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Source: moneyning.com
Video: The Unintended Consequences of Bankruptcy and Student Loans
What are the consequences of filing for bankruptcy?
With bankruptcy filings becoming more common over the last few years due to the state of the economy, many people are wondering if it’s the right financial move for them and their families. The process carries less of a stigma now than it once did, however, there are consequences to filing for bankruptcy if it is the right choice for you. Meeting with a qualified bankruptcy attorney can help you to decide whether this process is right for your individual situation.
Source: losangelescountybankruptcyattorneys.com
Business Consequences in Bankruptcy
By filing bankruptcy, Bob must be aware that not only are his personal assets subject to the bankruptcy, but so too are the assets used in the window cleaning business itself. If personal assets or assets of the business are not protected under a specific exemption, Bob runs the risk of losing those items by filing bankruptcy. Because Bob operated his business as a sole proprietorship, he is not now able to separate the bankruptcy filing from his business. All of Bob’s personal assets and the assets of the business are made part of the bankruptcy. If Bob has minimally valued assets that are used in the operation of the business, he may be able to claim a specific exemption that covers those items as tools of his trade (contingent upon their current use and dollar values). This exemption is in addition to any other available exemption that Bob may be able to claim on his own personal assets.
Source: bankruptcylawyeraz.com
Implications on the Bankruptcy Filing and its Consequences
Bankruptcy is intended to take you out of financial troubles but on the other hand, you may have to face the consequences, as it is not an easy concept. Let me discuss the consequences major to your life that can affect your living standards. 1) Credit score is effected in such a way that the other creditors you may want to get more loans from may not be able to give you loans. They will see that you were already not able to pay for the loans in the previous years and you filed bankruptcy. They may not be willing to risk their finances over you as loans. 2) Credit history is affected for a straight 10 year period. You may be under its influence for so long that you may never be able to take any kind of financial help and this 10 year effect may lose you your family relatives and friends because this happens with some people. 3) You may not be able to apply for good jobs. This is because all the employers want to hire those candidates who have a clean slate on the credit history. Those who have bankruptcy or debt issues in their credit score may not be able to score for good jobs. 4) Your reputation may be at stake. This is because when you have bankruptcy in your history, your repute may travel before you. 5) Your house, assets that are valuable like car, land and property may be taken up to pay your debts. Your bank accounts may be confiscated as well. This may be a higher rate of a consequence to you. 6) If you had capital gains on your property, the bankruptcy may have an effect on the tax calculation when the bankruptcy affected capital gains.
Source: squidoo.com
Consequences of defaulting on student loans
More students than ever are depending on federal student loans to help finance their education. Over 65 percent of graduates in 2010 borrowed an average of $25,250 from the government. Statistics show that even individuals over the age of 65 carry an average of $32,000 in student loan debt. The total amount of student loan debt nationwide: over $1 trillion. That’s more than the total amount of credit card debt.
Source: pennsylvaniabankruptcyprosblog.com
U.S. bankruptcy law overhaul needs to be overhauled
For example, a couple making $90,000 a year with a $2,500 house payment and two car payments under the new law would be allowed an extra deduction from their monthly income of $2,276 for the car and house payments. A couple with the same income, a $1,200 house payment and no car payments could be required to pay up to $136,560 more to their unsecured creditors than the couple with the more expensive house and nicer cars. Not exactly fair or just.
Source: standard.net
Tax Consequence of Forgiven Debt
Even if you get a 1099C form from a creditor you may not have to report the forgiven debt as income, there are some exceptions. If you lost your primary residence to foreclosure and the mortgage was to buy, build or restore the home and the “forgiveness” of the debt took place between 2007 and 2012. There is a mortgage exception that will help you. There are limits on the exception to balances of less than 2 million dollars. Be sure to see a qualified Certified Public Accountant (CPA) in the preparation of your taxes when faces with forgiven debt.
Source: btruelaw.com
2Pac hologram makers file for bankruptcy
The company’s new CEO, Ed Ulbrich, is pushing for a quick sale, pointing out that any delay could jeopardize work that Digital Domain has in the pipeline, reports The Wall Street Journal. But the 12- to 14-day time frame Ulbrich is shooting for would limit the ability of other potential buyers to put together bids for the mandatory one-day auction required under Chapter 11. Judge Brendan Shannon had originally insisted any sale be put on hold until around October 2nd at the earliest, but gave in after hearing testimony from a Marvel Entertainment executive who said his studio would withdraw its business if Digital Domain’s future was still undecided next week, reports The Chicago Tribune. The one-day auction is tentatively scheduled for September 21st.
Source: theverge.com
Calls From Bankruptcy Lawyers In Salt Lake City
You need to attend many meetings during the processing of your bankruptcy case. An example would be the 341 meeting in which you’re given the opportunity to air things out with your creditors. Normally, bankruptcy lawyers in Utah phone their clients to remind them beforehand of these meetings. If you don’t answer your phone, and therefore fail to attend the meeting, well, let’s just say it won’t help your case.
Source: craigswapp.com
The Bankruptcy Effect: What happens after I file bankruptcy?
Secondly, a bankruptcy will severely damage your credit. If you file bankruptcy, you will probably not be able to competitively qualify for loans for a year or more. You may also be unable to apply for a credit card or other lines of credit. You may not be able to buy a home or refinance your home for a year or more. It’s likely that you would be able to purchase a new car, but the interest rate will probably be higher than it would be if you had not filed bankruptcy.
Source: oal-law.com
Consequences of Chrysler or General Motors Bankruptcy
Should one or both fail, then the tsunami would sweep over parts suppliers and could affect their ability to accommodate other car makers in Europe and Asia. This is especially true if General Motors collapsed; remember, it has two European brands alone, not to mention numerous rebadged vehicles in every major market from Asia to South America to Eastern Europe. Detroit, at the very least, would be in sadder shape than it is now, with thousands unemployed and no money from tax payers.
Source: automotive.com
Personal Finance: 3 Often
I think there should be a new process with these credit agencies on how an employer views a credit file. There should be a specific site that employers should log into that will only enable them to view if you have any criminal employment violations that could potentially be related to the type of position applied for. Any and all other negative credits issues should be blocked from viewing. We all know at this point in time that everyone is experiencing financial hardship with bankruptcy being the number 1 activety along with foreclosures and then credit cards payments being missed or stopped. Consumers are barely making ends meet. They only can handle the basic living expenses like the mtg (if they still have one),utilities (if they have already started paying those late too)and putting food on the table. So, why do employers still look at the credit rating it not fair to the low income families.
Source: bryanellis.com