Top Seven Leading Situations of Bankruptcy

Bankruptcy is legal process where you are declaring that you are unable to pay your debts.  When people can’t pay their debts at that time bankruptcy is a suitable option for them. When people file for bankruptcy, bankruptcy allows them to start rebuilding their credit faster and putting them on track for a brighter financial future. According to US bankruptcy court statics every year in USA 1.5 million people file for bankruptcy.  Bankruptcy is a tool to help people tide over their financial hardships and this should never be taken up as a first choice, it needs to be the last option when all the doors to pay off your debt are closed. An experienced and skilled bankruptcy lawyer Mr. Brian Linnekens shares a few reasons and situations why people go bankrupt. You need to know these reasons of bankruptcy so that you can try and steer clear of these situations and ensure that you don’t have to ever file bankruptcy. After knowing your financial problems you can easily control your debts before they take control of you.

Job Loss –

Sometimes people might lose their job and in that time frame they might not be able to pay off their debts and credit card bills which might also lead to depression which further results in the piling up of the already accumulated debts.  Also decreasing salary is a big factor in increasing financial hardships. The end result is that more and more people are applying for bankruptcy. Unemployment is another big factor in the rising cases of bankruptcy. Watch out for any career and market changes that might affect you adversely.

Divorce –

Divorce is quite an emotional time for both partners. Divorce is an expensive process because of high attorney fees, court costs, child support and other hidden costs, that are hard to identify, but never fail to show up. At this time it is really important that you need to hire an experienced and skilled bankruptcy attorney who can help you manage and eliminate your debt in the most feasible way possible in case you are left with no option but to file for bankruptcy.

Unexpected Emergencies –

Emergencies can come anytime like – car accident, home expense, fire, tree falling on home. These types of unexpected expenses quickly drain the whole savings of the people and create more problems to pay other monthly important expenses, bills and loans.

Medical Expenses –

Recent studies say 62 percent of people are filing bankruptcy due to increasing medical expenses. Sometime family members suffer from medical issues like cancer or accidents. Health insurance plans do not cover the entire cost since the treatment time may prolong based on the gravity of the problem. Thus medical expenses shoot up and then some people can’t pay the already existing debts along with the already accumulated medical expenses. Better keep an emergency fund handy which can be used in times of medical emergencies. You can also look out of an insurance plan that covers the whole family for a sustainable and large amount of cover.

Poor or non-existent Financial Planning –

If your financial planning fails then you have to face numerous financial problems. Managing money is really hard, if you don’t pay your loan installment and bills on time then creditors will start hounding you with phone calls, messages and mails.  To stop creditor harassment you need to file bankruptcy. Better have robust financial plans in place and make sure to have a plan B is the main plan fails to avoid filing bankruptcy.

Student Loan –

Most students are unable to pay their loans timely. Whatever loan type if you do not pay loan installments on time then it will become a problem for you.  To avoid creditor harassment, students generally file for bankruptcy.

Avoiding Foreclosure on their homes-

In America 1% people file for bankruptcy in order to avoid foreclosure on their homes. And some people try to cut down and reorganize debt by filing for bankruptcy.

Useful tips from Brian Linnekens to protect yourself during Bankruptcy

When you are struggling from financial crisis and not able to pay your debts, then filing for bankruptcy is the best solution of your problem. According to Brian Linnekens, It is a serious issue, you need to have a fresh look at it once, before filling and make proper plans in order to get rid of the problem.

Bankruptcy will help us to clear credit cards bills and other unsecured bills excluding student loans and overdue taxes. For such issues the financial plan created as a part of bankruptcy will helps you.

Before filing for bankruptcy you need to understand well which areas they are covering and which are not covered. A bankruptcy attorney will give suggestions that you need to take for your bankruptcy case. Along with his/her suggestion you need to do a few other things proactively.

Create a new bank account

The very first thing you need to do is to open a new bank account. It is essential even if you file for chapter 7 and take automatic stay against collections, some creditor banks and credit unions are legally allowed to take their debts against funds you own.

To protect yourself from these situations you need to open a new account in a bank or any other financial institution from where you had not taken any credits or loans previously. Transfer your direct funds or any other funds that you have in this account.

Stop all automatic payments

Once you decide to file for the bankruptcy the next thing you need to do is to stop your auto debit payments as soon as possible. By doing this you will save yourself from penalties and other fees that is linked with failed transaction. You should use your new account for making payments of car loan, cell phone or other utilities. These small things will help you a lot during bankruptcy.

Cut up your Plastics

The key concept of bankruptcy is to give you the chance to get rid from debt that you can’t pay due to some reasons. Using credit card just prior to filing for bankruptcy is a questionable thing and on this basis a card provider can accuse you for fraudulent activity. So once you decided to file for bankruptcy you should avoid using credit card.

Create a workable budget

You need to create a workable budget so that you are able to repay your debts only then bankruptcy will work for you. According to chapter 13, all the plans for the repayment of debts are set according to the ability of your paying. After some time it is set according to your disposable income.

When you file for the bankruptcy you need to follow certain set of rules and a good attorney will help you in doing this. You need to appear in front of bankruptcy trustee with your attorney for a few questions that you need to answer. A court will issue a Notice of Commencement for the case, which decides the date and time of meeting with the creditors in order to take the clarifications.

During bankruptcy proceedings you need to go through several issues – creditors can make objection on your claim, a trustee may disapprove your case as the required paper work is not complete or even due to late submission.

The case is not over even after your bankruptcy plan is set. You need to make various kinds of communication even after that. When you get mail from your attorney, creditors or trustee; you need read it carefully and respond to it accordingly.

In bankruptcy you need proper guidance and a constant communication with your bankruptcy attorney will protect you during the bankruptcy.

Brian Linnekens gives an insight on Different Types of Bankruptcy

Bankruptcy is a legal process that reduces debt and gives you a chance to reorganize your debts. According to Brain Linnekens by filing bankruptcy, you can easily overcome your bad financial situation. You can pay back your debt within 7-10 years with repayment plans. Bankruptcy has several types of chapters but in most cases, people file chapter 7 & 13 because these chapters are effective and easy to file.

When Chapter 7 Bankruptcy can be an option explains Brian Linnekens

Chapter 7 is very helpful for debtors who are not able to pay back their debt. It is very useful in those cases where majority of the debt is unsecured because in chapter 7 bankruptcy some of your property is sold to recover the debt one has incurred from creditors and in return your unsecured debt will be written off. Remember everyone does not file chapter 7 bankruptcy. In cases where the disposable income is enough to file a chapter 13-repayment plan after subtracting certain allowed expenses and monthly payments for certain debts you would not be allowed to use chapter 7 bankruptcy.

Chapter 9 Bankruptcy as explained by Brian Linnekens

Chapter 9 bankruptcy is designed for “municipalities.” The main purpose of chapter 9 is to safeguard a municipality from its creditors while it negotiates its debts. According to chapter 9 bankruptcy a creditor cannot take over the assets of the municipality from the municipality. Only a municipality can file for relief under chapter 9.

Chapter 11 Bankruptcy

Chapter 11 bankruptcy is very complicated and it used for those peoples who are struggling with their business and want to reorganize their finances. It is generally used only by those whose debts exceed chapter 13. In this process debtors continuously work and maintain owner ship of all assets and try to fulfill to pay off creditors. Chapter 11 is more expensive. Before filing chapter 11 you will need to talk to a bankruptcy lawyer like Brian Linnekens who will be able advice you professionally based on his experience and years of learning in the realm of Bankruptcy.

Chapter 12 Bankruptcy

Very few people use chapter 12 bankruptcies. It is specifically for farm owners. According this chapter the debtor maintains ownership of his assets and works out a repayment plan with the creditors. Similar to chapter 13, filing under chapter 12 bankruptcy you can pay back your debt within three to five years.

Chapter 13 Bankruptcy

Chapter 13 bankruptcy is one of the most beneficial options for those people who are struggling with their debts. It is best for those debtors who are behind on secured debts such as home mortgages and car loans. Chapter 13 bankruptcy gives you a chance to keep all your assets and you can stop foreclosure with the repayment plan agreed upon in the Bankruptcy terms and conditions. According to the repayment plan, you can pay back your debt within three to five years. The time of three to five years can be increased by the bankruptcy process if you are not able to pay off your debt within three to five years. Since paying off the debt within a particular time period will depend on your present income. Chapter 13 will help you to reorganize and reduce your debt. It will also gives you a chance to create new plans to pay off your debts and gives you more time to fulfill your financial obligations.

Bankruptcy has provided us many options. If you are thinking of filing bankruptcy then you need to understand the various bankruptcy options and know which one is suitable for you. Before filing bankruptcy, you can talk to a bankruptcy lawyer since bankruptcy law is very complicated and with the help of an attorney you can easily know the difference between the various bankruptcy chapters. Filing for bankruptcy should be the last option. Before filing for bankruptcy you should check for other options like loan modification or loan settlement whichever is possible for you.

Tips from Brian Linnekens to choose an Experienced Bankruptcy Attorney

Nothing can be more complicated and stressful than filing for a bankruptcy in court. Filing for a bankruptcy without having proper knowledge of court rules and bankruptcy laws has a very low success rate. For an easy and successful bankruptcy case, you are not allowed to make bankruptcy blunders that could increase the chances of having your case rejected by the court. The main reason behind most rejected bankruptcy cases is hiring a wrong attorney for the job. Hiring a wrong attorney can make blunders that can put you into a big loss. For many attorneys, bankruptcy filings have become a volume business. Debtors are getting inferior legal services from attorneys that put them into loss. For this reason, you’ll need to do some research before hiring a bankruptcy lawyer. Here are a few things according to Brian Linnekens that you have to look in a bankruptcy lawyer before hiring him or her while filing for a bankruptcy.

Determine How Much You Can Pay to Your Bankruptcy attorney

Bankruptcy attorney’s fees may vary by region. In America for Chapter 7 bankruptcy, fees ranges from about $1,000 to $2,500. In the case of bankruptcy you get what you pay for. Decide your budget, but remember the fact that attorneys who advertise their fees on their website or charge below the prevalent market fees work on volumes rather than on quality. Never pick up these kinds attorneys. They may take as many cases as possible at the lowest rates possible, with only one objective to make money. Be prepared to spend at least $1500.00 on a bankruptcy case. Although, pricing of bankruptcy depends on the number of creditors involved, judgment liens, and the complexity of the matter. Try to not go for a cheap attorney. Invest on some quality lawful services to ensure that your assets are protected, and creditors are no longer knocking on your door.

Make a list of Best Bankruptcy Attorneys within Your Area

Make a list of potential bankruptcy attorneys of your area and try to narrow down your list by doing some research on yelp or other portals that can help you find a good attorney just like you do when you search for the best hotels in the city. Consider checking their ratings and customer reviews on yelp and other websites. Make sure the attorneys on your list actually practice bankruptcy law. When hiring an attorney, do not pick one without checking him online.

Contact their Previous Clients

If you have picked one do not finalize a contract with him for filing your bankruptcy before talking to their previous clients. Ask their previous clients if the attorney communicated with them in a timely manner or not and did he answer all the queries on time or not. It will assure you that they actually serve in the best possible manner.

Consider Checking Their License and Experience

There are countless of websites available that would help you to find a potential attorney where they list their practice and specialization areas. Make sure that the attorney is licensed and has gone through the necessary practices and qualification of bankruptcy lawyer. Choose an attorney that is familiar with the local rules of your district and knows the trustees. It will help you go smooth throughout the case.