All posts by Larry Rogers

How to Apply for a Bankruptcy Funding

With the state of the economy today, it is really difficult to predict the health of your income and the longevity of the business. If today you are only in breakeven when it comes to sales, when time comes that the economy gets lower than it is today, it is really inevitable to be bankrupt. This may sound a bit harsh but there will come a time where bankruptcy shall be declared.

It is a wide known fact that with bankruptcy there are fees involved. So, how will you pay for the fees if you have no money already? Fortunately, there are bankruptcy funding that you can take a look into; below are just some ways to pay the fees.

How to Apply for a Bankruptcy Funding
  1. If you are a union member or had been a previous member, you can always talk and ask advice from the Union’s Welfare Officer. The Officer can assist you in paying for the fees involved in bankruptcy. The union may be able to help you also since you are a member and nobody can understand you better than they do.
  2. It would also not hurt if you ask for help from your local Citizen’s Advice Bureau. In the state of bankruptcy, it is best to lower down you pride and asks help from them. You may be surprised to know that they have local bankruptcy funding that you can apply to.
  3. Lastly, contact any utility company trust funds. Oftentimes these utility providers (gas, water and electricity) have Trust Funds which you can apply to. These funds are particularly set up for businesses that are running in bankruptcy. The nature of this bankruptcy funding is, they would help you with the costs incurred while filing for bankruptcy. The good thing about this option is, once granted; some companies actually give the money as a form of a gift and are not repayable.

When in a state of bankruptcy, never hesitate to ask around as you may not know, there are actually bankruptcy funding that are available for you. Remember, there is no harm in asking and trying to seek for help.

The Two Types of Personal Bankruptcy

There are two main purposes for filing a personal bankruptcy. The first one is to relieve a person from his or her debts where he or she can no longer settle the financial obligations from a creditor or a lender. This is referred to Chapter 7 Bankruptcy which allows debtors to be clean slate or partly discharged of their debt. Second, is to provide a fair process for the creditors. It can be found on Chapter 13 of Bankruptcy wherein debtors pay all or a part of their debt.

The purposes of personal bankruptcy can be accomplished by those two Bankruptcy legal processes of the U.S. constitution (and codified in Title 11 of the US Code). Let’s discuss first about the Chapter 7. Under this chapter, as a debtor you are allowed to be relieved from your debts by using your liquid assets to repay your debts or by giving up a certain property that you own. The liquid assets are personal possession that a debtor may have and can be converted into cash include savings accounts and checking. However, there are liquid assets that are classified depending on the debtor’s state which are exempt assets that cannot be used to repay the creditors. The non exempt liquid assets shall be turned over to the court for proper distribution among creditors as partial repayment for the debts. Debtors are discharged only of their remaining debts after the courts have distributed the non exempt liquid assets to the creditors. Yet you have to pass some standards in order to qualify filing for Chapter 7 Bankruptcy. You must undergo a means test to

prove that the income must be less than the median income in your state for your family size. However, failing the test means that you will not be allowed to file for Chapter 7, but there’s another option for you which is the Chapter 13. Moreover, it is also important to undergo credit counselling aside from passing the means test.

The Two Types of Personal Bankruptcy

If you should plan to file for Chapter 13, you should know that you are able to repay all or a part of your debt through a repayment plan that has a time span of three to five years. In filing the personal bankruptcy, you must include submitting the repayment plan to the court. You can only start making payments to the courts who then distribute repayments for creditors, after you have submitted the plan. This is a requirement that you should accomplish even if your repayment plan has not been approved yet. You must wait for a few weeks for the hearing to approve the plan, where the Judge has the final say about the amounts you’ll be paying while creditors have no control or object about it. The approval of your repayment plan will signal you that you shall be making payments to the court. You can only be discharged of any remaining debt once you have completed your Chapter 13 payment plan.

Post-Bankruptcy: On How to Apply for a Home Loan

Obtaining credit loan to buy a home can be very hard to come by once you have a history of bankruptcy. However, this does not mean there won’t be any institution that will approve of such application. It is important to note that one can apply for a home loan after 2 years from the declaration of bankruptcy.

Post-Bankruptcy: On How to Apply for a Home Loan

How to Apply for a Home Loan Post-Bankruptcy

Post-Bankruptcy: On How to Apply for a Home Loan
  • First and foremost, you need to get an updated copy of your credit report. Review it and see to it that there are no issues that have not yet been resolved or cleared. If you find one, then you might as well have them corrected immediately before applying for any loan.
  • Re-establish credit transactions after bankruptcy. This can be done through acquiring a credit card with the lowest possible credit limit, use it and then make sure you are able to pay them regularly. Ensure that you do not incur overdue balances; this will support your claim that you are now more responsible of handling your credit and finances.
  • Save up enough money for a down payment. If you have enough money for down payment, it might just be easier for you to get approved for the loan.
  • Take note that, more often than not, banks or financial institutions will most likely charge you with a higher interest rate compared to that of a loan applicant without a history of bankruptcy for the past few years. This is primarily because there is an increased risk that the latter might not be able to repay the money that was lent.
  • Look for a credible lending institution in your area. Make sure to find an agent that will gladly help you with your needs during the loan application process. Remember to choose an agent that you feel most comfortable working with.

How to Minimize Risk of Insolvency

Insolvency risk is also known as Bankruptcy risk. It is defined as the risk where a firm or a person’s liabilities exceeded his or her assets is unable to meet and satisfy debts and financial obligations. Now if you have a small business or property that you have invested by lending from a company or an entity, it is your obligation to raise money in order to pay for your debts in due time. It is a concern to be put in such situation, luckily there are ways for you or your business to minimise the risk of insolvency by taking smart steps to solve any problems that could arise from it. Bankruptcy threats are always there however a strategic and active approaches that will help you a lot in avoiding financial or business failures.

How to Minimize Risk of Insolvency

Your personal assets may be at stake if your business is to fail. Your liabilities may exceed your liquid assets when times get tough or personal insolvency hits you. There is a correlation between business insolvency and personal insolvency. You can help protect your personal assets through incorporating as a limited liability company or a limited liability partnership, as long as your personal guarantee must not cover your business debts.

How to Minimize Risk of Insolvency

Through giving your business a secured loan instead of buying shares when you try to put up the money into a business, then it helps you to invest in less risky way. The con however is that you are not able to borrow from other lenders since the kind of protection limits you to do so.

How to Minimize Risk of Insolvency

Another significant way to minimise insolvency risk is through cash flow forecasting and credit control. The method of credit control will help you enhance the balance sheet which in return, reducing chances of insolvency of your business. Meanwhile, cash flow forecasting is also vital and should is regularly updated to keep track and give you an early warning system of any inevitable shortage in cash flow.

The Important Things to Know about Declaring Bankruptcy

Some of us may not be aware of the things that we impulsively spend for such a long time, not minding the costs and then one day it hits you, realizing it’s too late and you can no longer bring back time. I’m talking about bankruptcy; yes you’ve heard it and most of us are familiar with it. Well, for some who have no idea about it–Bankruptcy basically, is a legal status where a person is unable to repay its debts from creditors or unable to solve financial issues from an entity, group or individual. Times get hard when you are faced with money issues due to pile of credit card debts that you are unable to financially settle. Bankruptcy is a legal process which you can opt to choose if you don’t have the means to pay off. Well, it seems easy to get rid of your debt issues through filing bankruptcy; however, that idea is not as easy as it may sound nowadays.

The Important Things to Know about Declaring Bankruptcy

There are things to consider before declaring bankruptcy; if you however have the means to legitimately pay your creditors, then you may be able to handle things in a good way. Knowing the facts is the very first step to do. There are laws promulgating the matters of bankruptcy and there are actual changes in the laws today about it. One can simply declare that “I’m broke and I can’t pay my bills,” and get a clean slate after so. Yes, it was used to be like that before however, legal processes about bankruptcy have changed in the year 2005 which makes it more difficult in declaring bankruptcy. Well, if you are left with no choice and in dire straits with nowhere to go, declaring bankruptcy is an option. But it will cost you to do so because today it is required that you must undergo pre-bankruptcy counseling that will actually charge you fees. Therefore you may have to think it over before you decide to declare bankruptcy and there are also more reasons for you to think twice. Aside from that, credit counseling is also required if your filing gets to be approved, but expecting a clean slate will be a surprise for you. But the most important thing to know before you consider bankruptcy is that if ever you do so, it will be shown on your credit reports and some creditors may keep a permanent record about it and you may find it hard to do business with them because of that.

Bankruptcy: The Ways to Prevent it

Bankruptcy can give a lot of people a fresh start without any prejudice, but it’s not going to be an easy highway. It can possibly affect your credit; force you to sell all what you got and may create a bad impact in your future employment. With this, you may need to take positive measures to avoid that financial situation. And here are the ways to how prevent it from happening.

Bankruptcy: The Ways to Prevent it

Adding up all your debts

You need to have clear and bigger picture about your debts. This can be done by gathering all things that can possibly affect your financial situation, such as your bills, all statement of accounts, mortgage, home value and every financial document. These things are your debts or assets, which you may need to review and compute. Break these debts into two types: the good debts (home loans and student loans) and bad debts (credit debts, personal loans, car loans and medical bills). In this manner, you can assess your situation if it has gone worse or if you are still capable of paying the debts. Nothing is better than being sure about your own situation.

Minimize your expenses

Reviewing all the things that you’ve been spending can make a difference on your finances. You should put more investment on the things you need and avoid spending on those things you don’t really need. Important necessities like food, housing, clothing, and groceries should be your priority. If you can pay for your monthly bills but incapable of paying your other debts, you may need to avoid buying unnecessary things that you don’t really need.

Merge your debts

When you have lots of multiple debts piling up, getting rid to any of them is not an easy task. You can reduce your debts merging them all. It will help reduce the number of bills and it can also reduce the interest rate. Aside from that, it’s also necessary to pay your debts more than your minimum payment every month. Paying your debts this way will eliminate them one by one making you far away from the possibility of bankruptcy.

Bankruptcy: The Ways to Prevent it

Use the advice of a Credit Counselor

A credit counselor serves as your back up in driving you away to bankruptcy if you can’t do it with yourself effectively. With the help of a credit counselor they can teach you money management by totaling all your debts, advise you ways how to reduce your expenses, and consolidating your debt. Not only that, they can assist you in getting a consolidation loan by meeting the requirements. These reputable credit counselors can also help get you involved in a debt management program which can be very beneficial to your part in getting rid of negative attitudes in paying debts

Debt Settlement

Bankruptcy: The Ways to Prevent it

If your total debt is bigger than your own income, then it’s better to consider the idea of debt settlement. A credit counselor can still play a part in this situation where they can discuss and negotiate with your creditors which sometimes results to the reduction of your balances. Although, this method can affect your credit but it’s more worth it than getting a bankruptcy. Debt settlement is not that easy but it’s a way to prevent bankruptcy from occurring especially that it’s your only last resort when you’re tired of other options. Debts can still be settled without you going on bankruptcy. It’s one of the best reasonable options to consider since bankruptcy will really have a bad effect on your future finances.

Properties that Are Part of your Bankruptcy Estate

The bankruptcy estate is the list of all your existing property and property rights which the court has the right to govern. This usually consists of all of the property that is under your name at the time that you have filed for bankruptcy. The property that you acquire after filing for bankruptcy is not considered as part of your estate. But take note that while the bankruptcy case is still on going, the income and any kind of property that you acquired in the said time will still be part of the estate.

Properties that Are Part of your Bankruptcy Estate

Below are some of the types of property which can be part of your bankruptcy estate:

Properties that Are Part of your Bankruptcy Estate
  1. Any property that you own but do not possess (ex. Security deposits held by your landlord or anything that you have loaned to another person)
  2. Property that you currently own and possess when filing
  3. Any kind of property that you are entitled to receive (ex. Commissions, tax refunds, inheritance, insurance policy, salary, etc.)
  4. Any kind of property that you obtained within 180 days after filing (ex. Divorce settlement, death benefits or life insurance proceeds)
  5. Income that has been generated from the property that is part of your bankruptcy estate (ex. Royalties from a book you have written prior to filing for bankruptcy)
  6. Any appreciation in value of a property that you own after filing for bankruptcy (ex. Land, buildings, etc.)
Properties that Are Part of your Bankruptcy Estate

On the other hand, do not also forget to ask the court if there are exemptions in your estate once you file for bankruptcy; since there are some states where they offer exemptions like the exemption in 401(k) plans, certain retirement plans and spendthrift thrusts. The reason for this is to be able to help you start over again after the bankruptcy case has been finalized.

What are the Guidelines for Bankruptcy

Are you already having problems managing your finances? Are you in the brink of going bankrupt and does not have an idea on what to do? If your answers to the questions are yes, then perhaps someone should shed some light and give you the bankruptcy guidelines. Below are the major steps to take when you are going to file for bankruptcy.

What are the Guidelines for Bankruptcy
  1. Ensure to get the Debtor’s Bankruptcy Petition Form and the Statement of Affairs (Debtor’s Petition). You can get these forms from the court (downloading it from the site, picking them up or asking them to send it to you). Make sure that prior to facing the county or high court, these forms have already been answered and three copies have been furnished (One for you, for the court and the Official Receiver).
  2. Be aware that there are bankruptcy fees involved which can be paid either in cash, bank, building society, postal order, or charity checks. It is important to note that the fees cannot be paid through credit card and/or personal checks.
  3. To file for the bankruptcy, go to your nearest court. It is best to go to the court nearest to the place where you have lived for the past six months. However, if you are not comfortable in the court near you, you can always opt for the one that you are most comfortable with.
  4. When you are in the court, you actually do not have to face everyone. Most often than not, you are only called in court if there are ambiguity in the forms or to confirm the details that you have written. Then they will give you a bankruptcy batch number which has an agreed time and date for the Official Receiver’s interview.
  5. The interview usually takes place in via phone and can take up to 45 minutes. The call will only tackle about your income and expenditures to ensure that you are able to pay anything that comes towards the administration of the bankruptcy.
  6. Once it has been affirmed that you can pay, the two of you would come into an income payment agreement which is a legally binding agreement that states the specified amount to be paid in certain periods. There is no definite amount; this usually depends on how much the Official Receiver thinks you can afford to pay.
  7. When everything is set, you should not be paying any of the lenders and/or creditors that you have listed in your petition for bankruptcy. When they are seeking for payment, give them your bankruptcy order number instead and advice to deal with your Official Receiver.

Filing for bankruptcy is really not that daunting once you follow the correct bankruptcy guidelines.

Bankruptcy Options: Chapter 7 and Chapter 13

4Finances can be very unpredictable. When money is not managed properly by the individual, inability to pay debts and meet obligations to creditors will become problem. If this happens, some assets may have to be sold in order to repay what is lent. However, when you have done everything you could to meet the said obligations but there is still a huge amount of liabilities to pay, bankruptcy declaration is inevitable.

Note that, filing for a bankruptcy does not necessarily mean that it is the end of the world. There are various options that will help in getting the weight off your shoulders and this is through Chapter 6 Bankruptcy and Chapter 13 Bankruptcy.

Two Types of Bankruptcy Options

Chapter 7 Bankruptcy

Under this bankruptcy option, your liquid assets are used to repay your debt. Liquid assets are assets that are easily convertible to cash such as properties or checks issued to you. Note that there are also assets that cannot be used to repay creditors; these are called exempt assets. Also take note that there are laws that will dictate which assets are exempted and not exempted in the liquidation. As soon as non-exempt liquid assets are distributed to creditors (no matter how much everything amounted to), your debt will be discharged. That is, you are no longer liable to pay for any debt; creditors will no longer have the right to collect the debts from you.

In order for you to qualify for this option, a means test will be conducted to prove that your income is actually less than the median income for the size of your family. In the event that you are not eligible for this option, you can file for the Chapter 13 option.

Chapter 13 Bankruptcy

Under this option, you will be allowed to pay all or part of your liability in a specific repayment plan depending on the settlement terms with the creditor. When you file for a personal bankruptcy, you are actually required by the court to submit a repayment plan. After this, you can start to make payments to the court in your state; they will be the one who will give your payments to the creditors. This is actually a protocol even if your repayment plan is not approved yet.

Bankruptcy Options: Chapter 7 and Chapter 13

A hearing will be conducted for the approval of your repayment plan. Note that creditors are allowed to object to the terms of your proposed plan; however, it is still up to the judge to decide. If your plan gets approved, you will continue paying the debt to the court and as soon as you have completed the plan, the debt will be discharged.