Recovering From Financial Ruin

Two Ways To Counter A Debt Buyer’s Claim That You Owe Them Money

Posted by on Oct 11, 2016 in Uncategorized | Comments Off on Two Ways To Counter A Debt Buyer’s Claim That You Owe Them Money

When people default on their accounts, it’s common for creditors to sell those accounts to debt buyers to recoup some of the money they lost. These buyers then take on the responsibility for collecting the debt, which oftentimes includes suing the debtor for the money. If you find yourself having to defend a lawsuit filed by a debt buyer, here are two ways to respond that may help you win the case. Ask for Proof the Collector Legally Owns the Debt Only someone who legally owns a debt may sue the debtor for the money. While debt buyers may purchase accounts from creditors, many times they don’t have the required paperwork that goes along with it, such as copies of signed agreements. Additionally, many debt buyers purchase accounts in bulk from third-party repositories, which means they may not even have contracts with the original creditors. One way to get the case dismissed is to force the debt buying company to prove it is the lawful owner of your debt. Prior to court date, there is a period called “Discovery” where you can request the company send documents to you. Send a certified letter to the company requesting it furnish you copies of its agreement with the original creditor that specifically references your debt and stating it was sold to them. You should also request the company send you proof you owe the debt in the first place, such as a contract with your signature that lists when the account was opened, the amount borrowed, and interest rate. Many times when debt buyers purchase accounts, they only receive a spreadsheet with the debtor’s contact information and the amount owed. They often don’t have any supporting paperwork for the debt itself. If the company can’t provide proof the debt exists or that they’re the owners of your account, you can request the judge dismiss the lawsuit for lack of standing. Prove the Statute of Limitations Has Expired Companies only have a certain amount of time to collect a debt before their ability to take any legal action expires. This is known as the statute of limitations, and the clock starts the day of your last payment on the account. If you can prove the time period allowed for lawsuits has passed, the judge will typically dismiss the suit. The statute of limitation varies depending on where you live and the type of debt involved. For example, companies have three years in Alabama to collect on credit cards and other types of open-ended accounts. Therefore, be sure to look up the relevant laws in your state. If you lose your case, these debts can typically be discharged in bankruptcy. For more information about dealing with debt buyers or to learn how bankruptcy can provide a fresh financial start, contact a bankruptcy...

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3 Factors To Consider Before Ruling Out Bankruptcy As An Option For Debt Relief

Posted by on Feb 18, 2016 in Uncategorized | Comments Off on 3 Factors To Consider Before Ruling Out Bankruptcy As An Option For Debt Relief

Filing for bankruptcy is something a lot of people want to avoid, primarily because of the negative effects it can leave; however, using bankruptcy to get relief for your debts might turn out to be the best decision you ever choose. If you are on the fence about this and are trapped with loads of debt, you may want to consider the following three factors before you toss out the idea of filing for bankruptcy. Other alternatives do not offer complete relief When it comes to debt relief, you will find that there are several different methods available, and all of these are designed to offer debt relief. Unfortunately, the alternative options you can choose will not offer complete and instant relief from your debts. These options will help you develop a plan to repay your debt, but you are likely to still have debt for at least three to five years. With Chapter 7 bankruptcy, you can have instant relief from your debts as soon as you file. This means you will no longer owe money to your creditors, and your creditors will no longer have the right to try collecting the money you owed them. Other options also harm your credit If you are worried about the effects bankruptcy will have on your credit, you should realize that alternative types of debt relief can also negatively affect your credit. When you choose a debt consolidation program, for example, your credit will be affected. Creditors do not always report properly to the credit bureaus when borrowers use consolidation programs, and your credit report may get hard inquiries on it simply from filing a debt consolidation plan. A Chapter 7 bankruptcy filing will stay on your credit report for 10 years; however, this does not mean your credit will be bad for the full 10 years. As soon as you file, you can begin looking for ways to boost your credit score. If you take the right steps, your credit could be good within just a few years. The fees may vary When you choose bankruptcy for debt relief, you will pay one amount. This amount will cover the entire bankruptcy case, and you will never have to pay anything else for it. With debt consolidation plans, you may not really know how much your fees will be in all. Companies that offer these often have hidden fees that you may not realize, and you will probably have to continue paying these fees until your case is closed after three to five years. After considering these three factors, you might discover that bankruptcy could be the right choice for you. To learn more about this and other types of debt relief options, contact a bankruptcy attorney such as Dennis Lee Burman Attorney at...

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3 Ways To Repair Your Credit After Chapter 7 Bankruptcy

Posted by on Sep 29, 2015 in Uncategorized | Comments Off on 3 Ways To Repair Your Credit After Chapter 7 Bankruptcy

When you are so far in debt that you can’t really see any way to get out of it, filing for Chapter 7 bankruptcy may be a good option for you. Doing that will allow you to set up a plan that will let you pay back your creditors and start to get out of all that debt. However, filing bankruptcy can also cause you further credit problems. One reason for that is that it can take up to 10 years for a Chapter 7 bankruptcy to come off your credit history. But, your credit may already be bad from all the debt that you are in, and the bankruptcy can give you a chance to repair it. So, how can you repair your credit after a Chapter 7 bankruptcy? Watch Your Credit Report After you file for bankruptcy, you will want to start keeping a close eye on your credit score. That will give you the chance to know if anyone is accessing it as well as let you know if your efforts in rebuilding your credit are working. You are going to want to aim for a score of 650, which is the lowest number that is considered fair. Fair credit will allow you to do things like get better interest rates on loans and credit cards.  Apply For Secured Credit Cards The best way to start repairing your credit is to have a way to prove that you can make payments. A secured credit card with a low limit is a good way to do that. When you have a secured credit card, your credit card company sets up a special secured account. You will then deposit a specified amount of money into that account. Your credit limit is based on how much money you put in that account as well as what your income is. The goal here is to make small purchases that you can pay off very quickly.  Get Some Credit Counseling Credit counseling can help you learn to set up budgets and stick with them. You can also learn smart money handling strategies that will allow you to start to build a good emergency fund and repair your credit at the same time.  Applying for Chapter 7 bankruptcy is one way that you can get out of unmanageable debt. It also gives you a chance to rebuild your financial life so that it is better and stronger than it was before. Contact a legal professional such as Julie A Philippi Attorney at Law for more...

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Student Loans: Are There Legal Ways To Get Out Of Debt?

Posted by on Sep 24, 2015 in Uncategorized | Comments Off on Student Loans: Are There Legal Ways To Get Out Of Debt?

Drowning in student debt and don’t know what to do? Well, first of all, you aren’t alone. In fact, there are 40 million Americans who have some level of student loan debt, with the average borrower having four loans. These loans aren’t always easy to pay back, especially with everything else that you need to pay on a regular basis. Luckily, there are options available to you that can have your loans partially or fully forgiven, discharged or cancelled: Income-Based Repayment Forgiveness With an Income-Based Repayment Plan, you are essentially ensuring that your payments will never exceed the amount that you can afford each month based on your income. In other words, your monthly payment amount is going to be based on your income using a sliding scale rather than the actual amount of the loan. In addition, after 25 years of making qualified payments on your student loans, the remaining debt will be forgiven under this program. This program is eligible to be used with FFEL and Direct loans, as well as most federal loans. Loan Forgiveness for Teachers If you adequately meet certain conditions, you may be eligible for the Teacher Loan Forgiveness Program. Under this program, you can receive student loan forgiveness for up to $17,500 on your Subsidized and Unsubsidized Federal Stafford and Direct Loans. PLUS loans are not eligible at this time for this program. Now, one criteria that you’ll need to meet is having been a full-time teacher for five straight years in an elementary or secondary school that meets certain conditions, such as being a low-income facility. Other criteria and information regarding this program can be found at the Federal Student Aid website. Loan Forgiveness for Public Service Workers If you work in the public service sector, such as for the local, state or federal government, you may be able to receive loan forgiveness under the Public Service Loan Forgiveness Program. In order to qualify for this program, you do have to be in a qualifying public service job for at least 10 years, although these years are not required to be consecutive. It is also must be full-time, which is 30 hours or more per week. You also must make 120 monthly payments on time. This program only refers to Direct Loans, but you can consolidate other loans into your Direct Loan so that they can be eligible as well. What About Other Programs or Even Bankruptcy? There are other ways to have your student loans forgiven, cancelled or discharged, depending on your exact circumstances. As a general rule, bankruptcy is not an option for eliminating your student loans. There is one exception, of course, but it is often hard to prove as you must prove that paying your loans would create an undue hardship to you, according to Even if you can’t prove this, you may be able to find help with Chapter 13 bankruptcy (not chapter 7 bankruptcy) by having your payments reduced throughout the duration of your reorganization plan. Currently, President Obama is trying to expand bankruptcy options for those who have student loans. Ultimately, your best bet is to speak with a qualified bankruptcy attorney. He or she will be able to examine your exact circumstances and prove you with a guideline of what can and...

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Discharging Alimony During Bankruptcy

Posted by on Sep 23, 2015 in Uncategorized | Comments Off on Discharging Alimony During Bankruptcy

If you are unable to pay your debts, then bankruptcy allows you to discharge them so that you can start a fresh financial journey. As with other legal processes, however, there are exceptions to this rule. There are some debts that you cannot discharge, and alimony (spousal support after divorce) is one of them. Whether you are filing for Chapter 7 or Chapter 13 bankruptcies, you will have to continue servicing your alimony payments. So if you were thinking of bankruptcy as a way out of these obligations, then you should start thinking of alternative solutions. Don’t forget that the consequences of not paying alimony can be dire; you can be held in contempt of court, your income can be withheld, and portions of your financial accounts can be seized. How Filing for Bankruptcy Can Help Alimony- related payments: Although bankruptcy cannot help you to avoid making alimony payments, it can help you with some alimony-related payments. This is because only alimony per se is non-dischargeable, other related payments, such as interest or late fee payments, are not. Therefore, a bankruptcy discharge can still help you if you have not been paying alimony for a long time and have accrued a significant amount of interest. The discharge may get rid of the accrued interest so that you only concentrate on paying the principal amount, which is the real alimony. Misclassified alimony – You may be able to discharge part of the “alimony” debt if it wasn’t really spousal support, but some form of marital obligation misclassified as alimony. For example, some divorcing persons have a tendency of classifying part of their divorce settlement as alimony. If you can prove that this is what happened during your divorce, then you may succeed in having this part of the debt discharged. Modification of Payments – Filing for bankruptcy may also lead to a modification of the alimony payments. This is possible if the discharge significantly affects your ability to pay the alimony. The debt is not discharged, but it may be reduced according to your ability to pay. Assigned alimony – you may also be able to discharge the alimony debt it has been assigned to a third party. This may be the case if you have been having difficulties paying your spousal support, and your former spouse has assigned another person to collect the money on his or her behalf. In such a case, it is as if you owe money to the third person, and not your spouse, which is why you may be able to have them discharged. This brief discussion of the relationship between alimony and bankruptcy shows just how complicated these issues can be. It is advisable to consult an attorney, such as Legal Clinic Of Jerry Paeth, early on so that you don’t make any move before ascertaining that it will help you meet your objectives. For example, an attorney may help you decide on which bankruptcy chapter to choose if you have debts related to marital...

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Chapter 7 Bankruptcy: Federal Tax Debts And The Automatic Stay

Posted by on Sep 21, 2015 in Uncategorized | Comments Off on Chapter 7 Bankruptcy: Federal Tax Debts And The Automatic Stay

An automatic stay is one of the benefits of filing for Chapter 7 bankruptcy. The stay can help keep creditors from taking legal action until your bankruptcy is completed. If you have a federal tax debt, here is what you need to know about how an automatic stay can impact your debt. What Is an Automatic Stay? The stay immediately goes into effect when you file for Chapter 7 bankruptcy. The stay stops creditors from taking you to court or taking any other actions to collect on the debt. The Internal Revenue Service, or IRS, will be notified with your other creditors of the stay. You are protected by the stay until your bankruptcy is completed unless the IRS asks the court to lift the stay. In that instance, the judge will review the IRS’s request and make a decision. If the judge agrees to remove the stay, the IRS can continue legal actions to collect on your debt. What If the Stay Remains? In the event that the court rules that the stay must remain in place, the IRS has several other options available to it to try and collect on the debt. For instance, the agency could choose to file a proof of claim. The proof of claim basically means that the agency wants to be paid for the debt and that it should not be discharged. The IRS could also ask the court to completely dismiss your bankruptcy case. If the judge agrees, your complete filing could be dismissed. You can re-file at a later time. What Happens at the Completion of the Bankruptcy? Depending on the type of tax debt you have, there is a chance that it could be discharged when your bankruptcy is completed. There are certain rules that must apply to a tax debt that dictates whether or not you can have it discharged. For instance, only tax debts that you have filed a tax return for are dischargeable. If the court rules that your tax debts are not dischargeable, the IRS can once again start collection efforts. If the bankruptcy trustee has taken any of your assets to liquidate, the IRS can receive part of the proceeds and this will help lower the amount that you owe. Consult with an attorney experienced in handling tax debts and Chapter 7 bankruptcies. He or she can help you decide before filing whether or not it will be beneficial to your financial situation. To find out more, speak with someone like Morrison &...

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3 Questions To Ask You Attorney About Filing For Chapter 7 Bankruptcy

Posted by on Sep 21, 2015 in Uncategorized | Comments Off on 3 Questions To Ask You Attorney About Filing For Chapter 7 Bankruptcy

If your financial life isn’t as good as you want it to be, you may have problems paying your debt. This can be a very stressful and annoying time for you. It’s in your best interest to consider filing for Chapter 7 bankruptcy because this may be the key to getting rid of your debt. It’s important to ask certain questions before filing for this legal status and knowing the answers to these may be helpful to you.   Question #1:  What is the cost of filing for bankruptcy? When you don’t have a lot of money, the last thing you will want to do is to pay a huge fee for filing for this status.  However, the cost of filing for Chapter 7 bankruptcy is only $335, and this includes the court costs and the administrative fees, as well. Question #2: What are the requirements for filing for this status? In order to have success in getting your debts dismissed, you will need to complete some forms. This will show that you’re eligible for the legal help, and these are listed below: 1. You will need to provide proof of your income. You could rely on a W-2 from the previous year to do this or an old pay stub. 2. You should have a report that lists the amount of your monthly expenses, and some of these may include how much you pay for rent, clothing and food for your entire household. 3. Be prepared to provide the amount of debt that you owe each creditor. It’s a great idea to bring the previous month’s statements with you when filing for this status. Question #3: What debts aren’t discharged? When filing for a Chapter 7 bankruptcy, you may be under the impression all of your debts will be discharged, but this is simply not true. There are some debts that you’ll have to pay, and these are listed below: 1. Student loans – If you borrowed money to pay for college, you’d be required to pay this money back. 2. Spousal or child support – If the court has ordered you to pay money to either your ex-wife of a child, this amount must be paid and will not be discharged. 3. Payments for a lawsuit – If you have been ordered to pay another person a certain amount of money because of civil litigation, you will be required to pay it. It’s important to be prepared for the process when filing for this legal status. Be sure to consult with a bankruptcy attorney in your area (such as Arthur M Richard) for professional legal...

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Chapter 13: Do You Have To Give Up Your Deceased Parent’s Summer Home?

Posted by on Sep 15, 2015 in Uncategorized | Comments Off on Chapter 13: Do You Have To Give Up Your Deceased Parent’s Summer Home?

If your parent passes away and leaves you a summer home as an inheritance right before you file Chapter 13 bankruptcy, you may wonder if you should add it to your case. The answer is yes. You must report all inheritances you receive within 180 days of filing your case. If you don’t report the summer home, a judge can dismiss your bankruptcy. A bankruptcy attorney may help you keep your summer home based on its value and the exemptions in your state and federally. Can You Keep Your Inherited Property? Bankruptcy court allows you to keep certain items or assets when you file Chapter 13 if they fall under certain income limits. If your inherited summer home is worth more than your debt, your bankruptcy trustee can use it to pay off your creditors. However, if the home’s value is less than your debt, your bankruptcy attorney may ask the court to exempt the property. State and federal exemptions describe the value of property and assets. Your property and assets must be lower than the state or federal exemptions you claim to keep them. For example, if your summer home holds a value of $12,000 and you owe $15,000 to your creditors, the bankruptcy trustee can sell the home to cover most of the debt. If your inherited summer home holds a fair market price or equity of $5,000 and your debt is $50,000, the trustee may not consider the property worth the trouble of securing and selling. The overall costs of placing the home up for auction, private sale or some other method may be greater than what it’s really worth. However, the bankruptcy trustee may hold on to the property as security until your Chapter 13 ends. For instance, if you don’t pay off your debt on time or lose the ability to pay off your debt, the trustee may then sell the summer home to obtain some type of funding for your creditors. What Can Your Bankruptcy Attorney Do? Your bankruptcy attorney may do two things to protect your property. They can have a real estate agent place a value on the home based on the surrounding fair market price of similar homes in the area. The price your loved one paid for the summer in the past may not be the same as it is now. The home may be worth considerably less than the initial purchase price because the area experiences a lot of foreclosures, crimes and other problems that affect the ability to sale homes. Your attorney may use these potential problems as a way to keep your home during your Chapter 13. The attorney can also study the federal and state exemptions and use the exemptions that work better for you. Your attorney will discuss the best options with you before filing your case. If you have concerns about your inherited home, don’t hesitate to speak to a professional bankruptcy attorney, like those at Wiesner & Frackowiak,...

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Can You Keep Your Vacation Home If You File Chapter 7 Bankruptcy?

Posted by on Sep 14, 2015 in Uncategorized | Comments Off on Can You Keep Your Vacation Home If You File Chapter 7 Bankruptcy?

Making the decision to file Chapter 7 bankruptcy is never an easy one. Navigating the complicated rules of what is considered exempt and what you can discharge can be difficult. One of the key concerns about bankruptcy is what happens to your home. Chapter 7 rules have some distinct methods to let you keep your existing primary home. However, what if you have a second home? There are some very specific instances where you may be able to keep a vacation home under Chapter 7 rules. How Much Equity? Under the rules of Chapter 7 bankruptcy, all of your property must be reviewed by a neutral trustee. They make the decision on what to sell to raise funds to pay off your creditors. Every piece of property has an exemption, which is a dollar amount that you are allowed to keep from each item. The trustee makes the decision if selling a piece of property makes sense based on the exemption. If your second home has a mortgage for $200,000 and you still owe $150,000, you have $50,000 in equity. The trustee then decides if it is worth it to sell the home based on the amount of money left after paying your exemption, liens, his commission, and selling costs. What Exemptions? While the homestead exemption for Chapter 7 bankruptcy will protect your primary residence, you cannot use it on vacation homes. There may be other exemptions you can use, however. In most cases, the exemption you can use is called the wildcard exemption. Unfortunately, the wildcard is usually not that large, so it may not cover the equity you have in your vacation home. For example, in California, the wildcard exemption is only $1,350. However, you can also apply any unused amount of the homestead exemption. The second exemption that can save your vacation home during a Chapter 7 bankruptcy is actually your primary exemption. If for some reason you don’t need your homestead exemption to protect your primary home (for instance, if you don’t have enough equity to make selling it worthwhile), you can use it to cover your second home if your dependents live there. An example of this is if you have children from another relationship and they live in the second home. The homestead act would apply here then. Undergoing a bankruptcy is a difficult process and stressful for everyone involved. However, knowing what you can expect from your trustee and the courts can go a long way toward making it easier. With some foresight, you can make plans on how you will have to deal with a second home during a bankruptcy. For more assistance, contact a local debt defense...

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Which Debts Are Discharged In A Chapter 7 Bankruptcy?

Posted by on Sep 8, 2015 in Uncategorized | Comments Off on Which Debts Are Discharged In A Chapter 7 Bankruptcy?

When you file for a Chapter 7 bankruptcy, many of your debts will be discharged by the court once the filing is complete. However, some debts will remain and you will still be responsible for them. If you are weighing whether or not filing for bankruptcy would be beneficial for you, it is important that you know which debts will and will not stand after the process is complete. Student Loans Student loans typically are not discharged in a bankruptcy filing. It is only if your financial and personal situation meet certain standards that you could potentially qualify for a discharge. To have your student loans discharged, you have to prove that paying back the loan would create an undue hardship and that you have made a reasonable effort to try and pay them in the past. To request that your student loans are discharged, you need to file a formal request with the court. You will need to include evidence that shows the hardship the loans will cause. For instance, if you have an illness that limits your ability to work and you cannot afford the loans, you should include a statement from your treating physician and documents showing your income and expenses. Medical Debt High medical bills have forced many people to file for bankruptcy. In a Chapter 7 bankruptcy, medical bills are considered to be an unsecured debts. Unsecured debts do not have any collateral attached to them. As a result, it is very likely that your medical bills will be discharged by the court when your case is completed. You do not have to take any special steps to ensure your medical bills are discharged. As long as you include them on your list of debts, they will be reviewed and discharged with your other eligible debts. Retirement Plan Loan It is not uncommon for people to take out loans from their retirement plans. If you did, you still are responsible for paying off the debt after the filing is complete. Retirement plan loans are viewed in the same light as other loans. You should contact the administrator of the retirement plan to work out a repayment plan so that your future credit ratings are not impacted by a poor repayment history. Your bankruptcy attorney can help advise you on whether or not your other debts are dischargeable. The attorney can help ensure that you do not miss out on the full benefits of filing for...

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