A recent move may impact your ability to protect property in bankruptcy

Article Source: National Banruptcy Forum

You’ve recently moved, which state’s exemptions apply?

First of all, why is this important? Whether federal or state, the exemption laws vary in the amount of property they allow you to protect from creditors. Some states may allow you to protect $100,000 of equity in your home, others $40,000 or less. O.J. Simpson famously moved to Florida to take advantage of its absolute exemption for the homestead.

As the guardian of your assets, exemption laws are crucial to any personal bankruptcy filing. Indeed, since exempt property is sheilded from creditors, the availability of exemptions is usually key to the determination of whether to file bankruptcy in the first place. If the debtor has significant amounts of property that could potentially be lost in a chapter 7 liquidation, chapter 13 may be the answer. Even in a chapter 13 setting, the value of nonexempt property may determine the minimum that must be paid to unsecured creditors. All Denver bankruptcy lawyers can agree about the fundamental importance of the exemption laws, however, sometimes it can be tricky figuring out which state’s exemption laws apply.

When states have “opted out” of federal exemption standards and only allow citizens to use their own, choice of exemption law is decided by domicile or residence. The state exemption law that applies to a debtor is determined by the state in which the debtor’s domicile has been located for the 730 days (two years) immediately preceeding the filing. What if the debtor has lived in two different places in the past two years? For example, Colorado has experienced rapid growth in population by people drawn to its pleasant climate and strong economy.

If the debtor’s domicile has changed in the last two years, the determining factor for exemption law purposes will be where the debtor resided for the 180 day period preceding the two year period. In other words, we look back two years plus 180 days. Wherever the debtor spent the majority of this 180 day period will be his or her exemption state. The plot thickens when the debtor’s exemption state requires that a debtor be a resident to take advantage of its laws. Some states such as Colorado limit their exemption laws only to current residents (defined as someone who lived in Colorado longer than anywhere else in the actual 180 day period immediately preceeding the bankruptcy filing).

So what becomes of the debtor who lived in Colorado for 10 years but moved to North Carolina 1 year ago? Colorado and North Carolina are both opt out states, meaning federal exemptions are normally not available. Let’s run through the analysis. Since the debtor has not lived in North Carolina for the last two years, North Carolina exemption law is not applicable. We turn to the Colorado bankruptcy exemptions. But wait! Colorado law mandates residency in Colorado in order to claim its exemptions. The debtor will not qaulify for the protections of Georgia law because the Colorado legislature has limited the scope of Colorado exemptions to current residents only. Have we created the Yaser Arafat of bankruptcy debtors who has no protection from any state’s bankruptcy exemption laws? Thankfully, No. If the effect of this complicated residency scheme is to render the debtor ineligible to claim any exemptions, the debtor may elect to exempt property under the federal exemptions, even if the state of the debtor’s domicile is an opt out state.

Questions about bankruptcy? Consult a Denver bankruptcy attorney.

How Long Does Chapter 7 Bankruptcy Take

Chapter 7 bankruptcy is a fairly quick process that generally lasts about four months after you file your case.

Your case will be filed electronically. A few minutes after the case is filed, you will be given a hearing date. This hearing is called a 341 hearing (after section 341 of the Bankruptcy Code) or a First Meeting of Creditors. We’ll just call it “your hearing.”

Your hearing will be held four to six weeks after you file your case. All of the deadlines in your case run from the hearing date. Creditors and the United State Trustee have 60 days after your hearing date to file motions to dismiss your case, object to discharge, or file non-dischargeability actions for specific debts. A non-dischargeability action is where the creditor asks the court to rule that a particular debt is non-dischargeable. Not all debts can be discharged. For example, debts incurred by fraud cannot be discharged.

Once the 60 day period runs after your hearing, neither creditors nor the United States Trustee can bring complaints or motions to disallow your discharge of your debts.

However, the United States Trustee could bring an action to revoke your discharge if he later learned that you comitted fraud during your bankruptcy. For example if the U.S. Trustee found out you lied about your assets or income, the bankruptcy court could later revoke your discharge. This could be done years after your bankruptcy case was closed, so be sure to be honest and provide your attorney with accurate information.

In the vast majority of cases, the 60-day period is just a waiting period where nothing happens. As with many things in life, no news is good news.

After the 60-day period runs, you will get a discharge from the court. The discharge order provides that all dischargeable debts are now discharged. Put simply, you don’t owe them anymore. Any debts excepted from discharge, such as alimony, child support, certain taxes, student loans, or specific debts the court ruled that are non-dischargeable will not be discharged.

The actual discharge order will not be issued immediately after the end of the 60-day period. The bankruptcy court clerk’s office is busy dealing with thousands of other matters. Because of this you may not get your discharge until 90 days or even longer after your hearing. Don’t worry; this is normal. Once you get past the 60-day period after your hearing, you can breathe easy. Your discharge will arrive shortly. Enjoy your financial fresh start!

Chapter 7 Bankruptcy Help

written by: Steve Young

In the financial system that people are facing now, many are challenged with very complex financial decisions. Many people have just lost their job, incurred great medical bills or are even going through a divorce. These can be devastating at times to your everyday life and financial expectations.

Every individual is unique, but when you face a challenge like working through bankruptcy, you are never alone. You can always get a chapter 7 bankruptcy support. Countless men and women have faced the exact same problem and have survived and thrived. Luckily, people who file for bankruptcy in Denver may find that other difficult debts are removed from their lives and they may be able to re-structure their budgets to handle money much better. This freedom may make it much easier to maintain timely child support payments and pay off medical debts as a result. With other debts out of the way, persons going through bankruptcy may find it easier to pay off the debts that were not discharged. Over the year's people's opinion of bankruptcy have certainly changed. Whilst years ago you may have been imprisoned and looked down on it is now a viable and humane option for dealing with debts that you cannot afford to repay.

Bankruptcy can sometimes help in situations where support obligations are in arrears or a garnishment is about to effectuated for arrears. In some cases, the Bankruptcy Court could provide a forum to address any arguments about what may be owed or may have already been paid prior to filing bankruptcy. A bankruptcy judge may address accounting issues on what is due and owing in a support claim, but a Bankruptcy Court will typically not address any support orders made by a Family Law Court, or modify any future ongoing support.

Many people think that if they simply file Chapter 7 bankruptcy, then they will get rid of all of their debts. Unfortunately, this is not the case. There are some types of debts that cannot be discharged in bankruptcy by law. In other words, even if you complete bankruptcy proceedings, you still have to pay back these debts. These debts include child support, alimony, student loans, most taxes, many secured debts, and debts not listed in your bankruptcy petition. Filing for bankruptcy protection does not let your ex to discharge past due child support obligations. Any back payments owed for child support cannot be discharged in a bankruptcy proceeding.

The automatic stay rule which prevents creditors and other debt collection entities from seeking compensation from borrowers does not apply to child support payments. In other words, if you are trying to collect from an ex-spouse, his or her bankruptcy filing will not protect him or her from having to making good on past due support bills. Child support payments are considered main priority -- meaning that they must be paid off before other creditor obligations, such as payday loans, credit cards and medical bills -- but the receiving spouse may have to work with an attorney to ensure the proper and speedy expedition of said child support payments. If you want to know more about Denver bankruptcy, just visit Denver bankruptcy information.

What to Know about Bankruptcy

Bankruptcy is the name given to a process where a person legally declares himself or his business unable to pay outstanding debts. Depending upon the type of bankruptcy filed, one meets with a judge in order to determine a payment schedule, or for having a legal bankruptcy discharge most if not all debts.

Bankruptcy may also be declare by the businesses , which either means that the business will close, or that the business will continue to operate but with reduced payments to debtors. Each country has its own bankruptcy designations, but here I will explain you the most common types of bankruptcy in the US.

3 Forms of Bankruptcy

There are three forms of bankruptcy for the individual or the married or domestic partner couple, these are called “Chapters.” The most common form filed by spouses or individuals is Chapter 7 bankruptcy. Chapter 12 bankruptcy is restricted to those people who are family farmers or fisherman. Chapter 13 bankruptcy may also be filed by the individuals or married couples, but this is rare.

Bankruptcy for Business

The two common forms of bankruptcy that are utilized for businesses, are Chapter 7 and Chapter 11 bankruptcy. Less common is that an individual or business might file under Chapter 15 bankruptcy. This bankruptcy involves the clearing of international debts. If a bankruptcy must be declared by an agency of the state, such as a city then they file Chapter 9 which is also called municipal bankruptcy.

Chapter 7 bankruptcy

Either individuals or businesses that want a total clean slate tends to use chapter 7 bankruptcy. A business that files Chapter 7 bankruptcy as a result of that has to close their business. Chapter 7 bankruptcy for the individual, means that the courts declare that the person is unable to pay debts incurred, and almost all debts are then void.

When filing Chapter 7 bankruptcy all assets must be declared. Other assets like second houses, collectibles, and additional vehicles are liquidated in order to pay debts. Most who file Chapter 7 bankruptcy do because they have very little left what they can lose. Once a judge approves the bankruptcy filing, then virtually all debts, like those that are owed to credit card companies and doctors or hospitals are cleared and that person is given a clean slate.

Chapter 13 bankruptcy

Those individuals file chapter 13 bankruptcy who do own a great deal of property or assets, but find that their income cannot cover the exorbitant payments on debts that are own by them.

In this form, the debt is restructured, and in some cases they are reduced so that people retain their assets but they have reasonable payments which can be made by them to debtors. Generally the court-ordered payments must be made on time and regularly so that the seizure of assets might be avoided.

Chapter 11 bankruptcy

Businesses file a similar form of bankruptcy that is referred to as chapter 11 bankruptcy. Some or part of the business’ debt may be cleared, and the payment plans are restructured. The purpose of chapter 11 bankruptcy is to reorganize the debt so that the business can continue to operate.

All forms of Denver bankruptcy are a costly means of gaining debt relief. There is a reduction in the credit score of both individuals and businesses after a bankruptcy. Individual bankruptcy remains on one’s credit report for almost 10 years, due to which it could be difficult and costly for that person to get approved for new cars, homes, or credit cards.