a survival guide to pre bankruptcy-by mitchell allen[1]

8/6/2019 A Survival Guide to Pre Bankruptcy-By Mitchell Allen[1]

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What YouShould KnoW be ore

You i l e for banKrup tcy

A Su rv i vA l

Guideto

Pre-BAnkruPtcy

Ma a a ap f m M A sA Sur v ival Gui e to debt


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s e


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c o n t e n t S

Introduction 1

First Steps to Fixing the Problem 4

d g s 5

S g r ss ss 6

d g w c c s M 7

Consumer Protection 10T c r g a 10

T d c p s a 12

T c b g a 12

Taking Stock 14

M c s w S m 14

t s d 17Your Situation, Your Strategy 22

h d y ow 22

c c s g 28

d S m 30

p s b k 32

Bankruptcy Myths and Facts 33

M : b k is i s s p l s s 33

M : b k is p W a b k 34

M : b k r s s l s g ev g 35

M : i W n v r v m b k 35

M : g b k W c s M l s M J 36

: b k M k s c c s S 37

: b k h s s 38

: b k a ws y K c ass s 39


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iv Debt Education and Certifcation Foundation

: b k c G v y s S 39

: b k is n imm c S 39

: b k c r v y c o g s 40

Chapter 7 Personal Bankruptcy: Liquidation 42

1. a s s y a s 43

2. t k g w a 43

3. c m a v c -c s g c s 45

4. g c s w c 455. T 341 M g (c s M g) 46

6. p - s g d e c s 47

7. d s g 47

Chapter 13 Bankruptcy: Reorganization and Repayment 48

1. a s s y a s 49

2. t k g w a 50

3. c m c c s g 51

4. g c s w c 51

5. T 341 M g 51

6. a v c 52

7. r m p 528. p -d s g d e c s 52

9. d s g 53

i y a u M k p m s 53

Dealing with the Root Causes 55

r s s e 55

W n w? 58


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7/64

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ms. T s w s v w w sk g v w g s s m ms:

* a v s s ss q v s s v s.

M re than70 ercent Americans live r m

aycheck t aycheck.


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2 Debt Education and Certifcation Foundation

Unexpected expenses77 percent

Unemployment or business loss70 percent

Unnecessary spending50 percent

Illness or injury38 percent

Divorce, separation, or death of a loved one29 percent

Addictions (including gambling) and other reasons7 percent

y m s g s m 100

M m s g M s sss m m s s j ss ms w s s

s m ms s s v . n m w z , m ms

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Unexpected expenses or straight up bad luck a ict a surprising number

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v s v s. Serious medical problems, even when covered by insurance, can drain

s v gs m g s. a v j , m v s s s


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s . a s m m , mg , s s s x

g m . Divorce or death of a wage-earning spouse often reduces available house-

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Addictions (including gambling) can quickly erode years of savings andv m q k s m m .

S m m s, s k m: v g s , s s g w v w m x s s. b m m

w : m .n m w gs g w, s ! W g s m g m , w w s

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v m g v , s v v .a s g g.

Y uare n t y ur debt!


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F i r S t S t e P S to F i x i nGt h e ProBleM

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Y u havet realize

that youare

res nsibler taking acti n t im r ve y ur

situati n.


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m m w g m t c mm ss M g g

S g y r g? h s W d , v www.

.g v (j s m g g -

g s x).M s z

g k m s s s .

C mmunicati nis y ur m st use ul

t l as y u w rk y ur way ut debt.N w is the time t begin using it.


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Caution: Avoid Foreclosure Scamsd w v ss s s s g m s ms m

s . T s s m s m m s m , v g m - k g . T

m s, m z g g wm s , m , s m m s, w s q

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s d s ss.

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m , m k w . i v m s, g v ms m , s

k s . i g s

m v s m g s s ms g k s g v

m , follow through.

Re ssessi n isa c stly r cessthat the lender w uld muchrather av id i it thinks thereis a reas nable alternative.


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a S v v G p -b k 7

ag , g k m s s ss.

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(www. .g v). T x m s m , s m s s m g k s:

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j z g m m m . p s m m m s [g v w k g s] g .

b s m. i s , m m g v g s g m m w tc.

t m s w s 8:00 .m. 9:00 .m. s m ss v w s . i w k g s m

s m v . h w v , s x s


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s g s ; s w v mm w m ws , w v s s

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3. m v k s m (ww.g v/ s/s s/ / mm . m#805; ss 4/5/2010).

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ss . b s g s , m w s s s q s.

i m s w v v km s v g g, s g g m w s v s w

g , v k w w w g .


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a S v v G p -b k 9

o m s m s v s s mm w s s w m

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s , m g, s mm s, w m . c g s s m j m s s w s. b g s

w mm s, mm s s s w mm v w w

g v m k g g g s.

GettinG ColleCtors to Work With You

a s j s v s m ; v , w s

v , gs s w m w s w k

m . c m g s

honest acknowledgment of your responsibility for the debt,

being forthcoming with information about your nancialms s ,

maintaining a respectful tone, and

following through on anything you agree to do, including subsequentmm s.

T s g m k g s s g w- k g m , s m m s

mm w v w s i s s m m s k ws .


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conSu M er P ro t ec t ion

l s k k s m ws s g s m , m j s m s s : c

g a , d c p s a , c b

th e FA i r cre dit r ePort i nG Act

y g s s m s v g s k w s . T s m s s s

m s m k s, s m m m . T w m m s u S s: t

ex , eq x. T s m s m g s s m

T v s m s s ss g w w m s g s

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is c , m v s g s s m g w m 300 ( w s )

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Data arerwarded by

y ur credit rst the threemain credit

bureaus in the United States: TransUni n, E erian, and

Equi a .


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a S v v G p -b k 11

c g ss ss c r g a ( cra) 1970 s s m g g s x s g v s s

ss, m , s s m s g vg v). T cra g s w g g s:

e right to know what is on your credit report

e right to be informed if someone uses information in your credit s s s v s s s s

e right to receive your credit score

e right to dispute incomplete or inaccurate information and have itm v m

e right to have your credit information revealed only to parties with v s

e right to control access to your credit information

e right to seek damages for violation of your rights under the FCRA

K w g v g s m s g

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v s -s s, s, -

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s, ss v ms v s.

A certainercentage

all creditre rtsc ntains me inaccurate r

inc m lete in rmati n.


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t h e FA i r deBt coll ection PrActiceS Act

c g ss ss d c p s a ( dcpa) 197g s m s v

s m g m g s s m s w m g dcpa s s s m s w s -

s m s v s m :

Creditors and collectors must treat you fairly and respectfully.

You may limit the times and ways in which you may be contacted s.

You must be informed about the debt and the fact that it isg m w .

Creditors and collectors may not use harassing, abusive, or threateningm s s s s s.

You may seek damages against any creditor or collector who violates g s s g v s s dcpa.

t k s v s s v w . T s , s g

s gs dcpa w s s g m.

th e FA i r credit Bil l i nG Act

M s m s k s s k m m . y s g

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T c b g a ( cba) s m m t lg a v s s g s s s m s w

g g m g m , s s m s g . h

g s v , g tc w s :


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a S v v G p -b k 13

Unauthorized charges (your liability is limited to $50)

Charges listing the wrong date or amount

Charges for goods or services you didnt accept or that werentv s g

Mathematical billing errors

Failure to post payments and other credits, such as returns

Failure to send bills to your current address (the creditor must receive g ss w g s w s

g s)

Charges for which you request an explanation or written proof ofs g w m q s

y m s s w g m , ss b g i q s ss s m (

m s ss) x s w v s. i m s w s x s s m

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T s s s w k w gmm , m s s v m w w g

m s) v g mm . W s , m w m m q s . y w s

g s m . T m m m s s s g m m .

i m, m s s w s j s m s w m

s g s v s m, m s m v m. i , w v , m s m v

v m w w m w w . y m g s v w m w s g v s


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tA k i nG Stock

i s s s k g s s g k , s x m m k w x

s s ss s, s, s s

ss x s s.n k w g v s s v g

s m w g m s .s ; m k w s g s m v s g

Mon t h ly cASh F low StAt eM en t

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s ss ss g s s w v g g m . , m s f w s

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i m

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s. n , w v , v m s gs k m s, s s, m

g s, s m s k m s m s , w w k m x s s.


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a S v v G p -b k 15

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S S , s , x s, M , s mm s. y s g m s mx m s s s s g q . a

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m .

exp s s

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w ; ; g; m ; s , g g s , m , mm g s s s s x s,

m ss s ; / m ; n x , m s , m , , m , s, m s m k m . i s g , m

m s q m k . W w m s ( s, m g s, s m

, s x s s q ( s m

m , v m 12 s


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Monthly Cash Flow Statement

INCoMEMonthly gross income $ _____

Payroll taxes $ _____Social Security $ _____Medicare $ _____Insurance $ _____Union dues $ _____Retirement $ _____Other deductions $ _____

Monthly net income (gross pay minus deductions) $ _____Other income $ _____Other income $ _____

Total monthly income $ _____

ExpENSES

Rent or mortgage $ _____Electricity $ _____

Gas $ _____ Telephone (cellular and/or landline) $ _____Cable $ _____Internet $ _____ Water $ _____Food $ _____Clothing $ _____Medical $ _____Car payments $ _____

Car maintenance $ _____Gas $ _____Other commuting costs (train, bus, etc.) $ _____Recreation/entertainment $ _____Charitable contributions $ _____Life insurance $ _____Medical insurance $ _____Auto insurance $ _____Home or renters insurance $ _____

Other insurance $ _____Alimony $ _____Child support $ _____

Total monthly expenses $ _____

Bottom line (subtract expenses from income) $ _____


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a S v v G p -b k 17

t B m l

t m x s s, s x m . T s s s v m . i ,

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x s s w m m s s s v s f w, m g g m s s f w s m s g . S ,

k s s m s v g w

ty PeS oF deBt

a m s s m ss s s s s s k m

v , x m . u s s k s m

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l s s k g m s s ms m s, w ss s v

S d b

v s, s s s m s gm s s s s. a s s m

s z m , m s g s g g k k ss ss s ,

v s m w s .


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m w s, s ws g v s ss w k m ss ss m m

m g g g s g s s. c s ss m , s m s s m m

s m s s v m s s . l ws v , ss j g , s s g g s .

a s g s m ( m q s s s , g ks w m m g g

T s , k m m g g , s g m s s m m g g

. M , s s v m k g g ms k s s g s m s, z g

s m s g m g g gs ss s v .

y s s s s s z

i g g m s, k w ss ss v . y w v w wm s s q s s , s m m s, w-

s s m v s g x , g w v g v ss ss .

depen ng n the te ms the l n n the l ws g ve n ng ep ssess n n y u st te, the len e m y be ent tle t ep ssess the c t ny t me the y

n ght n m y use ny me ns t s , s l ng s the ep ssess ng gent esn t c mm t b e ch the pe ce by us ng ce, th e ts ce, by b

ng nt l cke bu l ng. once the c h sbeen ep ssesse , typ c lly the nly w y y uc n get t b ck s by m k ng ll p st- ue p y-ments n ls p y ng ees n c sts ncu e

the ep ssess n n these c n be qu tehe ty. i y u nt p y ll the ees n b ck p yments by ce t n t me pe , the c w llbe s l t uct n.

pri ritize y ur debt:

Secured debtre resents

the m stcritical bligati nsth se

that must be satis ed be reall thers.


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a S v v G p -b k 19

as m , m s v s w m w s . a , k m , s

g ss ; s s s v s , s w m j s . s , v s m

m k m s , s s . T g v s g s m s v s

s , g s , s .

n S , b A m s

o g s s s k x s s s g s, s ss w g s g v

v x s, m s m s s s. T irS, x m , s g

w g s k v s s s x s. T s ,

v , q s ss s g s w s, w s k g s, , g s s g s s , w w w . c s w

k s v s s sc - s m m s, g

, g s g . i m s s s, s m

s j s , g s m w g s, s, s q s, g j m .

u s d b

T g m s s s s. a g s

g w g, m k s m s 40 s m u

S s, g r s v

Credit carddebt grew

r m nearly $800 billi nin 2003 t$976 billi n in late 2008.


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ss d m 5, 2008. T g w s s gggrew from nearly $800 billion in 2003 to $976 billion in late 2008.

r m m s -q z - s s gm ? T s s ks ss s m m g m m w g m g w q

w s w s m m ss g s s m s w g m w s m k m

u , s k w, gs w s w k s , ks s m .

Make Your PaYMents on tiMe or Bearthe ConsequenCes!

i m k m m ss m , m s g m s g v ss g s m m g w

s m m s x ss 25 ! S , s w s g m s, gs

.

i s , v m s w s s j s w

m s w v s m k g m s v m m . ev , s g , ks q m g . b s m v

s g .o , m s w ss g g - s

m s w , (s m m s s m s 50

m ), w g m v g s m . b s

s s . h w v , m s s s s ss

j gm g s , ms j gm


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a S v v G p -b k 21

ss s s s . S m s s x m ss s, ss s v , m ms s

l ws v s g s , s s s w s q m x w s

k w s j gm g s .u s , g m s w g mm , s z s , m s

w s, s g , s m k g m g g s

v k m , s m k v ms m w s , s s s m s m ss ss s.

PrioritiZe Your DeBts

1. S s s ss m v s m .

2. d s s m s , ss s , x s, s s, s

m w .

3. u s s k s, s m .

4. u s s ss k g , s s m s, s m .

as w, m k g m k s g w g g

gs m g g s s . T gs s s g .

l k w s , s s , s , k w m ss w s. l s x m s.


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you r S i t uAt ion ,you r St r At eGy

y s v s g g k

1. h w g g w s, s g m s, v g

s g .

2. S k s g w m g m .

3. us s m .

4. k .

l s x s s s m

h An dle th e deBt on you r ow n

a v w s , m v s v g s . T s g s

g mm g . h w v , v s g g s m , s s

g g s , w w v s s k W w s s g

s g) w s; g s g g w s s v sm .

n g a g y c s

i g g w k gs w s, v w m s v sw k v


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a S v v G p -b k 23

S k g s s w m g m z s s

S G g c s W k w y g 9 s k . T m s m s s . i ,

s s s w k s v g m. M ks v ss m g m

s s g g w s w v

m g g s s g g s m m k g g m s.

am g s m g g s s - v s s

Temporary forbearancea m g w

m s m Reinstatementoften used in combination with forbearance, in

w w s w q m s m

Repaymenta period of time during which the borrower is allowed s s - m g w g m

g m g Loan modi cationactually rewriting the loan contract and changing

s ms m k s w g m ( .g., x g m m s, m v gm ss m s , g g j s

m g g x ).

i s s s, s v w , m q

m m m s s m m s (s . .g v). W s s s, w v

I they d nter, ask i they

have any s rt hardshi

re ayment lanavailable.


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s g m ; m s k s .

W v v s g s, s m , s m m s ss m . y m w w

ss s m g z ( s ss )

BasiC stePs for WorkinG With CreDitors

1. a k w g .

2. ex x w g w3. ask s s, x

m s, v g

4. d m mm s.

5. w g w w s g g .

b , s , g g g v s w w v v w m k m s v s .

Ma g M , Sp g l ss

t s s, s s m k m

s ss, g s m s s ss g w g g T m w s g g x m v s

s w g:

Ask for more hours at your current job or work overtime, if possible.

Ask for a raise if you are in good standing at work.

Take a part-time job for a while.

If there is a stay-at-home adult in your household, consider having s w k s v s m

Sell items you dont need or use.


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a S v v G p -b k 25

a m w s x s s, g q s k s m k g s

s m s s : Downsize your home.

Downsize your vehicle.

Consider thrift and resale stores or discount stores for purchases.

Rent movies or check them out from the public library.

Brown bag it for lunch rather than buying lunch out.

Wants Versus neeDs

h s m : m s s -s v g m s s v v s v s s w s. W w x s s

s w s v s, w s m s wg s. i

s s m s g s g ww . y m s s s k

s s w s s m v s

A Realistic Look at Your Housing Costsi m g g s s g m 29 m

g h s g a m s m mm s m w ms v s

. y k s s k w g v s s w. W s v g s s m s

, m s s g w s , m g .

B g f m F s a Fam

i v m s w m s m, g s m ssm m v s m v


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v s w m s . ask m , , s . i g

m s, m w w q , s s m v . i

s mm s s w g s s w m s s s g-

s s.

B Aga s S Ass sb w g g s s g ss s w

, g s m s m j z g s s . w g s m x m s:

Home Equity Loan:W m q , m g g s w w w ms s m g g s s s .

s s s w- s s g w v s s. h w v , w s m q

s , g v ss gg . y s v , w s m

k m . p s s v s s g s .

Consolidation Loan:d s s w k k g s m q ss s, s g s g - s s. b s s

s , g g w s s gm s s.b m sk g m s v ss s g g s , s s v s .

Liquidate assets:a g s g ss s wv g s m w g w m

h w v , w s ss , s k m k v q .


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a S v v G p -b k 27

d p g a Pa ff P a : Ma M s f y ca s

i s m s, v w s . T m s s g s s

s g .

Snowball Payo Plan. T s m m m s; w x m v g g

w sm s s. as s s s ,

m v g g x sms . T v g s v m m m m vq k s g m s w w s

m s g g s s s .

Highest-Interest-First Payo Plan. W s s g , z s g g

W v s g s s g s m s mm s . T , m m

w x - g s s , s . T s w s g s m m v m s m

g v m w g

Hybrid Payo Plan. S m s w s v m s s w v . W s m w s s w s mm m m s g s . o

s m w ks v s m s w s g .

y m v s m s w k g w w . b m s q s s

m s ss w k w . o ss w s m s s v w m g

, s g s m g s g


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cre dit counSeli nG

T n c c s g (n cc) ass i c s m c c s g ag s (aiccca)

w s g s s g gj v m s s g ms s

(dMp) w v s m v g s m ? T w:

W dMp w s g g , s w s . T g w s

m m dMp s s g .

o g m k g m m s dMp, s - s w - g , w m s

g s m v m s m ss w .

T s g w ( g w s s w m dMp ( s v ).

y g s m s g m m ( g ), m s

ss s m mm s. T s g

m ss w ks w ks ss g , s s

w w m s ms m s w dMp.

c s g g s s s g s s .

y m w g, W s w s ? T s m s w w k g w s g z .

When y uenr ll in aDMp with

a creditc unseling agency, the

c llecti n calls will st .


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a S v v G p -b k 29

c s g ms v s m s m s dMp w s s ss g s ss

-s m . T s g sms s m s m s m s.

c s g ms - s m s mag s w n cc g m sfee of around $10, but some agencies can charge signi cantly more.

n s s m s v s

s m s w dMps. S m s m s v x g ms v s m s v g

a m s s v g v s g gs s m s g g s. S m v

s s v k . b w k g w g z s s v s .

T m g g z s v s v s v s . o w s w w sm s m w s s w k g w

n cc (www. . g) aiccca (www. . g).

ask a ProsPeCtiVe CreDit

Counselor

What services do you o er?

Are you licensed to o er your services in my state?

Do you o er free information?

Will I have a formal written agreement or contract?

What are the quali cations and training of your counselors? Are they ?

Have other consumers been satis ed with your services?

What are your fees? Are there monthly or setup fees?


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How are your employees paid? Are they paid more if I sign up for g ms s v s?

How will you ensure the privacy of any information I give you?(S : www. .g v.)

deBt Set t l eMen t

i s m , v

s m . y g s m m s m s . y s s g m w ms

s m m , s s . y f s s w

, g m ss m s w s s w, m s w ks w w s m g. d s m s s

m , m s s W m g v s s m

w m, m s 1099, s w g mm . y w s x

x s . y m w s w x v s s q s s m g .i v s v s s w , gs g

. i s s , m s m xg w s w . T s s w

ss s m m . u k s m m s m k s m g

s v s v s s, s s sk s q s s q s s w m

s m m s g. w g s m m q s s sk:


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a S v v G p -b k 31

How much will I pay you, and what happens to the money I send youeach m nth? d s m ms g w 100

m , ks. T m s s m m g s s

w g m g s s m w

s m . h g m s s s s m m . as g s g m m

, v v s s s m . y s s s s m m

w ks w s s w sm s g g ss s. d sm s g s s v s.

Can you provide documentation of settlements youve successfullyneg tiated r ther e le in my situati n?d s m ms

s s s s s gv w s m s g w . a m

s w g v s s ss s s m s.

When will you communicate with creditors on my behalf?M s s m m s w g v v

w s v g m s g m s m m k s m . n

, w s g s s . T s m s g m g

s m w w mm g w s.

r m m g w k g w - , s m. b s

s m g z , b b s ss b t c mm ss , m v ms.


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PerSonAl BAnkruPtcy

i v s v w , v w k w s g s m m, v s m m v w m

m k m s ss k v m s g k .

w g k . T s s v v x s s k s k g w s x

k s s s m s. b k g k g v s s s . b s s s

w g- m m s w . as w m j s , s

w g s g w s k T u.S. b k c s v s s s

s v s s . T w s m s v s c 7,

s s g s m s s ss s s s, c 13, w m s w k

ss s s s s s v m . ds s s s s s m k v

q k .p s k , s s m s ms, s -

s s s s s ss . i v s w v s ms v s

s , s , g s s m g s v , w k , , w m s s s s m s ss

s w s. T s s k w x k g s k , s w

gs, g g w k m s s.


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BA n k ru P tc y M y t h SA n d FActS

T g m g v k s w g ms, k m s , m s v s m s

y m k g, i v g g , ks s , k s s m s m g im

s s - g w g.i s m s g s g g g g w, jw . S g v ss s x s m m g v g k s s s s v s, v

m v w s v . M s s s k s m m

l s k k w m j m s s g ks g m. T w x m s s s s s q sw k

w g.

resourCe on BankruPtCY CoDe

t w x u.S. b k c v ms (s s c 7 c

go to http://uscode.house.gov/download/title_11.shtml.

Myt h: BAnk ruPtcy iS For ir reSPonSiBle PeoPleor loSerS

T m k m s s s s s s . T s k s g v


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v s m s s . W s m m v

s v s g s s s m j v s w k

s m v s s , m , m s, x x s s, ss j

w g . T s s s ss s m m s: m s v s.

as m , s g s g s s wu.S. b k c v , s s ss , m sg s s . J g s k v m v w, x m w m x s, k s m s

g s g g s. , b k a s p vc s m p a 2005 s s g s

v s v s gs s , g q

m s s m x m v a g k m k s s , w s s g s . T m w v k

g v , s m s s, s - g gk k s k s s .

J s s ,

s k . M s w k

g g v ms v s m - s s .

My th: BAn k ru Ptcy iS For PeoPle who A r eF l At Brok e

b k s w protect the assets you do have , s w k w m w s , s s s s. M w

Bankru tcy

r tects h neste le wh haveallen n hard

times.


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a S v v G p -b k 35

v s g ss s s k g m vg v g s. b k s m

m s m , g v g v g v

Myt h: BAn k ru Ptcy r eSu ltS in loSi nGeverythinG

b k s m s g v g v g s s. S w w ss s

gs. T s x m s v gs k , s g gs s

m k . T ws g v gx m s v m s s , s

w s ss x m s w s w k . S

s ss x m s s : b k a ws y K c ass s g 39.

Myt h: i wi l l neverr ecover FroM BAn k ruPtcy

b k g v s sw ss v m . W k s s s , s

s, , m k w m v s , v m g k . a m

w w v ss m ss ms.

T k w s g sresponsibility. M s v s s w m k , g s s w m - s k b ? n m!

q k s s s s - w s

Bankru tcy is m re ab ut

r tecting what is m st

im rtantt y u, rather thangiving everything y uhave t credit rs.


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g ms v s g k s m m s . T s v s s w w

i s v m , s k , v m . M s

s s. x m , s mm v j s m g m k m s

k g s s s s . iv s w g

g s w k . t k g s m s - k g m

i s g w s g s m w s v s g g k . W

s s s g g v , ss s .

r s ss : s

m s s m s w g g v ,

w g k w m k g s m g

s s. a s v j s m k .

Myt h: Fi l i nG BAn k ru Ptcy wi l l cAuSe Me toloSe My JoB

u ss m , w m , s j s, m s m m g m m

s k , . a s , s

s g s s s s s v s m k s m z ss s m q k .

obtaining andres nsibly using credit

will all w y ut make steady

im r vements in y ur credit rating.


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a S v v G p -b k 37

BankruPtCY MYths

Bankruptcy is for irresponsible people or losers. Bankruptcy is for people who are at broke.

Bankruptcy results in losing everything.

I will never recover from bankruptcy.

Filing bankruptcy will cause me to lose my job.

n w s m v s k .

FAct: BAnkruPtcy MAkeS creditor cAllS StoP

W k w , s ( ) m m s . m

s m s w s mk w . W , m s g s m m k

m -s m s m . T m s v s m sm s, g s, s, ss ss v s,

g g s, ws s g s w ,

w g g s m , g m k . T m s q s g, ,

s g j g . m , w x s m s , m v g

g m . s s s, s w s m v km s s v .

i s s, s m q s m ss g , w v g s m m s

k ss ss . h w v , s s s s w s s v s

sk m g m s s . o x


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m g v s s j , w w s s . n x s

- g s s s m s .

FAct: BAn k ru Ptcy h A ltS For ecloSur e

a k g s s , g ss d g w k s , w w

m k k m ss m m s, v s g s v

s g m g g k k m , m g m g g . T s s w

v x k .a s , m g sw q s s m

s s : W ks w s s s W s s s s v s

, s m m s s k . es s s w

k s v m k g m s mg k ss, m g g m k m

k s .i s g k , w

w w k m g s , s s m g g v m . i m s s m s k k s

x s , g m k g k m s s g

s m s s k g.

s s s, s g -v s k , m

k ss m ss m w .

I y u arec nsidering bankru tcy,

y u r bably need t w rry

less ab ut h w y ur creditre rt will l k and m re

ab ut r tecting y ur assets.


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a S v v G p -b k 39

FAct: BAn k ruP tcy A llowS you to ke ePcertA i n ASSetS

i m s s s, s ss m k m m s m ss s, s s m , , m

s . d s ws g v w x m , g ms w .ex m s m v w w

w ss s s ss s. T x m

other s s s ss s s s g k s ss s s s s

, m s s ss s. b k ws s s s s w v s ss s s .

S ws v w w s s x y m s w s x m s

s . m , x m s , s m s s g v g s s s v v

s s s q k s g k s .

FAct: BAn kruP tcy cAn Gi ve you A Fr eSh StArt

s w v g k v g w , g v - v . T k w s w

w w w s g s s, g m m s g , v s

s v w g g.

FAct: BAn k ru Ptcy iS not An i M M edi AtecleA n SlAt e

ev g k g w g v mm s w w m m

s s s w . b k


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s s s s. as g s k , m s ss s.

W m g m k , g w w gs v m s w g s s g g

g m m s g s. y m w s w g x g

ms m w s m . W g s g g , m w s s w s v , s s s s w w . ov

g s g j gm , i s s w m g m s

w s c 13 k . y s k s s m s.

FAct: BAnkruPtcy cAnnot relieve you oFcertA i n oBliGAtio nS

T s m s m s v k T s s s g g v m , s m k

- s m m s.Student l ans . M s s v s g s

s s s g m s ms, km k s s . y m s g

m s g m s s , v k ss v m s

w k w s v s g mBack ta es. b k x s s g g k ,

ms s:

If the due date on the return is at least three years before yourk g

If the return was led at least two years before your ling


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a S v v G p -b k 41

If the assessment from the IRS is at least 240 days old

If you arent guilty of tax fraud or evasion

i w s, g s mm w g x s , k s w v ; s s w v g s .a x s k : g b k

p v c s m p a 2005 x s m s s s q s g s

s ss . Child su rt and alim ny . T ws v : w s

m m s x-s s , k w v s g s g s. m ,

s m m s, m s s m k v k . T m s s

s m g s m s m . i w s m s, m s m k g k .

BankruPtCY faCts

Bankruptcy makes the creditors stop calling

Bankruptcy halts foreclosure Bankruptcy allows you to keep certain assets

Bankruptcy can give you a fresh start

Bankruptcy is not an immediate clean slate

Bankruptcy cannot relieve you of certain obligations

n w s w k m w , s m ss g c 7

k .


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c h A P t e r 7 P er S o nA lBAn k ru P tcy : l iqu i dAt ion

o g k , s g k , q7 s k s m s s m. c 7 s g s

s, s m . u c 7, m s g vx m . T s ss g k m s v s m g s. d s

s s k s, m s, s m m y s ss

v s s

s g . M s m , w v , w

c 7 k s ss s g.

as m , m s w w c 7 ss , s s s

s g c 7 k v .i m s s s, c 7 ss g s k s:

1. a s s s

2. t k g

3. c m eouSt v * - s g s ; sk s s m m s v

m w d e c

4. g s w k

5. T 341 m g


M st thetime e le wh

le a Cha ter 7 bankru tcy d nt l se any assets by ling.


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a S v v G p -b k 43

6. c m - s g s , s deca

7. d s g

e s s s s s m w g

1. AnA lySiS oF your Fi nAnci A l AFFA i rS

b g g k k g, s m s m . i s s s m

Your average monthly income;

Your average monthly expenses; and

List of your assets and debts.

as s s s, m s m

File tax returns for the previous four years, and have your tax return

Collect six months of pay stubs and bank statements (you will need to s s)

Run a credit report

List all property purchased, sold, or transferred within the last two years Provide documentation for any 401(k), IRA, or pension distributions;

m m m ; m s m v s s x m s

a s s s, g s, w s g s .

2. tAl ki nG w it h An At tor n ey

o v k v s s , x s s s w q k


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s ss v s m w k w w, s m w s ms, s

s s m k s v v ss sa m s m g s s

s s s s w m w u.S. b k c s s k s m s s s s. as m v s , s m wk v s w w w

. b s s w s m w s, s s v s g m .

y w s s m m m s s g c 7 w q ba s p v c s m p a 2005. T s w q

v s w m m s v s s m mleast $166.67 of monthly income above living expenses ($10,000 over ve year

v m s c 13 s c 7. t w m m s s g c 7 m m s ( s g s v

s s b w s : www. s s.g v). i m s w c 7. i s g , w v ,

m v v g x s s v v m

v g x s s s s s s g irS- v stax calculation and collection. If, by applying this schedule, you have $166.67

m m v v g x s s, w qChapter 13. If your income is above the median and you have less than $166

m v g x s s, s s m m m s s c 7. y m s m w

x ss m v v g x s s v v v - m . i s, w v

i s , m m s s m w g y w s ss m w

s s s .


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a S v v G p -b k 45

3. coM Plet ion oF An A PProvedcre dit-counSeli nG cou rSe

b w k g, w sm s m - s g s v g180 s g k . d e c

v g .* T s k k g m v s s s q m . o

m s , g gs g .

4. Fi l i nG th e cASe w i t h th e cou r t

T g k ss g s w k w k . o

m , m s g s . as m m m k , m s s m

s s, s gs s w T m s s s ,

x g .

thinGs to ConsiDer Before or Justafter filinG BankruPtCY

Do not make large, unusual purchases on your credits ms w s ss

g k .

Prioritize your payments to creditors. If funds m , s ss m w .

d g s , m s s

s m s s s. Attend all meetings when scheduled. ese meetings may have

s ss w m, w m s sm ss s .



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If additional documents are needed to le your bankruptcy case,v m s s s ss . T s g

k m s, v g s m s s sm ss s .

Dont take money from your 401(k) or any other type of retirement s g k . d g s m

m k g k , m v s s s m s s s.

Dont transfer any property to other parties for less than fair market v g k .

5. the 341 MeetinG (creditorS MeetinG)

a x m - v s g k

, m s m g, k w s g ( m s k g s

s, s , k m s m , s w v w

. T s s k s w m s.a 341 m g, k s w sk m

s, . T s q s s s x mx m ss s v s m w k , w

s g s k , w v s s s v .

o g s s sks s m . T s s m w w v ss s k , s s s s s.

s s g s k m g g s m k s s m s s, s m m k g g k .


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a S v v G p -b k 47

r m v s. i ws k ss s

s g m. a w m k g m m s w s w

s w g g. i

g m s w g k ,

m m s s m g v s v r m m s w s v v k

m s g s g . b g v s m w s , k .

6. Pr e-diSch A rGe de Btor e ducAtio n cour Se

u w k s ss g b kp v c s m p a 2005, s q

v s v v s s g . us , s s s w s g. T s v s m w s

s s g s k s m . d c s s s s w . c s w

m w k s

7. diSch A rGe

W s q s x m ss s s s s s ms , w

j g s g s m g s , 7 k s m g s s

g k . T s m g s, s s s . y w k

v m v m .

Reafrming a debt in

bankru tcy meansagreeing tc ntinuemaking ayments


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c h A P t e r 13 B A n k ru P t c y :reorGAnizAt ionAn d r ePAy M en t

a c 13 k v v s s , - v s g k v m s v -s g q m g c 13 s v

m s v . T m w m v v s s s .

as , w s s m g ss m x s s: , g, s , ss, , , - m s k s. T s g s v s , , k c 7, s s s s s g s k

r v S v g m x s

resourCe on BankruPtCY CoDe

t s c 13 S m c Mi m u.S. c w s , g www. sgov/rules/BK_Forms_08_O cial/B_022C_0108v2.pdf.

a v m s m w s v

, w w . T s s s s w w s s m m s s m . y

v s s m m s , ws s m s.


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a S v v G p -b k 49

T c 13 m m s ss w s s: s s s s . T s s s s s s

m s s s m s w v T s s s q s s s m

s x m s.u w, c 13 s g v s. as g

m k m s m , s s x s s g s v g m

w g . us , c 13 ss g s k s:

1. a s s s

2. t k g

3. c m s g w v g *

4. g s w

5. T 341 m g

6. a v

7. r m

8. p - s g s

9. d s g

1. AnA lySiS oF your Fi nAnci A l AFFA i rS

i ms s, s s s m s m . i s s s m m

Your average monthly income;

Your average monthly expenses; and

List of your assets and debts.

as s s s, m s m



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File tax returns for the previous four years

Have your tax return for the prior year on hand

Collect six months of pay stubs and bank statements (you will need to s s)

Run a credit report

List all property purchased, sold, or transferred within the last two s

Provide documentation for any 401(k), IRA, or pension distributions;m m m ; m s m v s s x m s

a s s s, g s, w s g s .

2. tAl ki nG w it h An At tor n ey T x s s m w q k w s s ( s m k gm s s g s s g ss s g s

T s s m w w u.S. b k c s s k

m s s s s s. as m v w k v s w

w s . b s s w s m w x m s, s s v s g m .

s g w s x m s s s s s s m k s w k . o

, g gs g .i v s s m s v

ss s w s v g k , m c 13 s s v s s.


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a S v v G p -b k 51

3. coM Plet ion oF cre di t counSel i nG

b w k g, w sm s m - s g s v g180 s g k . d e c

v g . T s k s s s q m . o g m s

gs g . n v s ss q v s s v s.

4. Fi l i nG th e cASe w i t h th e cou r t

T g k ss g s w k w

W c 13, s v s m m s s

w c 7, s , m s s s m w, s s m v

s gs. y s m s s w .

5. th e 341 Me eti nG

a x m - v s w 341 m g. T s 34

s s s s k s , s k . T q s s q sw w

m v v g s w; q j s g. u , s w sk

m s g, ss s, m . m s m , k s

m v . y s , s m s k m


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q m s, m s s w m k g g s.

6. A PProvA l By t h e court

o 341 m g s m , c 13 s s j g v m g. T j g m k s s

s s v , m s w m s w w w s m g s,

k m q m s m s v s q

7. re PAy M en t Per iod

W s g, s m k g m s ( s ) s . T s s s s m

s w . T m m v - v - . a s , m s

m k s g m s v mv s m k g v s s. i s m s, v

v m m m k g

8. Pr e-diSch A rGe de Btor e ducAtio n cour Se

b v s g m k , v s m v v . us

w w s g. T s v s w s k s m . d e

c s - s g s m s s s v s s.


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a S v v G p -b k 53

9. diSch A rGe

o s v v m q c 13 m s m . T w m m g g s, s s s . n w

k g v m v m .

iF you Ar e unABle to MA k e PAy Me n tS

i s m s , g g c 13 m m k m s s s , w x

ms s . G , w s ss wms v m g m s m

w k w m , g v g m ss m s, x m , , ms m m k g m s g , s

s s s s . T k g s s v m ms

s s m.i w w s v s, m m c 13 c 7 g. i q s,

v v s g c 7 g w v

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a survival guide to pre bankruptcy-by mitchell allen[1]

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