Bankruptcy laws have changed, and figuring out how to use them effectively is harder than ever. For plain-English guidance you can trust, turn to The New Bankruptcy.
Here, you'll discover the clear-cut answers, information and strategies you need to figure out whether bankruptcy is the right solution for your debt problems. Find out:
if you qualify for Chapter 7 bankruptcy
how Chapter 13 repayment plans work
which debts are wiped out
how bankruptcy affects homeowners
if you can keep cars and other property
how bankruptcy affects credit
alternative ways to handle debt problems
and much more
The 2nd edition is completely updated to show how the courts have interpreted the new bankruptcy laws. It also provides worksheets to help you determine whether you can file for bankruptcy, and includes helpful checklists, sample forms and easy-to-use legal charts for all 50 states.
If you've picked up this book, you probably have more debt than you can handle. Most likely, your debt mushroomed because of circumstances beyond your control -- job loss, divorce, business failure, illness, or accident. You may feel overwhelmed by your financial situation, and uncertain about what to do next. Maybe a friend, relative, or even a lawyer suggested bankruptcy, describing it as the best thing in the world for you. Someone else may have said the opposite -- that bankruptcy is a huge mistake and will ruin your life.
This book will help you sort through your options and choose the best strategy for dealing with your debts. It explains:
how the new bankruptcy law works
how filing for bankruptcy under Chapter 7 or Chapter 13 (the two bankruptcy options for consumers) will affect your debts, property, home, and credit
the procedures you'll have to follow (and paperwork you'll have to complete) to file for bankruptcy, and
some alternative ways to handle your debt problems, outside of the bankruptcy system.
Armed with this information, you'll be ready to decide whether filing for Chapter 7 or Chapter 13 bankruptcy makes sense for you.
As you consider the strategies available to you, keep in mind that you're not alone. During each of the first five years of the new millennium, more than 1.5 million Americans filed for bankruptcy. So did thousands of companies. Although filings dropped dramatically just after the new law took effect, bankruptcy remains a necessary and pervasive part of our economic system.
And bankruptcy may be right for you. You may be able to stop creditor collection actions (such as foreclosures, wage garnishments, and bank account levies) and:
wipe out all or most of your debts in a Chapter 7 bankruptcy while hanging on to your home, car, and other necessary items, or
use Chapter 13 bankruptcy to pay back a portion of your debts over three to five years.
If your debts are overwhelming and your creditors are hounding you, bankruptcy may seem like a magic wand. But bankruptcy also has its drawbacks. And, because everyone's situation is a little bit different, there is no one-size-fits-all formula that will tell you whether you absolutely should or should not file. For many, the need for and advantage of bankruptcy will be obvious. Others will be able to reach a decision only after closely examining their property, debts, income, and recent financial transactions -- and how persistent their creditors are. For some, simple non-bankruptcy options might do the trick -- these are explained in Ch. 11 of this book.
This chapter provides some basic background information about the two types of bankruptcies most often filed by individuals: Chapter 7 and Chapter 13. In the chapters that follow, you'll find more detailed information on the issues you are likely to face under the new bankruptcy law, including:
whether you are eligible to file
which debts will and will not be cancelled
what will happen to your home, car, and other essential property items
how your post-bankruptcy credit will be affected,
how bankruptcy will affect your personal life, and
whether you need to be represented by a lawyer or can represent yourself, perhaps with some outside help.
Synopsis
A clear path through the bankruptcy maze!
Table of Contents
Introduction
The New Bankruptcy Law: A Work in Progress
1. What Is Bankruptcy?
Types of Bankruptcy
How Bankruptcy Stops Collection Efforts
The Bankruptcy Trustee
Changes to the Bankruptcy Laws
2. Who Can File for Bankruptcy
Credit Counseling
Calculating Your Income Status
Chapter 7 Eligibility Requirements
Chapter 13 Eligibility Requirements
3. How Bankruptcy Affects Your Debts
Debts That Will Be Discharged in Bankruptcy
Debts That Survive Chapter 7 Bankruptcy
Debts That Survive Chapter 13 Bankruptcy
Debts Discharged Only Under Chapter 13
How Joint Debts Are Handled
4. Your Property and Bankruptcy
Your Bankruptcy Estate
Inventory Your Property
Value Your Property
Understanding Exemptions
5. Your Home
Homeowners Filing for Bankruptcy Under Chapter
Homeowners Filing for Bankruptcy Under Chapter 13
Renters Filing for Bankruptcy
6. What Happens to Property That Secures a Loan
What Are Secured Debts?
How Secured Debts Are Handled in Chapter 7 Bankruptcy
Eliminating Liens in Chapter 7 Bankruptcy
How Secured Debts Are Handled in Chapter 13 Bankruptcy
7. Your Credit Cards
If Your Balance Is Zero
If You Owe Money but Are Current
If You Are in Default
8. Your Job, Freedom, and Self-Respect
Will You Lose Your Self-Respect?
Will You Lose Your Job? Effect of Bankruptcy on Job Applicants
Other Forms of Discrimination Because of Bankruptcy
Effect of Bankruptcy on Child Custody
Effect of Bankruptcy on Your Freedoms
9. Bankruptcy Forms and Procedures
The Means Test
Challenges for Abuse
Valuation Hearings
Common Chapter 7 Motions and Proceedings
Converting From One Chapter to Another
Potential Problems in Chapter 13
Filling Out the Bankruptcy Forms
10. Getting Help With Your Bankruptcy
Debt Relief Agencies
Bankruptcy Lawyers
Bankruptcy Petition Preparers
Books and Internet Resources
11. Alternatives to Bankruptcy ,br>
Glossary
Appendixes
A. Federal and State Exemption Tables
B. Charts and Worksheets
Median Family Income
Worksheet A: Current Monthly Income
Worksheet B: Allowable Monthly Expenses
Worksheet C: Monthly Disposable Income
Worksheet D: The Means Test
Worksheet E: Personal Property Checklist
Worksheet F: Property Value Schedule
C. Sample Bankruptcy Forms
Form 1, Voluntary Petition
Form 6, Summary of Schedules
Form 6, Statistical Summary of Certain Liabilities
Form 6, Schedule A -- Real Property
Form 6, Schedule B -- Personal Property
Form 6, Schedule C -- Property Claimed as Exempt
Form 6, Schedule D -- Creditors Holding Secured Claims
Form 6, Schedule E -- Creditors Holding Unsecured Priority Claims Form 6, Schedule F -- Creditors Holding Unsecured Nonpriority Claims
Form 6, Schedule G -- Executory Contracts and Unexpired Leases Form 6, Schedule H -- Codebtors
Form 6, Schedule I -- Current Income of Individual Debtor(s) Form 6, Schedule J -- Current Expenditures of Individual Debtor(s) Form 6, Declaration Concerning Debtor's Schedules Form 7, Statement of Financial Affairs
Form B22A, Statement of Current Monthly Income and Means Test Calculation Form 8 -- Chapter 7 Individual Debtor's Statement of Intention Form 21, Statement of Social Security Number Creditor Matrix Cover Sheet Creditor Mailing Matrix
Index
Reviews
Eric Tyson, best-selling author of Personal Finance for Dummies and Mind Over Money...
"Authoritative, comprehensive and packed with helpful advice and useful information, including state-specific details."
Accounting Today...
"With last year's change in the bankruptcy laws creating unprecedented confusion in the field, it's important to know whether it remains a viable option, and this book will offer both explanations and reassurances..."
About the Author
Stephen R. Elias is an attorney and former associate publisher at Nolo, as well as current President of National Bankruptcy Law Project. He is the author of many Nolo books, most recently The New Bankruptcy: Will It Work for You? Other titles include Special Needs Trusts: Protect Your Child's Financial Future, How to File for Chapter 7 Bankruptcy, and Legal Research: How to Find and Understand the Law. He is also one of the original authors/designers of Nolo's bestselling WillMaker software. Steve holds a law degree from Hastings College of Law and was a practicing attorney in California, New York and Vermont before joining Nolo in 1980. He has been featured in such major media as The New York Times, The Wall Street Journal, Newsweek, Good Morning America, 20/20, Money magazine, and more.
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