The Basics Of Claiming Bankruptcy

Knowing how to claim bankruptcy can make a very big difference in the amount of time it takes and the stress you have to deal with to get through the process. Not only will you be in financial strain, you will also be in emotional turmoil and knowing how to go about it will be very helpful.

Once you have decided that this is your only way out of your financial woes, get in touch with a bankruptcy lawyer. These are professionals who understand the process, know the implications and provide bankruptcy services to assist you. The lawyer will be able to confirm that bankruptcy is your only and best option and if not they will offer alternatives that you can pursue to save your credit rating. Your credit may already be bad but if there is something other than bankruptcy you should consider it since the consequences of bankruptcy are long term.

Once you and your lawyer have settled on bankruptcy as your best option, the next step is to decide what form of personal bankruptcy is best for your situation. Your lawyer will use the information you provide as well as the documentation you produce to help you make this decision. Be completely honest with your lawyer or they could misguide you which could have serious implications. Chapter 7 involves liquidating all your assets and beginning a fresh. Chapter 13 on the other hand involves negotiated payment of debt. Each has its pros and cons and your lawyer will address each so that you can arrive a well thought out decision.

Beyond guiding you through the bankruptcy proceedings, your lawyer will help you get help that will keep you out of financial trouble in future as well as get you back on your financial feet. There are professionals who can help you with budgeting, financial planning, savings and other financial services. A lot of them will charge a minimal fee or offer free services as they understand that they are working with people who are in financial trouble.

If you know the people who understand how to claim bankruptcy you will find that the process could be much easier for you as opposed to the situation of deciding to go it yourself. It is important to note that bankruptcy should be an opportunity for you to reorganize yourself and prepare for a return to financial well being. Try and take care of your finances by following solid financial advice and you will never need to apply the information on this article.

Death of an American Icon as GM declares Bankruptcy

On Monday, GM will declare its official Chapter 11 bankruptcy. GM once called the American Icon is surely no longer the part of great American Icon Team. Others belonging to this team are still surviving including Apple Inc. and Microsoft. GM has definitely gone to the garage. Barack Obama is very disappointed with the news.

Death of an American Icon, GM - 1908-2009 :(

The largest US Auto maker will file its bankruptcy on Monday in the Federal Court in New York City, as confirmed by the FOX Business Network. Obama has decided to provide details on how to reconstruct GM as it was before. This will take place before the formalities of the bankruptcy filings. Even though GM has been declared bankrupt, it was found by the media, they negotiating for their two high profile cars, Hummer and Saturn.

GM will continue to negotiate with its creditors regarding proposal made by GM that would increase its shareholder's stake in a new restructured company to 10% that equals to increase the stake by 25% which is a good news for the bondholders.

The only thing that GM is now expecting is support from its creditors. They have also declared Fritz Henderson to remain the GM CEO. Al Koch, MD of AlixPartners, a business oriented company that helps in restructuring of bankrupted companies. Earlier they have guided K-Mart, the largest bankruptcy in US to come out of bankruptcy.


CM CEO, Fritz Henderson after declaring bankruptcy of GM.

Obama confirmed that the GM bankruptcy will involve the treasury spending of around $30.1 billion so that during bankruptcy period operations can be performed.

Now let's hope GM comes back to its original position once again. I surely don't want to see the death of an American Icon, GM.

Understand Individual Voluntary Arrangement

Individual Voluntary Arangements or IVA is an agreement between any individual and their Creditor. It is nothing but an alternative to Bankruptcy which brings an individual to an agreement with the people and firms whom they owe money to repay their debts, paying off certain percentage of outstanding debts over a period of time.

Rules for IVA these days are very flexible by nature. By applying for IVA it will always mean that you will get lump sum upfront and then series of monthly payments. People can negotiate on different arrangements with their creditors with a proper co-ordination of experienced insolvency practitioner. It is nothing but a loan repayment scheme in actual sense that is how much you pay back is calculated by your income verses your expenditure. When it is agreed then the same scheme becomes the part of legally binding contract.

With the help of IVA you can also stop your Creditors forcing you into bankruptcy. But it is not a cake walk. You have to remember some important things before you do this. The most important being that is 75% of your creditors have to agree with IVA. Secondly, if you miss a repayment by any chance the arrangement then becomes null and void. Lastly, you should have enough income and assets for your creditors so that you can very easily cover the repayments.

IVA is mostly needed when you think you are facing bankruptcy. With the help of IVA you get more control over your assets. But with some good things comes bad things too. There are some minor disadvantages of IVA too. As we can see the current economic conditions which is stumbling down, the bankruptcies are expected to increase. As a result of this the fees of IVA will be drastically increasing.

If you think you are into bankruptcy, then make sure you take complete help of IVA but with that always make sure that you are quite capable of fulfilling your repayments or else you will be in soup.

Bankruptcy do have Alternatives

We can do many other things rather filing for chapter 7 or chapter 13 bankruptcy. In many situations, filing for bankruptcy is the best remedy for debt problems. In others, however, another course of action makes more sense. Let me outline the main alternatives infront of you.


You can actually stop the harassment from the creditors. If your main concern is that creditors are harassing you, bankruptcy is not necessarily the best way to stop the abuse. You can get creditors off your back by taking advantage of federal and state debt collection laws that protect you from abusive and harassing debt collector conduct. You can also negotiate with your creditors on this part. If you have some income, or you have assets you're willing to sell, you may be a lot better off negotiating with your creditors than filing for bankruptcy. Negotiation may buy you some time to get back on your feet, or your creditors may agree to settle your debts for less than you owe.



Designing a Repayment plan with the help of lawyer is yet another good option. Many people aren't comfortable negotiating with their creditors or with collection agencies. Perhaps you aren't confident with your negotiation skills, or the creditors and collectors are so hard-nosed that the process is too unpleasant to stomach. If you don't want to negotiate on your own, you can seek help from a nonprofit credit or debt counseling agency. These agencies can work with you to help you repay your debts and improve your financial picture.

Participating in a credit or debt counseling agency's debt management program is a little bit like filing for Chapter 13 bankruptcy. The agency will help you come up with a plan to pay back your creditors over time, somewhat like a Chapter 13 plan. But working with a credit or debt counseling agency has one advantage: No bankruptcy will appear on your credit record.

However, a debt management program also has some disadvantages when compared to Chapter 13 bankruptcy. First, if you miss a payment, Chapter 13 protects you from creditors who would start collection actions. A debt management program has no such protection: Any one creditor can pull the plug on your plan. Also, a debt management program usually requires you to repay your debts in full. In Chapter 13 bankruptcy, you often pay only a small fraction of your unsecured debts.

Consumer advocates have also raised concerns about credit counseling agencies, because these agencies receive most of their funding from creditors. As a result, critics say, these agencies could face a conflict between the interests of their funders and the interests of their clients.

Surprisingly, the best approach for some people deeply in debt is to take no action at all. If you're living simply, with little income and property, and look forward to a similar life in the future, you may be what's known as "judgment proof." This means that anyone who sues you and obtains a court judgment won't be able to collect from you simply because you don't have anything they can legally take. (As a famous song of the 1970s said, "freedom's just another word for nothing left to lose.")

Except in unusual situations (for example, if you refuse to pay taxes as a protest against government policies or you willfully fail to pay child support), you can't be thrown in jail for not paying your debts. Nor can a creditor take away such essentials as basic clothing, ordinary household furnishings, personal effects, food, or Social Security, unemployment, or public assistance benefits.

So, if you don't anticipate having a steady income or property a creditor could grab, bankruptcy is probably not necessary. Your creditors probably won't sue you, because it's unlikely they could collect the judgment. Instead, they'll simply write off your debt and treat it as a deductible business loss for income tax purposes. In several years, the debt will become legally uncollectible. And in seven years, the debt will come off your credit record.

Author is the site member of bankruptcyXp.com

Never Consider Bankruptcy as an Option

When debtors fail to pay their enormous debts, many of them turn to declaring bankruptcy. However, almost every financial adviser will most likely agree that bankruptcy should be the absolute last solution to resort to. The truth is bankruptcy rarely should be the last resort. Even when the sky is falling down with massive debts, you can still turn to debt consolidation services.

Although you still have to pay through all the monthly debt payments, consolidating your debts will drastically lower the monthly interest rate, where as declaring bankruptcy will leave you with a 10-year bad credit record. By lowering the interest rates per month, the rate you have to pay per month significantly reduces to as low as 57%. This is equivalent to half the financial burden off your shoulder. This is a clearly much more comfortable standpoint than declaring bankruptcy and enduring 10 years of being turned down by insurance, jobs, and bank loans.

Check out what Bankruptcy Attorney Jamie Ryke has to say about avoiding Bankruptcy:



Whether it is credit card debts, bill debts or student loans, non-profit debt consolidation services can help you lift a considerably large financial baggage off your shoulder. Lower interest rates equal lower monthly debt payments, which all leads to a better financial standing. With such a good offer, it is undoubtedly unwise to declare bankruptcy when you still have a promising option ahead of you.

Debt Consolidation: Saving you from Bankruptcy

If you are in a huge debt and on the brink of declaring bankruptcy, think again. You may think that you are out of all possible solutions, but the truth is you are not! If you think there are no other options, then you must have overlooked debt consolidation. With non-profit debt consolidation you still have to pay your debts, but at a much lower interest rate, resulting up to 57% of the original rate per month in most cases. Some may think that declaring bankruptcy is the easy way out and an end to having to pay all the debts, but that is definitely not true. Declaring bankruptcy often entails forfeiting personal assets and ruins your credit report for at least ten years. Furthermore, you will be turned down by countless bank loans, mortgages, insurance, and even jobs. In short, you will no longer have control with your own financial life (and virtually your entire life) once you declare bankruptcy.

Clearly, avoiding bankruptcy would be the wisest decision. Consult debt consolidation organizations to cut down your monthly debt rates. Debt consolidation organizations will negotiate with your debtors and arrange for a much lower interest rate, relieving you from some financial trouble in the long run. Not only will you have to pay a lower amount each month, debt consolidation (especially non-profit consolidation services) can lower a 15% interest rate to as low as 2%. If you are truly suffering from fear of bankruptcy, get your debt consolidation quote today for a better financial tomorrow.