Talk of bankruptcy is widespread throughout the entire country, even though it has arguably had an impact here in Southern California the most.  With all the advice and news excerpts lately surrounding the economic failure of individuals and businesses, few have given consideration to where it comes from and how much worse it could be if everyone lived in a different time.  To be able to appreciate and understand why bankruptcy laws were created the way they are today, it is good to understand a little history from bankruptcy’s start.

Rome is where the first bankruptcy law began.  For a long time bankruptcy was declared by lenders instead of the individual that owed, calling on the government to punish them since they either were not able or refused to pay them back.  Abuse from people acquiring loans and not repaying them was not accepted by most and would result in injury or debt, so these laws were a lot more civilized than the alternative.  As a result of the cooperation between lenders and the government, people became much less likely to go into a debt they could not repay.

England’s bankruptcy laws were chosen as the basis for the laws made with the establishment of the first 13 colonies.  At this point the companies would be able to repossess goods with the option of putting the individual in jail based on previous experiences.  Based entirely upon the situation, companies would typically let people stay free and reverse the debt by confiscating the item and selling it off.  Since bankruptcy laws were driven by each state at the time, the law gradually evolved until Congress passed the Bankruptcy Act of 1898.  With the increasing practice of encouraging individuals to go into debt, the law was reformed to represent the consumer more than the company.  This change was the largest concept change in the way bankruptcy law was made from there until now.

Bankruptcy cases can have numerous outcomes based on the excellence of the representing attorney.  Whether hunting for a Thousand Oaks bankruptcy attorney or Encino bankruptcy attorney, they are usually the same and represent huge regions.  Even though it could be difficult to get around for a while, it is important that a good lawyer is gotten because it can help so much.  Cases can often affect people’s lives in a big way, so making certain the best lawyer is hired can be the difference between a headache and moving forward.  In order to establish good credit and make the impact on one’s life smaller, getting on with some good credit practices after the proceedings is a good idea.

It is surprising how often, as an Orlando bankruptcy lawyer, I wind up advising clients NOT to do something they planned to do before they came to see me about filing bankruptcy. Many times, they had a feeling they shouldn’t do whatever it was in the first place, but were coming to see me for clarification and certainty. Some of these plans, if seen through, could seriously jeopardize their bankruptcy case. I’ve put together a quick list of 5 things you should or should not do when filing bankruptcy.

1. DO: Disclose all of your assets and all of your creditors in your Petition

When someone files bankruptcy, they fill out a lot of paperwork known as the bankruptcy petition, which is prepared and filed with the Court by their bankruptcy lawyer. In that document, the Debtor (person filing bankruptcy), must acknowledge all of their assets and their debts. This is the core principal in bankruptcy, that everyone who files bankruptcy must provide full disclosure. Therefore, if you are filing bankruptcy, all of your possessions (no matter who purchased them originally) and all of your creditors must be listed on the petition.

2. DON’T: Contact the Trustee’s office if you have an attorney.

The Orlando Chapter 13 Trustee recently conducted a luncheon wherein she informed all the attorneys in attendance that if our clients contact her office, only bad things would result from it. She made it very clear that we were to instruct our clients NOT to contact her office. You see, when you are represented by an attorney and you contact the Trustee’s office directly, the staff member in question has to stop what they were doing and pull up your file. Once they have your file up, they take that opportunity to review your case. Have they missed something? Did they receive your most recent tax refund? Are you late with your Plan payment?

3. DO: Let your bankruptcy lawyer know about any changes in your income while you are in a Chapter 13 bankruptcy.

When you enter into a Chapter 13 bankruptcy, it can go on for up to 5 years. Think of a Chapter 13 as a partnership between you and your bankruptcy lawyer. To reach the intended successful outcome, each party must perform their duties. One of the obligations of a person filing bankruptcy under Chapter 13 is to ensure their bankruptcy lawyer is aware of any changes in their income, whether an increase, or decrease, during the entire case. While you may be hesitant to let your bankruptcy lawyer know about an income increase, you must keep in mind that it does not always result in an increased plan payment.

4. DON’T: Before filing bankruptcy, give your property away.

This DON’T might be the biggest and most important. Just re-read the statement after DON’T above, it doesn’t sound honest, does it? The bankruptcy Court certainly doesn’t believe that it is. In fact, the Court calls this FRAUD and you can get in a lot of trouble for it. Transferring any property out of your name before filing bankruptcy is just something you shouldn’t do.

5. DO: Be honest and Disclose

If there is one thing that every experienced bankruptcy lawyer tells their clients, and that is to disclose everything. In other words, if you are not sure whether or not you should list something in your bankruptcy petition, list it. It could be that it was not important and nothing is lost by disclosing it. Alternatively, what if you don’t list it and the Trustee uncovers it and believes you were trying to get away with something shady and misleading. If the second, you could be in a lot of trouble. So what you should take away from this DO: inform your bankruptcy lawyer about everything.

There you go, 5 quick Do’s and Don’ts to keep in mind when filing bankruptcy, or considering filing bankruptcy. Believe me, there are many, many more.

Learn more about filing bankruptcy. Stop by K. Hunter Goff’s site where you can find an experienced Orlando bankruptcy lawyer and learn how he can help you.

Do not panic when facing spouse bankruptcy. Of course, we don’t mean to say here that the fact your spouse declares insolvency is not a serious matter. We’re just saying don’t be alarmed.

Inheriting the debt of the insolvent spouse and being made suddenly responsible for them is not supported by law. Except for certain situations.

One thing you must never forget is that if you are not part of a debtor-creditor agreement, then you are not part of it. The obligation to pay any debt only arises between those involved in that agreement.

So, this means that the spouse of the debtor is not responsible for the debt. The bond of marriage between them does not operate to transfer the obligation.

However, when the spouse of the insolvent person is part of the agreement, then he or she will also be responsible to pay the debt. That’s the only instance where that can happen.

In other words, the spouse also contracted to pay the debt together with the now insolvent debtor-spouse. That makes that spouse a co-debtor.

This obligation is either a joint or solidary one.

In a joint obligation, you are under obligation to pay only your share/percentage of the debt, but not the whole debt.

In a solidary obligation, however, the creditor has the choice to make either husband or wife (who are co-debtors) answer for the whole amount. The point of the solidary obligation is that in case your co-debtor cannot pay, then you pay the whole amount or what remains of it.

What makes spouse bankruptcy special is that there is a privilege given to husbands and wives in that they can file for bankruptcy together. This is about the only time this can be allowed.

There are advantages and disadvantages to a joint filing for chapter 13 or 7 bankruptcy.

Under a chapter 7 bankruptcy, when a husband and wife who owe a debt together do not file for bankruptcy together and instead opt to have only one of them do it, then this would not stop the creditor from pursuing the other spouse.

But if they file for bankruptcy together and they obtain a discharge, that would stop the creditors from going after either of them.

There is also the case for unsecured debts under chapter 13. These are debts not secured by property.

This falls under chapter 13 bankruptcy. When a co-debtor spouse decides to file for bankruptcy, he can be shielded by the collection activities of creditors because of the “automatic stay”.

A “co-debtor stay” is also activated which holds back creditors from pursuing the other non-filing spouse. However, this protection is not a guarantee that the creditors cannot pursue the non-filing spouse.

However, the application of payments on secured debts must be uniform. For example, if you pay 75% on one unsecyred debt, then you must also pay 75% on your other unsecured debt. Failure to do this or failure to totally satisfy all these debts can give allow your creditors to pursue your non-filing spouse especially when the court gives its consent.

The examples given above are what make spouse bankruptcy different from ordinary bankruptcy. That is because it may involve two persons.

Filing for bankruptcy is a long and tedious process, if you need help, then seek legal counsel from a Schaumburg attorney.

Want to find out more about Spouse Bankruptcy, then visit changandcarlin.com.

The bankruptcy law is designed with the purpose of giving an honest debtor a financial fresh start by discharging his debts.

So, if you are filing bankruptcy, why would you want to hold on to one of your credit cards?

I think the question is rooted in the fear many people have that, without access to a credit card, “What will I do in case of an emergency?” I remember when I was an impressionable, naive, 18 year old freshman in college, I asked my parents if it would be a good idea to get a credit card. After all, It came with a free t-shirt! They said “Sure, you can use it for emergencies”. Well, I found that there were plenty of situations, that, in my mind, qualified as an emergency, and therefore would allow me to employ the services of the trusty credit card.

If life, there are valid emergencies and in those moments, knowing you have a credit card to fall back on to help you out of the mess is gratifying. However, don’t you think it would be even more gratifying if you could fall back on your savings and not have to rely on a credit card company to help you in an emergency? Filing bankruptcy and achieving that fresh start is a great time to break yourself of the myth, perpetuated by the credit card companies, that credit cards are the solution to life’s emergencies. Just think, after you have eliminated your debts with your bankruptcy, you can take that minimum payment you were sending to the credit card companies each month, $100/month as an example, and pay it into your savings account. With your own emergency fund, you could concentrate on rebuilding your credit without worrying that one emergency will send you back into debt.

You will be surprised at how quickly you can build an effective emergency fund. Car break down? Your savings covers you. Son fall out of the tree in the back yard and you need to go to the emergency room? With your own emergency fund, you will not be still be paying for that visit to the doctor next year.

The court requires that all people filing bankruptcy list every creditor they owe money to on their bankruptcy petition. When signing their petition, I advise all clients filing Chapter 7 or Chapter 13 that they are declaring they have done so under penalties of perjury. I am not an 18 year old college freshman anymore, so as much as I would like to think that my advice is being followed, I know that is not always the case.

I know, for example, that some clients have tried to keep a credit card out of their bankruptcy in the hopes that they could use it. Problem is, even if you don’t list a credit card in your bankruptcy petition, your creditors will know you’ve filed (they subscribe to services that flag accounts of their customers who file for bankruptcy) and they will deactivate the account. Then, you’ve got no credit card and no disclosure of the debt in your bankruptcy. Not good.

Why not free yourself from that ball and chain and take control of your financial life by saying “goodbye” to the idea that you need a credit card to help you out of a jam and, instead, rely on the emergency fund that YOU created!

Want to find out more about bankruptcy? Then visit K. Hunter Goff’s site on how to choose the best bankruptcy lawyer for your needs.

According to a recent story in the Orlando Sentinel, Orlando home values continue to decline. As an Orlando bankruptcy lawyer, I have witnessed this first hand. Now, I know you didn’t need the Sentinel to tell you that, but I digress.

Unfortunately, the same can be said for real estate in almost all areas of Florida. It seems everyone is underwater on their homes. In the past few years, many of my Orlando bankruptcy clients have benefited from the ability, in a Chapter 13 case, for their Orlando bankruptcy lawyer to file a motion in their case which allows them to completely wipe out the balance owed on a 2nd mortgage.

In order to qualify for this “lien stripping”, you must prove that your current home value is less than the current balance of your 1st mortgage. In most cases, an appraisal from a certified appraiser is sufficient evidence. Recently, David Leibowitz, a bankruptcy lawyer practicing in Illinois and Wisconsin reviews the choices people have when eliminating a 2nd mortgage.

Here in Orlando, a recent opinion was issued by a Bankruptcy Judge that says you can only strip off a 2nd mortgage in a Chapter 13 bankruptcy case. This type of relief is not available in Chapter 7 cases. Also, you must successfully complete your Chapter 13 payment plan, and receive your Discharge Order from the Court before the mortgage will be totally gone.

Eventually, we should start to see a reverse in the declining home values plaguing Orlando, Florida, and the rest of the county. At that time, those who took advantage of the lien stripping option in Chapter 13 bankruptcy and successfully completed their payment plan, will, hopefully, again have equity in their homes.

With the help of an experienced Orlando bankruptcy lawyer, my clients can achieve this goal, as well as other goals such as eliminating credit card debt and saving money on car loans, all by filing Chapter 13 bankruptcy.

Do you have questions about filing for bankruptcy? Check out K. Hunter Goff’s FREE eCourse. Hire an experienced bankruptcy lawyer to work for you.