Filing Bankruptcy - Understanding Non-Dischargeable Debts

Many people have the misconception that filing bankruptcy will erase all their liabilities. There would be no obligation to pay the amounts that they owe to their various creditors. However, this not true at all. There are certain kinds of loans that have been considered as non-dischargeable ones. Filing under chapter 7 will eliminate all kinds of debts but you would still owe the non-dischargeable ones. Depending upon your specific case and the judgment of court, there can be a wide range of such debts. Following are some of the most common ones.
Student Loans
No matter for whatever reason is that you have been forced towards filing bankruptcy, educational based debts such as student loans cannot be exempted. These may include loans for board, room, books, tuition etc. Even if the court grants your petition and orders for the liquidation of all your assets, you will still be liable to pay these loans off. However, there is a rare exception, as per which if you are able to prove the bankruptcy court that the loans will cause undue hardship for you, they may be discharged as well. For example, you may have to show some permanent disability that prevents you from getting a job and living a normal financial life. If you are capable of proving such aspects, the court may order to discharge the student loans.
Debts Owed To The Court
If you owe some court fees, such debts are also not dischargeable while you are filing bankruptcy under chapter 7. Likewise, because of any criminal activity, if you owe a certain amount to the victim or the court, such amounts are also not dischargeable. Any kind of Court imposed restitution cannot be discharged. In all cases, all such debts come under the title of non-dischargeable.
Debts Associated With A Divorce Or Marital Case
If you owe a certain amount associated with a divorce or marital decree by the court, such debts also cannot be discharged under chapter 7 of the bankruptcy code. Some people have the misunderstanding that these amounts can be discharged if the ex-spouse does not have any objection, which is not true. Even if the ex-spouse does not object, these amounts come under non-dischargeable debts while you are filing bankruptcy for straight liquidation. Therefore, while you are planning to file your petition, you must keep in mind that you will not be able to discharge the debts associated with a divorce or marital case.
Certain Kind Of Taxes
All kinds of taxes except the following are non-dischargeable as per the new bankruptcy laws. Even if you are declared as bankrupt, you will still be liable to pay these taxes.
Taxes measured by gross receipts or income taxes
If the taxes are accurate and no omissions or errors in the return are found in the IRS
If the taxes are older than three tax years
What is more, if you owe an amount associated with Alimony and child support, these are also non-dischargeable while you are filing bankruptcy for complete liquidation.
Filing bankruptcy under chapter 7 of the bankruptcy court may discharge most of your debts, but not all. As per the new bankruptcy laws of the bankruptcy code, there are certain kinds of debts that cannot be discharged in any case. Such debts may include student loans, debts owed to the court, debts associated with a divorce or marital case etc.
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How Do I Improve My Credit Score After Bankruptcy?

There are, In essence, two ways a person can file for bankruptcy and those two ways consist of getting rid of all the debt completely or paying some of it back. Chapter 7 bankruptcy is where nothing is repaid and Chapter 13 is where some is repaid. Either way a person looks at it, bankruptcy will impact a credit score quite negatively. These impacts will in most cases last on a credit report for 10 years. But how does a person who has a bankruptcy on their credit report help improve it? This is what we will discuss here.
First, no matter how you look at it; it will be extremely difficult to obtain any financing following a bankruptcy right after it occurs. But that does not mean a person cannot begin building their credit back up while the effects of a bankruptcy are in full effect on a credit report. One major way a credit score can be improved is through secured lines of credit.
Secured lines of credit are simply where the creditor will allow a credit account to be active, even after bankruptcy, provided that the maximum credit amount is backed up 100% by your own funds. So if you want a $5,000 credit line, you will have to deposit $5,000. This is simply to eliminate the risk to the lender that any more default of delinquent payments will occur. This is a great opportunity for those who need to build their credit back up while providing that creditor a lower amount of risk. Over time this will help improve a credit score substantially after many payments on the accounts have been made.
After a couple years, many of those who had filed for bankruptcy will be eligible to apply for another loan such as a mortgage. If that person has been working on improving their credit score over the years, then that improvement will surely show on their report which will help their chances substantially. There are no guarantees, however, especially after a situation such as bankruptcy, but it does show that the person is making a good, honest effort to improve.
Granted, in this type of situation such as bankruptcy, there will always be repercussions to that negative impact on your credit score as it will usually result in higher down payments and such. The ramifications of a bankruptcy are really never actually eliminated completely from a person's record so it is very important to reconsider one's options if they are considering declaring bankruptcy, especially if they are planning to declare a Chapter 7 bankruptcy where they decide not to pay ANYTHING back at all.
Overall, the best way to improve one's chances of having a much harder time in the financial world is to work on preventing the situation all together. One way that many keep their credit in line is through monthly monitoring of their credit through services offered by Experian and other credit monitoring companies which can be seen in more detailed at our website. If a person monitors their credit often and prevents decisions which could compromise their credit in the future such as with mortgages higher than they can afford, the rewards will be much greater when the time comes when such items become necessities. There are many other ways a person can help avoid the problems associated with a bankruptcy before it happens through services such as debt settlement or even making an appointment with a legit credit consolidation professional whose job it is to help you get out of any financial jams that you may currently be in. If it has already been established, then just focus on making payments and improving that score over time.
S. Michael Windsor is currently publisher and a writer for myCreditScoreNetwork.com. The MCN Online FICO Credit Score Guide is a premier FICO score and credit report information platform that provides individuals with a quality in-depth look at credit scores and reports and the associated products, services and information available today. Visit us today at http://www.myCreditScoreNetwork.com and subscribe to our FREE Member services.
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Chapter 13 Bankruptcy - Is It Right For You?

Chapter 13 Bankruptcy is a financial reorganization option available to all citizens of the United States. However, in order to be eligible to file Chapter 13, any unsecured debts you owe must be less than $307,675 and secured debts must be less than $922,975.
Drastic changes to Chapter 13 Bankruptcy laws have taken place within the past few years. Perhaps one of the most important changes is U.S. Bankruptcy Law U.S.C. 109,111, which requires individuals to obtain credit counseling from an approved credit counseling agency within 180 days prior to filing.
There are many reasons people file bankruptcy. Oftentimes, it stems from an extended period of unemployment or the inability to work due to health issues. Other times, people are forced into bankruptcy due to divorce or the death of their spouse.
Many people facing foreclosure will file Chapter 13 Bankruptcy in an effort to save their home. While filing for bankruptcy can temporarily halt foreclosure proceedings, the individual must continue making mortgage payments if he wants to retain his property.
Also known as Wage Earner's Plan, Chapter 13 allows individuals to retain their possessions and repay their debts over a period of three to five years. Borrowers can reschedule secured debts to extend and lower payments. A Trustee is assigned to handle your financial obligations and distribute payments to creditors. This encourages creditors to be more flexible in their negotiations, as they know they will be repaid.
Individuals can file Chapter 13 Bankruptcy on their own or with the assistance of an attorney. The majority of people prefer to hire an attorney to represent them and ensure all paperwork is properly filed. If an individual cannot afford an attorney, they may be entitled to pro bono legal assistance through the American Bar Association.
The first step of the bankruptcy process begins by filing a petition with the bankruptcy court in the judicial district where the debtor resides. The petition must include a list of assets and liabilities, current income and expenses, proposed repayment plan and proof of credit counseling.
Approximately three to six weeks after the Chapter 13 petition is filed, a creditors meeting will be scheduled. During this meeting, the trustee and creditors are allowed to ask the debtor questions and either accept or reject the proposed repayment plan.
Creditors must file their claims with the court within 90 days of the creditor meeting. Once these terms have been met, a hearing on the debtor's Chapter 13 repayment plan will take place in front of a Bankruptcy Judge.
The judge may either accept or reject the repayment plan or make modifications to it. Once the plan is approved, the debtor must make regular payments to the Trustee until the reorganized debts are paid in full. The debtor is not allowed to take on any new debt without first consulting with the Trustee.
Most new debt requests are denied unless they are for extenuating circumstances. An example of this would be if the debtor needed to replace an automobile or obtain a loan for college tuition or medical care.
Chapter 13 Bankruptcy is a complicated and lengthy process; however, it can significantly improve the debtor's financial situation and help them get back on track. It can keep people on an excruciatingly tight budget, so it is crucial to propose a repayment plan that you can adhere to.
Before making a final decision, it is highly recommended to conduct thorough research via the Internet or by consulting with a qualified bankruptcy attorney. Chapter 13 Bankruptcy manual and forms can be downloaded at U.S. Bankruptcy Courts.
Simon Volkov is a professional Real Estate Note Investor helping individuals who need to liquidate their real estate. Simon offers numerous investment opportunities for serious investors via RSS feed and email subscription. His website provides resources and articles on today's real estate and financial market. Learn more by visiting http://www.SimonVolkov.com
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Personal Bankruptcy

Is bankruptcy an option?
This is something that you should really only consider as a last chance option. Although it is possible to declare bankruptcy and still rebuild your life afterwards, you need to know the full truth before you make any solid proceedings in this direction.
Bankruptcy should never be a first option for anyone looking at debt and credit problems, it should always be a last option. And even then you need to be completely certain that you are willing to take that last step and deal with the consequences that will follow. So, now that I have hopefully given you an idea of how serious you need to be to even be considering bankruptcy as an option, we can take a look at it with due seriousness.
Bankruptcy
What does bankruptcy mean, and how does it affect you. Well, to begin with, you need to find out the pertinent details about bankruptcy in your own area/ state/ country.
The laws change from place to place, and before you look to file bankruptcy proceedings, you should ideally check things over with a lawyer or other such professional, to find out where you will stand after filing for bankruptcy.
The long and short of it though, is that once you file for bankruptcy, your creditors etc, will not be able to ask you for monies, or otherwise, owed to them. This is generally known as a 'stay', as in a stay of all proceedings against you, which means that your creditors cannot take action against you.
Once proceedings have moved along and you have been declared bankrupt according to the laws of your state or country, matters will then depend on what type of bankruptcy was declared to begin with. As I said, all laws regarding bankruptcy vary from place to place, but the there are generally two different forms of bankruptcy filings available to individuals, families etc.
For businesses, the forms of bankruptcy and the outcome of what they have to do, is different. You should ideally check with a qualified person dealing with bankruptcy for more information on these. You will have been required to declare at the time of filing for bankruptcy, your debts and any assets which you posses.
Generally, you will find that once you have been declared bankrupt, you are discharged from most of your debts, however, some debts will remain depending on the type of debt it is, for instance child support.
Your assets, those which are not exempt from being liquidated that is, will be sold off to discharge your debts. And depending on the state/ country etc, you will not be able to file for bankruptcy proceedings again for a certain number of years.
If you are thinking seriously about filing for bankruptcy, you should really get in touch with someone who knows what they are doing on this front, and get some qualified professional help to get you through the entire procedure.
Remember that you need to have everything in order, and that you cannot be found to be 'concealing' any debts or things, as this can be constituted as fraud. There are many things that you should learn about, before you file for bankruptcy, the least of which, is what happens to you after you have been declared bankrupt.
Debt busting ideas for fast Debt Relief The traps of debt and the many pitfalls of getting out of debt outlined here.
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How Bankruptcy Can Stop Foreclosure

When most people think of bankruptcy, they think of a Chapter 7 Bankruptcy. A Chapter 7 is when the court seizes assets and eliminates the associated debt. This type of bankruptcy can stop foreclosure, but most people want to keep their home. This is where a Chapter 13 bankruptcy can help. A Chapter 13 bankruptcy allows the homeowner to keep their home and establishes a repayment plan with the lender. During the Chapter 13, the homeowner will not have a lot of extra money, but the court will make sure they are left with enough to live on and pay their bills. A Chapter 13 bankruptcy gives the homeowner a chance to get their affairs back in order and the time needed to recover from the hardship.
Bankruptcy has been a somewhat negative topic with homeowners, but bankruptcy was designed to help people through a hardship when they have nowhere else to turn. In my experience, this is exactly the situation foreclosure victims have found themselves in. We have been brought up to believe that we should always pay our debts and to not pay for our debts is shameful. This is one reason people have such a low opinion of bankruptcy and the people who file it. But bankruptcy is a legal option that was established to help those in need. It is not shameful to file a Chapter 13 bankruptcy. It shows that you are responsible for your debts and you will do whatever it takes to pay them.
Another negative aspect of bankruptcy is that it causes a drop in credit score, but when someone is facing foreclosure, their credit score is already very low. In reality, a bankruptcy could improve a foreclosure victim's credit, or at least speed up the recovery process. The bottom line is: when a man is faced with losing his home and moving his family into the streets, he should embrace the legal system and take full advantage of any assistance it can offer.
A Chapter 13 bankruptcy is not the only option to stop foreclosure, but it is considered one of the top ways to stop foreclosure and it can be considerably less expensive than other alternatives. When compared to other options, such as loan modification, refinance, or forbearance agreements, bankruptcy is easily the fastest and most reliable option when it comes to saving your home from foreclosure.
If you are facing foreclosure then you owe it to yourself and your family to speak with an attorney and discuss the option of bankruptcy. Your initial consultation should always be free and you should never work with an attorney you do not trust, so feel free to meet with several attorneys before you make any decisions. Bankruptcy is not for everyone, but it has helped many families save their homes from foreclosure and gives them the second chance they are desperately looking for.
The ForeclosureFish website has been created to provide homeowners with mortgage foreclosure help and resources that are designed to educate them on how foreclosure works and how it can be stopped. The site contains descriptions of numerous foreclosure solutions that may be applicable, including bankruptcy, short sales, loss mitigation, and more. Visit the site to read more about the foreclosure process and how to avoid losing your home before time runs out: http://www.foreclosurefish.net/
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Getting Credit After Bankruptcy Is Easy With Secured Credit Card

Most people hate to do it and look at it as a last resort but bankruptcy is sometimes the only option for people with their backs against the will financially. Although once your bankruptcy is discharged the stress of bills may be gone but a whole new type of stress will set in. That is the stress from being denied credit. How ever there is a easy to get form of credit that not many people know about and it can help you re establish your credit fast.
What To Use For Getting Credit After Bankruptcy
The first thing any one should do when getting credit after bankruptcy is to apply for a secured credit card. A secured credit card is secured by a cash deposit that you make with the issuing company. If you fail to make the payments they take the money from the account there fore eliminating any risk on their part. The great thing about secured credit cards is that the credit reporting agencies have no way of know its a secured account so it will be scored the same as a standard credit card.
When using secured credit cards for getting credit after bankruptcy the same rules apply. You will need to keep the balance to limit ratio under 50% or your credit score could be negatively impacted. Never pay late, even though the card is secured by cash a late payment will still be reported to the credit bureaus further decreasing your score. After a period of time with good payment history many companies will turn the card over to a standard unsecured credit card and may even increase the credit limit.
Getting credit after bankruptcy with these is an easy way to rebuild your credit rating. After a period of 6-12 months many creditors will be happy to extend you credit based on your timely payments to your credit card.
Learn more about secured credit cards and rebuilding credit after bankruptcy from a Wisconsin mortgage broker who has compiled a HUGE informative financial database to help you get back on track.
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How to Prevent Bankruptcy

If you are in danger of falling into bankruptcy or other financial difficulty, then you have to take certain measures to repair your situation. There is no way to just magically make financial problems go away. If you are going to turn that negative situation into a positive one, you will have to take positive corrective action.
The first and most important change in your financial situation must come as a result of a personal change in your philosophy. If impulse purchases have been a problem for you, it is time to eliminate those things. You should concentrate on only purchasing things that are well thought out. This includes both big purchases and small purchases. For instance, some people will spend too much money on things like DVD box sets. Even those small things add up over time.
Control your credit card spending at all costs. If bankruptcy is in the near future for you, then you do not have the choice to use your credit card and pay it off later. You have to cut up the cards if it takes that to keep you from using them.
With that in mind, don't give any consideration to credit card offers that might come in the mail. Strangely, credit card companies like to prey on people who have suffered some financial issues. This is because they make a huge portion of their revenue off of the fees associated with credit card misuse.
When bankruptcy is in the equation, your life is not going to just stop. The world won't stop spinning just to make things easy on you. This means that you might even choose to purchase a home during this time. Like with your other spending, you have to control how much you spend on your home, as well. Don't try to impress anyone with your home. Stay within your means and purchase a house to fit your needs both financially and as a family.
One thing that people always seem to overlook is insurance. They have all of their bases covered except for that one very important base. If you don't have the appropriate medical insurance, auto insurance, or homeowners insurance, you could be putting yourself in significant danger financially. Without insurance, you are only one mishap or one emergency away from losing everything. If you have adequate insurance coverage, you will be pleased with your financial stability in the rocky situation.
Being in danger of bankruptcy won't stop you from saving money for retirement. You must still put some money into the coffers for savings. It's incredibly important to make sure that your investments are only safe ones. If you are having trouble financially, you cannot afford to make any mistakes with your investments. Don't make any brash decisions and don't extend your portfolio too much
Bankruptcy can be a difficult thing to go through, so you want to take all measures to prevent it from happening. If you follow these steps and use a little bit of common sense, you will more than likely find yourself in decent financial standing after a short period of time.
Read more about personal finance at the money philosophy blog Get the education on money that everyone needs.
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