Last week the feds reported that the unemployment rate has dropped to 9%. The markets responded with guarded optimism because two days earlier the housing numbers came out showing that house prices are continuing to drop. With the mix of positive and negative economic news the thoughts of bankruptcy are still on many Americans minds.
Many people are doing everything they can to avoid filing bankruptcy hoping that things will just get better. If a person is spending more than they have coming in, using available credit and whatever savings they have, it's foolish for them not to take a serious look at bankruptcy.
Bankruptcy court will accept a debt consolidation plan prepared without an attorney as long as it is compliant with the new bankruptcy laws and is prepared properly.
It just so happens that the bankruptcy law is probably one of the most humane, most civilized, and most culturally advanced of all social laws around. To its credit, the Congress of the United States recognizes (or, at least, did recognize) that a debtor's life does not automatically come to an end the minute a bankrupt walks out of the bankruptcy courtroom, but must go on even after bankruptcy. For that reason, bankruptcy is governed by a FRESH START principle of bankruptcy law: it does not seek to penalize or punish the debtor, but rather to give an honest debtor the opportunity to rehabilitate himself. There's one principal way the bankruptcy law seeks to do this, and that is this: it makes exemptions for a minimum amount of various assets which creditors may not seize from a bankrupt debtor, thus giving such a debtor a fighting chance of rehabilitating himself after bankruptcy. Furthermore, the Congress seemingly recognized that of a person were to be permitted to file bankruptcy only when he shall have really become bankrupt or plain "flat broke," that person would in all likelihood become a public charge because he shall have had nothing left after the bankruptcy even to live on. Consequently, to avoid having such grave circumstances, both on the society and on the government, the Congress created as system of property " exemptions" that allow debtors to keep a certain amount of property despite filing for bankruptcy.
Most people want to eliminate their debt whether they're filing Chapter 7 or Chapter 13 bankruptcy. For some reason, people have a tendency to over think about living in the moment and not how things are going to be in a few years after the bad time is past. There are certain people, that believe that bankruptcy is a cure all solution for all of their problems and are extremely let down when they find out it's not true.
Essentially, the system that currently operates under the last bankruptcy law of 2005, is based on one fundamental principle of the Bankruptcy Code of 1978 which had preceded it. That 1978 Code had considerably liberalized and expanded the amounts, as well as the kinds of property, a debtor may be allowed to take as exemptions. Kenneth N. Klee, a Los Angeles bankruptcy attorney who participated in the drafting of the 1978 law, put it this way: "For the first time, the law makes bankruptcy a viable alternative in those states that traditionally had low exemptions"
"Now," added Morton B. Dicker, an attorney with the Legal Aid Society of New York, "there is a way to free yourself from your debts and still retain some of the comforts of life." You better believe it! Just take a look at the level of some of the exemptions in different states. Using the exemptions provided under the Federal category, for example, a debtor is permitted the following exemption - $10,125 in a debtor-occupied home, for example, $3,225 in a motor vehicle, $10,775 total in personal property (furnishings clothing, appliances, household items, books, etc) or tools used in one's trade or profession; pension or welfare benefits, and so on and on. While for a person filing for bankruptcy in New York who is using the State exemptions, he is permitted to have, among other things, up to $2,500 in cash, $2,400 of equity in an automobile, and unlimited funds in a qualified 401(k) plan. (For a complete list of exemptions for New York State debtors domiciled in New York, see the New York CPLR sections 5205 and 5206, New York Debtor and Creditor Law Sections 282-284, and the New York Insurance Law sections 3212-3213.)
IN SUM The point is that you do NOT have to be or to get bankrupt to file bankruptcy. You absolutely can file bankruptcy without being too broke already, without having to lose everything you have or own - thanks to the FRESH START principle of bankruptcy! Now you know, it's simply a big mythology for anyone to tell you that you get stripped of everything when you declare bankruptcy!
Many people are doing everything they can to avoid filing bankruptcy hoping that things will just get better. If a person is spending more than they have coming in, using available credit and whatever savings they have, it's foolish for them not to take a serious look at bankruptcy.
Bankruptcy court will accept a debt consolidation plan prepared without an attorney as long as it is compliant with the new bankruptcy laws and is prepared properly.
It just so happens that the bankruptcy law is probably one of the most humane, most civilized, and most culturally advanced of all social laws around. To its credit, the Congress of the United States recognizes (or, at least, did recognize) that a debtor's life does not automatically come to an end the minute a bankrupt walks out of the bankruptcy courtroom, but must go on even after bankruptcy. For that reason, bankruptcy is governed by a FRESH START principle of bankruptcy law: it does not seek to penalize or punish the debtor, but rather to give an honest debtor the opportunity to rehabilitate himself. There's one principal way the bankruptcy law seeks to do this, and that is this: it makes exemptions for a minimum amount of various assets which creditors may not seize from a bankrupt debtor, thus giving such a debtor a fighting chance of rehabilitating himself after bankruptcy. Furthermore, the Congress seemingly recognized that of a person were to be permitted to file bankruptcy only when he shall have really become bankrupt or plain "flat broke," that person would in all likelihood become a public charge because he shall have had nothing left after the bankruptcy even to live on. Consequently, to avoid having such grave circumstances, both on the society and on the government, the Congress created as system of property " exemptions" that allow debtors to keep a certain amount of property despite filing for bankruptcy.
Most people want to eliminate their debt whether they're filing Chapter 7 or Chapter 13 bankruptcy. For some reason, people have a tendency to over think about living in the moment and not how things are going to be in a few years after the bad time is past. There are certain people, that believe that bankruptcy is a cure all solution for all of their problems and are extremely let down when they find out it's not true.
Essentially, the system that currently operates under the last bankruptcy law of 2005, is based on one fundamental principle of the Bankruptcy Code of 1978 which had preceded it. That 1978 Code had considerably liberalized and expanded the amounts, as well as the kinds of property, a debtor may be allowed to take as exemptions. Kenneth N. Klee, a Los Angeles bankruptcy attorney who participated in the drafting of the 1978 law, put it this way: "For the first time, the law makes bankruptcy a viable alternative in those states that traditionally had low exemptions"
"Now," added Morton B. Dicker, an attorney with the Legal Aid Society of New York, "there is a way to free yourself from your debts and still retain some of the comforts of life." You better believe it! Just take a look at the level of some of the exemptions in different states. Using the exemptions provided under the Federal category, for example, a debtor is permitted the following exemption - $10,125 in a debtor-occupied home, for example, $3,225 in a motor vehicle, $10,775 total in personal property (furnishings clothing, appliances, household items, books, etc) or tools used in one's trade or profession; pension or welfare benefits, and so on and on. While for a person filing for bankruptcy in New York who is using the State exemptions, he is permitted to have, among other things, up to $2,500 in cash, $2,400 of equity in an automobile, and unlimited funds in a qualified 401(k) plan. (For a complete list of exemptions for New York State debtors domiciled in New York, see the New York CPLR sections 5205 and 5206, New York Debtor and Creditor Law Sections 282-284, and the New York Insurance Law sections 3212-3213.)
IN SUM The point is that you do NOT have to be or to get bankrupt to file bankruptcy. You absolutely can file bankruptcy without being too broke already, without having to lose everything you have or own - thanks to the FRESH START principle of bankruptcy! Now you know, it's simply a big mythology for anyone to tell you that you get stripped of everything when you declare bankruptcy!
About the Author:
Harris Smith offers advice on home equity line of credit and obtaining credit. Get Debt Consolidation help before your neighbor does!
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