Recovering From Financial Ruin

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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The Effects Of Bankruptcy On The House You Live In

Posted by on Sep 4, 2015 in Uncategorized | Comments Off on The Effects Of Bankruptcy On The House You Live In

There are many differences between Chapter 7 bankruptcy and Chapter 13 bankruptcy, including what can happen to the house you own. If you really want to keep the house you live in, you might be able to with either type of bankruptcy, but there is also a chance you could lose it. Here are three factors that influence the way bankruptcy affects the house you live in. The Equity In The House When you file Chapter 7 bankruptcy, the trustee will typically allow you to keep your house if you have very little equity in it. The trustee will use a calculation to determine the answer to this. If you do not have equity in the home, it would be useless for the trustee to take the home from you. If the trustee did and sold the house, there would be nothing left to pay to your creditors. With Chapter 13, the amount of equity in your home does not affect your ability to file or keep your house. You can keep the house if you want, but you will have to include all the arrears in your repayment plan. An Underwater Loan If you owe more money on your house than what it is worth, it could also affect your bankruptcy. This is referred to as an underwater loan. In Chapter 7, this would not affect your ability to keep the house. As long as you can come up with a way to repay any arrearage, the trustee would allow you to keep your house. With Chapter 13, having an underwater loan might give you the ability to get part of your lien removed from the house. The trustee would compare the amount you owe to the current market value of the house. If you owe more than it is worth, the trustee might be able to reduce the amount you owe through lien stripping. This often requires having a second loan on a house, but it might also be possible if you have only one loan. Reaffirmation Of Debt The third difference involves reaffirming the debt you have. With Chapter 13, you can automatically keep your house if you choose to. With Chapter 7, you will have the right to keep your house; however, you must reaffirm the debt you have with your lender. This basically means that you are asking permission from the lender to keep the loan you have, even though you are filing for bankruptcy. Knowing the effects bankruptcy can have on your house can help you make the right decision about which branch to use. If you would like to find out more information regarding your options, contact a bankruptcy lawyer, like William C Fithian III,...

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How To Prepare For A Bankruptcy

Posted by on Sep 3, 2015 in Uncategorized | Comments Off on How To Prepare For A Bankruptcy

Facing bankruptcy is stressful. However, if you prepare for the process, you can make it easier for you and your family. Documents Needed When Preparing For Bankruptcy Your lawyer can provide the most thorough requirements for a successful bankruptcy filing. However, it helps to have your documents ready ahead of time when you consult your lawyer about assets and debts. It also makes less work for your attorneys when you have papers gathered, which will lower your legal consultation fees. Here’s a list of some commonly requested documentation required for declaring bankruptcy: Bank statements from the past 12 months (or even older if you have them) Bills or invoices for purchases made in the past year Current outstanding copies of recent bills As many receipts as you can possibly find Previous attorney records and papers from prior judgments or filings Cancelled checks, creditor correspondence records,  or signed promissory notes Vehicle titles, leases or mortgages Written repayment agreements made between you and private parties Lawsuit records and other proof of owing money Tax returns from the past three years Any other documents you have that would determine your case All other papers requested by your lawyer If you’re not sure you have all the information you need, ask your attorney. He or she will instruct you on whether or not you need to include certain assets, income streams or purchases. Check Out Your Credit Report Before Bankruptcy Before making the decision to declare that you are unable to pay your bills, you’ll want to review all your credit reports. This will prepare you in case of a potential lawsuit. In addition, it is highly recommended that you look at public records to find out if you have any judgments posted in your credit files. This will alert you of any possible wage garnishments or bank levies.  Talking to Your Spouse and Children There isn’t going to be any easy way to break the news to your loved ones concerning your financial situation. Perhaps you need to plan a family meeting where you can announce your intentions to file bankruptcy. In doing so, you also will want to prepare for the questions your spouse or children might ask. Remain as positive as possible, and don’t forget to tell them how this will help give your family a fresh start. With careful practical planning on your part and emotional support from your family, you’ll get through this financial challenge. Talk to an attorney, like Richard S. Ross – Bankruptcy Attorney, to learn...

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