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How can I stick to my bankruptcy budget?

Chapter 13 bankruptcy allows you to get control of your finances once again. Budgeting is crucial in this case, as you must adhere to the repayment plan provided by the court or your bankruptcy may be revoked. Because sticking with a budget can be difficult for even the most well-intentioned people, The Balance offers the following helpful tips to ensure a bright financial future ahead of you. 

If your budget is too strict you may be setting yourself up for failure. It's unrealistic to say that you're going to stop all non-essential spending, as very few people can actually live a life of such austere means. Instead, occasionally treat yourself to things like dining out or going to the movies as a reward for keeping to your budget. Just make sure that you're not constantly spending money on non-essential purchases, such as a daily cup of coffee. 

What financial issues to business owners face?

Running your own business is extremely fulfilling, but it's not without its challenges. In fact, many small business owners face a myriad of financial issues. If these issues aren't adequately addressed, they may lead to increased debt and instability down the line. To ensure you have the knowledge you need to handle the financial aspects of your business, The Motley Fool offers the following advice. 

First and foremost, you should be acutely aware of your business's incoming flow of cash. Sloppy bookkeeping prevents you from having a good grasp on your financial health. It may also cause you to overdraft bank accounts when invoices go unpaid. When you know how much money is coming into your business at a given time, you'll be able to undertake the proper financial planning to keep your operation afloat. 

How can I stop creditor harassment?

Creditor harassment is hard to deal with when faced with massive debt. Some practices are not actually lawful, which many consumers don't know when they're actively being pursued for money that remains unpaid. The Balance recommends taking the following steps if you're currently experiencing creditor harassment. 

Creditors use multiple methods of communication when reaching out to people. For instance, you may be contacted via phone, email, postal mail, or even text. No matter how you're contacted, be sure to keep accurate records about the items you're sent. When it comes to phone calls, jot down the time when the call took place, the name of the caller, and the subject of the conversation. This information will be exceedingly helpful if you do file a claim for creditor harassment. It will also help you determine whether any wrongdoing has occurred. 

Should I file for chapter 13?

If you're faced with massive debt that you can't seem to get a handle on, bankruptcy may be the best option for you. Most individuals file for chapter 7 or chapter 13, each of which entails different methods of relieving debt and satisfying creditors. Debt.org explains how chapter 13 works so you can determine whether it's the best option for you. 

With chapter 7, certain debts are discharged due to a person's inability to pay. This can also result in the surrender of certain property, including things like homes and vehicles. Chapter 13 does not require debtors to surrender their property. Instead, a repayment plan is devised that allows a person to pay back any debt over a specified period of time. In this case, a distinction is made between secured and unsecured debt. 

The emotional benefits of Chapter 11

Those who successfully complete the Chapter 11 process may experience a number of financial benefits, getting rid of their debt and welcoming new opportunities. However, the emotional advantages of Chapter 11 should not be overlooked either. People who are buried in debt may be facing incredibly difficult emotional challenges due to their circumstances, including depression, unbearable anxiety and so on. Moreover, these emotions can get in the way of their sleep and disrupt other facets of their lives (such as their job performance and relationships). By getting rid of debt through Chapter 11, some people are able to leave these emotional hurdles behind.

The bankruptcy process can generate negative emotions as well, especially stress and uncertainty. However, once the process is complete, those who took the right approach and were able to secure a favorable outcome may be able to leave adverse emotions behind. After getting rid of debt via Chapter 11, they may notice improvements in their relationships as well as their careers and personal interests. It is imperative for people who are going through these tough emotions to tackle their problems promptly and before their lives unravel in other ways.

Can student loan debt be discharged via bankruptcy?

Bankruptcy can help a person clear outstanding debt to work towards a brighter financial future. Most people claim that student loan debt, which is a burden on the finances of many graduates well into adulthood, can't be discharged via bankruptcy. While this is generally the case, Nerdwallet explains what steps you can take to get a handle on massive student loan debt. 

For many people who file for bankruptcy, getting student loan debt discharged is a separate process. This entails participating in an adversary proceeding, which is a type of lawsuit that exists outside the initial bankruptcy process. You or your legal team will file a complaint that requests the judge considers forgiving student loan debt. In this case, you must prove that you're faced with some type of financial hardship that makes student loan repayment all but impossible. 

Securing a mortgage after a Chapter 7 bankruptcy

Hackettstown residents who feel as though they are drowning in debt may find a Chapter 7 bankruptcy to be their best option at getting back to enjoying a comfortable financial position. Indeed, the benefit of having certain debts discharged is likely one of the primary reason why Chapter 7 is the most popular form of personal bankruptcy (as evidenced by the fact that the American Bankruptcy Institute reports that an average of over 62 percent of all cases in 2018 were filed under this chapter). Yet one question that those considering a Chapter 7 bankruptcy should ponder is how long such an action might prevent them from securing a traditional loan again (specifically a mortgage). 

While a personal bankruptcy can help one struggling with debt, it also has a significant impact on their credit rating. Lenders may be hesitant to loan them money out of fear that their recent financial struggles make it more likely that they might default on a loan. There are not, however, any set regulations that prevent a lender from offering a mortgage to one who has recently filed for bankruptcy. If a bankruptcy filer has a large enough down payment to offset any risk, they might even qualify for a mortgage soon after their filing date. 

What is a meeting of creditors?

If you are plagued by medical expenses, bills, credit card debt, mortgages and other expenses, you may feel overwhelmed by the monthly payments required just to stay afloat. It may get to the point where you are unable to keep your head above water, and the chances of paying off your expenses may seem impossible. Chapter 7 bankruptcy allows people in this situation to wipe away much of their debt and start again with a clean financial slate.

Once you have filed your Chapter 7 bankruptcy paperwork,you must attend a meeting of creditors before the trustee who is assigned to the case. This meeting will take place anywhere between 21 and 40 days after you have filed your paperwork. Creditors are given the date of the meeting and are invited to attend. During the meeting, the trustee and creditors in attendance may ask questions regarding your case. The trustee will ensure you understand the following:

  •      How the bankruptcy will affect your credit history
  •      All the chapters of bankruptcy that are available to you
  •      How to reaffirm a debt
  •      The effect a discharge will have on your finances

What can bankruptcy’s automatic stay protect you against?

As a New Jersey resident who has watched your debt spiral out of control, you may be feeling the pressure from your creditors as they attempt to collect what you owe them. Often, this seemingly constant barrage of phone calls can prove immensely stressful, but you may be able to put a stop to the communications by filing for bankruptcy. How?

According to LendingTree, once you begin bankruptcy proceedings, an automatic stay takes effect, and during this time, most of your creditors may no longer legally contact you in an attempt to collect on your debts. While the automatic stay period does not last forever (in most Chapter 7 bankruptcy cases, it last somewhere between 90 and 120 days) it can provide you with a period of relief while you work through your bankruptcy case and attempt to get a better handle on your finances.

Understanding the role of a creditors committee

For businesses in Hackettstown who are experiencing financial difficulties, a Chapter 11 bankruptcy offers the chance to halt the collection activities that have been driving it deeper into debt and formulate a strategy that will allow it to remain open. When discussing Chapter 11 cases, much attention is paid to the debtor in possession and the court-appointed trustee (if there is one). Yet while everyone assumes that their presence is recognized in a bankruptcy case, few details are often given about the creditors involved. Who looks out for their interests? 

The answer to that question depends on the unique circumstances of each individual case. If a debtor filing for Chapter 11 bankruptcy only has a handful of creditors, then dealings between the two sides can often be easily managed. Yet when several different creditors are involved, the court may appoint a creditors committee. 

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