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Petitioning a court for a judicial declaration of bankruptcy is always an option for people who simply cannot fulfill their debts because of some financial woes.

There are 2 kinds of bankruptcy: voluntary bankruptcy where the debtor himself initiates the proceedings; and involuntary bankruptcy where the creditors are the ones who initiate the proceedings to protect their interests and enforce their rights.

There are 2 kinds of voluntary bankruptcy: one which is filed under Chapter 7 of the Bankruptcy Code, and another which is filed under Chapter 13 of the same law.

Chapter 7 bankruptcy, once granted, will ask the debtor to surrender his properties – at least those which are not exempted by law – to a trustee who will thereafter liquidate the same and send the proceeds to the unsecured debtors in proportion to how much they have lent the debtor. Regardless of whether or not the liquidated properties will be enough to satisfy these debts, they will be discharged upon distribution of the proceeds. The debtor can start his financial life all over again.

Chapter 13 bankruptcy, on the other hand, works the same way, with one major difference. The debtor will be asked to satisfy a portion of his unsecured loans before he will be discharged of the same. This portion depends on the court’s judgment, taking into consideration the debtor’s financial abilities in the foreseeable future, no matter how woeful it may seem at the time of the grant of the petition.

Immediately, one would think that Chapter 7 bankruptcy is a better option.

Well, it is.

Unfortunately, it’s not up top the debtor to decide under which chapter of the statute should he file his petition for judicial declaration of bankruptcy.

The law is quite explicit when it comes to this matter. First, the petitioner’s income will be taken into consideration. If his income is below the median, then he will be allowed to file for bankruptcy under Chapter 7. But if his income is slightly above the median, he will be asked to undergo a “means test.”

This “means test” will gauge his ability to pay his debts, as well as how much of such debts he will be able to pay. This will be the basis of the terms and conditions under Chapter 13 of the Bankruptcy Law.

The above is a relatively new law passed by Congress in 2005.

A debtor is advised to seek the services of a bankruptcy lawyer so that his interests will be protected in the best way possible. An attorney will defend the petitioner against any and all attacks against his petition so that, at the end of the day, he may be declared bankrupt and his financial misery will be alleviated.

By: Joseph Then

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In bankruptcy Chapter 13 mortgage foreclosure is either stopped or at least temporarily avoided.
Here’s how.

First, just in case you are not familiar with a Chapter 13 bankruptcy, it is a bankruptcy court approved payment plan where the debtor (the person filing bankruptcy) pays a bankruptcy trustee each month and then the trustee pays the debtor’s creditors.

There are several aspects of a Chapter 13 bankruptcy that work to help people facing mortgage foreclosure. The first aspect is actually applicable to all bankruptcies. It is called the “automatic
stay”.

By law, whenever anyone files bankruptcy, regardless of the type of bankruptcy, there is an immediate “automatic stay” (automatic temporary stopping) of most civil proceedings against the person filing bankruptcy. What this means is that if someone is facing mortgage foreclosure and the person files bankruptcy, the mortgage lender has to immediately stop its’ foreclosure action until it gets permission for the bankruptcy court to proceed.

In a Chapter 13, the bankruptcy court will not lift the “automatic stay” and grant the mortgage lender permission to proceed with a foreclosure until the debtor (the person filing bankruptcy) fails to make his payments to the bankruptcy trustee. As long as the debtor pays the monthly payments to the trustee and pays his regular mortgage payments, the “automatic stay” will remain in force and the mortgage lender can not do anything.

The second aspect of a Chapter 13 that works in favor of people facing foreclosure is that it allows a debtor to pay mortgage arrearage over time, normally 3 to 5 years. In most foreclosure cases, a person has not paid his monthly mortgage payment for several months and the mortgage lender demands full payment of the delinquent monthly payments (arrearage) in lump sum before the lender will consider stopping foreclosure. Most people cannot pay the lump sum.

In a Chapter 13 bankruptcy, a debtor can pay the arrearage over time. He does not have to pay it all at one time. Spreading the lump sum over time means paying smaller monthly payments until the total arrearage is paid. A creditor can object to the amount to be paid each month towards the arrearage, but once the bankruptcy court approves the payment plan, the creditor can not do anything except take the payments.

A third aspect of a Chapter 13 bankruptcy that helps people facing mortgage foreclosure is that unsecured creditors may be paid a portion or all of what is owed to them. What this is really doing is reducing the amount of debt that a person has to pay back each month. By paying unsecured creditors less each month, there is more money available with which to pay a secured creditor such as a mortgage lender. Therefore, it should be easier for a debtor to pay his monthly mortgage payment.

This is general information. If you need specific information or have any questions of any nature whatsoever, talk with a lawyer licensed in your state.

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By: Steve Bingman

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An advanced care directive, commonly known as a living will is something everyone should have. It is a legal document that states specific directives regarding medical treatments that must be followed by caregivers or the person appointed power of attorney for healthcare decisions if you are unable to give informed consent. A living will ensures that your wishes are carried out.

What Does a Living Will Cover?

There are some people that think this type of will is used only to direct health care providers to withhold necessary medical treatment. While many do use one for this type of instruction, it is also a way for a person to ask for all available medical techniques and treatments should they want them. These wills are complicated because they deal with medical issues so it is always a good idea to consult with your doctor so he can clarify any treatments or techniques you are unsure of.

One thing to keep in mind is the will’s legality does not take effect until the patient has been medically determined to be terminally ill or is in a permanent vegetative state, unable to communicate medical wishes.

The Difference between a Living Will and Durable Power of Attorney

Some functions of a living will can be performed by a durable power of attorney. The document gives the attorney legal power to make any healthcare decision for a person who is unable to make those decisions for themselves, in some cases it also allows the durable power of attorney to use his/her own judgment. Unlike a living will, a durable power of attorney does not depend on a vegetative state or terminal illness in order to be used. A good example of someone who would be incapable of making their own sound medical decisions is someone with Alzheimer’s.

If you choose not to have a will or appoint a durable power of attorney your family members may end up fighting and arguing over what treatment you should or should not be receiving. Even though a doctor will consult with your family they still may be split in the decision making. Since doctors only consult with family members, if you are unmarried the will and durable power of attorney will enable them to have a say in your health care decisions.

An Attorney-In-Fact

An Attorney-in-Fact is the person you assign power of attorney. Whomever you chose as the proxy for healthcare decisions or attorney-in-fact needs to be someone you trust and is comfortable talking about medical issues. An assertive and diplomatic individual is the preferred choice because you are choosing someone to be your advocacy. They may need to argue with the doctors and even your family members, and in some cases, go to court and fight on your behalf. You need someone who is aware of the choices your have made and will support any and all instructions you have laid out.

More people are choosing to have a living will as it takes the pressure off family members when it comes to making important medical decisions. Medical decisions should never be made with your emotions, but unfortunately it happens too often. This is why a living will is a very important document to have.

By: Maria Sandella

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