Archive for the ‘Bankruptcy’ Category

What Does a Bankruptcy Attorney Help With?

If the idea of bankruptcy has crossed your mind more than a few times, there’s a good chance that it’s something that you need to pursue. Maybe you’ve gone so far as to Google a few sites and articles to learn what is involved, then closed the computer again because the whole thing seemed too overwhelming. If that’s the case, or something close to it, then it’s time for you to seek guidance from a bankruptcy attorney.

A bankruptcy attorney will help in many ways, starting with reviewing your situation and advising you as to whether bankruptcy is the right step for you and explaining other options you may have.  One of the first steps of every bankruptcy case is determining whether your situation is more appropriate for a Chapter 7 bankruptcy filing or a Chapter 13 bankruptcy filing.

Your bankruptcy attorney will assess all of your assets and holdings to determine whether the bankruptcy trustee is likely to want to sell any of your property and to help you navigate the process of holding on to the things that are most important to you. If you are a business owner they will help you to understand what you need to do if you intend to continue running the business or, conversely, if you want to liquidate everything.

Whether your situation is straightforward or complex, a bankruptcy attorney will be able to leverage their knowledge and experience to make things as simple as possible for you, handling the paperwork, telling you what to expect, explaining delays and other complications, and representing you in court. Though bankruptcy proceedings do not require the use of an attorney, having the help of somebody who knows and understands the bankruptcy code and laws makes an enormous difference in your chance of having a successful filing.

Perhaps most important of all, when you choose an experienced and empathetic bankruptcy attorney, they will understand your anxiety and stress and help you see that filing for bankruptcy represents a fresh start and new beginning. They will allay your fears and answer your questions, explaining all of the benefits that filing for bankruptcy can provide and all the ways that it will eliminate the issues that have been negatively impacting your quality of life.  For information on how we can be of help, contact us today to set up a time for a consultation.

How to Start Saving Money After a Bankruptcy

Going through bankruptcy proceedings is an emotionally exhausting, sometimes traumatic event. No matter whether you got into financial trouble through bad decisions or through no fault of your own (medical event, job loss, etc.), you still have had to go through the process of putting all of your assets, income and debt on display and agreeing to either an extended payment plan under Chapter 13 or the loss of some of your assets under Chapter 7.

The good news is that once you’ve gone through the process you have the chance to make a fresh start, and that should begin with building savings.  After what you’ve been through, that may sound more easily said than done – but with a little diligence, consistency and purpose you’ll be able to do it. Here are some pointers to help you get started.

  • Begin by creating a budget. Make a list of all of your expenses – no matter how big or small and add them up. Then write down your net income. How do they compare? If you are bringing in less money than you are spending, you have a problem. You will need to eliminate some of your expenses. Go through your list and see what can be eliminated, or even cut down. If you have to pay for cable and internet, you might be able to cut out some channels. If you have a newspaper subscription you might be able to save by going strictly digital. Your goal is to get your expenses below your income.
  • Open a savings account and deposit your extra income into it every week. The extra income that exceeds your expenses needs to be deposited with the same attention that you give to paying for your other bills. Treat savings as an obligation, not an option.
  • Avoid applying for credit cards. When your finances are tight, it is very tempting to apply for a credit card so that you can buy the things you can’t afford. Don’t do it! This is how you can get into trouble. If something isn’t in your budget and you truly need it then you can use your savings. If you don’t need it, then not having a credit card will prevent you from lapsing into biting off more than you can financially chew.

If you’re considering bankruptcy, our experienced attorneys can help guide you to a solid financial future. Contact us today!




What Type of Bankruptcy is Best for Credit Card Debt?

Credit cards have unquestionably made our lives easier – and for some of us, it may have made life too easy. The temptation to simply reach into our pockets and pull out a card to pay for something we want can quickly lead to debt that gets beyond our ability to pay. If this has happened to you – whether as a lack of discipline or in response to a need that is out of your control (such as a job loss or illness), your best option may be to file for either Chapter 7 or Chapter 13 bankruptcy. The two are significantly different, and the appropriate one will be determined by your individual circumstances.

The biggest difference between Chapter 7 and Chapter 13 bankruptcy is that a Chapter 7 filing will discharge your debts in exchange for liquidating existing assets, while Chapter 13 bankruptcy represents a reorganization of debts and allows you to retain assets. In plain language, this means that under Chapter 7 you no longer have an obligation to pay but you also have to make significant sacrifices, and under Chapter 13 you agree to continue paying over a period of time.

Though Chapter 7 may sound like a better answer – and an easy way to eliminate your credit card debt – when you file for bankruptcy you will have to detail all of your debts, income and assets.  You may not qualify for Chapter 7 bankruptcy if your income is high enough for a payment plan to work, in which case you will be forced to turn to Chapter 13, agreeing to pay off debts over a three-to-five-year period. Once you’ve filed you will put a stop to all collection efforts, but your creditors will be able to request the liquidation of your assets, so it is a good idea to do a thorough analysis of your economic situation prior to commencing any kind of bankruptcy. You should also recognize that any debt that you have accumulated on your credit card immediately prior to filing for bankruptcy will be closely reviewed to determine whether your expenditures were for necessities or luxuries. If you decide to run up your credit card with expensive items prior to filing, those purchases will be spotted, and will likely be discharged.

If you are facing credit card debt that feels insurmountable, we can help guide you to the solution that is best for your situation. Call us today for help in determining your best legal options.

Should I Consider a Mortgage Modification?

When you applied for your mortgage, you did so based upon your income and assets at the time. That was the same data that your mortgage lender used to approve your mortgage, and when all of the paperwork was done you knew exactly what your monthly payment would be. Though both sides entered that arrangement with the expectation that none of the basics would change, sometimes circumstances intervene and people fall on hard economic times. If that has happened to you, a mortgage modification may be worth your consideration.

A mortgage modification allows you to change the terms of your existing loan in a way that maintains the same debt, but makes it easier for you to continue paying it. There are a number of different changes that can be made to accomplish this, including extending the length your loan’s term, reducing the rate of interest on the money that you have borrowed, or simply switching from an adjustable-rate mortgage to a fixed loan so that you don’t have to fear your mortgage payment increasing. Unlike refinancing, which replaces your existing loan with a new one, a mortgage modification represents a negotiation with your lender to make it more affordable for you to continue with the existing loan.

Asking your lender to consider a mortgage modification is an intimidating proposition – homeowners fear that letting their lender know that they’re struggling to pay their loan may result in action being taken against them. The truth is that your lender would likely prefer to work with you than to take action against you. Banks don’t generally like foreclosure, which is an expensive, time-consuming process. A mortgage modification is frequently a much better answer for all involved.

Qualifying for a loan modification is not as simple as just asking for it. Eligibility requires that the borrower is either already delinquent or is about to be delinquent as a result of a job loss, the loss of a spouse, an illness or disability or some other verifiable reason for an inability to pay based on your loan’s existing terms. The resulting modification, if approved, may be a temporary fix or may make permanent changes to your loan, and may be facilitated directly by your bank or loan servicer or through an assistance program such as the Flex Modification program offered by both Fannie Mae and Freddie Mac to homeowners whose loans they guarantee.

Keep in mind that a mortgage modification may reflect negatively in your credit report, though certainly not to the same extent that foreclosure or delinquency on your mortgage would. To find out more, contact your bank or mortgage servicer to ask about the availability of a mortgage modification, or contact our office to inquire about how we can help.


Can I File for Bankruptcy During the COVID-19 Pandemic?

It’s hard to find much positive to say about the COVID-19 global pandemic, but one good thing is its timing from a technology perspective. The internet and the advent of advanced communications technology have made it possible for us to keep in touch with loved ones, tp have telemedicine appointments with physicians, and to continue doing business of all kinds, including filing for bankruptcy. Accommodations have been made to previously stringent rules, and that means that doctors are willing to write prescriptions without actually seeing patients, schools are willing to let students take tests without being proctored, and courts are allowing those who are in isolation to file bankruptcy papers and have lawyers represent them without having to actually leave their homes.

The easing of existing requirements won’t be of help to those who intended to represent themselves in bankruptcy proceedings: it will be necessary to rely upon a bankruptcy attorney to accomplish your goal. The good news is that you will be able to interview most bankruptcy attorneys online, and you can do your due diligence by reading reviews on social media,  as well as by asking friends or family members about their experiences or knowledge of reputable attorneys who have helped them or people they know to get past their debt problems. When you make contact with these attorneys, make sure that you ask them about their willingness and ability to proceed on your behalf while you remain at home. Attorneys who are unable to make this accommodation for you should be thanked for their time and then bypassed unless you have time to wait for the COVID-19 crisis to pass.

Attorneys who are able to help you will make use of email, scanning of documents and other technology tools to make sure that all of the necessary paperwork that is required by the bankruptcy court can be sent back and forth between you, your attorney, the courts and your creditors.  You will also still need to take credit counseling and debtor education courses as part of the process, and those are also available online.

Though it may feel strange to go through such an important legal proceeding without ever meeting an attorney in person or going to court, filing for bankruptcy is a process that is best done as quickly as possible so that you can move ahead with a fresh start on your financial health.  For information on how we can help, contact us today.


How Complicated is the Bankruptcy Process?

There’s nothing quite as scary as the unknown, and that is as true of the bankruptcy filing process as of anything else. That’s one of the reasons that it’s smart for anybody considering filing for bankruptcy to consult with an experienced bankruptcy attorney who can explain what is involved and provide invaluable guidance.

The good news about bankruptcy is that it is a highly formulaic process. There are steps that need to be followed, and they are entirely predictable. The downside is that they require significant attention to detail, and if you miss a step or make a mistake while preparing the many documents that are required, it could end up costing you more money or taking you more time. Here are the basics.

  • Choose between Chapter 7 and Chapter 13 for your bankruptcy filing. Chapter 7 is usually a better choice for people who want to discharge all of their debts and not be responsible for any of them. Though you may have to sell off some assets, many of the things that are most important to you – like your house or car – may be exempt. Chapter 13 lets you keep more of your things but you end up continuing to pay for most of your debts under a new payment plan, over time.
  • Take a credit counseling course. This is required before you can actually file for bankruptcy, and can be done online. The cost of the class is minimal, but you will need a certificate to show that you have completed the course.
  • Collect all appropriate documents, including bills and papers that demonstrate your debts as well as your assets.
  • Fill out all of the required bankruptcy forms and file them according to the rules posted on the bankruptcy court’s website.
  • As soon as the paperwork is filed there will be an automatic junction to stop creditors from any further collection activities.
  • Meet with the bankruptcy trustee to discuss the sale of any non-exempt assets. The trustee will use the proceeds of those sales to satisfy debts.
  • Allow time for creditors to object to the bankruptcy filing.
  • Take a course on financial management. This class can be taken online.
  • Debts are discharged, with the exception of child support, alimony, some taxes and student loan debt. These are not dischargeable.

This quick summary just scratches the surface of the bankruptcy process. For more information, contact us today to set up a time to discuss your situation.

Can I Keep My Car During a Bankruptcy?

There are certain questions that loom large for people considering filing for bankruptcy, and one of the biggest is whether they will be able to keep their car. The reason for the question’s prevalence is obvious: people need their cars in order to continue going to work, to shop for food, to attend doctors’ appointments, and more. The loss of a vehicle is the loss of freedom, so getting the answer is important.  Unfortunately, there’s no one-size-fits-all response, and a lot of the determination will depend upon the specifics of your situation.  Here’s what you need to know:

  • Filing for a Chapter 13 bankruptcy offers your best chance for keeping your car. That’s because under this type of bankruptcy filing you do not discharge your debts as much as reorganize them into a new repayment plan. Payments may be spread out over a longer period of time then what was initially agreed to, interest rates may be lowered or some of the debt discharged, but you are able to keep your property. You may even be able to lower the amount of your car loan if the loan has a greater value than the car.
  • Filing for a Chapter 7 bankruptcy has the advantage of canceling all of your debts (with the exception of child support, student loans and other nondischargeable debts), but also puts you at risk of having to give up some of your property so that they can be sold to pay off your creditors. Your equity in your vehicle may be considered exempt up to a certain value, and if your equity exceeds that value there are often workarounds available, such as wildcard exemptions or trading other property that you’re willing to part with in return for keeping your vehicle. However, that does not always work and there are scenarios where your bankruptcy trustee may say that they have to take your car and sell it.

If you have fallen behind in your car loan obligations, then there’s a good chance that your car will be taken unless you can negotiate something with the lender. In some cases, this means paying what you owe, while in others you might arrange a new payment plan or pay the lender the car’s replacement value. This is only an option where the bankruptcy trustee has already indicated that your vehicle is exempt or they have decided not to sell it.

Finding a solution to the problems surrounding your car during a bankruptcy is just one of the ways that our bankruptcy attorneys can help you through this difficult situation. Contact us today to learn more.

What Happens to a Bankruptcy During a Divorce?

Divorce and bankruptcy are two of the most emotional legal processes that any individual can go through, and as a result, it is a good idea to pursue them one at a time if at all possible. Though it is understandable to want to escape or end a bad marriage quickly, doing so can complicate a bankruptcy proceeding, and potentially make it much harder for the divorce proceedings to move forward quickly. There are several reasons for this:

  • One of the first things to happen when you file for bankruptcy is that an automatic stay is placed on all of your debts and puts a freeze on all of your assets. The stay is effective through the entirety of the process, and though that’s great if you’re getting constant calls from debt collectors, it makes the equitable division of property in divorce nearly impossible. If possible, complete the bankruptcy process before the divorce.
  • Filing for bankruptcy prior to your divorce will allow you to split the cost of a bankruptcy attorney and all related costs. Additionally, it will eliminate debt for both of you instead of leaving one of you with debt on property listed in both of your names.
  • Depending on where you live, if you are married and file for bankruptcy together it will double the value of your home exemption, thus making it more likely that you can hold on to your house.
  • If you are planning on divorcing after bankruptcy, then Chapter 7 will probably be the best route for you to go. This is because the Chapter 7 process is much faster. Where Chapter 7 bankruptcy generally resolves within a matter of months, a Chapter 13 bankruptcy is not completed until the payment plan has eliminated all debt, which generally takes years.
  • Bankruptcy does not address all debts and specifically does not eliminate alimony or child support payments.

Though these are important considerations, you should also keep in mind that calculating eligibility for a Chapter 7 bankruptcy will be based on your joint incomes. If your combined income puts you over the threshold, then completing the divorce process first may make more sense.

There’s an old saying about money being the root of all evil, and it is definitely the source of many marital problems. If you are considering a divorce because of money arguments, you may want to reconsider whether eliminating your debt would also eliminate your problem. If not, be advised that once you decide to divorce you and your spouse should probably each have your own bankruptcy attorney to represent your best interests. For more guidance, contact our experienced attorneys today.

Short Sale and Bankruptcy: Weighing the Options for Mortgage Debts

When paying your mortgage debt is beyond your means and you are facing the possibility of foreclosure, there are a couple of options available to you. These include allowing the foreclosure to happen; proceeding with a short sale; and filing for bankruptcy. Deciding which is the best choice for you can be a challenge, especially if you are interested in maintaining or rebuilding your credit score.  Let’s look at the factors that you should consider.

There’s no doubt that choosing any of these options will hit your credit score hard. Most short sales and foreclosures will drop your credit score by between 85 to 160 points, while a bankruptcy filing will drop it by 130 to 240 points.  But consider this: allowing your lender to foreclose on your house is not necessarily the end of the story. They can still go after you for any difference between the outstanding loan and the price at which the house sold at public sale. By contrast, if you choose bankruptcy this difference would be discharged. Another thing to consider is that if you pursue a short sale you will be more likely to qualify for a mortgage loan in the future.

Lenders tend to look more kindly at those whose histories include a short sale, and generally allow those who’ve chosen this route and who have a 20% down payment two years after the short sale takes place. Similarly, those who file for bankruptcy can qualify for a mortgage four years after their date of discharge, but those who have chosen foreclosure are required to wait 7 years from the date of the judgment entered against them, and also have to pay off any deficiency judgment.

Though many people believe that a short sale is more beneficial than bankruptcy when it comes to preserving or rebuilding your credit score, there are other things to remember, including the fact that short sales are not easy and can take a long time. Additionally, banks don’t always approve them, and the borrower can still be left in the position of needing to make up for the deficiency. Bankruptcies can be accomplished quickly and without the fear of being pursued for any shortfall in the amount that you owe the bank. Best of all, without these issues haunting you, you can begin rebuilding your credit quickly.

Contact our experienced bankruptcy attorneys today! 


How to Know if Bankruptcy is Your Best Option

Nobody likes opening their mail (or inbox) and seeing a ton of bills. But for some people, bills evoke more than dislike: they cause actual pit-of-the-stomach, heart-thumping dread. The reason is simple — they are unable to pay. Regardless of whether the reason is financial carelessness or having been through some kind of economic disaster, if you’re in a situation where you see no end to your financial trouble then you are probably considering filing for bankruptcy. The question is, how can you tell whether it’s your best option?

The first thing you need to know is that there are plenty of highly qualified people who can help you come to the conclusion and action that’s right for you, including the skilled attorneys at our law firm. Though bankruptcy is an excellent vehicle for some people with debt, it is not the only way to find relief. Here’s what you need to know.

  • Not every debt is dischargeable. Though credit card debt and medical debt can be erased in a bankruptcy, you will still be liable for alimony, child support, and student loans. Further, if you file for a Chapter 7 bankruptcy and some of your loans have to do with secured debts such as your home, keep in mind that you are probably going to have to sell off some of your assets in order to hold onto them – or face losing them.
  • You can’t cordon off some of your assets as though they don’t count. If you have a pension or life insurance plan, a 401K or other types of savings that you have been hesitant about cashing out, a bankruptcy court is not going to allow you to continue doing so. You’re going to have to end up making some sacrifices.
  • There are different types of bankruptcy. While Chapter 7 means that most of your debts will be discharged but you have to get rid of assets, Chapter 13 gives you more time to pay off your debts and might lower them or the interest rate that you are paying. Many times a debtor will not qualify for Chapter 7 because their income is too high.

There are other options, outside of bankruptcy, that might be a better fit for you. If your biggest problem with your debt is the calls you’re getting from creditors, you can put a stop to that under the terms of the Fair Debt Collection Practices Act, which has established limits on the times and ways that debt collectors can communicate with you, on what they can say and even where they can call you. You can also undergo credit counseling to help you figure out how to deal with your debt, or you might consider debt consolidation or settlement.

For assistance in finding the best way to deal with your situation, contact us today. We have the experience and knowledge you need.

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