Sabtu, 14 Juli 2012

The Bankruptcy Automatic Stay Keeps Creditors at Bay

Anyone who has filed bankruptcy will tell you that one of the biggest benefits of filing bankruptcy is the automatic stay. The automatic stay is a legal process that goes into effect the moment your bankruptcy petition is filed with the court. It prohibits all creditors from any contact with the debtor and it stops all collection attempts. This means no more fears of answering the telephone and being attacked by aggressive debt collectors. No more letters of delinquency coming to your house. The stay will even put a halt to wage garnishments, lawsuits, judgments, and even foreclosure. The stay has the power of the US Bankruptcy Court behind it and can allow a frazzled debtor peace of mind during a time of great stress to get themselves and their finances together. When someone is at the end of their financial rope and burdened with overwhelming debt, the automatic stay can give them much needed immediate relief so they can regroup and move forward with a clear thought process in their bankruptcy filing. After the bankruptcy petition is filed the bankruptcy court, the court will immediately send notices to all of the creditors informing them of the bankruptcy filing and the automatic stay. But what if a creditor contacts the debtor prior to receiving the notice of the bankruptcy filing from the court? The debtor can simply tell the creditor that they have already filed bankruptcy and give the creditor the bankruptcy case number that will be generated and given to the debtor at the time of the filing. The debtor can also confidently tell the creditor to no longer contact them or they will be in violation of the automatic stay and face possible legal repercussions. The debtor should document any calls or collection attempts by a creditor that continues to contact them after being informed of the bankruptcy and automatic stay and inform their bankruptcy attorney right away. The bankruptcy attorney will directly contact the creditor in violation to inform them of pending legal action if they persist. If the creditor continues they may be found in violation of the automatic stay by the bankruptcy court and can be forced to pay damages to the creditor and fines for breaking the law, depending on how flagrant the violation was. This shows the true power of the automatic stay and how it is there to protect the individual filing bankruptcy. Giving someone a little extra time to get their life and finances together also shows that filing bankruptcy was not designed as a punishment for honest people. Filing bankruptcy was created by Congress as a means to give hard working Americans that are buried in debt a fresh start. The ability to file bankruptcy has provided relief for millions of people each year in financial hardship and allowed them a new beginning. With the New Year here and no signs of real financial recovery for the country there are many more people that will be facing the prospects of filing bankruptcy and taking advantage of the benefits of the automatic stay. The author started DebtFreeBankruptcyAttorney.Com which is a website that helps individuals with debt problems by putting them in touch with a local bankruptcy attorney that specializes in filing bankruptcy under Chapter 7 and Chapter 13 bankruptcy. Check our website for more answers to bankruptcy questions and ideas on how to have a debt free future.

Kamis, 14 Juni 2012

Will Baby Boomers Have To File Bankruptcy in This Economy?

When the financial markets virtually collapsed back in 2007 no one really knew what to expect in the future years. One group that has been freaking out about the economy and how the government responds to the downturn is the baby boomers. Rightfully so, this group is increasing at an alarming rate with more than 10,000 reaching the age of 65 every single day. I believe this is why the federal government is starting to get very nervous about the Social Security system. In a recent report, Social Security is expected to have $134 trillion shortfall over the next 75 years. What's frightening is that Americans as a whole no longer have a savings account and count on that money to be there for their retirement. In fact, 50% of all American workers have less than $10,000 in some sort of retirement account. Over the last 10 years I heard many individuals saying that their retirement was the equity in their home. For many the last few years destroyed all of their equity even pushing many of these people out of their houses by foreclosure. So much for planning on using your home equity for your retirement. Because of the economy, many baby boomers had to come out of retirement to avoid filing bankruptcy and just be able to continue living. When Social Security was started a person could retire at 62 years old and receive benefits. Back then, people only lived to a ripe old age of 67 years old. This left the Social Security system on the hook for paying only a few years of benefits to that individual even though that person paid in their entire life. Now, the average American is living to 77 years old and SSI starts at 65 years old. According to this the system just became liable for twice as much. In the big scheme of things the program could've worked if the money was set aside and invested like it was supposed to have been. Instead, the money has sat in the general fund to be used as Congress saw fit. It doesn't take a rocket scientist to figure out that this will not be there in the near future because the money does not exist. The sad thing is many seniors count on this coming in every month and without it they would have to file bankruptcy and possibly end up out on the street. Baby boomers need to wake up and smell the coffee and if necessary file bankruptcy to eliminate their debt to lower their overall cost of living. Here are some scary facts that should wake up the baby boomer generation. In a recent survey it was found out in the age group of 46 to 64, 26% of these individuals have no savings at all. In another poll that showed 46% of them have less than $10,000 set aside for retirement. According to the Employee Benefit Research Institute, 60% of all American workers said the total value of their savings and investments is less than $25,000. Currently, there are more than 40 million senior citizens in the US and over the next 30 years that number is expected to double. Out of those, one in every six lives below the poverty line. To avoid filing bankruptcy many seniors are having to continue working in their retirement years. Back in 1985 the number of seniors still working between 65 to 69 years old was only 18%. In 2010, that number increased to 32%. Seniors filing bankruptcy has increased by 178% for the ages of 65 to 74-year-olds between the years of 1991 and 2007. With a cost-of-living increasing and only having Social Security to rely on it's no wonder so many are having to file bankruptcy. Although the cost of living is a factor, the main cause of bankruptcy filing among the elderly is medical bills. In fact, medical bills played a major role in 60% of all individuals filing bankruptcy in the US. Of all of the medical bill bankruptcy filings, 75% of the people had health insurance. You could just keep going on and on about the economy and the US and how it will affect baby boomers that are preparing to retire. People really need to take a serious look at their finances and even consider filing Chapter 7 bankruptcy if necessary. Going into retirement being in debt and relying on Social Security to survive will only end up in disaster. It would be much better to eliminate these debts before having to rely on a fixed income. In a perfect world it would be much better to be debt free when you retire and not carry the burdens in your later years.

Jumat, 23 Maret 2012

Bankruptcy Trustees - What Do They Do?

Bankruptcy trustees in Canada usually refer to corporations or individual's that are legally permitted to distribute the existing property of a bankrupt individual among all his creditors or to hold this property in trust. Distribution of assets among creditors is done by the trustee in accordance with the laws and rules laid down by BIA or the Bankruptcy and Insolvency Act's distribution scheme. The official superintendent is entitled with the duty of licensing the bankruptcy trustee and for granting permission for this property distribution. Roles and Responsibilities of a Bankruptcy Trustee Once the bankruptcy trustees are given the legal right to access the bankrupt individual's property and assets, the insolvent person and everybody else who has a stake in the bankrupt individual's property and assets, must transfer the assets and property to the bankruptcy trustee. It is also the responsibility of the trustee to help the bankrupt individual submit and prepare a consumer proposal for creditors. The bankruptcy trustee is mandatorily expected to arrange for the bankrupt person's credit counselling or debt counselling. Bankruptcy trustees cannot violate the rules of the Bankruptcy and Insolvency Act and is bound by law to follow the BIA's procedures. The trustee is also entrusted with the responsibilities of calling meetings for creditors and for sending notices and documents of proceedings to the concerned parties. The trustee has the full right to oppose the discharge of the bankrupt individual and is also required to prepare the pre-discharge report of the bankrupt person. Common Duties of Bankruptcy Trustees They are responsible for distributing funds to creditors, selling assets that are not exempted, chairing meetings of creditors, reviewing files for detection of fraudulent preferences, reviewing transactions and objecting to the discharge of the bankrupt person. A bankruptcy trustee is also entrusted with the duty of calling the creditors' first meeting for a number of reasons. These purposes include appointment of inspectors, affirmation of the trustee appointment or some kind of a substitute in that place, consideration of the bankrupt individual's affairs and providing of directions and orders to the bankruptcy trustee for proper administration of the estate. Other Responsibilities The bankruptcy trustee acts as the representative of the court in any case of bankruptcy. His responsibility involves examination of all the documents that the debtor has filed, monitoring creditor claims, verifying validity of those claims and verification of whether the bankrupt individual can actually qualify under the category filed for. It is the job of the trustee to protect the bankruptcy system's integrity. The trustee also decides which debtor assets should be sold off for repaying debts, manages this sales process and takes possession of the debtor's non-exempted assets. A Word of Caution If a bankrupt individual intentionally provides false information to or withholds valuable information from trustees, he or she might face criminal charges and his/her case may be dismissed. The bankrupt individual may also have to brace up for government initiated investigation on charges of alleged bankruptcy fraud. Bankruptcy trustees, even the individual ones, on the other hand, may be subjected to auditing for criminal/ethical violations or for breaching fiduciary duties.