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Bankruptcy Law Blog

Bankruptcy may offer viable options

Your financial troubles might be extremely challenging, but they aren't necessarily insurmountable. Although you may have blurred the line between where your business accounts end and your personal finances begin, there are certain forms of bankruptcy that could potentially help you deal with your debts to creditors in Florida and elsewhere. Of course, it's important that you make the right choice about what kind of bankruptcy you want to declare.

You might have several options for dealing with insolvency. For instance, you may prefer to keep your business going by using some of its existing assets or future profits to pay off creditors over time. On the other hand, you could opt to close your doors for good and start over by rebuilding from the ground up. Many individuals simply want to avoid having to pay off business debts with their own money or family resources.

Why debt settlement might not be a good option

Florida residents who are facing overwhelming levels of debt may think that debt settlement might be a good option. Debt-settlement companies try to negotiate settlements for their clients to pay substantially smaller amounts in exchange for their creditors forgiving the balance. There are several reasons why this might not be a good option, however.

People who decide to use a debt-settlement company be asked to stop paying anything to their creditors. Instead, they will deposit money into an escrow account. When the balance grows to a sufficient level, the debt-settlement company will then make the creditors offers to settle their defaulted balances for somewhere from 10 to 50 percent of the amounts owed. If they agree, the remainders are forgiven.

Is a loan modification right for me?

Loan modification is becoming an increasingly popular method of saving a home from foreclosure. This is especially true in Florida, where state law now requires lenders to rework loans with terms that are more manageable for the homeowners who are at risk of foreclosure. Nevertheless, lenders are in the business of making money, and many of will still attempt to finalize deals that serve their own interests more than the homeowners.

Loan modification is a very effective tool for people who are struggling to keep up with the mortgage payments under the current terms of their loans. If you feel that you are at risk of foreclosure, loan modification may be a good option for you.

Lawyer sanctioned in bankruptcy filing

People in Florida who are filing for bankruptcy may want to make sure that they supply their attorney with original signed documents. In California, an attorney was sanctioned when he was unable to back up electronically signed documents with original signatures.

The law in this attorney's district permitted electronic signatures for electronically filed documents. However, the attorney was also supposed to have documents on file for three years that had the so-called "wet" signatures as well.

You can rebuild your credit after bankruptcy

When you're dealing with overwhelming debts, filing for bankruptcy in Florida may be the best solution. Bankruptcy can stop the flood of threatening calls and letters from creditors and put a hold on any creditor actions that are taking place like foreclosure and wage garnishment. Although bankruptcy can negatively impact your credit score initially, the discharge process may ultimately lead to better credit.

Many people think that a bankruptcy filing will unalterably damage their credit score. In reality, bankruptcy could have a positive effect on your credit score, especially if you had a very poor debt-to-credit ratio before you filed. A large part of credit scoring is based on how much debt you have compared to your available credit, and bankruptcy can help you to improve this ratio.

Bankruptcy and your new job application

Miami residents who have gone through Chapter 13 bankruptcy may want to consider how the filing could impact their future career aspirations. Thoughts expressed by at least one personal money management expert indicate that honesty might really be the best policy for individuals who are looking for a new job after previously filing for bankruptcy.

The advisor suggests that attempting to hide the bankruptcy during the job application process could potentially cause problems with prospective employers. He also points out that it is reasonable for a business to weigh a job applicant's financial history during their analysis of whether the candidate is a good fit for the position. If questions about the bankruptcy arise, honest answers coupled with a willingness to address the situation head-on could be indicative of an applicant's willingness to learn from past mistakes. In such cases, a bankruptcy may not necessarily impact the applicant's prospects.

Understanding the bankruptcy means test

Bankruptcy is a legal procedure that can be used for debt relief. In order to qualify, certain criteria have to be met. Florida residents who are considering Chapter 7 bankruptcy should know that the bankruptcy means test is one of the eligibility requirements.

The two-part testwas initially designed to limit how many people would qualify for a Chapter 7 bankruptcy. It is a test that determines the amount of disposable income and takes into account certain factors, such as expenses, net income and the size of a family. Individuals may opt for a Chapter 13 bankruptcy if they want to retain possession of assets or if they are unable to qualify for a Chapter 7 filing.

Treating bankruptcy seriously

A bankruptcy filing can be dismissed for a number of reasons, including if there is any evidence that the information filed within the request was not true. Florida residents should take the bankruptcy process seriously and be aware that certain behavior can bring the validity of their bankruptcy filing into question.

A similar recent case involves the conduct of an entertainer who, after declaring bankruptcy, began posting online pictures of himself posing with large amounts of cash. Upon being notified of the existence of the photos, a bankruptcy court judge questioned whether the entertainer had failed to divulge all of his assets. A response filed by the entertainer admitted that the money in the photos consisted of props. Although the court accepted the explanation, the episode does reflect the gravity of the bankruptcy process and the importance of how it should be treated.

Rapper Memphis Bleek files for Chapter 13 bankruptcy

Florida residents who are fans of rapper Memphis Bleek may be interested to learn that he has filed for bankruptcy. The rapper filed March 14 for Chapter 13 bankruptcy in New Jersey. At the time, the 38-year-old claimed that he owned $274,190 in assets but had $384,804.91 in liabilities.

Memphis Bleek, whose given name is Malik Cox, reportedly owes $9,000 to the IRS, $13,000 to Monmouth County Superior Court and $335,000 for his home in New Jersey. The rapper also owes $24,000 for a Chevy Impala. According to his bankruptcy documents, Bleek's monthly bills total $5,377 while his monthly income is $5,911.94. With just $534.94 left after his basic living expenses, Bleek owes more money to creditors than he can afford to pay back.

Proposed changes for Chapter 13 bankruptcy

Florida residents who file for Chapter 13 bankruptcy often do so in order to keep some of their assets. This type of bankruptcy allows a person to arrange a payment plan that lasts for three to five years. The Judicial Conference Advisory Committee on Bankruptcy Rules has proposed an amendment to an existing rule, Rule 3015, and a new Rule 3015.1. People are invited to electronically submit comments on the new rule until Oct. 3. The general public is also invited to present testimony in person regarding the rule on Sept. 27 in California.

The amendments deal with the introduction and use of a national Chapter 13 plan form. A local form might be used in place of this national form, and Rule 3015.1 deals with the features that this local form will need to have in order to replace the national form.

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