay in line in accordance to your repayment plan’s terms. Only when you have completed all payments will you be discharged and it will be up to you to avoid this problem again.

• There are two different types of trustees you may encounter depending upon the type of bankruptcy you file for. A U.S. trustee comes from the Department of Justice. This is the department that watches over all cases involving bankruptcy. A different individual not directly with the Department of Justice will be appointed by the U.S. trustee to monitor your specific case.
• When filing on your own, you may or may not decide to have an attorney present. The decision will be up to you, however, if you are filing for a business, then you must have an attorney to do so.
• At times a portion of your debt is discharged. A court order stating you do not have to pay this portion is a discharge. You are free from this amount and creditors cannot request you pay it. Keep in mind, however, that this may not always apply or be available depending upon your situation.

For example, if you owe money for taxes, you will not receive a discharge. Situations involving child support or alimony also do not qualify, just as fraud and student loans are also not included. You must be fully truthful about all your information; lying about something, destroying information, or otherwise misrepresenting information will ruin your chances for a discharge.

• Should a creditor ignore the fact that you have a discharge, you should contact your attorney or otherwise obtain legal advice. Be sure the creditor has a copy of the discharge as well as any other necessary information to prove you have a legal reason not to pay the money.
• When you need forms or information about filing for bankruptcy, you can always ask either an attorney or by visiting a local Bankruptcy Court. You can also ask the Bankruptcy Court for documents you need for your personal files if you have already filed for bankruptcy. Likewise, if you have questions regarding the status of your or another person’s case, the Bankruptcy Court can tell you.
• If you have questions regarding the account balance for the Chapter 13 bankruptcy you filed for, or if you are interested in property for sale by other Chapter 13 trustees, you will have to contact them directly in order to find out.
• After filing, you will find that usually a case will close after a certain number of days, depending upon what you have filed for. If you file for Chapter 7 bankruptcy and there are no assets involved, 60-90 days after the 341 Meeting of Creditors, the case should be finished. For a Chapter 7 case with assets, the number of days can be from 90-120.

For a Chapter 11 case, a Final Decree must be entered before the case can close. A Chapter 13 case closes around 60-90 days once the Final Report is given. These are only approximations, and you must know that these numbers begin after the case has been presented and information given, which case take a great deal of time before closing can even be considered.

• If you have information regarding bankruptcy fraud, you should send the information you have to a U.S. trustee in your area as well as to the trustee assigned to the case if you are aware of whom it is. Be sure to give them all available information, including who you are and details about the fraudulent practice.

Information about a 341 Meeting of Creditors

• First of all, a 341 Meeting of Creditors gets its name from the more legal listing of 11 U.S.C. 341(a) Meeting of Creditors. This is a meeting of both creditors and other parties associated with the person filing for bankruptcy to discuss questions the person was asked, as well as his or her financial situation. While the person filing for bankruptcy must be present, creditors do not have to be. Should you fail to show up, your case may simply be dismissed, so be sure to be prompt!
• You can locate the place of meeting by calling your local district office, getting directions online, and can make sure of the meeting time by looking at your Notice of Meeting of Creditors. If you did not receive this information, you should call your attorney or the court.
• If you have any disabilities, the building is required that it should be accessible. Try not to bring your children if all possible, but if you have no choice, make sure they will behave well and be able to sit quietly for the duration of the meeting.
• Should your attorney be unavailable at the time of the meeting, you should still go to the meeting and then tell the trustee your situation. The meeting may then be changed, and if your attorney cannot attend the second time, you will be given different instructions by the trustee. When you have an attorney, you will want him or her present, so do not try to weather the meeting without your attorney. If your attorney cannot attend a court hearing, the judge will give you instructions on how to handle the situation.

Keeping this in mind, you should now have a general idea of how the bankruptcy process works and some information on what you might want to look for in case you are considering bankruptcy.