The Legal Insider

October, 2009

Top 6 Things to Consider Before Filing for Bankruptcy

The following are 6 things that legal experts think you should consider before you file for bankruptcy:

  1. Bankruptcy Means Test: The Means Test determines your ability to pay your creditors through a complicated calculation which also accounts for the financial demographics in your area. If you qualify, you are allowed to file a Chapter 7 Bankruptcy, wiping away all of your debts. Otherwise, you can only file a Chapter 13 Bankruptcy, repaying many of your debts.
  2. Credit Counseling: Since 2005, all debtors are required to undergo credit counseling before they are eligible to file for bankruptcy. Credit counseling must be provided by an agency approved by the U.S. Trustee's Office and will determine if you are eligible for bankruptcy or if an informal repayment plan could help avoid filing.
  3. Affect on Co-Signers: Filing Chapter 7 bankruptcy allows creditors to proceed against any co-signers to your debt. However, filing under Chapter 13 protects co-signers if the consumer debt is from personal purchases, the debt was not incurred in business transactions, and if the co-signer doesn't gain anything from the proceeds of the debt.
  4. Affect on Your Future: Bankruptcy will likely destroy your credit for at least 7-10 years. This may result in the loss of credit cards, losing non-essential possessions, and the inability to obtain a mortgage.
  5. Some Debts Are Not Discharged: Student loans, DUI judgments, income taxes less than 3 years past due, fraudulent debts like bad checks, overdue child support, alimony, or other court ordered debts may not be discharged in bankruptcy. If most of your debts are non-dischargeable then filing for bankruptcy probably won't help.
  6. Creditor's Rights: Secured debts holders (debts with collateral, such as a car or house) have the highest priority and will likely reclaim the property if you file for bankruptcy. Unsecured debts, such as credit card debt and most bills are the lowest priority. Such creditors may receive little or no payment in bankruptcy.

If you have a specific question about Bankruptcy or want to read others' questions and answers to get an idea of the issues, check out our Bankruptcy Forum.


Laws We Really Need: Blind Luck

Yes, just like yourself, I think I'm a better driver than 96% of people on the road. And yes, 99% of those people probably think the same but don't try to prove it by driving blindfolded. United States Section 32-5A-53 stipulates that it is illegal to obstruct one's view, or have someone/something else obstruct that view while operating a motor vehicle. Sounds like a Darwin Award recipe to me. (Acts 1980, No. 80-434, p. 604, S11-104.)


Debunking Traffic Ticket Myths

There are countless myths and "strategies" to beating tickets. Some are based in fact, while others can do more harm than good. The following are explanations of the most common myths surrounding traffic tickets:

  • Officer Fails to Appear in Court: The officer's failure to appear on your court date may cause the judge to dismiss the case because there is no one to testify against you. However, many smaller towns rely on these tickets for revenue and will work to reschedule your date.
  • Refusing to Sign the Traffic Ticket: If you've tried this technique than you probably just agitated the officer and found yourself or your vehicle under greater scrutiny. Signing a ticket has nothing to do with admitting guilt; it's simply a promise to appear.
  • Traffic Camera Pictures: In the early years of traffic cameras people would try covering their faces to hide their identity, and later claim the picture taken did not show them driving. But today many places like Washington D.C. require you to supply the guilty driver's information.
  • Out of State Tickets: The Driver's License Compact is an agreement between 46 states to report traffic tickets to your home state. Vermont and North Carolina do not currently participate in reporting traffic tickets to your home state unless it is a serious crime.
  • A Good Excuse/Emergency: While this is obviously a case-by-case basis, it's not likely that a good excuse will save you from a ticket. That said, a cousin of mine maintains that he was clocked going 112 on a Georgia highway and told the officer he wanted to see how long the snail on his windshield could hold on. The snail's trail up his windshield was enough evidence for the officer to actually let him go.
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