Bankruptcy

Common Mistakes Made During the Bankruptcy Process

The bankruptcy process can forever change your life. While many people are capable of realizing positive change through bankruptcy, by making mistakes during the process, some people can end up facing obstacles that last for years. The following will review some common mistakes to avoid when filing for bankruptcy. Not Honestly Disclosing Your Assets Chapter 7 bankruptcy involves a means test, which requires you to disclose all of your assets and income because this amount determines your ability to pay off creditors. If you do not honestly disclose your assets, there is a good chance that your case will be dismissed. In some situations, you might even be prohibited from ever filing for bankruptcy again. Giving Assets to Family Members You are prohibited from giving away any of your assets to friends or relatives with the understanding that they will give the assets back to you at a later date, after your bankruptcy filing is complete. There is a risk that if you attempt to hide assets in such a way, you could end up losing them. Accruing Credit Card Debt Before Filing for Bankruptcy If a creditor determines that you purposefully accrued additional credit card debt in anticipation of     Read More

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Home Mortgages and Bankruptcy

Filing for bankruptcy no longer creates obstacles for a future home buyer. Instead, many mortgage lenders have relaxed requirements so that even individuals who file for bankruptcy are able to obtain a home more quickly than ever before. The following will discuss some available mortgage loans and how they are affected by the bankruptcy process. Federal Housing Authority (FHA) Loans FHA loans are federally-insured loans and are attractive to many because they allow a buyer to put down only 3.5% of the home’s purchase price. The credit score limits for these loans are also much more generous than other types of conventional loans. In many cases following a Chapter 7 bankruptcy, a person will be required to wait two years to obtain this type of loan. If a person opens a new credit account after filing for bankruptcy, he or she will often be required to make payments on time to establish a good credit history. Other individuals decide to speed up the qualification process by not opening any credit accounts following bankruptcy. Instead, if a person is able to demonstrate that filing for bankruptcy was beyond his or her control, it is possible to reduce the waiting period to     Read More

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Student Loan Scams and Bankruptcy

It is common for students to pay for their education through loans. During the process of attempting to find a loan provider that will lower a student’s monthly loan payments, many students encounter companies offering fraudulent deals. If you have student loan debt, it is critical to be aware of various common refinancing scams. While bankruptcy courts have traditionally not allowed students to discharge student loans through bankruptcy, the landscape has changed significantly over the last few years. If your student loans have led you to pursue bankruptcy, you should not hesitate to speak with an experienced bankruptcy lawyer. Advance Fee Scams Advance fee scams involve companies who claim that they can help you receive the best interest rate and loan terms in exchange for a small fee, which can range from 1% to 5% of your total loan. These offers exist in stark contrast to other types of student loans, which do not require upfront fees. The only type of acceptable fee that comes with student loans is a default fee for federal loans or a disbursement/origination fee associated with private loans. A company that offers to help with your student loan debt should never require an upfront free     Read More

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How Bankruptcy can Affect Children

Many people place the interests of their children above their own. As such, it is common to have concerns about how the bankruptcy process will affect your children. Some relevant questions include whether children will lose property, what happens to a child’s bank account, and whether college loans can still be obtained for the child. While it might be surprising to learn, the bankruptcy process can affect your children in a number of ways. The following will review some of the most common ways in which bankruptcy is known to affect children. How Bankruptcy Affects the Child’s Property While items that were given as gifts to a child are still viewed as household property, property that a child purchased will not be classified this way. The risk of losing property arises in Chapter 7 when individuals navigating bankruptcy are allowed to only keep exempt property. In many cases, however, property belonging to a child is often not of interest to bankruptcy trustees unless the items are exceptionally valuable. Child Bank Accounts and Bankruptcy Money that is held in a child’s bank accounts is not considered property for a bankruptcy estate. Neither a bankruptcy trustee nor creditors are able to obtain     Read More

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Bankruptcy and Divorce

Divorce is almost always an emotionally challenging process. Many people discover that every aspect of their lives are impacted by divorce more than they ever would have anticipated. If you and your former spouse have decided that divorce is your best option, it is likely that your finances will be affected, and sometimes, bankruptcy becomes a necessity for one or both spouses. Navigating bankruptcy can complicate the divorce process, however. The following will review some important things to consider if you have facing both bankruptcy and divorce. Do Not Simultaneously File for Divorce and Bankruptcy It is often best to not proceed through divorce and bankruptcy at the same time. After filing for bankruptcy, an “automatic stay” is placed on a person’s account, which prevents creditor harassment and freezes a person’s assets and property. If the two overlap, an automatic stay will be placed on a person’s assets and will make it impossible for the divorce court to divide assets. While it is often best to not file for both bankruptcy and divorce at the same time, a person should carefully choose which process to navigate first. If a marriage ends and the former spouses are still friendly with one     Read More

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Navigating Chapter 7 Bankruptcy if You do Not Have Any Money

If you have considered filing for bankruptcy, you are likely short on money and tired of being harassed by creditors. Unfortunately, it is not free to file for bankruptcy even though the process is designed for individuals who are facing a large amount of debt. This article will examine how much you can expect the bankruptcy process to cost and list some reasons why this process is still often a wise idea if you are facing financial difficulties. The Assistance of a Bankruptcy Lawyer Some people try to save money during the bankruptcy process by avoiding paying for a bankruptcy lawyer. While it is possible to navigate the bankruptcy process on your own, there is a much lower success rate for individuals who try to file for bankruptcy without the help of a lawyer. While an attorney is not required to navigate the bankruptcy process, it is almost always a good idea to obtain the assistance of one. Other Costs Associated with the Bankruptcy Process Even after hiring an attorney, there are other costs associated with the bankruptcy process. The average filing fee for a Chapter 7 bankruptcy is reported to be $335. There are also additional fees that a     Read More

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Renting an Apartment After Filing for Bankruptcy

Many people are aware that after they file for bankruptcy, details about the event will appear on their credit report for at least the next few years. Some people discover that the bankruptcy process impacts their ability to rent an apartment even after the bankruptcy is complete. Factors Landlords are Likely to Consider There are several factors that a landlord is likely to consider when deciding if a person is a good candidate to rent an apartment. Some of these factors include:   Disposable incomes. Landlords almost always place great emphasis on the amount of disposable income that a person has to pay rent. A landlord who owns a property will often be willing to listen to a person’s story about bankruptcy and consider extenuating factors. Employment history. Many landlords are concerned about a person’s job stability. In addition to a person’s employment history, a landlord will often be interested in the length of time that a person has been at a position, permanent employment, the person’s previous employment history, and the individual’s wage history.   Tips to Renting an Apartment After Bankruptcy There are several pieces of advice that a person can follow to increase his or her chances     Read More

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Personal Injury Claims and Bankruptcy

Filing for bankruptcy is a challenging part in many people’s lives because it involves a substantial amount of paperwork and complicated emotions. Because bankruptcy law is particularly challenging, it can be difficult to determine what to do. The bankruptcy process can be made even more complicated if the person who has filed for bankruptcy expects to receive compensation from a personal injury claim. The Role of a Bankruptcy Trustee When a person files for a bankruptcy petition, it creates a bankruptcy estate that is administered by a bankruptcy trustee. After this estate is created, a person has an obligation to disclose all details about assets and properties to the estate. It is critical to disclose information about compensation received in a personal injury lawsuit to a trustee. Discharging Debt in Bankruptcy If you file for Chapter 7 bankruptcy, you will be allowed to clear most types of debt. The role of the bankruptcy trustee is to take your non-exempt assets and pay creditors using these proceeds before your debt can be discharged. In cases in which a person files for Chapter 13 bankruptcy, however, the individual’s debts are reorganized. The bankruptcy trustee mediates negotiations between the debtor and creditor to     Read More

Child Support and Bankruptcy

Filing for bankruptcy offers individuals the opportunity to wipe out various forms of debt or to reorganize debt into a more manageable payment plan. Some types of debt, however, can not be discharged in bankruptcy. Filing for bankruptcy will discharge stop child support obligations, for one. Filing for Chapter 13 bankruptcy, however, sometimes allows a parent to turn child support payments into a more feasible payment plan. An experienced bankruptcy attorney can help you determine which option is best for you. Chapter 7 Bankruptcy and Child Support Chapter 7 bankruptcy allows a person to liquidate assets to pay off creditors and eventually discharge debt. Because child support is a “priority” debt, however, it can not be discharged through Chapter 7 bankruptcy. Priority debts are obligations that are not secured by collateral but are prioritized among other debts when there are not enough assets to pay a person’s creditors. Child Support and Chapter 11 Bankruptcy Chapter 11 bankruptcy involves the reorganization of debt. Under this type of a bankruptcy, a person creates a reorganization plan that takes into consideration factors like assets, liabilities, current income, and expenditures. Reorganization plans must first be approved by bankruptcy courts. Under this type of bankruptcy,     Read More

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How Unemployment Affects Bankruptcy

Statistics compiled by the Bureau of Labor Statistics reveal that 4.1% of Americans are currently unemployed. Without a regular income, many people face difficulties in keeping up with their bill payments. Many people in this situation discover that bankruptcy offers the opportunity to reduce financial hardships. If you are currently navigating financial complications after unemployment, filing for bankruptcy can help to reduce and sometimes even eliminate many debts. While being unemployed might increase your chances of obtaining certain types of bankruptcy, not having a job can prevent you from qualifying for other types of bankruptcy. It is important for unemployed individuals to understand how their employment status can affect filing for bankruptcy. In most situations, it is also important to contact an experienced bankruptcy lawyer. How Unemployment Affects Chapter 7 Bankruptcy A person is not required to be employed to file for Chapter 7 bankruptcy. Instead, unemployment can often help a person qualify for Chapter 7 bankruptcy. The means test to qualify for Chapter 7 bankruptcy measures a person’s financial ability to repay creditors. If your income falls below the median income for a household of equivalent size, you will be considered to have passed the means test and be     Read More

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