A primer on Chapter 7 liquidation bankruptcy

A primer on Chapter 7 liquidation bankruptcy.

2013-03-06

March 06, 2013 (Press-News.org) Back in 2005, the federal government made a number of important changes to the bankruptcy laws. The changes were encompassed in the Bankruptcy Abuse Prevention and Consumer Protection Act, a landmark piece of legislation that reframed the way in which most people thought about filing for bankruptcy. Many people incorrectly thought that it was impossible to file for Chapter 7 bankruptcy protection after 2005.

Not long after that legislation was passed came the onset of the so-called "Great Recession" that our country is still feeling the effects of today. This extended period of economic uncertainty has resulted in a record number of bankruptcy filings under the new laws even though misconceptions still persist about Chapter 7 bankruptcy relief.

The good news is that it is still possible to file under Chapter 7; it is just a different process than it was in the past.

The means test

Chapter 7 bankruptcy relief is now determined through a qualifying process known as the "means test." Essentially, since Chapter 7 is a more inclusive form of debt relief, only those people who need the most help will be eligible for it. Eligibility is determined by a financial analysis that looks at the:
- Amount and type of debts, whether they are secured (those that are backed by some sort of collateral like a car loan or mortgage), or are unsecured (like medical bills and credit cards that aren't secured by any collateral)
- Number, type and value of non-exempt assets that could be liquidated to pay for debt relief
- Income coming in relative to the amount of debt

If the means test favors the debtor, then a Chapter 7 bankruptcy - sometimes known as a "liquidation bankruptcy" - can proceed.

Several viable options

Just because one qualifies for a Chapter 7 filing, though, it doesn't mean that it is the best fiscal option for he or she to pursue. Chapter 13 is also a valid personal/consumer bankruptcy option, while Chapter 11 is a possibility for most businesses seeking bankruptcy protection.

Of course, there are also non-bankruptcy options that could be a better fit, like:
- Debt consolidation with a reputable debt management organization
- Negotiating debt settlement directly with creditors
- Liquidating some assets to pay down debt without filing for bankruptcy
- Modifying mortgage, vehicle or personal loan payments temporarily to facilitate "catching up" on past-due payments

Regardless of what type of debt repayment issues you are having, there are financial and legal experts out there who can help you. If you are considering a Chapter 7 bankruptcy filing, speak with an experienced bankruptcy law attorney in your area to learn more about your legal rights and options to get a fresh financial start.

Article provided by Law Office of Ronald D. Cummings
Visit us at www.bankruptcylawcenter.org

ELSE PRESS RELEASES FROM THIS DATE:

Supreme Court: Drug dogs can be used to establish probable cause

2013-03-06

Police have a lot of power when investigating alleged criminal activity. If they suspect an individual may be involved in the distribution of illegal drugs, they will often conduct extensive investigations into the suspect. Despite these powers, police must still adhere to the rights afforded to citizens in the U.S. Constitution, specifically protections against searches and seizures that would violate the Fourth Amendment. A recent Supreme Court case addressed the use of drug-detecting dogs to establish probable cause to search a vehicle in a Florida traffic stop. After ...

Help for social workers seeking SSD and SSI benefits

2013-03-06

Social workers are an invaluable resource to the millions of Americans struggling with illness, disability, poverty, abuse, addiction and innumerable other life hurdles. Social workers help these individuals manage their stress, connect socially and get access to programs and resources that can help them lead full and active lives. But for all the good social workers do, they also face very high levels of stress. Many social workers get close to their clients, and it can be hard to watch them struggle in the face of adversity when they are deserving of so much more. ...

Distracted driving contributes to thousands of deaths each year

2013-03-06

The next time you see someone talking on a cell phone while navigating traffic -- or you catch yourself reaching for your own phone while behind the wheel -- here's a little food for thought: A National Highway Traffic Safety report found that distracted driving contributed to 10 percent of all fatal crashes in the United States in 2010 and 18 percent of all car accidents with injuries. What does that mean in actual numbers? It means that 416,000 people were injured and 3,092 people lost their lives in distracted driving crashes. Distracted driving includes cell phone ...

Disabilities can threaten people's abilities to meet basic needs

2013-03-06

In difficult economic times, it can be a challenge for people to make ends meet. It can be even harder for those with disabilities to make enough money to provide for themselves and their families. A January 2013 study conducted by a federal agency showed that disability often plays a role in "food insecurity." Food insecurity When an adult in a home has a disability, it can be difficult for families to afford basic necessities. According to the U.S. Department of Agriculture, almost 15 percent of the household in the U.S. had trouble getting enough to eat ...

Firearm liability insurance could benefit victims of gun violence

2013-03-06

As mass shootings continue to plague our movie theaters, shopping malls and even schools, voices on either side of the gun control debate have grown louder. In many cases, gun control and gun rights advocates have struggled to find common ground. Those advocating for stricter gun control measures have suggested requiring universal background checks and placing restrictions on the size of magazines. Others who oppose gun ownership restrictions -- including at least one state representative in Missouri -- have resisted proposed gun control laws, including those that would ...

Colorado Supreme Court abandons corpus delicti rule

2013-03-06

Recently, the Colorado Supreme Court reversed a centuries-old rule governing the use of confessions as evidence in criminal cases. The standard for admitting confessions as evidence in such cases has been the corpus delicti rule. "Corpus delicti" literally translates to the "body of the crime." In other words, the rule requires the admission of evidence -- besides the confession -- to prove that a crime actually occurred. The confession alone is not sufficient to show a crime was committed. In overturning the rule, the Colorado Supreme Court elaborated ...

Tampa sinkhole causes water scare at local university

2013-03-06

Given the frequency of sinkholes in the Sunshine State, many Florida residents are well aware of the damage these craters can cause - everything from ruined landscaping to entire homes being swallowed up. However, a recent sinkhole scare at a local Tampa university demonstrated yet another potential hazard that may be linked to Florida sinkholes; namely, possible water contamination. USF boil water order According to the University of South Florida's (USF) newspaper - The Oracle - a boil water notice was recently issued after university officials received several ...

Distracted driving is primary cause of Missouri auto accidents

2013-03-06

Despite a nationwide focus on decreasing the number of accidents caused by distracted drivers -- including public awareness campaigns with slogans such as "Stop the Texts, Stop the Wrecks," -- statistics show the frequency of distracted driving collisions is on the rise. According to a Missouri State Highway Patrol sergeant, distracted drivers are now the primary cause of motor vehicle accidents in the state. In 2011, the Missouri State Highway Patrol reported that distracted driving accidents led to 153 fatalities and approximately 10,000 personal injuries. ...

Breast cancer misdiagnoses often lead to malpractice suits

2013-03-06

As new reports have revealed that a rising number of younger women are being diagnosed with breast cancer, the role of radiologists in ensuring the health of women in Ohio and across the country is as important as ever. According to a study published in the Journal of the American Medical Association, the number of women under 40 with breast cancer has increased by approximately 2 percent every year since the 1970s. In 2009, 2.9 out of every 100,000 women in the U.S. between the ages of 25 to 39 were diagnosed with advanced stages of breast cancer. This study was ...

Increasing use of DNA evidence both convicts and exonerates in Texas

2013-03-06

One of the more recent technological advancements in the criminal justice world is DNA analysis. More and more frequently, especially in Texas, DNA evidence gathered from a crime scene is used to identify someone who may have been present. It is also used to exclude someone from consideration as a suspect or to save him or her from a wrongful conviction. DNA evidence in criminal cases DNA stands for deoxyribonucleic acid, and DNA is present in almost every cell of the human body. An individual's DNA is the same in many types of cells, such as saliva, blood, skin tissue, ...

A primer on Chapter 7 liquidation bankruptcy

ELSE PRESS RELEASES FROM THIS DATE:

LAST 30 PRESS RELEASES: