When you have trouble paying your mortgage or keeping up with your piles of bills, the topic of bankruptcy often comes up. While this can help you stop all of the calls from your creditors and get rid of some of your debt, it is also damaging to your credit and financial history. Here are some things to think about and ways to determine if it is time to file for bankruptcy.
You Can’t Keep Up With Any Bills
While bankruptcy should definitely be considered a last resort, sometimes it is the only option when you are having trouble paying your bills. In many cases, the bills just keep piling up and because of your financial circumstances, you are barely able to pay any of them. Instead of tossing a coin to decide which one you will pay this month, it might be better to file for bankruptcy. Not all of your bills and debts will be taken care of through bankruptcy, so talk to a lawyer or bankruptcy expert to find out exactly what type of debt will qualify.
Your Creditors Won’t Take a Deal
If you are lucky, you can contact your creditors and let them know your situation. If they know you having extreme financial difficulties, but still want to attempt to settle at least part of the debt, they might be able to work out other arrangements. They may be willing to reduce the total amount you owe as long as you pay the balance in full, or take smaller monthly payments until you get caught up with all your debts. If they are not wiling to work with you, it is a good sign that bankruptcy should be your next option.
You Are Losing Money to Garnishments
One thing many people aren’t aware of is that the bankruptcy might allow you to stop wage garnishments. This only works if the garnishment is related to something other than government taxes owed or other debts that are not taken care of by bankruptcy. If your garnishments are from a creditor debt that will be released due to bankruptcy, this just might stop the garnishments once it is processed.
You Are Spending Your Retirement Money
If you have been saving up for retirement since you started working, and that account is running low because of having to pay all your debt, consider whether this is really worth it. Your credit might take a hit by filing for bankruptcy, but you can save your retirement funds and avoid the big penalties of withdrawing from the account early.
It is always a good idea to get help from a bankruptcy attorney, like William C Fithian III, before filing. They will help you understand the difference between different types of bankruptcy filing and help you get through the filing process.
When you file for Chapter 7 bankruptcy, the trustee has the right to take possession of some of your assets so that he or she can sell them to pay off creditors. However, if you do not have any assets that the trustee can take, you might have to file a no asset bankruptcy. Here is what you need to know about the process.
What Is a No Asset Bankruptcy?
In each state, bankruptcy filers are allowed to keep assets that total value is equivalent to a certain amount. For instance, if your state allows you to keep assets totaling up to $25,000, you can keep those assets whose value add up to that amount, such as your car and home. The remaining assets are sold by the trustee.
However, if you do not have any assets of value after the state allowance, you could qualify for a no asset bankruptcy. In essence, you have absolutely no assets that can be sold to earn money to pay off the creditors.
How Do You File?
Filing for a no asset bankruptcy is essentially the same as filing for a normal bankruptcy. You first need to determine if you are eligible to file for a Chapter 7 bankruptcy. In each state, you have to meet certain income requirements. Since the requirements can vary from state to state, it is important you talk to your attorney to determine if you qualify.
Part of the qualification process is determining how much value your assets have. Even though the trustee will double-check the valuations you and your attorney place on the assets, it is idea for you to know the values so that you can determine whether or not the state allowance will cover your assets.
You would need to complete your bankruptcy documentation and submit it to the court. When the court receives your documentation, notice is given to all of your creditors that you are filing for bankruptcy.
Even though you have no assets, you still must attend the 341 hearing. The hearing is a chance for your creditors to challenge the canceling of their debts. It is also a chance for the trustee to ask specific questions about your filing. For instance, the trustee might ask you to confirm the amount of income you are claiming to receive.
Once the trustee has determined that you are eligible for a Chapter 7 and that you deserve a discharge, the court will approve it.
Whether you believe you qualify for a no assets bankruptcy or you do have assets that could be taken in the process, it is important you confer with an attorney before filing. He or she can help you understand your state’s allowance and what to expect.
For professional legal help, contact a law firm such as Morrison & Murff.
When you are thinking about filing bankruptcy one of the biggest concerns is often: what will happen to your mortgage? Will filing bankruptcy help prevent foreclosure on your home? Will it be able to reduce your monthly payments? The answers depend mainly on the type of bankruptcy that you file. You can choose either Chapter 7 or Chapter 13, and each works very differently.
Your Mortgage Under Chapter 7
A Chapter 7 bankruptcy is designed to eliminate unsecured debt. A mortgage, because it is backed by your home is a secured debt. This means that a Chapter 7 will not help much if you are in danger of foreclosure. Filing a Chapter 7 may help by freeing up money that you are using to pay off credit cards or other unsecured debts, however. Additionally, when you file, an automatic stay is put into place that prevents any collections activity (which includes foreclosure, which is your mortgage company trying to collect on your mortgage). While this stay is only for a few months, or until the bankruptcy is settled, it may give you enough time to bring your mortgage current.
If your mortgage is current, filing bankruptcy will not lower the amount of your payment. This is because again, a mortgage is a secured debt. The only way to renegotiate your mortgage is with the lender.
Chapter 13 and Your Mortgage
Chapter 13 bankruptcies are often referred to as a paying bankruptcy. This is because the purpose of the bankruptcy is to allow you to catch up on arrears. If you are in danger of losing your home because you have fallen behind in your mortgage, Chapter 13 is designed to help with that.
The first way that Chapter 13 helps is by issuing the stay, just like in a Chapter 7. Additionally, if you have multiple mortgages, this type of bankruptcy can help by removing them. This lien stripping removes all mortgages that are wholly unsecured. For example, you have a home that is worth $150,000 and have a primary mortgage of $200,000. Any other mortgages can be removed then because they are not secured by anything.
The last way that a Chapter 13 will help is by letting you pay off your arrears gradually. Most repayments are between 3 to 5 years. How long yours lasts depends on how much disposable income you have and how much debt you have to pay back. As long as you continue to make regular payments during the repayment plan, you have nothing to worry about.
Filing for bankruptcy is a strenuous time. With a little bit of information, that stress can be lowered. If you have any questions at any point, consult with a debt defense attorney (such as one from Brackett & Strunk LLC).
A major part of a Chapter 13 bankruptcy filing is the repayment plan. If you fail to make the scheduled payments on time, your bankruptcy status could be in jeopardy. If you and your spouse filed together and he or she dies while the plan is still in effect, you have several options available to deal with the remaining payments.
Request a Modification
Modifications to repayment plan are sometimes allowed by the bankruptcy court if there is a situation that warrants it. In this instance, the loss of your spouse and his or her additional income could be a reason to allow for a modification. In order to receive the modification, you have to prove that you are no longer able to financially make the payments as agreed. You might have to submit additional financial information so that the bankruptcy trustee can help calculate exactly how much you can afford.
Request a Discharge
There is a possibility that you could receive a discharge of your remaining debts if you can prove that paying would cause a hardship for you. In order to qualify for the discharge, you need to submit financial documentation, such as your income and current bills, to the trustee. A discharge is only allowed if you can show that even with a modification, you could not afford to continue to make the payments.
It is important to note that if you received any insurance payments from the death of your spouse, the trustee could ask that documentation concerning it is submitted. The amount that you received could possibly be considered when determining whether or not you are allowed a discharge.
Continue Making Payments
If you are financially able to, you can also opt to continue to make the payments that you and your spouse agreed to. In the event that you do decide to continue the payments, you still have the option to ask for a modification or discharge in the future if you reach a point at which you cannot continue the payments. It is important that you let the trustee and your attorney know as soon as it is evident you cannot make the payments. Continue to make as many payments as you can until it is decided whether or not you qualify for the discharge or the modification.
Depending on your state’s laws, there might be other options available to you. Contact your bankruptcy attorney as soon as possible to discuss those options and learn more.
Stevens-Johnson Syndrome (SJS) and toxic epidermal necrolysis (TENS) are rare disorders that overlap. In many cases, the conditions are fatal. For those that do survive, however, the conditions can be life-altering and leave you disabled even years later. Here’s what you should know when filing for disability due to the aftereffects of SJS or TENS.
What is SJS or TENS?
SJS and TENS are both skin conditions that cause the top layer of your skin to detach from your body and peel away. The conditions can also move internally, affecting your organs in the same fashion. Essentially, they cause the same physical problems – but doctors label the condition SJS if less than 10% of the body is affected, an SJS/TENS overlap if up to 30% of the body is affected, and TENS when greater than 30% of the body is affected.
While the cause of SJS and TENS isn’t always known, the diseases often result from an allergic reaction to any number of common medications, illness, or infection. Death is usually a result of sepsis and multi-organ failure.
What are the long-term effects of SJS or TENS?
SJS and TENS can leave victims with damaged vision (including blindness), damaged lungs or other internal organs, chronic skin pain, scarring, and emotional damage. Patients can suffer from anxiety, depression, or even post-traumatic stress disorder after this highly painful experience.
They may also lose feeling in their fingertips or range of motion in their hands or limbs due to scar tissue. Nerve damage can occur from their skin peeling off repeatedly. They can also end up with a weakened immune system that puts them at risk of more infections and a recurrence of the condition.
Can you qualify for disability if you’ve suffered through SJS or TENS?
Social Security will examine several things when determining whether or not you qualify for disability based on the lingering effects of SJS/TENS:
When you file, it’s critical that you list all of the ongoing problems that you have. Since you’ve technically “recovered” from the episode of SJS/TENS, Social Security will instead examine the problems that you now have as a result of the episode. The more specific you are about your ongoing limitations and problems, the more that you improve your chances of being approved for disability benefits.
If you’ve tried filing for disability benefits due to the ongoing problems you have as a result of SJS/TENS and been denied, contact a disability attorney for help.
It may seem a tad cruel that you have to pay a fee to file for bankruptcy, especially if you don’t even have two nickels to rub together. The hard truth is there are actually several fees that must be paid during the course of your bankruptcy before you can receive your discharge. If you desperately need the protection bankruptcy offers but can’t afford to pay for it, here are a couple of things you can do.
A Brief Interlude About the Bankruptcy Fees
The bankruptcy filing fee encompass more than the amount of money required to submit the paperwork to the bankruptcy court. Here’s a breakdown of the charges you’ll incur during your quest to get your debts discharged:
All in all, your total out-of-pocket costs can be anywhere from $1,600 to $3,455. If there are challenges to your bankruptcy or issues that require special attention from an attorney, you may have to pay more.
Tackling the Bankruptcy Court Fees
The court filing fee is due the moment you submit your bankruptcy petition to the court. If you don’t have the money at that time, you can ask the court to let you pay the fee in monthly installments. The fee can only be split into a maximum of 4 payments, and it must be paid in full no later than 120 days after you file your paperwork with the court. The application to pay monthly installments can be downloaded from the US Court website.
Alternatively, you can ask the court to waive the fee altogether. However, you must meet certain requirements to take advantage of this option:
If you qualify, you won’t have to pay the fee at all. The application to have the bankruptcy fee waived can also be found on the US Court site.
The government requires companies that handle the credit counseling and financial management education to offer their fees on a sliding scale. If you can’t afford the full amount, you’ll be charge a lower fee based on your income. Those whose incomes fall 150% below the poverty line can have the fee waived. You’ll need to talk to those specific companies about these options, however.
Handling Attorney’s Fees
Attorney’s fees may be a little more challenging to deal with. Because attorney’s fees can be discharged in bankruptcy, most lawyers will ask that you pay the money up front. However, it doesn’t hurt to ask if the person is willing to accept monthly payments or to handle the case pro bono. The lawyer may agree if your case and reason is compelling enough. Alternatively, look for a legal clinic that offers free or low-cost legal help.
Many attorneys offer a free consultation. Take advantage of this to discuss other ways you can make filing for bankruptcy more affordable.
There is a common misconception that people only need to file for bankruptcy because they have been irresponsible with their money. However, this is not always the case, and there are a variety of things that can force a person to seek this type of protection. You may not be familiar with this type of legal protection, and as a result, you may benefit from learning the following answers to common bankruptcy law questions.
What Is An Example Of Fraudulent Debt?
While bankruptcy can be an excellent way of getting a second chance with your finances, it is important to note that there are some debts you will be unable to discharge, and fraudulent debts are an example of these. This type of debt is essentially any debt that you accrued with no intention of repaying. In addition to being highly unethical, this type of activity can have profound impacts on your ability to file for bankruptcy, and it is important for you to avoid making this mistake.
An example of this type of debt would be someone running up their credit card balances because they are anticipating filing for bankruptcy. The courts will thoroughly review your financial history during this procedure, and if this type of activity is discovered, the fraudulent debt will not be discharged and your ability to file for this protection may be compromised.
What Should You Do To Rebuild Your Credit Following A Bankruptcy Filing?
Some of the more common questions that clients filing for bankruptcy will want to have addressed relate to rebuilding their credit histories following this type of filing. While some people assume that it will be impossible to rebuild their credit following a bankruptcy filing, this is far from being correct.
Outside of paying your bills on time, you should consider applying for a secured credit card. This is a credit card backed by a deposit or some other form of collateral that you can use. By paying off this balance each month, you will gradually build positive credit, which can further help you to get the fresh financial start that you deserve.
Filing for bankruptcy protection can be an excellent way for you to relieve yourself from crushing debts and aggressive collectors. By understanding how to avoid fraudulent debt and the steps you can take to rebuild your credit history following a bankruptcy, you will be in a better position to understand the process of filing for this protection.
If you’ve fallen behind on your monthly mortgage payments, you may have already begun receiving threatening letters from your bank or mortgage lender. After a certain period of time has passed without payment, you’ll be declared in “default” and the bank will file a lawsuit to foreclose your mortgage. However, in today’s mortgage market, where loans are bought, packaged, and sold multiple times over the life of the loan, the bank that files a foreclosure lawsuit may not even be owed money. How can you tell whether the entity suing you has the right to enforce your mortgage note? Read on to learn more about this area of law and what you should do if you find yourself facing foreclosure.
Who has the right to sue you for failing to pay your mortgage?
If you took out your mortgage through a local bank (or a branch of a larger national bank), it’s likely that this loan was sold to another bank before the ink was even dry. While banks generate closing fees and other revenue from originating mortgages, the actual servicing process is less lucrative, and many banks find it worthwhile to outsource this by selling mortgage loans to servicing companies. After a loan is sold, the originating bank no longer has any right to enforce the loan.
Although some banks will help make this process simpler on you (the consumer) by allowing you to continue to make your monthly payments to this bank, when you’ve missed a few payments and a foreclosure proceeding is pending, you may find yourself receiving legal documents from a name you don’t recognize as being connected to your mortgage.
What should you do if you’re not sure your lender has the right to sue you?
It’s important to ensure that the entity filing the foreclosure lawsuit is the actual “note holder” in your case. This not only prevents you from being unjustly foreclosed by a company that has no right to do so, it can also help protect you from dual liability. For example, if a lender who has no standing to sue you does so — and is successful — your original loan obligation isn’t extinguished, and you’re still on the hook for the amount borrowed (plus any late fees and interest charges). Meanwhile, the foreclosing lender who has no claim on your mortgage may sell your home at a sheriff’s sale or bank sale and pocket the proceeds. Straightening out this legal mess can be costly and frustrating.
You’ll want to request documentation showing that the mortgage was transferred from your original bank to the foreclosing servicer or lender. The bank should be able to provide a clear chain of title showing each specific transfer from lender to lender. If the foreclosing bank can’t show that they actually own your mortgage, the case will be dismissed. Although you’ll still owe your unpaid mortgage payments (plus any costs and fees), this process can buy you some additional time to come up with needed funds.
For more information, contact the Legal Clinic Of Jerry Paeth or a similar organization.
If you are considering filing for bankruptcy, you should know that bankruptcy is more of a process than a declaration. There are a series of steps in this legal and financial filing, and overseeing the entire process is the bankruptcy trustee. The trustee is a court-appointed official, usually an attorney and sometimes a judge.
Your only contact with the trustee may be at the creditor’s meeting, sometimes called the 431 meeting. The trustee will preside over this open meeting and will ask you a series of questions about your bankruptcy case. You will be under oath, and this meeting will be open, with others also declaring bankruptcy present. Normally, you will be prepared by your bankruptcy attorney to answer the questions, and the meeting will be relatively quick and uneventful.
One of the trustee’s most important tasks is the seizing of property to help pay off your debts. In certain instances, the bankruptcy trustee may visit your home to inspect your assets. This commonly occurs if you have valuable assets such as real estate, boats, or jewelry, but can occur even with more modest bankruptcy cases. This visit is scheduled in advance, and you must be present. No property will be removed at that time, but the trustee or an assistant may photograph some of your belongings. While this visit can be nerve-racking, keep in mind that it is just a routine part of the bankruptcy process and is usually quick and painless.
The Trustee’s Compensation
The trustee’s interest in your case is directly proportional to how much non-exempt property you have. Nonexempt property is your assets that may be subject to seizure to help pay your debts. The trustee’s compensation is based on how much of your nonexempt property he recovers. By law, the amount is set at a 25% commission on the first $5,000, a 10% commission for $5,000 to $50,000 and a 5% commission for $50,000 up to $1,000,000. It should be noted that these commissions are based on the recovery amount, which is the amount gained by the sales of those assets, not by their appraised values. The trustee also earns a flat fee for certain administrative functions such as presiding over the creditor’s hearing.
Bankruptcy trustees are skilled in locating assets, so as long as you have been forthcoming about your property and have valued it accurately, you have nothing to worry about. Your bankruptcy attorney will have likely already prepared you for your dealings with the trustee, and with the resulting property loss if pertinent. If you have any questions about the bankruptcy trustee, exempt property or other bankruptcy-related issues, contact a bankruptcy attorney at Sever Law Office.
When you’re overwhelmed by credit card bills, collection agencies, and financial stress you may be considering bankruptcy – but you’re worried that bankruptcy will ruin your credit forever and keep you from fulfilling your dreams of owning a home or car. However, there are positive effects of bankruptcy. Here are the top five reasons why bankruptcy isn’t always a bad idea:
1. Delay Foreclosure
Filing for bankruptcy will delay a foreclosure which will keep you in your house longer. When you file, the court issues an automatic stay. The stay prevents creditor actions including foreclosures. Even if your home is scheduled for sale, bankruptcy may delay this action depending on your state and how fast you declare. Delaying foreclosure gives you time to look for an affordable rental and save money for moving costs.
2. Halt Garnishments
An automatic stay doesn’t just stop foreclosure, but it also stops garnishments. The only types of wage garnishments that aren’t stopped by the automatic stay are child support and alimony payments.
If the debt that led to the garnishment is discharged by the bankruptcy, the garnishments will not resume once your bankruptcy is granted. However, if the garnishment is due to student loans, the garnishment will resume once the stay is lifted.
3. Build Credit
With bankruptcy, you have the opportunity to recover and rebuild good credit faster. Even if you’re making payments, if your debt keeps building and you live paycheck to paycheck, your credit takes a hit. It will take you longer to get caught up and rebuild good credit. By declaring bankruptcy, you’re clearing debt and getting rid of monthly payments which will give you the breathing room that you need to use credit responsibly.
4. Catch Up
When your bankruptcy clears your debt you get a financial fresh start. You can use the money that would go to creditors to pay for other bills like student loans and utilities. You will finally have the ability to catch up and even get ahead. Use the opportunity to save money for an emergency fund so you won’t have to go into debt in the future to pay for expenses such as car repairs.
5. Keep Assets
Declaring bankruptcy allows you to keep assets such as your home, car, and retirement accounts. If you don’t declare bankruptcy creditors may seize these assets in a lawsuit depending on the state that you live in. You may also need to sell some assets to make payments or prevent garnishment.
Bankruptcy can have negative effects but not all the effects are bad. For more information, contact a professional like Jeffrey S Arnold Attorney At Law P.C.