What is Bankruptcy Counseling? [mortgagefraud101.blogspot.com]
A recent article published in Bloomberg states that the United States is bankrupt, as the US continues to fall further into debt what will the outcome be? Neither spending more nor taxing less will help the country pay its bills. It's a bold statement from professor of economics at Boston University Laurence Kotlikoff.
mortgagefraud101.blogspot.com 'Let's get real, the US is bankrupt'
Individuals suffocating under the weight of crushing debt often believe filing for bankruptcy is their only option. The decision to file for bankruptcy is not one to be taken lightly, and it is one of the most serious – and most frightening – financial situations someone may ever have to face.
Because of the consequences associated with filing for bankruptcy, bankruptcy counseling is not simply a recommendation of professionals; it is actually required by law. The government requires proof of bankruptcy education, so individuals who are considering filing should participate in bankruptcy credit counseling for a bankruptcy certificate through an accredited, approved credit counseling agency.
If you are considering bankruptcy counseling, it is important to remember that bankruptcy counselors are not able to offer legal advice.
What to Expect from Bankruptcy Counseling
During a typical counseling session, a trained, professional credit counselor will assess your financial situation using information such as your net income, expenses and spending habits, and your current credit score information. In order to do so, you will want to come to your counseling session with certain information in hand, including pay stubs, bills, and credit card statements. The more information you are able to provide your counselor, the better he or she will be able to analyze your situation to give you the best possible options and alternatives to bankruptcy. For some consumers, a personalized budget management program may be all that is needed in order to avoid bankruptcy. For others, consolidating bills through a debt management program might be the best option. There are, however, cases where bankruptcy is the final, and only, option.
In addition to bankruptcy education and exploring all possible alternatives, your credit counselor will also provide education on how to balance your monthly expenses against your income so that you are no longer spending more than you make.
A bankruptcy counseling session typically runs anywhere from 60 to 90 minutes, and can be completed either in person, over the phone or even online. Upon successful completion of a bankruptcy counseling session, you will be issued a bankruptcy counseling certificate, a full budget analysis, and a copy of your personalized financial action plan.
Look for a non-profit credit counseling agency approved by the Executive Office of the United States Trustees that will provide the best bankruptcy education and give you the tools you need to develop a solid financial plan for your future. Recommend What is Bankruptcy Counseling? Articles
Question by : What is bankruptcy? Do you get out of your debts? I've noticed celebrities declaring bankruptcy but still having really fancy stuff and huge houses. Do you get cleared of your debts with bankruptcy? How can they afford huge homes? Doesn't bankruptcy mean you're absolutely broke? Best answer for What is bankruptcy? Do you get out of your debts?:
Answer by Yirmiyahu
Bankruptcy is a constitutional protection of a debtor from his creditors. When an individual is incapable of meeting his financial obligations as they come due (i.e., can't make monthly payments), then a person is a candidate for bankruptcy. In bankruptcy, the individual's assets are turned into the bankruptcy estate to be distributed to the creditors. Under bankruptcy laws, certain assets are "exempt" and cannot be distributed to the creditors. Instead, they are "returned" to the bankrupt debtor. Examples of exempt assets can include: a) Certain retirement accounts regardless of their value. (Yes, you can have $ 5 million in your 401k plan and nobody can touch it. Nobody.) b) Certain values of real estate. For example, Florida allows the entire house to be exempt. (Yes, Rush Limbaugh's $ 25 million home in Palm Beach cannot be taken from him.) c) Tools of the trade d) Farm and ranch vehicles (tractors, etc.)
Answer by 8robinhood8
Consider what the above poster stated and also consider that there are different Chapters of bankruptcy for which an individual can seek relief. Speaking very generally, people who make more money cannot file for Ch. 7 bankruptcy, which is a liquidation of assets (excluding all of your exempt assets as noted by the poster above and which varies by local laws, etc.) and discharge of all unsecured debts. Generally, if you fall above the median income under Ch. 7, there is a presumption of abuse (unless you are a business), and you cannot file for relief under Ch. 7 unless you rebut the abuse. Thus, I imagine that most celebrities file under Ch. 11 or maybe Ch. 13. Ch. 11 is about reorganization of your debt, wherein you keep most of your assets, seek refinancing, and/or sell certain assets to pay your other creditors... Basically, all of that to say, anyone can probably file bankruptcy, it just depends on which Chapters are available to them, what they wish to accomplish from the bankruptcy, etc.
Answer by Sirdjr
Bankruptcy is a tool. Getting out of certain debts is just one of the things it can do. State and Federal laws dictate that there are certain things that can't be taken by creditors through a bankruptcy proceeding. These are called exemptions. When you deal with secured debt (like a house or car) you must also consider any creditors holding that secured claim. They must get their money or the property. Bankruptcy can't change that. It's possible to live in a 2 million dollar house and owe 2 million. In this situation there isn't any money for a bankruptcy trustee to distribute to creditors. So, it's left alone. Another thing wealthy people do is create trusts, estates, and companies. Then, it's those entities that own things. That way the wealthy person doesn't personally own anything yet they still have control over many things. Let's say you work for a company that gives you a company car to drive, a very nice company car. Then you file a bankruptcy. People may wonder why you get to drive such a nice car while you are in bankruptcy. The answer is that you don't own it so your bankruptcy has nothing to do with the type of company car you drive. So, how can celebrities declaring bankruptcy still have really fancy stuff and huge houses? - One possibility is that they owe enough money on it so it isn't possible for a bankruptcy trustee to sell it, pay off the secured creditor (and all other associated costs), and have money left over to pay creditors. - Another possibility is that the person filing the bankruptcy doesn't legally own the fancy stuff and huge house. As to your last comment: Bankruptcy doesn't mean you're absolutely broke. In fact, If you wait until you're absolutely broke to file a bankruptcy ... you waited to long. ________
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