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Personal Bankruptcy Archives

Bankruptcy filing is a good option in certain circumstances

Undoubtedly, one's credit rating will be hurt by a bankruptcy filing, whether in Arkansas or anywhere else. Most people, however, are already at the bottom of the line regarding credit scores. Where a large amount of unsecured debt is discharged in a bankruptcy, there is usually a rapid re-vetting of one's credit position by the credit bureaus and others. In some cases, an improved credit rating will come within a year or two after the bankruptcy discharge, mainly because the debtor owes no unsecured debt, and are paying only perhaps on their car and house loans.

Bankruptcy eliminates unsecured debt quickly and permanently

For those who attempt to resolve their debt problems by consulting a debt negotiation company, there are special precautions to take and issues to consider prior to committing to that debt relief alternative. The most important guideline is to find a reputable, established company that follows the consumer-friendly debt negotiation rules adopted by the Federal Trade Commission. At the same time, an individual or couple residing in Arkansas will be well-served by also evaluating their debt situation very carefully to determine whether a bankruptcy authorized by federal law will be the better and more effective way of obtaining maximum debt relief.

Bankruptcy provides superior results over debt relief firms

A debt relief company promises to contact a person's creditors and work out a plan, often for pennies on the dollar, to pay off all debt in a matter of a few short years. Unfortunately, many people throughout the country, including in Arkansas, will choose this generally unworkable and sometimes fraudulent format as opposed to taking advantage of the safe and proven bankruptcy alternative that is provided by federal law. Recently, the Federal Trade Commission obtained a $7.9 settlement from a debt relief company that the agency accused of scamming clients with false promises.

Some debtors can get a student loan discharge in bankruptcy

There is a popular fallacy regarding the possibility of discharging a student loan in bankruptcy. It is generally thought that it is impossible or nearly impossible to discharge student debt. However, an academic research study published in the American Bankruptcy Law Journal in 2012 found that, in reality, nearly 40 percent of those who try to discharge student loans actually succeed. In Arkansas and nationwide, it may be the right time for those with oppressive student loan debt to consult a seasoned consumer bankruptcy attorney in order to evaluate their prospects for discharge of that debt.

Bankruptcy judge rejects motion for surrender of debtor's home

Generally, when a filer in Arkansas or elsewhere designates in the bankruptcy petition that the residential real estate will be surrendered, it's an indication that no fight will be put up when the mortgage holder brings a foreclosure action. In some cases, in fact, the  foreclosure has already occurred prior to the filing of the bankruptcy and the bank has already taken possession. However, where the filer has defaulted on the loan and does not agree to surrender the property in the bankruptcy papers, what are the rights of the respective parties?

Bankruptcy filing relieves pressure-filled credit score

Filing for a personal bankruptcy to eliminate burdening consumer debt is no longer considered to be a shameful event that must be avoided at all costs. It is generally recognized these days, for example, that a couple in Arkansas or another state can obtain a mortgage to buy real estate within about three to five years after a bankruptcy discharge. In some cases, the time period is significantly less than three years, depending on the particular circumstances.  

Bankruptcy rules give options on reaffirmation of mortgage loan

It's a strange twist of bankruptcy law, but if a debtor does not formally reaffirm his or her home mortgage or other secured loan in bankruptcy, then the debt is no longer owed. This does not mean that the payments don't have to be made; rather, it results in a situation where the debtor continues to pay the monthly mortgage both during the bankruptcy and afterwards, and stays in the home despite not technically owing the money. This scenario, however, is not as simple as it may at first appear, and it may have consequences in other respects, both in Arkansas and in other jurisdictions.

Bankruptcy is a "fresh start" remedy provided by the federal govt

Hard-working people may suffer a medical or financial emergency that is entirely out of their control and not their fault. Illnesses, disability, being laid off at work, accidents and other disasters usually hit without warning and create a substantial and lasting deficit in a family's monthly budget. The federal government provides consumer bankruptcy relief for just those situations, with the purpose of giving an individual or married couple residing in Arkansas or elsewhere a chance to start fresh and get back to normal.

Banks are being pressed to report debts erased in bankruptcy

So-called zombie debt is a problem created by unscrupulous banks and debt collection companies, both in Arkansas and around the country. Despite the fact that a debtor may have paid off a debt, or that is has been discharged in bankruptcy or settled by a compromise payment, the original lender nonetheless packages the debt with hundreds or thousands of other closed accounts and sells the packages to debt collectors. The consumer must be vigilant enough to check his or her credit record regularly to make sure that the entry is challenged and removed.

New rules issued for student loan discharge in bankruptcy

On July 7, the U.S. Department of Education issued a letter of guidance on its future policy toward the discharge of student loans in bankruptcy. Due to the massive build-up of defaulted student loans in Arkansas and nationwide, the Obama administration asked the Department to evaluate the possibility of discharging some student loans in bankruptcy as one solution. As a result, the new policy will recognize some expanded situations in which either part or all of a loan may be discharged in a Chapter 7 bankruptcy.