Bankruptcy

When to Think Twice Before Filing for Bankruptcy

One of the most challenging aspects of bankruptcy law is that a large number of clients have misconceptions about the process and what it entails. One of these is when it is appropriate to file for bankruptcy. While the bankruptcy process offers several advantages including the opportunity to start over at building a good credit record, bankruptcy is not for everyone. This article discusses some of the situations in which you should think twice before filing for bankruptcy. You are Able to Pay Your Debts Occasionally, some people think that it might be a good idea to file for bankruptcy even though their debt is much smaller than their income. In these situations, a person should instead create a short or long-term plan to pay those debts. If you are not in a position to pay your debts, however, you should give serious consideration to filing for bankruptcy. Your Debt is Primarily Taxes or Student Loans Debt associated with taxes or student loans are particularly difficult to discharge through bankruptcy. To be discharged, income tax must meet several requirements including being three years old and not assessed within the last 240 days. Because you are unlikely to discharge most types     Read More

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Understanding Common Fears About the Bankruptcy Process

Few people approach Chapter 7 or Chapter 13 bankruptcy without any concerns about what the process might involve. Instead, it is much more common to involve bankruptcy as a potential solution in difficult times, but also a process that comes with several particular challenges. This article will address some of the most common fears that people have when considering filing for bankruptcy. Bankruptcy Will Remain on Your Credit Report for Years Chapter 7 bankruptcy might only take several months to complete and offer the advantage of discharging you from debts, but many people worry that a bankruptcy will remain permanently on their record. In reality, many people discover that the bankruptcy filings remain on their record for a period of only a few years, after which they are able to begin rebuilding their credit score. Bankruptcy Records can be Viewed by Anyone Bankruptcy is a legal proceeding, which many people fear means that these records can be read by anyone. To access bankruptcy records, however, a person must have your name and other personal details. A person also must have the correct information to conduct an online search, which often means that these records are better hidden than many people     Read More

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Important Things to Know Before Filing for Bankruptcy

Statistics reveal that last year there were 790,830 bankruptcy filings, which marked the smallest number of bankruptcies that have been filed in years. Even though this number has decreased, the bankruptcy rate in our country is still high. This article will review some important things to consider before filing for bankruptcy. All of Your Debts Must be Declared During Bankruptcy Bankruptcy is a challenging process, but some people do not reap the true benefits of the process because they are not entirely honest. Unfortunately, many people make the mistake of not declaring all of their debts when filing for bankruptcy. To eliminate debt, it is critical for a person to inform bankruptcy court as well as the involved legal counsel the exact type and amount of debts that are involved. Bankruptcy is Complicated Bankruptcy has numerous benefits, but it is a particularly complicated process. Unfortunately, the various nuances involved with the bankruptcy process cause many people to make errors when filing for bankruptcy. One of the most common of these errors is failure to file important documents that are necessary to successfully navigate the bankruptcy process. Another failure is to meet the strict requirements of bankruptcy criteria. In some cases,     Read More

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Ways to Improve Your Bankruptcy Recovery Time

Statistics reveal that in 2017 more than 700,000 people filed for bankruptcy. While it is true that a bankruptcy can remain on a person’s credit report for up to 10 years, there is no reason for a person to wait to begin taking steps to reduce the negative effects of bankruptcy. Instead, if you have a plan and follow it responsibly, it is possible to recover from bankruptcy much more quickly than 10 years. With the assistance of a skilled bankruptcy attorney, you can even create a strategy to quickly build up your credit. Use a Secured Credit Card to Raise Your Credit Rating After bankruptcy is discharged, many people benefit from opening secured credit cards that do not charge annual fees. As these people rebuild credit, it is a wise idea to place at least one charge a month on the card. Once the credit card statement is received, you should then make sure to pay off your balance each month on time. Using a credit card in such a way is one of the easiest and quickest ways that you can improve your credit rating. Join a Free Monitoring System To make it easier to understand the pace     Read More

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Bankruptcy Options for Senior Citizens

Many senior citizens, especially those who do not have an adequate amount saved for retirement, frequently face financial difficulties. Statistics also suggest that senior citizens are filing for bankruptcy at a greater frequency than they did 13 years ago. In reality, filing for bankruptcy in some situations is the best way to obtain financial relief. This article will discuss why more senior citizens should consider bankruptcy. The Types of Bankruptcy It is critical that anyone who files for bankruptcy understands that the process is irreversible and cannot be undone once a person has entered it. Senior citizens have two types of bankruptcy from which to choose, which include the following:   Chapter 7 bankruptcy. In this process, you begin by providing the court with information about all existing debts. Chapter 7 bankruptcy is available to senior citizens whose income is below the state’s median level. During this process, most of a person’s debts are relieved and any non exempt assets are sold to pay off creditors. If a person has enough disposable income to finance a Chapter 7 repayment plan, they will not be eligible for Chapter 13 bankruptcy. The primary advantage of Chapter 7 bankruptcy is that a person     Read More

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Deciding Between Bankruptcy and Debt Consolidation

It can be challenging to decide whether bankruptcy or debt consolidation is the best decision. While it might seem strange, some people decide to take out a loan at a lower interest rate to repay another amount of money. Other people decide to declare bankruptcy, which has its own attractions and challenges. These options frequently involve a person either discharging debt through Chapter 7 bankruptcy or creating a payment plan through Chapter 13 bankruptcy. In deciding which option is best, it is a wise idea to speak with an experienced attorney. Debt Consolidation as an Option Debt consolidation allows a person some significant advantages. One of the advantages of debt consolidation is that a person makes one payment to one lender rather than juggles the demands of various lenders. Some people are even able to obtain debt consolidation with low interest rates below 10%, which makes it much easier to manage debt. Another debt consolidation perk is that a person is often able to establish an end date at which he or she will be finished repaying a debt. Despite these advantages, there are some recognized setbacks to the option of debt consolidation. For one, a person needs a good     Read More

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Declaring Bankruptcy and Cosigning Loans

Cosigned loans serve an essential role in letting people who would otherwise be unable to obtain a loan to do so. If a person defaults on a cosigned loan, however, the cosigner can end up becoming liable for the entire amount of the loan. If you are experiencing financial difficulties and have a cosigned loan, speak with an experienced bankruptcy attorney who can help you determine your best course of action. The Effect of Defaulting on a Cosigned Loan Parents frequently cosign for children who have not yet established a line of credit. In some situations, however, adults sign for the loans of other adults, which can result in many complications. Often, if a person cannot make the required payments, the financial institution will pursue the cosigner for payments. To stop collection efforts from credit agencies, individuals in these situations often decide to file for bankruptcy, which results in an automatic stay that prevents a court from collecting on a debt. Even though filing for bankruptcy prevents creditors from pursuing the person who has taken out the loan, these protections do not apply to a cosigner.  As a result, credit collectors in these situations frequently pursue the loan’s cosigner. Chapter     Read More

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Financing the Bankruptcy Process with Your Tax Refund and Other Preparatory Steps

One of the largest obstacles that people face in filing for bankruptcy is deciding how to pay for the process. Many people argue that it is a Catch 22: If they were able to come up with several hundred or even a thousand dollars, they would not need to file for bankruptcy in the first place. In the last few years, numerous articles have been published about people paying for the bankruptcy process through the use of their tax refunds. The lesson to be gleaned from these articles is that there are numerous ways to pay for the bankruptcy process even if you cannot immediately think of one. Obtaining sufficient financial resources for the bankruptcy process is just one of the many complications for which a person who is interested in filing for bankruptcy must prepare. This article will review some of the important steps that should be performed in preparation of filing for bankruptcy. Stop Borrowing Money After you decide to file for bankruptcy, it is important to immediately stop borrowing money or using any credit cards. If you continue to do so, there is a risk that this might be construed as fraud and will result in additional     Read More

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Establishing Trusts When a Family has Debt

More than many other estate planning tools, trusts are capable of protecting a family’s assets for future generation. However, if either the person creating the trust or the beneficiary has debt, the trust will likely not be able to protect the assets from creditors. This means that if someone in the family files for bankruptcy, there is a risk that the trust could be seized for the repayment of debts. The Difference Between Revocable and Irrevocable Trusts The role of debt in the creation of a trust emphasizes the distinction between irrevocable and revocable trusts. A person who creates a revocable trust is in control of the trust until his or her death, which means that assets in this type of trust are considered property during the creator’s lifetime and will pass to beneficiaries after the creator’s death. Irrevocable trusts are not in control of the trust’s creator, but sometimes a “spendthrift”  provision can be added to the trust to protect it from creditor seizure if a beneficiary of the trust later files for bankruptcy. The Advantages of a Trust There are some distinct advantages to both irrevocable and revocable trusts. Irrevocable trusts offer the benefit of reducing estate tax,     Read More

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Common Questions About Creditor Harassment and Reporting After Bankruptcy

If you have to obtain a bankruptcy discharge after declaring either Chapter 7 or Chapter 13 bankruptcy, you are likely anxious to begin the process but are uncertain about how to proceed. While there are numerous areas in which questions arise, one of the most common types of questions that people who have to obtain bankruptcy discharge ask are about creditor harassment and credit reports. This article will provide some of the most commonly asked questions regarding these subjects. As always, while navigating the bankruptcy process, it can help significantly to rely on the assistance of a seasoned attorney who has helped others navigate the process. Question # 1: What if a Creditor Tries to Collect on a Discharged Debt? If a creditor contacts you after your debt has been discharged through bankruptcy, the best way to respond is to notify the creditor that the debt has been discharged. If the creditor contacts to you despite knowing the discharge has occurred, this is viewed as a serious violation of the Bankruptcy Code and likely violates the Fair Debt Collection Practices Act. As a result, a creditor can end up paying significant fines. Question # 2: What if You Forgot to     Read More

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