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Bankruptcy is the legal process pertaining to people who cannot afford to pay their remaining debts in order to get a chance to a fresh start. The Bankruptcy laws offer unburdens overwhelmed debtors who are unable to pay their outstanding balances and, at the same time, help the creditors get paid from whatever kind of assets the debtor has no need for. Bankruptcies are often used as a last resort but it is not a sure way to solve all your financial problems. It will cover only certain debts that are eliminated when you file for bankruptcy.
What is a Discharge?
A discharge enables the debtor to be free of debt and prevents the creditors from taking collecting actions against the debtor. In simpler terms, the debts are wiped out and the debtor no longer needs to pay those that are discharged.
However, while most debts can be discharged, not all kinds of debts are removed when you declare bankruptcy. 
What are the Debts that can be Discharged?
 In a bankruptcy, “Common Categories of Dischargeable Debts,” states that the debt must meet the qualifications and timing requirements. It works by filing for bankruptcy in the bankruptcy court before and after the case described as follows:

• Pre-filing debt – is a pre-petition debt obligation that you have before you file for bankruptcy. When the case ends, the court will wipe out or discharge the debts included and qualified in the pre-petition debt such as credit card balances, medical debt, and personal loans.
• Post-filing debt – are the debts and bills you need to present to the court that you incurred after submitting the pre-petition debt. In all kinds of bankruptcy cases. You are still obligated to pay for the balances the you incur even if the case isn’t over.

Among all the debts obtained, only those debts that you have before filing bankruptcy will be discharged. As for the subsequent debts, you still need to repay those. Take note that if you either fail to follow the bankruptcy process or your debt doesn’t qualify for a discharge, then these can be barriers for you to have your debts wiped out.
Common Categories of Dischargeable Debt
Under the Bankruptcy Code, there are 19 categories of debt that are not capable of being discharged. Everything else not included can be wiped out. However, you need to be mindful that misconduct or fraud in connection to the debts are grounds to make them non-dischargeable:

• Charges of credit cards (including overdue and late fees)
• Collection agency accounts
• Medical bills
• Personal loans
• Utility bills
• Dishonored checks (except if fraudulent)
• Student loans (in cases where it is proven that you endured undue hardship)
• Repossession deficiency balances
• Auto accident claims (except DUI related cases)
• Business debts
• Rent debts (including past rents that are due)
• Civil court judgments
• Tax penalties and unpaid taxes 
• Attorney fees (except those pertaining to child support and alimony cases)
• Revolving charge accounts 
• Social security overpayments
• Veterans assistance loans and overpayments 

Non-Dischargeable Debts in Bankruptcy Chapter 7
There are different types of Bankruptcy, some debts are nondischargeable in Chapter 7 but can be wiped out in Chapter 13. These types of debts in Chapter 7 are automatically deemed as nondischargeable without needing a hearing in court: 

• Unscheduled debts (all kinds of debts that are not in the bankruptcy petition), with the exception that the creditor had actual knowledge or notice about such filing
• Certain taxes
• Spousal or child support debts or alimony
• Debts owed to former spouse or child if they arose out of a divorce or separation
• Fines, penalties and debts to government agencies
• Student loans (if not exempted)
• Personal injury debts caused by the debtor driving a motor vehicle while under the influence of alcohol
• Certain tax-advantaged retirement plans debts
• Certain condominium debts or cooperative housing fees (such as homeowners association fees)
• Attorney fees in child custody and support cases
• Court fines and penalties, including criminal restitution

Debts not Dischargeable if the Creditor Objects
Not all debts are automatically wiped out. The creditors must ask the bankruptcy court first to know whether or not such debts can be discharged. If the creditors do not raise any objection or issue or if they do but the court doesn’t allow it, these debts are discharged.

• Credit card purchases for luxury goods
• Cash advances
• Debts obtained by fraud or false pretenses
• Debts incurred due to willful and malicious injury

Planning to file for a Chapter 7 Bankruptcy?
While declaring bankruptcy and bankruptcy filing may be done by any person without a bankruptcy lawyer, you will be responsible for fully understanding everything related to the law. We at Allmand Law are experienced in the field of bankruptcy cases. If you want to know how to file for bankruptcy but you are not sure of what bankruptcy form to avail or maybe you’re worried about potential liabilities, our bankruptcy attorneys can help you. We may be able to answer such questions for you including bankruptcy exemptions, debt settlement, insolvencies, mortgage payments, debt management and many more. Call us now for free legal advice.
The post Understanding Dischargeable Debts in Chapter 7 Bankruptcy appeared first on Allmand Law Firm, PLLC.

Bankruptcy is the legal process pertaining to people who cannot afford to pay their remaining debts in order to get a chance to a fresh start. The Bankruptcy laws offer unburdens overwhelmed debtors who are unable to pay their outstanding balances and, at the same time, help the creditors get paid from whatever kind of assets the debtor has no need for. Bankruptcies are often used as a last resort but it is not a sure way to solve all your financial problems. It will cover only certain debts that are eliminated when you file for bankruptcy.
What is a Discharge?
A discharge enables the debtor to be free of debt and prevents the creditors from taking collecting actions against the debtor. In simpler terms, the debts are wiped out and the debtor no longer needs to pay those that are discharged.
However, while most debts can be discharged, not all kinds of debts are removed when you declare bankruptcy. 
What are the Debts that can be Discharged?
 In a bankruptcy, “Common Categories of Dischargeable Debts,” states that the debt must meet the qualifications and timing requirements. It works by filing for bankruptcy in the bankruptcy court before and after the case described as follows:

• Pre-filing debt – is a pre-petition debt obligation that you have before you file for bankruptcy. When the case ends, the court will wipe out or discharge the debts included and qualified in the pre-petition debt such as credit card balances, medical debt, and personal loans.
• Post-filing debt – are the debts and bills you need to present to the court that you incurred after submitting the pre-petition debt. In all kinds of bankruptcy cases. You are still obligated to pay for the balances the you incur even if the case isn’t over.

Among all the debts obtained, only those debts that you have before filing bankruptcy will be discharged. As for the subsequent debts, you still need to repay those. Take note that if you either fail to follow the bankruptcy process or your debt doesn’t qualify for a discharge, then these can be barriers for you to have your debts wiped out.
Common Categories of Dischargeable Debt
Under the Bankruptcy Code, there are 19 categories of debt that are not capable of being discharged. Everything else not included can be wiped out. However, you need to be mindful that misconduct or fraud in connection to the debts are grounds to make them non-dischargeable:

• Charges of credit cards (including overdue and late fees)
• Collection agency accounts
• Medical bills
• Personal loans
• Utility bills
• Dishonored checks (except if fraudulent)
• Student loans (in cases where it is proven that you endured undue hardship)
• Repossession deficiency balances
• Auto accident claims (except DUI related cases)
• Business debts
• Rent debts (including past rents that are due)
• Civil court judgments
• Tax penalties and unpaid taxes 
• Attorney fees (except those pertaining to child support and alimony cases)
• Revolving charge accounts 
• Social security overpayments
• Veterans assistance loans and overpayments 

Non-Dischargeable Debts in Bankruptcy Chapter 7
There are different types of Bankruptcy, some debts are nondischargeable in Chapter 7 but can be wiped out in Chapter 13. These types of debts in Chapter 7 are automatically deemed as nondischargeable without needing a hearing in court: 

• Unscheduled debts (all kinds of debts that are not in the bankruptcy petition), with the exception that the creditor had actual knowledge or notice about such filing
• Certain taxes
• Spousal or child support debts or alimony
• Debts owed to former spouse or child if they arose out of a divorce or separation
• Fines, penalties and debts to government agencies
• Student loans (if not exempted)
• Personal injury debts caused by the debtor driving a motor vehicle while under the influence of alcohol
• Certain tax-advantaged retirement plans debts
• Certain condominium debts or cooperative housing fees (such as homeowners association fees)
• Attorney fees in child custody and support cases
• Court fines and penalties, including criminal restitution

Debts not Dischargeable if the Creditor Objects
Not all debts are automatically wiped out. The creditors must ask the bankruptcy court first to know whether or not such debts can be discharged. If the creditors do not raise any objection or issue or if they do but the court doesn’t allow it, these debts are discharged.

• Credit card purchases for luxury goods
• Cash advances
• Debts obtained by fraud or false pretenses
• Debts incurred due to willful and malicious injury

Planning to file for a Chapter 7 Bankruptcy?
While declaring bankruptcy and bankruptcy filing may be done by any person without a bankruptcy lawyer, you will be responsible for fully understanding everything related to the law. We at Allmand Law are experienced in the field of bankruptcy cases. If you want to know how to file for bankruptcy but you are not sure of what bankruptcy form to avail or maybe you’re worried about potential liabilities, our bankruptcy attorneys can help you. We may be able to answer such questions for you including bankruptcy exemptions, debt settlement, insolvencies, mortgage payments, debt management and many more. Call us now for free legal advice.
The post Understanding Dischargeable Debts in Chapter 7 Bankruptcy appeared first on Allmand Law Firm, PLLC.

A Tidal Wave of Bankruptcies Is Coming
Experts foresee so many filings in the coming months that the courts could struggle to salvage the businesses that are worth saving.

Already, companies large and small are succumbing to the effects of the coronavirus. They include household names like Hertz and J. Crew and comparatively anonymous energy companies like Diamond Offshore Drilling and Whiting Petroleum.

And the wave of bankruptcies is going to get bigger.

Edward I. Altman, the creator of the Z score, a widely used method of predicting business failures, estimated that this year will easily set a record for so-called mega bankruptcies — filings by companies with $1 billion or more in debt. And he expects the number of merely large bankruptcies — at least $100 million — to challenge the record set the year after the 2008 economic crisis.

Even a meaningful rebound in economic activity over the coming months won’t stop it, said Mr. Altman, the Max L. Heine professor of finance, emeritus, at New York University’s Stern School of Business. “The really hurting companies are too far gone to be saved,” he said.

Many are teetering on the edge. Chesapeake Energy, once the second-largest natural gas company in the country, is wrestling with about $9 billion in debt. Tailored Brands — the parent of Men’s Wearhouse, Jos. A. Bank and K&G — recently disclosed that it, too, might have to file for bankruptcy protection. So did Weatherford International, an oil field services company that emerged from bankruptcy only in December.

More than 6,800 companies filed for Chapter 11 bankruptcy protection last year, and this year will almost certainly have more. The flood of petitions from the worst economic downturn since the Great Depression could swamp the system, making it harder to save the companies that can be rescued, bankruptcy experts said.

Most good-size companies that go into bankruptcy try to restructure themselves, working out payment agreements for their debts so they can stay open. But if a plan can’t be worked out — or isn’t successful — they can be liquidated instead. Equipment and property are sold off to pay debts, and the company disappears.

Without reform in the system, “we anticipate that a significant fraction of viable small businesses will be forced to liquidate, causing high and irreversible economic losses,” a group of academics said in a letter to Congress in May. “Workers will lose jobs even in otherwise viable businesses.”

Among their suggestions: increasing budgets to recall retired judges and hire more clerks, and giving companies more time to come up with workable plans to prevent them from being sold off for parts.

“Tight deadlines may lead to overly optimistic restructuring plans and subsequent refilings that will congest courts and delay future recoveries,” they wrote.

The pandemic — with its lockdowns, which have just started to ease — was enough on its own to put some businesses under. The gym chain 24 Hour Fitness, for example, declared bankruptcy this week, saying it would close 100 locations because of financial problems that its chief executive attributed entirely to the coronavirus.

But in many cases, the coronavirus crisis exposed deeper problems, like staggering debts run up by companies whose business models were already struggling to deal with changes in consumer behavior.

Hertz has been weighed down by debt created in a leveraged buyout more than a decade ago, and added to it with the acquisition of Dollar Thrifty in 2012. As it was battling direct competitors, the ascent of Uber and Lyft further upended the rental-car industry.

J. Crew and Neiman Marcus were carrying heavy debt loads from leveraged buyouts by private equity firms while struggling to deal with the changing preferences of shoppers who increasingly buy online.

Oil and gas companies like Diamond and Whiting borrowed heavily to expand when commodities prices were much higher. Those prices started to fall as production increased, and plunged further still when Russia and Saudi Arabia got into a price war shortly before the economic shutdowns began.

(And then there are cases that have nothing to do with the pandemic but nonetheless take up time and energy in the courts. Borden Dairy, a Dallas company with a history that goes back to 1857, declared bankruptcy in January, a victim of declining prices, rising costs and changing tastes.)

A run of defaults looks almost inevitable. At the end of the first quarter of this year, U.S. companies had amassed nearly $10.5 trillion in debt — by far the most since the Federal Reserve Bank of St. Louis began tracking the figure at the end of World War II.

“An explosion in corporate debt,” Mr. Altman said.

Having a lot more debt to deal with is likely to make the coming bankruptcies a bruising experience for unsecured creditors, who may include retirees with pensions or health benefits, vendors waiting to be paid, tort plaintiffs whose lawsuits are cut short and sometimes even current workers. If a company goes into bankruptcy with more secured debts than the value of its assets, the secured creditors — including vulture investors who bought up the debt for a song — can walk away with virtually everything.

The sums at play in some of these cases will be enormous. Mr. Altman expects at least 66 cases with more than $1 billion in debt this year, eclipsing 2009’s mark of 49. He also predicted 192 bankruptcies involving at least $100 million in debt, which would trail only 2009’s record of 242.

Robert J. Keach, a director of the American College of Bankruptcy, said many companies had so far managed to put off bankruptcy by amassing cash and conserving it as best they can: drawing down existing credit lines, furloughing workers, delaying projects and taking advantage of federal and state pandemic-relief programs.

But when those programs expire, the companies will start burning through their cash. That’s when bankruptcy filings are likely to soar and stay elevated, Mr. Keach said.

Expect “a Covid-19 cliff” in the next 30 to 60 days, he said.

Companies that received loans under the federal Paycheck Protection Program may be waiting to file, said Mr. Keach, who practices bankruptcy law with the firm of Bernstein Shur in Portland, Maine. The loans can be converted to grants if the companies meet certain requirements, and if the borrowers can put off bankruptcy until they’re sure they won’t have to pay the money back, they will have more cash when they file.

That’s an important consideration, because Chapter 11 is expensive. A bankrupt company must pay the fees of the lawyers and other professionals that help it reorganize, as well as the fees of those who advise the official creditors’ committees.

The experts’ recommendations to Congress walk a fine line. They suggest allowing companies more time to come up with reorganization plans, even though Chapter 11 cases are supposed to move quickly so bankrupt companies don’t burn through their cash before they reorganize.

Generally, the longer a company stays in bankruptcy, the greater the chances of a liquidation. And that increases the likelihood that the company’s troubles will spread: Suppliers of raw materials could fold if a manufacturer languishes in bankruptcy, and smaller stores in entirely differently lines of business can suffer if a shopping-mall anchor can’t stay open.

These risks are real, said Robert E. Gerber, who retired in 2016 as a bankruptcy judge in the Southern District of New York. One of his cases was the 2009 bankruptcy of General Motors, which moved at lightning speed to keep the automaker from going under for good.

“If G.M. had failed, God knows how many companies in the supply chain would have failed, and this would have snowballed terribly,” said Mr. Gerber, who is now of counsel with the Joseph Hage Aaronson firm. The cascade would have wiped out paychecks to workers throughout the supply chain, threatening other businesses and even the finances of the local governments that count on them for tax revenue.

That, Mr. Gerber said, makes it imperative that the bankruptcy system have the resources to deal with the coming rush of cases.

“Bankruptcy can’t print money for those companies,” he said, “but it can give a good number of them a chance of survival.”

Figuring out your financial situation is imperative in a bankruptcy petition. For starters, you need certain details to be able to correctly accomplish your bankruptcy forms. In case you’re hiring a bankruptcy lawyer, the information is also important for him or her to provide you with proper legal help with the right debt relief solution. Unfortunately, many potential filers go to bankruptcy lawyers without any idea what their financial situation is like.
Hiring a lawyer specializing in bankruptcy law is actually the most prudent first step to take if you want to declare bankruptcy. The bankruptcy code has different types of bankruptcy, so your lawyer will help you understand which bankruptcy chapter you should file bankruptcy under. If you’re filing personal bankruptcy, you’ll get legal advice on whether to opt for liquidation or reorganization. You can rest assured that you’ll be making informed decisions as well as avoiding any violation of bankruptcy laws.
Making Lists
Filing bankruptcy with the bankruptcy court requires that you have a clear picture of your finances, so before you file for bankruptcy protection, take the time to gather the relevant data. If you want to petition for bankruptcy to rid yourself of financial problems and get out of debt, there are a couple of lists you need to make before filing.

• All debts you’ve been unable to pay – secured and unsecured debts, as well as dischargeable and non-dischargeable debts.
• All your exempt and non-exempt assets with their respective current values.

1. List of Debts

Filing for bankruptcy definitely requires that you furnish a list of all your debts and creditors. You must include all debts, every secured debt such as a car loan or a mortgage, and every unsecured debt such as medical bills and credit card debt. Name every creditor as well and how much you owe each one. Also include debt collection agencies that have contacted you. This way, your bankruptcy attorney can formulate a strategy for dealing with all the debt collectors involved in your bankruptcy case.
In a bankruptcy filing, certain debts like child support and student loans cannot be discharged. It’s important to include them even if you cannot discharge them since they directly impact your disposable income. You also have to indicate to your lawyer if you have a lawsuit filed against you or if there’s a possibility that somebody might file one against you.

2. List of Assets

Disclosing all your assets is necessary to the bankruptcy process, so when declaring bankruptcy, you need to disclose everything, including ones that you can claim as bankruptcy exemptions. Unfortunately, some assets such as furniture, vehicles, and real estate are not that easy to assign value to. Here are some things bankruptcy attorneys advise their clients to do so they can give a good estimate of an asset’s value.

• Furniture and other personal items – Price them as you would for a yard sale. Go to Craigslist and eBay to see how much similar items are worth. Don’t let your sentimental attachment to them cause you to overprice.
• Vehicles – Go to Edmunds.com to check how sellers are pricing your car model. Make sure to consider your own car’s mileage and condition when you price it.
• Real estate – Price your property as you would for an absolute auction or go online to see how much similar properties in the area are selling for. You could also simply look at your current tax bill and base your price on the county’s property value administrator’s estimate.

Other Pertinent Bankruptcy Information
Besides the assets, debts, and creditors lists, you also need to figure out the following data:

• Your entire household’s monthly income.
• Your household’s monthly expenses (get the average of the last three months.)

Want Legal Advice for This Legal Process? Contact a Texas  Bankruptcy Attorney Today!
Bankruptcies can give bankrupt debtors the fresh start they need. For help with bankruptcy proceedings, call us at Allmand Law Firm, PLLC to schedule a free legal consultation with one of Texas’s experienced bankruptcy attorneys.
The post Bankruptcy Information You Need appeared first on Allmand Law Firm, PLLC.