New Orleans Bankruptcy Resource Center

People all across the United States find themselves dealing with an unmanageable amount of debt and other financial difficulties, often feeling as if there is nowhere left to turn. At the Law Office of David D. Kervin, Jr., our New Orleans bankruptcy attorneys believe that with easy access to educational resources, people in debt can learn how to solve their present financial problems and how to avoid falling into debt in the future. The Bankruptcy Resource Center is designed to help connect people with valid, reputable information concerning bankruptcy, debt, loans, foreclosures, and other financial topics.

Facts About Bankruptcy

Sometimes, when people cannot afford to pay back their debts, they decide to file for bankruptcy. Bankruptcy is a legal declaration of the inability to repay debts, which allows people who cannot pay their bills to essentially start over. Consumers have a right to file for bankruptcy under federal law, and therefore all federal courts handle all bankruptcy cases. Bankruptcy may:

• Discharge debts. Many debts, although not all, are eligible for discharge. When a debt is discharged, you are no longer legally obligated to pay it.
• Pause foreclosures and repossessions. In some cases, bankruptcy may allow you to pause the foreclosure and repossession of your property as you work to repay debts.
• Eliminate actions on the part of creditors to try to collect debts.

Debtors often choose to file for bankruptcy as a last-resort option to take control of their finances and get their lives back on track.

Individuals, organizations, and businesses may all file for bankruptcy. However, each will file under a different chapter of the bankruptcy code depending on their particular circumstances. Bankruptcy chapters include:

• Chapter 7
• Chapter 9
• Chapter 11
• Chapter 12
• Chapter 13
• Chapter 15

It is important to understand the differences between the types of bankruptcy, as well as to understand the extent and limitations of bankruptcy. The following are some helpful links to help consumers learn more:

• Bankruptcy basics
• Corporate Bankruptcy

Managing Your Debt

Many people find themselves attempting to manage unreasonable levels of debt caused by overspending, borrowing money through credit, and taking out loans they cannot afford to repay. Often, people find themselves in debt because they did not properly understand credit and money management.

• Facts and advice for consumers about debt

Credit

Credit cards are good resources for people who need certain items immediately and have the means to pay for these items over time. However, many people treat credit cards like free money, borrowing far more than they can ever hope to pay back. To stay out of debt, it is important to only spend within your means, to avoid late payments, and to avoid paying only the minimum payment month-to-month on a credit card bill unless absolutely necessary.

• Learn about credit

Your credit score is a numerical value that shows loan agencies and banks how reliable you are in paying back money you have borrowed in the past. Higher scores indicate consumers with more responsible spending habits. Your credit score is important because it affects your ability to borrow money and credit.

• Credit Scores
• Free Credit Report authorized by U.S. government

Mortgages and Foreclosures

Many people fall into excessive debt after purchasing or refinancing a home. Very rarely does a person have the full amount for the purchase in his or her bank account. Therefore, lending agencies offer mortgage loans on homes, allowing purchasers to borrow money from the lender, pay the seller in full, and then pay back the lender over time. However, often people attempt to buy homes they simply cannot afford, and therefore cannot make their mortgage payments. In these cases, the lender may foreclose on the borrower’s property, meaning that they take possession of property, assess its value, and resell it in an attempt to reclaim the money owed.

• Avoiding foreclosure
• Explanation of the sub-prime mortgage crisis

Consumer Protection

The government has in place various protections for consumers filing for bankruptcy:

• The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 oversees bankruptcy proceedings and combats abuse and fraud to protect consumers.
• United Student Aid Funds, Inc. vs. Espinosa, the U.S. Supreme Court recently ruled to help people receive bankruptcy protection if they cannot repay student loans.
• Report bankruptcy fraud