Avoid Personal Bankruptcy

A Chapter 7 bankruptcy debtor receives a discharge and the case closes generally within four to six months. Chapter 13 is a repayment plan that lasts three to five years. Why in the world would anyone choose to file Chapter 13? Below are five reasons why Chapter 13 may make sense:

Reason 1: A Forced Repayment Plan under Court Protection.

When a creditor is unwilling to work with you, a Chapter 13 can force the creditor to accept payments on your terms. Some debts, like child-support or taxes, are non-dischargeable through bankruptcy and must be paid. Chapter 13 allows the debtor to propose a three to five year repayment plan according to what you are able to pay. During this time the creditor is not allowed to take any collection action without permission of the bankruptcy court.

Reason 2: The Cram Down. 

In some cases a vehicle or other secured loan can be reduced to the value of the collateral. The debtor retains the property, but may pay a lower monthly payment and less in principle and/or interest. The loan term may be also lengthened or shortened in a Chapter 13.

Reason 3: Curing Home Loan Defaults and Lien Stripping

A debtor who has defaulted on a home loan can stop a foreclosure action and force the creditor to accept payments on the arrearage. Some debtors can receive a substantial benefit by stripping away a second or third mortgage.

Reason 4: The Effect of Bankruptcy May Be Shortened

While the federal law states that bankruptcy information can remain on your credit report for up to ten years, the “big three” credit reporting bureaus (Experian, Equifax, and Trans Union) will generally remove chapter 13 information seven years after the filing date. That means the bankruptcy will drop off your credit report two to four years after your last Chapter 13 payment!

Reason 5: Retain Non-Exempt Property

In some cases, a debtor may own property with equity that cannot be protected. Say, for instance, that the debtor owns a Harley Davidson motorcycle free-and-clear and the non-exempt equity is $10,000. In a Chapter 7 case the trustee will want either the motorcycle to sell, or a cash payment of $10,000 from the debtor. In a Chapter 13 the debtor does not lose the motorcycle, but will pay $10,000 through the bankruptcy plan to unsecured creditors over three to five years. 

Deciding between Chapter 13 and Chapter 7 requires careful deliberation. An experienced bankruptcy attorney can discuss the pros and cons of each bankruptcy chapter and help guide you to a healthy and successful fresh start.

For most Europeans, it would be hard to find the Federated States of Micronesia on a map. But the small Pacific island nation is trying to punch above its weight. The country — with a population of 110,000 spread across more than 600 islands — is challenging the refit of a coal-fired power plant in the Czech report, according to Reuters. Micronesia says the 1,710 MW plant is a direct threat to its survival. The case could be the first time one country has tried to use another’s laws to block construction because of climate change fears.

As the Prunerov power plant near the Czech-German border produces 40 times more carbon dioxide each year than all of Micronesia combined, the Pacific islanders may have a point. And under international treaties, European countries must consider the global impact of their infrastructure when carrying out plant environmental impact assessments. In an interview with Reuters, Andrew Yatilman, director of Micronesia’s Office of Environment and Emergency Management, says the country will wait to hear whether Czech officials green-light the power plant’s refit before taking further legal action.

In part, Micronesia’s saber-rattling stems from the muted outcome at the Copenhagen climate change conference in December, 2009. While no on

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It’s a vicious cycle: You lose your job, causing you to fall behind on your mortgage, car payments and other bills. As a result, your credit suffers. You finally land an interview with good prospects, but a credit check costs you the job.

You need employment to improve your finances, but it’s your finances that are holding you back from employment.

Some legislators are taking steps to prevent this situation from occurring. Recently a House bill was introduced that would prohibit employers from using consumer credit checks to make adverse employment decisions.

The Equal Employment for All Act (H.R. 3149) would amend the Fair Credit Report Act and prohibit employers from making hiring decisions based on an applicant’s consumer credit report. The Act makes exceptions for financial firms, government agencies and jobs that require certain security clearances.

The bill was introduced by Representative Steve Cohen from Tennessee. According to Cohen, the bill would provide some of our country’s “most vulnerable, ‘credit challenged’ citizens” the chance to start rebuilding their credit by getting a job.

Supporters of the bill do not believe that a person’s credit history is a reflection of how they would perform on the job. Critics of the bi

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One of the first decisions you have to make when you’re starting a business is about what legal structure your new business will have. In Canada, you essentially have four choices, a sole proprietorship, partnership, corporation or cooperative. But which form of business ownership should you choose?

You need to give it some thought because the form of business ownership you choose will affect everything from the administrative costs of setting up and operating your business through your tax planning. Choosing a Form of Business Ownership lays out the advantages and disadvantages of each type of legal structure to help you decide.

If you are considering incorporation, you will also want to read Should You Incorporate Your Business?

Remember, though, that whatever form of business you choose, you are not locked into that form for the life of the business. Many people, for instance, start businesses as sole proprietorships and then incorporate them later when their circumstances change.

Once you’ve decided, registering your business is the next step. Visit the Business Registration section of this website to find details on how to register your business in your province.

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On Wednesday, the Supreme Court heard arguments addressing the question as to whether lawyers can be held liable as debt collectors if they serve a foreclosure notice that may have been incorrect in its statement of the law.

At issue in this case is a notice sent to a woman named Karen Jerman. Jerman, who owned her home outright and had paid off her mortgage in full, was served a foreclosure notice by lawyers for Countrywide Home Loans.

In the notice, Jerman was told that she had to dispute the debt in writing. Jerman hired a lawyer to draft the written response. Countrywide later realized its mistake and withdrew its complaint.

Jerman filed a class action lawsuit against the Ohio law firm that represents Countrywide,  Carlisle, McNellie, Rini, Kramer & Ulrich, and against a particular associate attorney at the Carlisle firm.

In her lawsuit, Jerman claimed that the Carlisle firm violated the Fair Debt Collection Practices Act (FDCPA) by erroneously informing her that the FDCPA states that the debt would be presumed valid unless she disputed it in writing.

At issue is whether the lawyer’s mistake of law qualifies for the bona fife error defense under the Fair Debt Collection Practices Act.

The Fair Debt Collection Practices Act excuses debt collectors if they can prove that their wrongdoing was not intentional and was in good faith. If

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When you file for Chapter 7 bankruptcy, your goal is to have your debts discharged. When a debt is discharged, that means that it can no longer be enforced against you personally.

When you incur a debt, you are personally liable for paying it back. If you don’t pay back your debt, your creditor can use a legal process, such as wage garnishment, in order to get paid.

If a debt is discharged in bankruptcy, however, your personal liability for that debt is wiped away. In the most simple terms, you are no longer legally obligated to pay that debt. It also means that your creditors can no longer take legal actions, such as wage garnishment, to extract payment from you.

A Texas bankruptcy attorney can evaluate your case and determine whether Chapter 7 bankruptcy is the right decision for you. Your bankruptcy lawyer can help you take the necessary steps to have your debts discharged and stop the harassing calls from creditors.