The Act gives the U.S. Trustee Program new responsibilities in a number of areas, including:
Mandatory Credit Counseling and Personal Financial Management Education Courses
As a result of the BAPCA law changes in 2005, the two events required in individual bankruptcy cases are:
Specifically, you must receive an “individual or group briefing” from a nonprofit budget and credit-counseling agency. The law provides that the briefing must “outline the opportunities for available credit counseling and assist such individual in performing a related budget analysis.” If a debt management plan is developed in the course of the required counseling, it must be filed with the bankruptcy court. If the credit counselor recommends that you go through an independent repayment plan rather than filing bankruptcy, which will be a black mark on your papers if you still decide to go ahead and file. Your Chapter 7 filing may be dismissed or converted to a Chapter 13, with your agreement. In addition, both Chapter 7 and Chapter 13 filers will have to take a personal financial-management course in order to exit bankruptcy as well.
The Credit Counseling Briefing and the Debtor Education Course are two completely separate programs with separate certificates and you must successfully complete both if you are to receive a discharge in your bankruptcy filing. The Debtor Education Course takes place after you file bankruptcy and attend your hearing but before your discharge. The purpose of this course is to teach you how to better manage your finances after your bankruptcy. If you do not complete this course, your debts will not be discharged. Upon completion of the course, you will be given a certificate that must Robert Pflueger will file with the court. This course can also be completed in person, by phone, or online.
Keep in mind: the bankruptcy credit counseling courses required by law are not optional. Many bankruptcy cases have been thrown out because the individual filing did not complete or file the credit counseling certification and bankruptcy judges have hardly any room to waive or offer an extension to complete this step. There are some very limited exceptions to the credit-counseling requirement, but they are strictly prescribed by statute and Judges have little or no authority to waive the credit-counseling requirement. If there is some reason that you think you may not be able to complete the credit counseling requirement, speak with Robert Pflueger far in advance of your planned filing date to see whether or not you might fall under an exception and what documentation might be required. The counseling is not much more than preparing a budget and Robert Pflueger will help you although he cannot provide the required certificate. The average cost for the course in Florida depends on the service provider you choose. The course is offered at no cost to those who can show an inability to pay based on financial need but to be eligible, you must request a waiver from the counseling program before you take the course. Eligibility is determined based on your income and debt ratio. In some cases payment for this course can be made to the counseling service directly through your bankruptcy lawyer on your behalf.
Because they think it will irreparably destroy their credit, most people with debt and credit problems consider bankruptcy as their last resort. This might have been a fair assessment years ago but today, many individuals see bankruptcy as the first step in rebuilding their credit. Credit is an important part of our society as it is difficult to make any major purpose, such as a car or house, without sufficient credit. Realistically, by the time most debtors realize they are not going to be able to pay their bills, their credit is already ruined. Although a bankruptcy remains on your credit history for ten years, after discharge most debtors find they are able to obtain credit again.
The Fair Credit Reporting Act governs the reporting of credit in the United States. This act limits the reporting of most adverse credit to a period of seven years from the time the debt is sent to collection or charged off. For people behind on their credit cards and other payments, this usually means spending years to payoff credit card debts or bring the debts current followed by seven years of poor credit ratings. In this situation, credit problems will exist for a decade or more. For those who are no longer able to pay even the minimum payment on their accounts, companies file suit resulting in judgments. Judgments in Florida and many other states remain effective for a period of twenty years. Florida has a special recording statute requiring the judgment holder to re-record the judgment every seven years in order for it to remain a lien on real property but the ability of a creditor to execute on personal property extends to twenty years regardless of re-recording. Judgments give the judgment holder the ability to garnish wages, garnish bank accounts, or send authorities out to levy on personal property, automobiles, etc. Judgments also will impact your ability to obtain new financing, since the item you are financing may be at risk of seizure by the judgment creditor. While judgments do not always show up on credit reports, they will show up on a search of Public Records. A name search in the Public Records is a normal part of the process in obtaining a mortgage loan and lenders usually require that you obtain a Satisfaction of Judgment before they will give you any financing.
Filing for bankruptcy protection is considered adverse credit and will be picked up by the major credit reporting services. Unlike other adverse credit, a bankruptcy filing can be reported for ten years. This, initially, is very damaging to your credit however; lenders now see bankruptcy as a “fresh start” for the debtor. Federal lending guidelines permit lenders to consider a loan applicant once two years has passed after their bankruptcy discharge. If you qualify for a Chapter 7 filing, you can file a bankruptcy petition, obtain a discharge of your debts in approximately four months, and establish good credit two years later. After you file for bankruptcy, you will want to start working on improving your credit rating and Robert H Pflueger will advise you on how to do this. He will advise that you maintain some credit, such as a home loan, car loan, or credit cards, to re-establish good credit. Many individuals have better credit ratings two years after their discharge than they had before their bankruptcy.
The act of claiming bankruptcy is a substantial financial commitment and can be a very complicated process. Robert H Pflueger knows how the law regulates bankruptcy in Florida, including what property exemptions you can claim. He knows the ins-and-outs of filing for bankruptcy and he will help you decide which bankruptcy chapter best fits your financial situation. Robert H Pflueger will help you deal with your creditors; work with the court systems to come up with a repayment plan; deal with the extensive paperwork that is required when filing for bankruptcy; and he will help you gather and liquidate your assets so that you are debt free. At Orlando Bankruptcy, we realize that there are few things in life that cause more personal stress than money problems and we want to help by giving you back your peace of mind. Robert H Pflueger will guide your every step of the way and once your bankruptcy has been finalized, you and your family will be able to start rebuilding your financial and personal life once again.
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