Posts Tagged debtors
Re-Establish Yourself Through Bankruptcy Loans
Bankruptcy is the dark side of a business and arranging for any kind of loan at this time is a real problem too. Before getting into the specifics of bankruptcy loan, let us understand how you can start preparing to apply for a loan.
It is very difficult to handle the financial situation after bankruptcy, but a loan can sort your problem to a great extent. It is true that many people who have suffered heavy losses due to bankruptcy think that it is the end of everything in this world. Even if you have filed for bankruptcy, it does not mean that the financial sufferings will never end. The real purpose of bankruptcy loan is to get you back onto your feet and offer you a way to survive through the mishap.
Through a bankruptcy loan you can plan again for survival in the market and re-establish yourself. This is an opportunity for you through which you can try to get back your home and automobile. This type of loan is given to those who have already stated bankruptcy, their bankruptcy cases have already been released by the court, and their creditors have also been compensated accordingly.
To apply for a loan after bankruptcy, one has to follow certain rules laid by the finance providers. In case you had filed for Chapter 7 bankruptcy, the debtors have to wait for at least for two years after filing for bankruptcy. On the other hand, in case of Chapter 13 bankruptcy law, the creditors need to be fully paid before you can apply for a bankruptcy loan; and only if you have cleared this picture of payment to the creditors, you can get the loan.
If you prove that right at the moment you are not the borrower who is at high-risk, you can easily apply for a loan without any doubt that your loan amount will be disapproved. Another effectual way of doing this is by re-establishing the credit amount by paying it back right on time and also maintaining a credit card successfully. Once this is done, you can request your credit company to provide you with a reference letter stating that you are responsible when it comes to paying on time.
Now, it is not true that only after bankruptcy you can get this type of loan. You can also apply for bankruptcy loan as a substitute for reimbursing the creditors at the time of bankruptcy. This has proved to be a disaster for almost all the financial institutions that offer loans to the companies because at the end the companies have to either go for another loan amount or the whole of the credit amount sinks. As the future of the companies who are on the verge of bankruptcy or are already bankrupt is very dicey, the finance providers need full assurance before offering loan to them.
Transferring Assets Prior to Bankruptcy
When it comes to bankruptcy, a lot of people want to know what will happen to their assets when they file for bankruptcy. The first thing to know is that each state has bankruptcy exemptions which allow you to keep a certain dollar amount of assets for each type of asset that you own. If you own more than that dollar amount then you will either have to give up that asset and receive the dollar amount up to the exemption limit or buy back the asset for the value over and above the exemption limit. Let me explain this by way of an example. Let’s say you own a house which has $75,000 of equity in it. That means that if you sold the house today and paid off the mortgage, you would pocket $75,000 from the sale. Now, if you lived in New Jersey, there is only a $20,000 exemption per person who owns the house, which means that $55,000 of the equity in the house is unexempt. In bankruptcy, you could do one of two things. One, you could allow the trustee to sell the house and distribute to you the first $20,000 and distribute the remaining $55,000 to your remaining creditors. The other option is to “buy back” the over-exempt asset for $55,000.
Unfortunately, some debtors try to avoid the above conundrum by transferring their over-exempt assets to others to try and avoid losing that asset in bankruptcy. However, this transfer can be avoided by your trustee in bankruptcy. There are two types of fraudulent transfers: actual and constructive. An actual fraudulent transfer is when you actually have the intent to transfer one of your assets to avoid bankruptcy. This transfer can be undone by the trustee of your case. The trustee can litigate to have the property taken from the transferee and given to the trustee to distribute the unexempt portion to creditors. A constructive fraudulent transfer is one that you may not have actually intended to defraud creditors but for all purposes the effect is that it did defraud creditors. Things like selling assets way below their market value and other such transfers are indicative of the types of transfers that are either actual or constructive. Each state has their own look back period in terms of how far back you completed the transfer. Obviously, if you did it within a year or two of filing for bankruptcy this could certainly be undone.
Each state has their own fraudulent transfer laws so the look back periods could be five to seven years. It is imperative to speak to a bankruptcy attorney in your state before transferring any significant assets with the intent to save money in bankruptcy. If you have over-exempt assets and you still want to proceed with filing for bankruptcy. Consider giving the Law Offices of Stefan Coleman, PLLC a call. We are a full service bankruptcy firm that helps regular individuals gain the protection of the bankruptcy code. Before you even think about transferring any assets before bankruptcy, it is well worth it for you to call our office and speak to a licensed bankruptcy lawyer whether or not this transfer is prudent for you. One of the biggest regrets clients have is that they wished they would have consulted with us earlier in the process since we could have saved them a lot of money and time in helping them plan for their bankruptcy. We have offices located in New Jersey, New York, Washington DC, and Florida. We look forward to hearing from you and working with you on your case.
Written by: Stefan Coleman, Esq.
Law Offices of Stefan Coleman, PLLC
Offices in New Jersey, New York, Florida, and Washington DC
(877) 333-9427