What is bankruptcy? html
Bankruptcy is a legal proceeding in which a person who cannot
pay his or her bills can get a fresh financial start. The right
to file for bankruptcy is provided by federal law, and all
bankruptcy cases are handled in federal court. Filing bankruptcy
immediately stops all of your creditors from seeking to collect
debts from you, at least until your debts are sorted out
according to the law.
What can bankruptcy do for me?
Bankruptcy may make it possible for you to:
-
Eliminate the legal obligation to pay most or all of your
debts. This is called a “discharge?of debts. It is designed to
give you a fresh financial start.
-
Stop foreclosure on your house or mobile home and allow you an
opportunity to catch up on missed payments. (Bankruptcy does
not, however, automatically eliminate mortgages and other liens
on your property without payment.)
-
Prevent repossession of a car or other property, or force the
creditor to return property even after it has been repossessed.
-
Stop wage garnishment, debt collection harassment, and similar
creditor actions to collect a debt.
-
Restore or prevent termination of utility service.
What bankruptcy cannot do.
Bankruptcy cannot cure every financial problem. Nor is
it the right step for every individual. In bankruptcy, it is
usually not possible to:
-
Eliminate certain rights of “secured?creditors. A “secured?
creditor has taken a mortgage or other lien on property as
collateral for the loan. Common examples are car loans and home
mortgages. You can force secured creditors to take payments over
time in the bankruptcy process and bankruptcy can eliminate your
obligation to pay any additional money if your property is
taken. Nevertheless, you generally cannot keep the collateral
unless you continue to pay the debt.
-
Discharge types of debts singled out by the bankruptcy law for
special treatment, such as child support, alimony, certain other
debts related to divorce, most student loans, court restitution
orders, criminal fines, and some taxes.
-
Protect cosigners on your debts. When a relative or friend has
co-signed a loan, and the consumer discharges the loan in
bankruptcy, the cosigner may still have to repay all or part of
the loan.
-
Discharge debts that arise after bankruptcy
has been filed.
Learn
more about bankruptcy basics
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Chapter 7 Bankruptcy
If you are covered up in unsecured debt, like credit cards, but your payments are current on your secured debts, like your home or card. This may be the right
answer for you if you meet
the Chapter 7 means test. It
allows you to discharge your
unsecured debts while
affirming your secured debts
that you want to keep.
Learn
more about chapter 7 bankruptcy
Chapter 13 Bankruptcy
Often referred to as the
wage earner's chapter, it's
mainly for those trying to
protect their home or car or
for those who make too much
money for Chapter 13. It
allows you to work out a
plan with your creditors
over a 60 month period. All
repossession and collection
actions are stopped while
the plan is in place.
Learn more about chapter 13
bankruptcy
Common Myths About
Bankruptcy
The average American knows
very little about
bankruptcy. Most people are
probably aware of
bankruptcy’s ability to
dissolve debt and give the
debtor a fresh start.
However, some of the
information you may have
heard from your creditors,
friends, and family is often
false.
The though of exploring
bankruptcy is very stressful
for most people. Therefore,
seeking the help of an
experienced bankruptcy
attorney will not only help
you dispel some of the most
common bankruptcy myths but
will help you find out if
bankruptcy is your best
option.
Some of the most common
myths about bankruptcy are:
Myth 1:
Under the New bankruptcy
law, there's no more
bankruptcy.
Myth 2:
Everyone will know you have
filed for bankruptcy.
Myth 3: You will lose everything you
have.
Myth 3: You will never be able to
own anything again.
Myth 4: You will never get credit
again.
Myth 5: Filing bankruptcy will hurt
your credit for 10 years.
Myth 6: If you're married, both you
and your spouse have to file
for bankruptcy.
Myth 7:
It's really hard to file for
bankruptcy.
Myth 8:
Only deadbeats file for
bankruptcy.
Myth 9:
Filing bankruptcy means
you're a bad person.
Myth 10: You can only file once for
bankruptcy protection.
Myth 11: Even if you file for
bankruptcy, creditors will
still harass you and your
family.
Myth 12:
There is a minimum amount of
debt required to file for
bankruptcy.
Myth 13:
You can't get rid of back
taxes in bankruptcy.
Find the answers to each of
these myths
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Bankruptcy In
The News
Debt Collector Abuse on the rise
Posted: December 12th, 2011
As consumers struggle to pay their bills, complaints about debt
collectors are growing faster than those in any other industry,
regulators say. The Federal Trade Commission reports that the
number of complaints about debt collectors rose from 104,766 in
2008 to 140,036 in 2010. The FTC receives more complaints of
debt collection harassment
(debt collection industry) than any other industry. The Fair
Debt Collections Practices Act (FDCPA) provides consumers many
rights while a debt collector is trying to collect money from
debtors.
Debt collectors may not harass, oppress, or abuse you or any
third parties they contact. For example, debt collectors may not
user threats of violence or harm, publish a list of consumers
who refuse to pay their debts outside of a credit bureau, use
obscene or profane language, call before 8AM or after 9PM, make
threats such as arrest for not paying your debt, among other
actions such as making false statements.
A USA Today article explains one story of a debtor harassed
by a debt collector. If you feel you are being
harassed by debt collectors,
or are in need of immediate debt relief, please
contact one of our offices today for
a free consultation.
(read the
full USA Today article)
Reporter's notebook: Pardon Jefferson County, but fewer
Alabamians resorting to bankruptcy
Posted: November 21st, 2011
Alabama has joined a national trend, in which U.S. personal
bankruptcy filings totaled 106,255 during October, down nearly
20 percent from a year earlier, according to the American
Bankruptcy Institute's analysis of data from the National
Bankruptcy Research Center.
"The declining filings correlate to tightened consumer spending
and the overall pull back in consumer credit associated with a
stagnant economy," American Bankruptcy Institute Executive
Director Samuel J. Gerdano said in a statement. "We expect total
2011 consumer filings to be less than 2010."
Brad Botes, a partner in the Birmingham-based Bond and Botes law
firm, which represents bankruptcy clients across the Southeast,
said he is not surprised that the number of filings are on the
decline from the height of the economic downturn two years ago.
"The numbers reflect a sense of hopelessness," Botes said.
"Bankruptcies are down significantly from last year. I think
that shows that a lot of people suffering in this economy have
given up and feel there is no way out so why file."
Please visit the AL.com website to read the full article.
Job loss, a weakened economy,
medical problems, or other un-foreseen life issues can cause
major financial struggles for all Americans.
Bankruptcy protection can help
Americans struggling with the burden of debt obtain much needed
financial relief. If you are facing foreclosure, vehicle
repossession, or abusive
debt collectors and harassment, the attorneys of Bond and
Botes may be able to help you seek the financial relief you need
and give you a fresh start. If you live in Alabama, Tenessee, or
Mississippi, contact one of our offices
to arrange a free consultation.
New rules will protect
against debt relief outfits
Posted: October 18th, 2010
Consumers complaining about high fees from companies that sell
debt-relief services will soon get some protection from Uncle
Sam. Starting October 27th, 2010, for-profit firms will be
banned from charging a fee before they settle or reduce a
customer's credit card obligation or other unsecured debt. The
Federal Trade Commission's new rules, listed on ftc.gov, cover
telemarketers of for-profit debt relief services, including
credit counseling, debt settlement and debt negotiation
services.
Birmingham bankruptcy lawyer Brad Botes
and Doug Horst, program manager of the non-profit Consumer
Credit Counseling Service, said the FTC ruling is over-due.
Botes, a partner in Bond, Botes, Reese & Shinn, and Horst, whose
agency provides low-cost counseling to debtors, both said many
of their clients have been victimized by debt settlement
companies. (read the
full article)
New rules will protect
against debt relief outfits
Posted: October 18th, 2010
Consumers complaining about high fees from companies that sell
debt-relief services will soon get some protection from Uncle
Sam. Starting October 27th, 2010, for-profit firms will be
banned from charging a fee before they settle or reduce a
customer's credit card obligation or other unsecured debt. The
Federal Trade Commission's new rules, listed on ftc.gov, cover
telemarketers of for-profit debt relief services, including
credit counseling, debt settlement and debt negotiation
services.
Birmingham bankruptcy lawyer Brad Botes
and Doug Horst, program manager of the non-profit Consumer
Credit Counseling Service, said the FTC ruling is over-due.
Botes, a partner in Bond, Botes, Reese & Shinn, and Horst, whose
agency provides low-cost counseling to debtors, both said many
of their clients have been victimized by debt settlement
companies. (read the
full article)
Debt-settlement firms' claims often unsettling
Posted: October 18th, 2010
With the economy in the tank and the unemployment rate hovering
around 10 percent, many consumers are finding more difficult to
pay their bills. For many consumers, promises made by
debt-settlement companies to "get you off the credit card
treadmill" or to "eliminate debt now" may sound like a great
solution, but it's not always the case. In most cases, experts
say, signing on with a debt-settlement company will put you
further in the financial hole. In some cases, the companies are
fraudulent and take your money with no intention of helping you.
Problem Solver Jon Yates of the
Chicago Tribune examines the issue and how new federal rules
aim to clamp down on the some of the most criticized practices
used by these debt-settlement firms. (read
the full article)
Chicago Tribune
How long does a debt collector have to sue after a credit card
ahs been canceled?
Posted: October 4th, 2010
How old is too old when it comes to being sued for an old debt?
If you are sued for an old debt, you may have a good defense.
Debt collection lawsuits must be timely, accurate and fair. Debt
buyers purchase old debts for pennies on the dollar, use data
bases to file automate lawsuits, and make huge profits. With new
technology, the 11 billion-per-year debt collection industry has
exploded, especially in the courts. (read
more)
AARP
Our view on bill collectors: Firms employ questionable
techniques to collect debts
Posted: September 28th, 2010
The easiest way to avoid being chased by debt
collectors is, obviously, to pay your bills. That said,
collection agencies have a responsibility to obey the law and
treat consumers fairly. At a minimum, collectors have a duty to
ensure that the debts they're trying to collect are real and
that their targets are the people who owe them.
But as debt collection has grown into a huge business, those
rules are easily flouted. The past decade's easy credit —
followed by a crash and a recession — left billions of dollars
in unpaid bills. Banks, retailers and other credit card issuers
charged off more than $86 billion in debt last year, more than
twice as much as in 2000, according to the Nilson Report.
Resourceful debt collectors are also finding sneaky new tactics:
According to reports from Las Vegas and Vancouver, attractive
women — who fail to mention they're working for collection
agencies — become Facebook "friends" with debtors, giving the
agencies access to personal information.
Computer-generated lawsuits are filed by the thousands in states
across the country. Anecdotal evidence suggests that many
consumers never find out they've been sued. In New York, for
example, process servers were found to be filling out false
affidavits claiming they had served people. (read
more)
USA Today
Foreclosure prevention program problems
Posted: September 28th, 2010
Across the country foreclosure rates have reached an
all time high. The Obama
administrations flagship foreclosure program, called Making Home
Affordable, is not working according to the federal government.
The program was designed to help homeowners reduce their
mortgage payments. Only 34% of those who enrolled in the program
have actually received permanent loan modifications. (read
more)
WLBT 3
> MORE
BANKRUPTCY NEWS
*Bankruptcy information contained in this
section may not necessarily be written or provided by Bond and
Botes directly.
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