The Complete Idiot's Guide to Personal Bankruptcy » (Original)

Lita Epstein is a seasoned financial writer who develops online courses on investing. She holds an MBA from Emory University and is the author of The Complete Idiot's Guide(r) to Improving Your Credit Score, The Complete Idiot's Guide(r) to Value Investing, The Complete Idiot's Guide(r) to Social Security and Medicare, Second Edition, and the co-author of The Complete Idiot's Guide(r) to Foreign Currency Trading.

The essential chapters for those facing Chapter Seven or Chapter Eleven.

With the percentage of personal bankruptcies soaring to over 10% nation­wide, and the process for filing now more complicated, many are investigating their options. This guide, by a business journalist and bankruptcy expert, offers the reader comprehensive information on: all chapters of personal bankruptcy; the most current legal information; and a detailed explanation on filing.

•Jargon free, pragmatic financial advice

•Clear, complete and up-to-date information about all aspects of personal bankruptcy

•State by state exceptions under new laws

•Complete listing of vital websites to research before filing

Part 1 Bankruptcy Basics 1 2 What is Bankruptcy? 3

Bankruptcy for a Fresh Financial Start 4

When to Consider Bankruptcy 6

Debt Relief from Unsecured Loans 7

Home Nearing Foreclosure 7

Car Could Be Repossessed 8

Stop Hospitals and Doctors from Calling 8

Need to Fix a Financial Mess After Divorce 8

Erase Some Legal Judgments (but Not All) 8

Halt IRS Seizures 9

Stop the Loss of Your Driver's License 9

Prevent Garnishment of Your Wages 9

The Four Basic Types of Bankruptcy 9

Chapter 7 10

Chapter 13 11

Chapter 11 11

Chapter 12 12

2 Is Bankruptcy Right for You? 15

Road Map to Bankruptcy 16

Listing What You Own 16

Acknowledging What You Owe 21

Available Cash to Repay the Debt 22

Bankruptcy vs. Other Credit Fixes 24

Credit Counseling 25

Loan Modification 27

Debt Consolidation 27

Debt Settlement 28

Are You Eligible? 28

Chapter 7 29

Chapter 13 29

Chapters 11 and 12 29

How Bankruptcy Impacts Your Life 30

3 Professionals You Should Contact 33

Role of Credit Counselors 33

Review Your Finances with Accountants 36

Certified Financial Planner 37

Talk with Debt-Relief Agencies 38

Contract 38

Disclosures 39

Debt-Relief Agency Restrictions 39

Bankruptcy Attorneys 40

Bankruptcy Petition Preparers 43

What If You Can't Afford to Pay an Attorney? 44

Part 2 Understanding the Bankruptcy Process 45

4 Fifing for Bankruptcy 47

Are You Eligible? 48

Your Official Income 48

Filing on Your Own vs. with Legal Help 51

Immediate Impact of Filing 53

Creditors and Collections 53

Foreclosures 54

Determine Assets in Your Bankruptcy Estate 55

Property in Your Possession That You Own 55

Property Not in Your Possession ThatYou Own 56

Property You Are Untitled to Receive in the Future 56

Marital Property and Bankruptcy 57

Working With the Bankruptcy Court 58

5 Chapter 7 Bankruptcy Process 61

What Is Chapter 7? 62

The Counseling Requirement62

Median Income and the Means Test 63

Step 1 Calculate Your Total Monthly Income 64

Step 2 Subtract Allowable IRS Expense Amounts 64

Step 3 Subtract Secured and Priority Debt Payments 66

Step 4 Find Out What's Left to Pay Other Debts 69

More Eligibility Requirements 72

Filing 72

Working With the Bankruptcy Trustee 73

Meeting Your Creditors 75

When You Must See a Judge 78

Getting Rid of Your Debt 78

Attending the Required Budget-Counseling Sessions 79

How Your Bankruptcy Case Ends 80

6 Chapter 13 Bankruptcy Process 83

What Is Chapter 13? 84

Fulfilling the Counseling Requirement 84

Meeting the Eligibility Requirements 84

Prior Bankruptcy Discharges 85

Businesses Aren't Eligible 85

Debts Can't Be Too High 86

Income Taxes Must Be Filed 86

Developing a Repayment Plan 86

Compute Your Disposable Income 87

Compare Your Disposable Income to Your Debts to Be Paid in Chapter 13 88

Committing Disposable Income to Repayment of Other Debt 90

Filing Costs and Fees 92

What Property Is at Risk? 92

Working with the Bankruptcy Trustee on Your Repayment Plan 93

Meeting Your Creditors 93

Seeing the Judge 94

Possible Endings 96

7 Choosing the Right Type of Bankruptcy 99

Why Choose Chapter 7? 100

Pros of Filing for Chapter 7 Bankruptcy 100

Cons of Filing for Chapter 7 Bankruptcy 101

Why Choose Chapter 13? 102

Pros of Filing for Chapter 13 Bankruptcy 103

Cons of Filing for Chapter 13 Bankruptcy 104

Using a Chapter 20 Bankruptcy 105

Why Consider Alternatives?-Chapters 11 and 12 106

Chapter 11 106

Chapter 12 Bankruptcy 108

Special Rules for Upper-Income Filers 109

Part 3 Using Bankruptcy for Specific Goals 113

8 Saving Your Home 115

Bankruptcy Filing to Stop Foreclosure 116

Saving Your Home from Foreclosure 118

Understanding Homestead Exemptions 119

Declaration of Homestead 121

Wildcard Exemptions 121

Tenancy by the Entirety 121

Relocation, New Home Purchase, and Bankruptcy Filing 122

Illegal Act and Homestead Exemptions 123

Options If You Have Too Much Equity in Your Home 124

New Bankruptcy Laws and Saving Your Home 125

9 Getting a Fresh Financial Start 127

Secured vs. Unsecured Debt 128

Debts Not Discharged by Chapter 7 129

Debts Not Dischargeable for Any Reason 129

Creditor Objections to Discharge 132

Discharge by Narrow Exception 135

Debts That Can Be Discharged Only by Chapter 13 136

Debts Not Discharged by Chapter 13 37

Debts and Creditors You Don't List 137

10 Clearing Out Medical Debt 141

Why People Seek Bankruptcy Protection for Medical Bills 142

Medical Bills 144

Treatment Bills 144

Medication 145

Unsecured Debt 145

Dealing With Disability 146

Timing and Choice of Bankruptcy 146

Seeking Outside Help 147

Medicaid 147

Medicaid Services 148

State Children's Health Insurance Program 149

Caring Voice Coalition 150

Chronic Disease Fund 150

The HealthWell Foundation 150

National Marrow Patient Assistance Program and Financial Assistance Fund 151

National Organization for Rare Disorders 151

Patient Advocate Foundation's Co-Pay Relief 152

Discharging Your Debt So You Can Focus on Healing 152

11 Cleaning Up a Financial Mess After Divorce 155

Dividing Debt-Joint Debt vs. Individual Debt 156

Joint Account vs. Authorized User 158

Community Property vs. Common-Law Property 160

Common-Law Marriages 161

Impact on Ex-Spouses 163

Clearing Out Bad Financial Memories 163

Part 4 Life After Bankruptcy 169

12 Managing Your Money After Bankruptcy 171

Taking Responsibility for Your Spending Habits 172

Get Family Support 172

Build Your Budget Quickly 174

Getting Started 174

Build Emergency Funds 176

Budgeting Together 176

Removing Temptation 176

Blocking Mail and E-mail 177

Blocking Telemarketers' Calls 178

Stop Unsolicited Faxes 180

Complaining About Phone Calls and Faxes 180

Watching for Danger of a Credit Relapse 182

13 Repairing Your Credit History 185

Clean Up Your Credit Report 186

Correcting Errors 188

Plan Your Fix 191

Public Records 191

Merger Mistakes 192

Response from Credit Bureaus 193

Dealing With Unpaid Debts 194

Knowing Statutes of Limitations 194

Adding Positive Information 196

Expect Repair to Take Years 196

14 Getting a Job 199

Possible Job Loss 199

Security Clearances 201

Check Bouncing 202

Cleaning Up Your Credit Report 202

Problems Getting Hired 204

How to Deal with Bankruptcy While Interviewing 204

Tell Me About Yourself 206

Why Do You Want to Work Here? 206

What Are Your Goals? 207

Changing Industries After Job Loss 207

Qualification Questions 208

Longevity Questions 209

Practice Makes Perfect 211

15 Getting Credit After Bankruptcy 215

Repair Your Credit Before Even Trying to Buy 216

Credit Score and Interest Rates 216

Lenders and Bankruptcy 220

Getting Student Loans After Bankruptcy 221

Federal Loans 222

Private Loans 224

Seek a Cosigner 225

Starting a Small Business 226

16 Managing Your Credit with a Spouse 229

Key State Laws Impacting Couples and Bankruptcy 230

Tenancy by the Entirety 231

Community vs. Common-Law Property States 231

Keeping Credit Files Separate 233

Applying for Loans in One's Name 234

Don't Take on Joint Credit Accounts 236

Appendixes

A Glossary 239

B Resources 243

C State-by-State Homestead Exemption Rules 251

Index 275