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Filing for bankruptcy is a difficult decision. Bankruptcy can come as a relief, but you may also feel a sense of failure. It isn’t the end of the world. In fact, it’s a new beginning. Many famous people have gone bankrupt at some point in their lives. For people of all walks of life, bankruptcy can be the new start they need to build their greatest success. Here are two people who went bankrupt before they made the amazing achievements we remember them for:
1. P.T. Barnum
Phineas Taylor Barnum, perhaps the greatest showman of all time, tried several other types of business in his lifetime. He tried and failed at running a general store, selling books, publishing a weekly newspaper, and selling lottery tickets on credit, but all of those ventures failed. He then moved to New York to start over again in a new business—show business.
Barnum did very well selling tickets to see odd and amazing people, but he used his profits, along with way too much borrowed cash, to invest in real estate. When the real estate ventures failed to turn a profit, Barnum was unable to pay his debts. He declared bankruptcy in 1855. He went on to found his famous American Museum in New York City five years later. In 1871, at the age of 60, Barnum founded his greatest show, Barnum’s Grand Traveling Museum, Menagerie, Caravan, and Circus, which took in $400,000 in its first year, and combined with other circuses to become the Ringling Brothers and Barnum & Bailey Circus—still a successful business today.
2. Walt Disney
The first animation company Walt Disney founded was Laugh-O-Gram Studios in Kansas City. They created short fairy tale cartoons to be shown in nearby movie theaters. The cartoons were quite popular, so Disney found a financial backer to help him expand the business.
When the backing firm went out of business, Disney’s business went down with it. After trying to save his company, Disney was eventually forced to declare bankruptcy. He moved to Hollywood for a fresh start. Eight years later, he created Mickey Mouse. The new production company Disney founded became one of the most successful studios of all time. Disney went on to revolutionize the theme park industry with Disneyland and Disneyworld.
If your financial situation is overwhelming right now, consult with one of our expert bankruptcy lawyers to find out what your options are. Bankruptcy can be the tool that makes it possible for you to start again. Your greatest success may be ahead of you, too.
The original post is titled Two People Who Built Their Greatest Successes After Bankruptcy , and it came from Oregon Bankruptcy Lawyer | Portland, Salem, and Vancouver, Wa .
To start a chapter 7 bankruptcy case, a person needs to file a petition with the United States Bankruptcy Court. Usually the case is filed with the Bankruptcy Court in the district where the person lives. If a person lives in Palm Beach County, Florida it is usually filed with the Bankruptcy Court in Downtown West Palm Beac Miami and if a person lives in Broward County, Florida, the case is usually filed with the Bankruptcy Court in Ft. Lauderdale. The Bankruptcy Court for the Southern District of Florida includes Miami-Dade, Broward, Palm Beach, and other nearby counties.
Besides the bankruptcy petition, the debtor must also file various schedules and statements. Schedule A is a list of a person's real estate, schedule B is a list of the personal property, schedule C lists one's exempt property, schedule D lists the secured debt, schedule E lists priority debt, schedule F lists unsecured debt, schedule G sets forth executory contracts and leases, schedule H lists co-debtors, and schedule I and J set forth income and expenses. A statement of financial affairs setting forth various information is also required.
In order to file for chapter 7, a person usually needs to file a certificate of credit counseling and evidence of payment from employers for the 60 days prior to filing.Jordan E. Bublick, Miami and Palm Beach, Florida, Attorney at Law, Practice Limited to Bankruptcy Law, Member of the Florida Bar since 1983
How Soon Can I Buy? You can typically buy a house two years after the filing of a Chapter 7 bankruptcy. Lenders want to see that you have rehabilitated yourself after a bankruptcy filing. They want to see that you have not incurred any negative credit since the time of filing. They want to see+ Read MoreThe post When can I buy a house after filing for bankruptcy? appeared first on David M. Siegel.
Before bankruptcy, I tell my clients to stop the automatic withdrawals to those internet payday loans. They always find it’s so hard to get their banks to help. Today’s New York Times says the same thing. The Times says that’s because the banks love those overdraft fees.
Banks will verify your signature on a check to match your signature card. But electronic transfers just sail through.
Probably the most important job of a bank is to make sure nobody takes money out of your account, unless you okay it. They try to do that on paper checks, by comparing your signature on the check with your signature card.
But when someone posts an ACH transaction on your account, as far as I can tell, nobody looks at anything. That’s one reason these internet payday loans are so dangerous.
(Legal payday loans in Virginia are not allowed to set up automatic withdrawals. But most internet payday loan companies know they are illegal and don’t care.)
The Electronic Funds Transfer Act give you important rights to protect your bank account, if you know to use them.
You have the right to STOP a pre-authorized electronic transfer up to three days before the transfer is scheduled by notifying your bank. You can notify them orally or in writing–obviously writing is smarter. Keep a copy.
(You should notify the payday loan people too. That’s not likely to stop them; but it improves your legal position against your bank.)
You then have to notify the bank within 60 days if they allow the money to come out anyway.
The bank then has ten days to investigate and one more day to put the money back. (Even if the bank can’t get the money back from the payday loan, they still have to reimburse you!) If they don’t, you can sue them. You can sue for the money you lost, which would include overdraft fees. (A quarter of people who take out payday loans get hit with overdraft fees when the payments come out.) Plus a penalty of $100 to $1000. Plus the bank has to pay your lawyer. (Three times the money you lost if the court says the failure was willful.)
I’ve threatened it. But I’ve never had to sue under the Electronic Funds Transfer Act. The New York Times article has me eager for an opportunity.
For consumers, I hope this helps your attitude when you tell the bank to stop a payday loan automatic withdrawal. You are not begging for a favor–even if that’s the way they treat you. You are asking them to do their main job–keeping your money safe! And you have rights under Federal Law to sue them if they don’t do it!
Owning a home can be a burden, especially for those who wish to surrender a property the bank does not want. Frequently the homeowner has vacated the premises and the property sits unoccupied for months or even years. These “Zombie” homes impose significant burdens for debtors, even after a bankruptcy is completed and the underlying mortgage debt is discharged. Regardless of whether the mortgage debt is discharged, the debtor owning a vacant home faces the following problems:
- Insuring the Property: As long as the home is in your name, you may be held liable for those who become injured on the property. If there is a dangerous condition on the property or if snow covered sidewalks are not shoveled, you may be held responsible for the injuries suffered by others, and for this reason I advise my clients to maintain insurance coverage even if they move out of the home. In addition, the insurance company must know the home is vacant since their policy may be conditional on the owner occupying the home.
- Maintaining the Property: Most local housing codes require the homeowner to cut the grass, shovel the sidewalks, and maintain the property. Civil and criminal citations may be issued for failure to keep the property maintained.
- Homeowner Association Dues: Although filing bankruptcy may discharge the homeowner association dues that exist when the case is filed, future homeowner dues are not affected by the bankruptcy filing and debtors commonly get hit with paying these ongoing fees.
- Vandalism: A frequent complaint of the owners of abandoned homes is that thieves steal the copper piping, plumbing and electrical fixtures, and HVAC components.
Why do mortgage lenders delay the foreclosure? There are several reasons for the delay.
- Too Many Loans. Banks can process only so many foreclosures at one time. If they foreclosed all their bad loans at once they would inherit the burden of insuring the homes, shoveling the sidewalks, cutting the grass, etc.
- Title Defects. It has been well documented that many banks struggle to produce all the required loan assignment documents necessary to begin the foreclosure process, and many banks have been found guilty of manufacturing phony loan documents just prior to initiating the foreclosure. In short, the bank may not foreclosure because it does not have the required loan documents.
- Damaged Properties. Banks do not want to take ownership of damaged properties. If the home is viewed to be a liability, especially if it is located in a blighted neighborhood and substantial repairs are necessary to bring the property up to minimal building code standards, the bank may opt not to foreclose.
What should a homeowner do with a Zombie home?
- Live in the home rent free. I frequently advise debtors not to vacate the home until the bank has scheduled the foreclosure sale. In Nebraska the bank must advertise the sale in a newspaper for five consecutive weeks, and that should allow enough time to move to another home. I also advise that a person save the money they would have paid to the mortgage company in a separate account so they have enough funds on hand to hire a moving company and pay the rent deposit on the next home.
- Rent the Home. If you must move to another location, consider hiring a real estate management company to rent the home. Renting a home is a burden, and it is advisable to find a company that can collect the rent, evict nonpaying tenants, cut the grass, etc. As long as you can rent the home and pocket the cash, who cares if the bank ever forecloses?
- Sell the Home: The basic problem facing homeowners is that they cannot sell the home for what they owe the bank. However, individuals in bankruptcy have a special power to sell a home free and clear of the mortgage liens. The sales proceeds are then deposited with the court. So, if the bank will not take the home back with a Deed in Lieu of Foreclosure and if you cannot negotiate a Short Sale of the home, consider filing a request with the bankruptcy court to force the bank to accept the sale.
- Quitclaim the Home to the Bank: This option is somewhat questionable since many experts in real estate law say that forcing a deed on the bank is an “incomplete transfer.”
- Donate the Home: You may not want to live in a home that will be sold at some uncertain time in the future, but other people may not have a problem with this reality. Maybe you can find a homeless shelter or a friend who would love to own your home even if for a short period of time.
Since many bankruptcy filers end up filing soon after getting their tax refund back, they are often curious as to whether any of their creditors can seize the refund before it gets to them. For many, the only way to afford the fees to file bankruptcy is by using that tax refund money. Only state and federal agencies can intercept a tax refund. So normally, only the IRS or possibly ORS will have the right to take that money. However, if a creditor has a judgment against you, they could seize that money as soon as it enters your bank account since creditors with judgments have the right to do a garnishment on your bank account. It may be a good idea not to have it directly deposited if this is the case.Adam Brown is a bankruptcy attorney for Dexter & Dexter, a debt relief agency helping people file for bankruptcy.
Payment Plans Are Available You most certainly can get on a payment plan to file a bankruptcy. In fact, most people do not have the ability to pay the lump sum which is the court costs and the attorneys’ fees, all at one sitting. What I like to do is offer a client a reasonable+ Read MoreThe post Can I make payments to file a bankruptcy? appeared first on David M. Siegel.
All Creditors Must Be Listed If you are filing bankruptcy, then all of your creditors must be listed. This includes credit cards, personal loans, auto payments, mortgage payments and any other debt, including debts owed to family members. I understand that many people have lived off credit cards, they love the convenience of credit cards+ Read MoreThe post Can I keep one of my credit cards and not put it on my bankruptcy? appeared first on David M. Siegel.
Bankruptcy is a tool for helping people recover from overwhelming debt. It is a complicated tool, though. To help you understand your options better, let’s clear up some of most confusing myths about bankruptcy. We’ve already debunked three common bankruptcy myths:
- People who file for bankruptcy are reckless spenders
- All debts will be discharged when you file for bankruptcy
- Filing for bankruptcy will damage your credit permanently
Here are a few more related bankruptcy myths:
1. Bankruptcy will fix your credit, so you can start with a clean slate.
As we said in our previous post, bankruptcy will not destroy your credit forever. However, your credit will be affected. The Fair Credit Reporting Act allows the reporting of a bankruptcy filing for 10 years.
While it will be possible for you to get credit during those 10 years, lenders and landlords will know about the bankruptcy and consider it when deciding whether to offer you credit, how much to offer, and how much interest to charge. Still, declaring bankruptcy may be better for your credit, overall, than staying in a situation with overwhelming debt.
To find out if it is the best solution for you, you’ll need to discuss the specifics of your situation with a lawyer who specializes in bankruptcies.
2. Going bankrupt means losing everything you own.
Many people believe the term “bankruptcy” means losing everything. Not so. When you file for bankruptcy, the law lets you keep the basic assets it deems necessary for your day-to-day life, and to make a new start. Retirment funds, such as 401Ks, IRAs, and pension plans are usually protected, too. You may even be able to keep a house or car that you owe money on.
How will you know how much you’ll be able to keep? The court will review your assets and your needs, and make a determination based on your unique situation. Again, you should discuss the details with your lawyer. A good bankruptcy lawyer will help you to figure out what you’ll be able to keep if you file, and what, if anything, you’ll have to give up.
3. Bankruptcy encourages people to spend like crazy, knowing they won’t have to pay their bills.
To clear up this misconception, Bankrate.com’s post on bankruptcy myths put it best: “That’s called fraud and bankruptcy judges can get really cranky about it.” This myth is related to the inaccurate belief that people who file for bankruptcy are reckless, immoral, or incompetent.
Bankruptcy does not protect frauds, embezzlers, or other criminals who take out loans they never intend to repay. Bankruptcy protection is for regular people who take business or investment risks, who have major medical expenses, who are out of work for a while, or who fall on other hard times, and need help to make a fresh start. It may be for you.
If your financial situation is overwhelming right now, consult with one of our expert bankruptcy lawyers to find out what your options are. Bankruptcy can be the tool that makes it possible for you to start again. Your greatest success may be ahead of you, too.
The original post is titled 3 More Common Myths About Bankruptcy , and it came from Oregon Bankruptcy Lawyer | Portland, Salem, and Vancouver, Wa .
The amount that creditors receive in a Chapter 13 depends upon a number of factors. The first factor is what type of creditor are they? Are they a secured creditor, secured by either real estate or a vehicle or some other item? Or are they an unsecured creditor such as a credit card, a medical bill, a personal loan or a debt for some type of service? Depending on what type of creditor will dictate to what amount they are paid back. General unsecured creditors can be paid as little as 10% on the dollar or they can be paid back 100%, depending upon the particular case. Secured creditors are paid back either the entire amount owed or in some cases the market value of their item plus an insurance risk percentage factor.
The main determination on whether or not a creditor is paid back 100% or 10% is the actual income and expenses of the debtor. The trustee will examine the income of the debtor based upon the information provided by the debtor such as paycheck stubs, tax returns and any other proof of income. The trustee will then examine the expenses of the debtor based upon reasonable customary expenses in addition to any exceptional expenses that the debtor may have. The difference between the income and the expenses per month is what is required under the Bankruptcy Code to be paid to the Chapter 13 trustee each month. It is from that amount that the trustee can then make disbursements. In some cases, creditors will get paid back in full. In most cases, creditors will get paid back less than in full, somewhere between 10% to 50% on the dollar.
Updated daily, this blog will keep you informed on the latest bankruptcy news! 
Learn more about how Bankruptcy works and what you need to know.