Bankruptcy
Far more common than an assignment or a composition is the use of procedures established by the federal government is the Bankruptcy Act and carried out by special bankruptcy judges affiliated with the U.S. district courts. You may take the initiative yourself and file a petition in bankruptcy.
To make the decision whether or not to file for bankruptcy protections you should consult with an expereinced San Antonio bankruptcy lawyer. Getting to the point of filing bankruptcy is always a difficult situation an in most cases painful so you need legal advice from a bankruptcy attorney. If you can see no reasonable prospect of payng your bills, you should not regard bankruptcy as dishonorable or immoral. The theory is that bankruptcy is sometimes advantageous not only to an individual but also to the country, since people cannot be productive if they have no hope for the future. Bankruptcy proceedings are authorized by Congress; they were established to enable you to receive a full discharge from all but certain debts. The expenses of going through bankruptcy include a filing fee & attorneys fees. You will be responsible for paying your attorney fees.
Filing a Petition in Bankruptcy
A bankruptcy proceeding begins with the filing of a petition in the bankrutpcy court where the debtor resides. A voluntary petition may befiled by any debtor, except a municipality or an insurance or bankring company, who is sane and who has not filed a petition within the past six years. An involuntary petition may be filed against most persons or corporations.
Advantages of the Bankruptcy Laws
As recently as 100 years ago you might well ahve gone to prison for failing to pay your debts. The whole philosophy of the bankruptcy system, established in 1898 is to give you an opportunity to throw in the sponge when your debts get unbearable and unpayable and to make a new financial start. Until recently you had to be willing o surrender very nearly everything you owned if you wanted to go into bankruptcy. The situation was changed by the BAnkruptcy Reform act of 1978, which went into effect on October 1979. The revised law, the first thorough revision of the bankruptcy system since 1938, allows you to keep a substantial amount of personal property and still be relieved of most of your old financial obligations.
What Can I Keep In Bankruptcy?
The fear of losing property stops many people from exploring their options in bankruptcy. The fact is that only four percent of chapter 7 bankruptcy cases are “asset cases,” meaning the bankruptcy trustee receives money or an asset from the debtor. For the other 96% of chapter 7 cases, the debtor continues to pay secured debts, like a house or car, and is able to keep the property.
Determining whether a debtor has an asset case is a simple arithmetic calculation using bankruptcy law exemptions. Bankruptcy exemptions are provided by state law. Every state grants exemptions so that the debtor can retain property, like home equity, a modest vehicle, some personal property, and household furnishings.
The homestead equity exemption can vary greatly from state to state. Some states grant an unlimited homestead exemption to their residents (which the federal law may limit in some circumstances), and other states do not offer much protection. Ohio, for instance, only provides a $5,000 exemption, while Kansas gives its residents an unlimited exemption.
The motor vehicle exemption generally allows the debtor to exempt equity in one (sometimes more) personal vehicle. The exemption can vary greatly by state, usually ranging from $2,000 to $10,000.
Every state grants an exemption for basic household furniture. In addition, most states give an exemption for tools used for work, musical instruments, etc.
Many states provide a wild card exemption to exempt miscellaneous items. This wild card exemption can be used to protect otherwise non-exempt equity in a vehicle or home. Generally it is used to protect cash money in the bank.
Identifying your property, determining its value, and applying your exemptions is the difference between retaining and losing property in a bankruptcy case. An experienced bankruptcy attorney can guide you through this process.
