How Bad is Bankruptcy For Your Credit?

What stops people from filing for bankruptcy? Ask a bankruptcy lawyer and you’ll get different answers. Is it fear, pride or a belief that declaring bankruptcy is in some way unethical? If you stopped and asked 10 people on the street for the number one reason not to file bankruptcy, most would mention damage to their credit.

How Bad is Bankruptcy For Your Credit

Bankruptcy in Utah

There is a common public perception that playing the “bankruptcy card” creates a ripple effect that reaches every aspect of your life in a negative way. After all, bankruptcy does show up on your credit report for 10 years and no one wants to start a job interview by discussing a past chapter 7 case. Filing for bankruptcy certainly won’t make it easier to rent an apartment or lock in a good rate on a mortgage. However, it won’t disqualify you from future credit either.

The Toothpaste is Already Out of the Tube

To be sure, filing bankruptcy is not something that is to be entered into lightly, however, there is more than a hint of irony in the reasons people commonly give for not filing bankruptcy. Perhaps the most commonly cited: that bankruptcy will ruin your credit (and by extension your life). Unfortunately, bad credit is a scenario that has already unfolded for a good number of people who find themselves in financial distress. For many people, the biggest reason not to file bankruptcy (damage to credit) has already happened by the time the thought of bankruptcy pops in their head. Maybe a series of financial missteps or the loss of a job have caused charge-offs, liens, foreclosures, missed payments and a whole host of other negative credit events to appear on your credit score, is a bankruptcy really going to make much of a difference?  Sure, bankruptcy will add another negative mark on your credit report, and you’d like to avoid it if possible, but in the long run it may actually give you greater access to credit. Taking your unsecured debts to zero and using the momentum to start over will help you build a stronger credit score. Waiting around with the phone off the hook won’t.

Bankruptcy vs. Other Negative Credit Events

Chapter 7 bankruptcy stays on your credit report for 10 years, whereas a foreclosure will usually stay on your credit report for 7 years. However, don’t assume that foreclosure is preferable to bankruptcy simply because it stays on your credit for a shorter period of time. Many credit counselors report foreclosure as having twice the negative impact on your credit score as a bankruptcy. According to Ray Hooper, Education and Housing Director for the Consumer Credit Counseling Service of Greater Dallas:

“A foreclosure is very serious to mortgage lenders. They’re going look at a foreclosure more seriously than they will a bankruptcy that doesn’t include the house.”

According to FICO estimates, bankruptcy will cause a reduction in the filer’s FICO score of between 130-240 points, whereas a foreclosure, deed in lieu or short sale will cause a reduction in the 85-160 range.

Public Records and Bankruptcy

Tax liens, judgments and bankruptcies are all listed under the “Public Records” section of your credit report. Any reported Public Record will damage you credit, however it’s important to understand that bankruptcy filings don’t have their own section on a credit report. They are lumped in with other government initiated events. If you’ve already had a tax lien or judgment reported on your credit, the negative impact of a bankruptcy will be decreased and the benefits of filing may outweigh the additional credit damage.

Even missing payments on credit card accounts can drop a credit score by 75 points or more. The point is not to make light of the seriousness of a bankruptcy filing, but merely to point out that, viewed in light of a series of negative credit events, bankruptcy becomes more and more attractive when a consumer’s debts have spiraled out of control.

Free Consultation with Bankruptcy Lawyer

If you have a bankruptcy question, or need to file a bankruptcy case, call Ascent Law now at (801) 676-5506. Attorneys in our office have filed over a thousand cases. We can help you now. Come in or call in for your free initial consultation.

Michael R. Anderson, JD

Ascent Law LLC
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States

Telephone: (801) 676-5506
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How to Pay Off High Interest Credit Card Debt

Perhaps like many Americans your New Year’s resolution involves paying down credit card debt. After all, even the most ardent supporter of the plastic hears that little voice in the back of their head “credit card interest rates are a huge ripoff, I shouldn’t use my Visa card as much as I do.” To be sure, if you’re trying to get your financial life in order, taming high interest credit card debt is job number one. Unfortunately, many consumers get caught in the minimum monthly payment trap, leaving stagnant balances that seem to never go away. So how do you go about paying down credit card debt and getting rid of Mr. Visa once and for all?

How to Pay Off High Interest Credit Card Debt

Damage Assessment

The first step to paying off your credit card debt is to figure out the exact amount that you currently owe. It’s not until you have exact balances and the interest rates you’re being charged that you’ll know how high of a mountain you’re faced with climbing. In addition to outstanding balances, add up the monthly payment for each card and figure out how much of your income is going to credit card payments every month. Organization is key. We’ve created a simple chart to help you organize what you owe.

Break Your Dependence on Credit Cards

In other words, stop using the credit cards! The idea in starting a plan to pay down credit card debt is to attack the principal balances rather than just paying interest every month. The credit card companies want you stuck in debt, feeding them their interest every month. The only way to stop interest from increasing is to stop the balances from increasing. Put together a budget and stick to it, without using your credit cards. Often, aggressive budgeting is the fastest way out of debt. It might hurt at first, but the sense of satisfaction you’ll receive from paying off your credit card debt will far outweigh any temporary inconvenience. If you absolutely need credit cards to live, it might be time to consider filing for bankruptcy.

Pay Off One of the Cards

To gain momentum in your quest out of credit card debt, pay off the smallest card first. Completely retire one of the balances, it feels good. Some will argue that tackling the highest balances first makes sense, but momentum will play a big role in getting you out of credit card debt. Get rid of the smallest card and the rest will start to fall in line.

Pay More Than the Minimum Monthly Payment

Salt Lake City bankruptcy attorney wrote an excellent post on the National Bankruptcy Forum describing the major problems consumers face when they try to pay just the minimum on a credit card. He listed a table showing how long it takes to pay off small debts at low interest rates which we’ve included here:

$1000 balance, 18% interest, minimum payment $100 = 11 months to payoff $1000 balance, 18% interest, minimum payment $50 = 24 months to payoff $2000 balance, 18% interest, minimum payment $100 = 24 months to payoff $2000 balance, 18% interest, minimum payment $50 = 62 months to payoff $3000 balance, 18% interest, minimum payment $150 = 24 months to payoff $3000 balance, 18% interest, minimum payment $100 = 40 months to payoff $4000 balance, 18% interest, minimum payment $200 = 24 months to payoff $4000 balance, 18% interest, minimum payment $150 = 34 months to payoff $5000 balance, 18% interest, minimum payment $200 = 32 months to payoff $5000 balance, 18% interest, minimum payment $150 = 47 months to payoff $5000 balance, 18% interest, minimum payment $100 = 93 months to payoff

As John points out in his article, these figures don’t even factor in administrative or late fees which can add up quickly! The bottom line is that minimum monthly payments on credit cards usually represent interest only, the underlying balances aren’t touched by making these payments. To actually get out of credit card debt it will be crucial to pay more than the minimum monthly payment, there’s simply no other way.

Transfer Debt to Lower Interest Cards

As the table above demonstrates, the credit card companies kill you with high interest rates. As we’ve established, if you’re trying to get out of debt, paying the minimum won’t do. Instead, try transferring balances from one lower interest card to another, and keep doing it as opportunities arise. Many banks offer promotional “teaser” rates to induce consumers to open a line of credit. If you pay enough attention to deadlines, you can move your credit card balances around to banks offering the lowest rate, this will cut down on some of the money you’re throwing away on interest.

Negotiate With The Bank

Many lenders are open to settling past-due credit card bills for less than the full amount owed and a good consumer attorney can aid in negotiating with your credit card lender as a way to avoid bankruptcy. How is this possible? Once a loan goes into default for long enough, lenders no longer carry it on their books as a performing asset. In cases where a consumer has fallen behind for many months, recovering anything at all may be considered gravy by the credit card lender. This doesn’t mean your lender will be a push over, they’ll likely ask that you produce financial information as part of the negotiation process, but to the extent you have some cash to throw at the problem, you might be able to get out of debt for far less than what you owe. In these cases, the amount of debt forgiven will be taxed as income come April. For more information, see: Tax Consequences of Forgiven Debt.

Know When to Look for Help

If you fallen behind on your credit card bills or need credit cards to purchase basic necessities such as groceries and gas, it may be wise to meet with a bankruptcy attorney. Although options outside of bankruptcy should always be explored, filing for bankruptcy protection will eliminate credit card debt as well as medical bills.

Free Consultation with Bankruptcy Lawyer

If you have a bankruptcy question, or need to file a bankruptcy case, call Ascent Law now at (801) 676-5506. Attorneys in our office have filed over a thousand cases. We can help you now. Come in or call in for your free initial consultation.

Michael R. Anderson, JD

Ascent Law LLC
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States

Telephone: (801) 676-5506

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I got a new job, can I still file Bankruptcy?

I got a new job, can I still file Bankruptcy

Yes.

Yes you can.

Does a regular paycheck disqualify a consumer from filing for chapter 7 bankruptcy?

If you’ve read this blog with any frequency, you’ve undoubtedly seen numerous posts about bankruptcy reform and the means test. Indeed, much has been written about the means test, the vaunted gatekeeper to chapter 7 bankruptcy protection implemented by Congress as part of BAPCPA in 2005. Under the “new” law, families that earn above the median income in their state must pass the means test in order to qualify for chapter 7 bankruptcy.

It is possible to file for chapter 7 protection while earning a salary

Will a new job give you a failing grade on the means test and prevent you from filing chapter 7 bankruptcy? Likely, no. First of all earning a salary doesn’t automatically preclude anyone from qualifying for chapter 7. Only individuals and families that earn more than the average in their states must pass the means test in order to qualify and often do. A job at a professional services firm, Like J.P. Morgan, that pays a higher salary, will make the path to bankruptcy harder than a job at Walmart that doesn’t pay as much. However, keep in mind that the income guidelines for chapter 7 look backwards.

Qualifying for chapter 7 looks at past earnings

In addition, if you’ve had a prolonged period of unemployment even a new job with a high salary shouldn’t pose a means test problem.  This is because the means test deducts allowed expenses from your current monthly income (average income over the last six months). If after expenses you have very little “disposable income” you will qualify for chapter 7. The six month look back period allows your period of unemployment to be averaged in with your new salary in calculating your current monthly income. For example, if you have recently landed a job that pays $100,000 annually but have only been working for 2 months, you will likely still qualify to file for chapter 7 bankruptcy because your average income over the last six months (which will include four months of no salary) will put you below your state’s average income. The means test can be complicated, if you have questions, it is wise to consult an attorney. If your attorney advises you that your income is too high for chapter 7, chapter 13 bankruptcy may be a good option.

Don’t Sell Property to Avoid Bankruptcy

Don’t cash in your 401(k) or sell your property to avoid bankruptcy. In the last several months, I have had a large number of people in their 50s and 60s contact me about filing for bankruptcy. In a lot of ways, this recession has hit people in this age group the hardest. Between the layoffs and the tough job market, a lot of people are really struggling. And even when someone is lucky enough to find a job, oftentimes it is at a significantly reduced salary.

The bad economy has caused people to file bankruptcy who didn’t expect to

The fact is that the recession is causing a lot of people to file for bankruptcy who never thought they would. While the recession is is undoubtedly a sad turn of events, I am also seeing an even more disturbing trend. Namely, a lot of them are selling all of their property in an effort to stay current with their bills and avoid filing for bankruptcy. By the time they come to me, they have already gone through everything they own. While these efforts are always well-intentioned, they are catastrophic for their finances. In a lot of cases, people are selling assets that they would otherwise be able to keep if they would have thought about filing for bankruptcy a little sooner.

Chapter 7 divides assets into two piles

When you file for chapter 7 bankruptcy, your assets are divided into two categories: exempt and nonexempt. When you file for chapter 7 bankruptcy, you get to keep your exempt assets and the bankruptcy trustee has the option of taking and selling your nonexempt assets. This distinction is vitally important because in most cases, your retirement accounts and equity in your home are exempt. The amount of the exemption varies from state to state, but the point is this: do not sell exempt property to pay debt that can be discharged in bankruptcy.

Example – mistakenly cashing in a retirement account

For example, let’s say you are in your mid-50s and are having financial difficulty. If you sell your retirement account to keep your head above water and pay credit card bills, you are literally selling your retirement years. Do not liquidate your retirement account to pay off credit card debt, or other debt that can be discharged in bankruptcy. This is especially true when you do not have a lot of time to start saving for your retirement again.

The bottom line about Bankruptcy

Do not go into denial about your financial situation. If you are thinking about selling your retirement account for living expenses, that is a pretty good sign that you should be thinking about filing for bankruptcy. But the only way you can know for sure is if you talk to a skilled bankruptcy attorney about your situation. A bankruptcy attorney will be able to listen to your situation and help you decide if filing for bankruptcy is right for you. Exemptions vary from state to state, and not all debt can be discharged in a chapter 7 bankruptcy. Therefore, be sure to talk with an attorney so you can make an informed decision. But please, do not sell any exempt assets to keep up with your daily living expenses until you have had a chance to talk with a skilled attorney.

Free Consultation with a Utah Bankruptcy Lawyer

If you have a bankruptcy question, or need to file a bankruptcy case, call Ascent Law now at (801) 676-5506. Attorneys in our office have filed over a thousand cases. We can help you now. Come in or call in for your free initial consultation.

Michael R. Anderson, JD

Ascent Law LLC
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States

Telephone: (801) 676-5506

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Who are Debt Collectors?

Payday loans and Bankruptcy

Even though the holidays are over, people of every income range have been buying gifts for others and now the lenders want to collect. For many, this is just an added year-end expense. Others who feel the pressure to give to family and friends but don’t have the money may look for other ways to fund this seasonal expense. The ads for “payday” loans tend to prey upon that need, offering quick cash now with a short-term temporary loan. But before giving into temptation, be aware of the pitfalls that could affect your financial future into next year…and beyond.

Payday loans and Bankruptcy

What is a payday loan?

Also known as a cash advance or a check loan, a payday loan was originally given that name because repayment of the loan was typically due on the borrower’s next payday.

Some common features of payday loans include:

  • the loan is for a small amount, generally $500 or less;
  • repayment is usually due on the borrower’s next payday;
  • the date of your next payday is disclosed to the lender to allow the lender to draft a payment from your checking account when the payment is due; and
  • the loan has unusually high interest rates.

Generally, the loan can be used for whatever purpose it is needed: the necessary, such as an emergency medical bill or an overdue electricity payment, or the frivolous, such as a quick weekend trip. But the key to using the loan in the most advantageous way depends on when and how the loan is repaid.

The Trouble With Payday Loans

Regardless of when the loan is repaid, the interest rates charged by the lenders are exorbitant compared to other credit sources. Interest on credit cards typically ranges from 12 percent to 30 percent on an annualized basis. A payday loan, on the other hand, generally carries a finance of charge of $10 to $30 of every $100 loaned. The annual percentage rate (APR) on a charge of $15 per $100 rate would be about 400 percent.

The interest rate alone is bad, but the real problems begin when the loan is not repaid within the two-week period. Obviously, most people who turn to a payday loan for a critical expense one week are unlikely to be in a greatly improved financial position in two weeks. In many cases, the borrower has to rollover the loan to the next payday (or the next, or the next…) and the high interest rates continue to accrue.

Payday Lending Online

That’s an ugly picture, but it can get worse. Payday lending is illegal in many states, but lenders will often operate online in order to get at consumers across state lines. Beware the online payday lender – many of them are just scams. They’ll collect an upfront fee and leave you with nothing. The website (and your fee) will disappear into the night and you’ll be left with less cash than before.

Who uses payday loans?

When considering the “typical” payday loan borrower, the obvious answer is someone in at least short-term financial trouble. But a study done by Pew Research in 2012 provides more specific information: most payday loan borrowers are white women between the ages of 25-44. In addition, the study identified five groups that are more likely to take out a payday loan:

  • those without a four-year degree;
  • those who rent, rather than own, a home;
  • African-Americans;
  • those who earn less than $40,000 per year; and
  • those who are separated or divorced.

Payday Lending Under Pressure

Many states have outlawed payday loans, having found them to be predatory and taking advantage of the people who use them. On the other hand, the lenders may choose to not do business in states that do allow them because those states have tightened their regulations on payday lenders to the extent that the lenders no longer make enough of a profit in those states due to the restrictions on interest rates and fees.

In 2013, the Consumer Finance Protection Bureau launched an aggressive investigation into payday lenders and their effect on American finances, soliciting complaints from consumers about their experiences with the loans. A year later, the Bureau has investigated almost 1600 of these complaints. Of those investigations that have been closed, only about 11 percent have resulted in a favorable outcome for the borrower.

During its investigation, the CFPB found that about 12 million Americans use some form of these loans. But the most disturbing part of the investigation was the discovery that almost 4 out of every 5 of the loans are not repaid within 14 days, causing the continuing high-interest renewal or rollover. And over 60 percent of those borrowers roll the loan over so many times that the interest and other fees end up being more than the original loan amount.

One consumer group, the Consumer Federation of America, states that the fault with the system is that the lender focuses on the ability to collect, not necessarily the borrower’s ability to repay. With access to the borrower’s checking account or employer information, the lender is in a position to collect the money owed if necessary.  But why do that when more money can be accrued by just continuing to rollover the debt and increase the interest owed over and above what was originally loaned.

Another consumer group, Consumers Union, is looking for changes to be made and enforced in the industry. Among its recommendations are:

  • limit the fees and interest that can be charged on the loans;
  • make repayment schedules longer, e.g., a few months rather than a couple of weeks; and
  • put a cap on the number of payday loans one person can borrow in one year.

Payday Loans in Bankruptcy

For those whose financial picture doesn’t improve enough to stop the continual rollovers and renewals, bankruptcy may eventually be an option to consider. If taking out payday loans is all that keeps a budget afloat, it may be time to look at putting a stop to the revolving door.

While payday loans in general may be discharged in bankruptcy, there are situations where the lender may have a valid objection. First, some debts incurred within 70 to 90 days of filing bankruptcy cannot be discharged because the creditor may claim that the debt was incurred while planning to file bankruptcy and discharge the loan with no intention of ever paying it back.

Free Consultation with a South Jordan Bankruptcy Lawyer

If you have a bankruptcy question, or need to file a bankruptcy case, call Ascent Law now at (801) 676-5506. Attorneys in our office have filed over a thousand cases. We can help you now. Come in or call in for your free initial consultation.

Michael R. Anderson, JD

Ascent Law LLC
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States

Telephone: (801) 676-5506

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Why Draining Your Retirement To Save a Doomed House from Foreclosure Before Filing Bankruptcy is a Mistake

Should I use retirement to pay a mortgage?

Twice in the last two days I have had the same discussion with two prospective clients. Each client owned a house that at the height of the market was worth over two million dollars. In each case, the client had encumbered the house with a loan for about a million dollars a few years back. Each client had suffered significant financial set backs related to the current economic recession. Both clients had been paying mortgage payments close to $10,000.00 per month from their retirement accounts for the past year, and both clients were now at the end of their rope, with their retirement accounts dwindled to a mere pittance.

Why Draining Your Retirement To Save a Doomed House from Foreclosure Before Filing Bankruptcy is a Mistake

Monday morning quarter backing on the eve of filing bankruptcy does not bring back a depleted 401K or IRA. But there is a lesson for others in these two cases. Before tapping out your 401K or IRA to continue paying a mortgage on a house that is doomed to end up in foreclosure, know your bankruptcy options.

Retirement accounts are often exempt in bankruptcy

Nearly all retirement accounts that are governed by the Employee Retirement Income Security Act (ERISA, as it is called), including pensions and 401Ks, are not assets of a bankruptcy estate because they almost all universally contain an anti-alienation clause that protects them from the reach of creditors. Due to recent amendments to Section 522(n) of the Bankruptcy Code, Individual Retirement Accounts (IRAs), and other similar retirement savings vehicles, while assets of the estate, enjoy special protection capped at $1 million.

What does all this mean? It means in most cases, all the money drained from retirement accounts to keep a doomed mortgage out of foreclosure for an extra year, could have survived a bankruptcy. Retirement accounts exist to help you survive in your twilight years. It does you no good to waste these assets to delay an otherwise inevitable foreclosure. If you find yourself in this situation, before draining your 401K or IRA, talk with a bankruptcy lawyer with experience in foreclosure defense about your bankruptcy options and foreclosure defense options.

How Can I Repair My Credit?

Whether you filed Bankruptcy or have faced foreclosure, repossession or a delinquency on a loan, it is a fact of life that your credit score can fluctuate. Access to credit is important when applying for a car or home loan or when starting a new business, the lower your credit score, the higher your interest rate will likely be.

Improving credit after bankruptcy or foreclosure

FICO scores range from 300 to 850; the median score is 723. To get the best rates, you’ll usually have to have a score of at least low- to mid-700s, so how can you repair your credit score after it has been damaged?

Credit Repair Steps to take

Unfortunately, it is far easier to bring your credit score down than it is to make improve it. Nevertheless there are steps you can take.

Step #1: visit annualcreditreport.com

Start by visiting www.AnnualCreditReport.com, a website set up under federal law to give consumers access to their credit reports. Be on the lookout for impostors, AnnualCreditReport.com is free, there will be no need to supply your credit card or make any payment. There are three different consumer credit agencies (ExperianEquifax and TransUnion) that compile information that factors into your credit score. Not surprisingly, the three agencies don’t always agree. It is important that you go through each report and identify any errors. Did you recently pay off a debt that is listed as delinquent?

Step #2: Write to the credit agencies

It is important to write to the credit reporting agencies both to correct errors as well as to explain any delinquencies. It is perfectly reasonable to write a letter to the credit reporting agencies explaining why you have been late on a mortgage or were forced to file for bankruptcy. Lenders view your credit score in its proper context. Perhaps you have been a victim of mortgage fraud and were forced to file bankruptcy to protect your assets from an aggressive lender. Maybe the economic downturn has caused a salary decrease that made it hard to stay current on car payments. Whatever the Cause of your credit taking a hit, it is crucial that you weigh in on the problem and voice your perspective. It can help.

Step #3: pay your bills on time

I advise my clients who have filed for bankruptcy to be meticulous in paying every bill on time after filing. The same principle applies to anyone trying to repair their credit as payment history is one of the biggest factors in determining your credit score. It may be a good idea to open a single credit card, use it only for groceries and then pay the balance in full each month.

Step #4: debt to income ratio

Filing bankruptcy can actually improve your credit score. Why? Because another factor lenders use in their underwriting process is how much of a debt load is the potential borrower carrying? Are they swamped in debt? If the answer is yes, they will be less likely to be able to service more. When large chunks of credit card debt are discharged in bankruptcy it can often have a positive impact on credit just a few months after filing.

Step #5: be patient

Your credit history factors into your score as well. The longer you’ve been borrowing and paying on time the better. In some ways this is the lender’s way of developing a friendship with you. When you meet someone for the first time, you might like them but can only develop a friendship or romance over time. If you have been paying your bills for a long time, lenders are more likely to court you.

Be of good cheer, with a little patience and responsible use of credit, your score will improve.

Free Consultation with Bankruptcy Lawyer

If you have a bankruptcy question, or need to file a bankruptcy case, call Ascent Law now at (801) 676-5506. Attorneys in our office have filed over a thousand cases. We can help you now. Come in or call in for your free initial consultation.

Michael R. Anderson, JD

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8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States

Telephone: (801) 676-5506

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180 Day Waiting Period to Refile Bankruptcy After a Dismissal

Dismissal of a bankruptcy case is unfortunate and can happen for a number of reasons. The Bankruptcy Code places numerous responsibilities on debtors and failure to comply can jeopardize your case; making it important to consult with a knowledgeable bankruptcy lawyer before filing. When a bankruptcy case is dismissed without issuance of a discharge, you are once again at the mercy of your creditors, meaning collection efforts can resume.

180 Day Waiting Period to Refile Bankruptcy After a Dismissal

Common Reasons for Dismissal

2005 changes to the U.S. Bankruptcy Code now require all debtors to complete a credit counseling course from an “approved credit counseling agency” within 180 days before filing their petition. Failure to comply with this requirement will result in an automatic dismissal of the case. Similarly, a bankruptcy case will be dismissed if the debtor fails to appear at the meeting of creditors or does not file a financial management certificate with the court soon thereafter.

Other common reasons for a bankruptcy dismissal include:

  • Concealing property or transferring property within one year of filing for bankruptcy, in an attempt to defraud creditors
  • Unable to explain missing assets
  • Destroying or failing to keep good records
  • Lying under oath

How do I refile bankruptcy after dismissal? How long do I have to wait to refile?

What to do in the event of a dismissal? The answer will turn on exactly why your case was dismissed. If you’ve dismissed your case in bad faith or it appears you’re trying to game the system, you might have to wait 180 days before refiling. Section 109(g) of the Bankruptcy Code prevents a debtor whose case was dismissed from filing another bankruptcy for 180 days if:

(1) the case was dismissed by the court for “willful failure of the debtor to abide by orders of the court, or to appear before the court in proper prosecution of the case” or (2) the debtor requested and obtained the voluntary dismissal of the case following the filing of a request for relief from the Automatic Stay.

While exactly what constitutes a “willful failure” to abide by the orders of the court is a fact-specific inquiry that must be decided on a case-by-case basis, it is unlikely that a creditor or U.S. trustee would object to a case being refiled that has been dismissed for failure to take the credit counseling or financial managements courses. In these cases, the debtor will almost always be permitted to refile right away without any hassle.

Can I file Chapter 7 after Chapter 13 is dismissed?

Although the order for filing Chapter 7 and Chapter 13 matters when you receive a first discharge and are looking to file again years down the road, there are limits to how many times you can receive a discharge.

Per the United States Courts:

The court will deny a discharge in a later chapter 7 case if the debtor received a discharge under chapter 7 or chapter 11 in a case filed within eight years before the second petition is filed. The court will also deny a chapter 7 discharge if the debtor previously received a discharge in a chapter 12 or chapter 13 case filed within six years before the date of the filing of the second case unless (1) the debtor paid all “allowed unsecured” claims in the earlier case in full, or (2) the debtor made payments under the plan in the earlier case totaling at least 70 percent of the allowed unsecured claims and the debtor’s plan was proposed in good faith and the payments represented the debtor’s best effort. A debtor is ineligible for discharge under chapter 13 if he or she received a prior discharge in a chapter 7, 11, or 12 case filed four years before the current case or in a chapter 13 case filed two years before the current case.

However, if your first bankruptcy case was dismissed, including a voluntary dismissal, you can generally file again for either Chapter 7 or Chapter 13 at any time. That is, unless the court says differently.

The 180-day wait period to refile a dismissed bankruptcy case was put in place because of the power of the automatic stay and its ability to stop creditors in their tracks. Readers of this blog will recall that the automatic stay is an injunction issued by the bankruptcy court that prevents collection activity of any kind after a case has been filed. Especially in the real estate context, repeatedly filing bankruptcy and then voluntarily dismissing the case can indefinitely frustrate lender foreclosure efforts. The Bankruptcy Code addresses this loophole by preventing a case from being refiled that has been dismissed after a creditor has moved to lift the automatic stay.

Similarly, the automatic stay is limited to 30 days if a debtor files for Chapter 7 bankruptcy within one year of a previous case being dismissed. In any bankruptcy filing, you’ll want to talk to an experienced bankruptcy lawyer who can help you get your debts discharged.

Free Consultation with Bankruptcy Lawyer

If you have a bankruptcy question, or need to file a bankruptcy case, call Ascent Law now at (801) 676-5506. Attorneys in our office have filed over a thousand cases. We can help you now. Come in or call in for your free initial consultation.

Michael R. Anderson, JD

Ascent Law LLC
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States

Telephone: (801) 676-5506

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Bankruptcy Law in Utah

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Tax Refund and Bankruptcy

It comes up every tax season. You’re looking forward to receiving a big tax refund check, and you’re also working hard to get your bankruptcy case filed. So, what happens to your tax refund in a bankruptcy case?

Tax Refund and Bankruptcy

Here’s How to Keep Your Tax Refund

We’ve said it time and again on the forum: Tax refunds are the number one asset that trustees routinely take from debtors. Exemption laws in most states only go so far to protect cold, hard cash, and anything over and above your state’s designated exemption is fair game for the trustee.

Trustees love to go after tax refunds because, unlike real estate and other assets, there isn’t the overhead and effort associated with listing the property for sale. With cash, they can get a check.

Your Tax Refund is Part of the Bankruptcy Estate

On the day the bankruptcy is filed, any assets that you own become part of the “bankruptcy estate.” Your tax refund is one of those assets. A trustee is appointed to represent your creditors, collecting assets and liquidating those assets to pay your creditors. In many Chapter 7 cases, there simply are not enough assets or cash to make it worthwhile for the trustee to take those to pay the creditors.

Unfortunately, if you are owed a large tax refund, that may be an easy target for the trustee. With a little planning, we can help you keep most, if not all, of your tax refund.

Exception to the Rule: Earned Income Credit

There are some exceptions to the general rule that the trustee is entitled to any refund not received and spent prior to filing. In Colorado, for example, any refund attributed to Earned Income Credit and Additional Child Tax Credit is yours to keep. The rest is subject to turnover.

Want to Keep Your Tax Refund? Spend it.

The best way to avoid losing your tax refund is to file your tax return, receive the refund and spend it prior to filing your bankruptcy. Your bankruptcy attorney should instruct you to keep a record of how your refund is spent.

Your refund can be used for a variety of expenses, including most of your ordinary household expenses, like:

  • Rent
  • Mortgage payments
  • HOA dues
  • Food
  • Utilities
  • Clothing
  • Educational expenses
  • Medical and dental expenses
  • Insurance
  • Home maintenance and repairs
  • Car payment
  • Car repairs and maintenance

You want to have minimal — if any — tax refund money in your bank account on the day that you file your bankruptcy. You may also be eligible to save a portion of your refund using a retirement account. Ask your attorney for more information.

If you are able to follow these steps, you will not be required to turn over your tax refund.

Caution! If you spend your tax refund on luxury goods, use it to repay a friend or family member, or pay off a credit card or other unsecured debt, you may trigger an objection from the trustee, and be required to turn over your tax refund, even if you HAVE spent the money.

If you have NOT received your tax refund on the date of filing, the trustee will be entitled to the tax refund when you receive it.

When the Tax Refund Hits While You’re in Bankruptcy

Ideally, you’ll have very little tax refund left over by the time you’ve filed bankruptcy, and will avoid the plight of Mr. Ellman, below.

In Re Ellman involved a public school teacher in Baltimore, Maryland, who filed for chapter 7 bankruptcy and thereafter received a $15,827 tax refund. The case trustee filed a motion for turnover and the U.S. trustee appeared at the hearing in support of the trustee’s motion. The debtor argued that he relied on his tax refund for living expenses for the upcoming year and that his refund should be excluded from the bankruptcy estate as future wages.

Citing a long line of cases that include tax refunds as part of the bankruptcy estate, the court found the debtor’s argument unpersuasive and ordered that he turn over the funds minus approximately $10,000 he had available in unused exemptions. In total, Mr. Ellman was ordered to turn over $4,615 of his tax refund. To support its ruling, the court in In Re Ellman recited an uncontroversial rule of bankruptcy law that applies to tax refunds:

Income tax refunds are property of a debtor’s bankruptcy estate to the extent they are derived from withholdings from the pre-petition earnings of the debtor.

To put the court’s words in plain English, tax refunds received for wages earned prior to filing bankruptcy are considered property of the bankruptcy estate and are subject to liquidation if no exemptions are available.

Part of the job of any good bankruptcy attorney is to sit down with clients, discuss their assets and come up with a plan for maximizing the exemption laws to their client’s benefit. If you’re considering filing for bankruptcy and are unsure of how a large tax refund will be treated, consult with an experienced bankruptcy lawyer before making any further decisions.

How can you avoid this problem altogether? Don’t receive a tax refund

If you had a large tax refund last year, the first thing we will ask you to do is to look at your W-4 and adjust your exemptions. You only want to have the necessary taxes withheld from your paycheck, nothing more.

When you are filing for bankruptcy you DO NOT want to receive a tax refund. At a minimum, keep the tax refund small.

Instead of receiving a tax refund and giving it to the trustee, wouldn’t you like to have a little more money coming to you in each paycheck throughout the year? I thought so! You can use the IRS’ withholding calculator to determine how many deductions you should be claiming.

Other Bankruptcy Tax Refund Issues

If we file your case later in a year (between August and December), it is likely that the trustee will ask for a copy of that year’s tax return. I know this sounds strange since it’s September and you have not filed a tax return for the current year. The trustee may request a copy of the tax return for the current year as soon as you file it. He will then review the tax return to see if you are going to be receiving any refunds. If you are, he will ask for a pro-rata portion of the refund.

Since your initial appointment with the attorney may be several months before you actually file your case, we want you to plan for your bankruptcy by adjusting your payroll deductions to avoid having the trustee take your refund.

Free Consultation with a Utah Bankruptcy Lawyer

If you have a bankruptcy question, or need to file a bankruptcy case, call Ascent Law now at (801) 676-5506. Attorneys in our office have filed over a thousand cases. We can help you now. Come in or call in for your free initial consultation.

Michael R. Anderson, JD

Ascent Law LLC
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States

Telephone: (801) 676-5506

Ascent Law LLC

4.9 stars – based on 67 reviews


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Can I Be Denied a Job Because of Bankruptcy?

If you have a job, need to file bankruptcy, and are worried about getting fired because of it, you probably shouldn’t be. The U.S. Bankruptcy Code prevents employers from firing you just because you have filed for bankruptcy. However, if you are a job seeker, need to file bankruptcy, and are worried about being denied a job, you might have cause for concern.

Can I Be Denied a Job Because of Bankruptcy

It May Depend on Your Employer

Under the current state of the law, a private employer can deny you a job if you are currently in or have filed for bankruptcy, whereas a public employer cannot. Section 525(a) of the Bankruptcy Code provides:

governmental unit may not . . . deny employment to, terminate the employment of, or discriminate with respect to employment against, a person that is or has been a debtor under this title [Title 11] or a bankrupt or a debtor under the Bankruptcy Act.

Notice that section 525(a) applies only to public employers. The behavior of private employers is governed by section 525(b), which prohibits discrimination based on bankruptcy, but does not contain the language of 525(a), which addresses denying employment to a debtor based on a bankruptcy filing. The bankruptcy code has this to say about discrimination by private employers:

No private employer may terminate the employment of, or discriminate with respect to employment against, an individual who is or has been a debtor under this title, a debtor or bankrupt under the Bankruptcy Act, or an individual associated with such debtor or bankrupt

Private Employers Denying a Job Based on Bankruptcy

Although a plain reading of 525(b) would seem to prevent denial of employment by private employers based on bankruptcy, the case law actually trends in the opposite direction. The great majority of cases have held that private employers are not subject to liability under Section 525(b) for a denial of employmentSee Rea v. Federated Investors, 627 F.3d 937 (3d Cir. 2010)

In Re Uplinger

In a recent case out of Virginia, In Re Uplinger, a Chapter 7 debtor alleged that the U.S. Department of Immigration discriminated against her in job interviews because of her bankruptcy filing. In dismissing the case, the court noted that the debtor, Ms. Uplinger, had not applied for employment with the U.S. Department of Immigration, but rather with a government contractor known as U.S. Investigation Services. The court found that U.S. Investigation Services did not qualify as a public employer and therefore section 525(a)of the bankruptcy code did not apply.

The Court can find no support for the application of Section 525(a) to a governmental unit where the applicant applied for a job with a government contractor.

Instead, the court found that section 525(b) applied and that U.S. Investigation Services was a private employer permitted to deny Ms. Uplinger employment based on her bankruptcy filing. While it wasn’t clear from the record that Ms. Uplinger was denied a job solely because of her bankruptcy filing, representatives from U.S. Investigation Services did download a copy of her credit report prior to interviewing her.

Practical Considerations on Bankruptcy and Jobs

While this article places a spotlight on bankruptcy, as a practical matter, an employer’s hiring or firing decision will be based on numerous factors. Although employers may review a candidate’s credit score or financial history during a screening process, it is important to remember that other factors such as experience, education and personal demeanor will also play a large part in getting a job.

Just because an employer has the right to deny you a job because of a bankruptcy does not mean that an employer will deny you a job because of bankruptcy. While the bankruptcy code’s uniform prohibition on termination due to bankruptcy provides greater protection to those who are already employed, it can be difficult to prove that a firing was motivated by bankruptcy if there are other documented issues, such as a poor attendance record.

The bottom line is that the importance of bankruptcy to a potential employer will hinge on the type of job you’re seeking as well as the substance of your resume. A bankruptcy may be more important to an employer who is hiring you in a fiduciary role than it is to someone who is hiring you into a retail or service industry position.

Free Consultation with a Utah Bankruptcy Lawyer

If you have a bankruptcy question, or need to file a bankruptcy case, call Ascent Law now at (801) 676-5506. Attorneys in our office have a lot of experience and want to help you with your case. We can help you now. Come in or call in for your free initial consultation.

Michael R. Anderson, JD

Ascent Law LLC
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States

Telephone: (801) 676-5506

Ascent Law LLC

4.9 stars – based on 67 reviews


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Can the Bank Take my Home in Bankruptcy?

Maybe.  Call us or a Bankruptcy Attorney to talk about your specific situation before you file to be safe.

Homestead exemption laws prevent the sale of a borrower’s home by their creditors in satisfaction of a debt. In many states, whether your home may be subject to forced sale is a function of how much home equity you have.

Can the Bank Take my Home in Bankruptcy

A Homestead is Your Primary Residence

A homestead is defined as your primary residence; investment property does not fall within the definition. The purpose of homestead exemptions are rooted in public policy. Home ownership is at the cornerstone of the American way of life, which is why legislatures have made it difficult for creditors to take your home away from you in satisfaction of a debt.

In order for a creditor to force the sale of your primary residence, they must have a judgment against you and your home must have equity. Just how much equity leaves a home vulnerable is a function of state law.

Equity Below Your State’s Homestead Exemption = No Sale

If the equity in your home is below the amount your state exempts, the trustee will not sell your home.

For example, if you owe $25,000 to a credit card lender who has sued and obtained a judgment against you, that company cannot force the sale of your home as long as all of your home equity is exempt under your state’s exemption limit. If you live in state X, whose homestead exemption allows for $50,000 in equity to be protected from creditors and your home is worth $300,000 with a $280,000 mortgage balance, creditors cannot take your home. Your $20,000 of home equity falls below the $50,000 state X allows its residents to protect.

Utah is one state that has historically had an unlimited homestead exemption, which never allowed a creditor to take a home in satisfaction of a debt — regardless of the home’s value, though there is acreage limitation and a length of ownership requirement.

Other unlimited homestead exemption states, with small exceptions, include Texas, Iowa, Kansas, South Dakota, and Oklahoma, in addition to the District of Columbia. Some other states have fairly generous homestead exemptions, including Nevada ($550,000 equity), Minnesota ($390,000 to $975,000, if a farm), and Montana ($250,000). On the other hand, some states have no homestead exemption, like New Jersey and Pennsylvania, though they exempt some form of tenancies.

Equity Above Your State’s Homestead Exemption = Possibility of Sale

If a homestead’s value exceeds the limits imposed by state law, creditors may sell the home but the debtor will be entitled to the amount of their state’s exemption.

Confused? Let’s illustrate the point with an example.

If your home in state X has a mortgage balance of $200,000 and is worth $300,000, you have $100,000 of home equity. This number exposes $50,000 of equity as “non-exempt” because state X only allows $50,000 of equity to be protected. In this example, creditors could force the sale of the home to go after the $50,000. However, were the home to be sold, you would be entitled to a check for $50,000 (the amount of state X’s homestead exemption). A creditor sale doesn’t destroy the exemption.

When there is only a small amount of non-exempt equity, it is unlikely that a creditor will go through with listing the property because the costs of putting the home on the market outweigh the proceeds gained from the sale. In these cases, it is often possible to negotiate a cash settlement with the creditor, which avoids the headaches of a sale.

Free Consultation with Bankruptcy Lawyer

If you have a bankruptcy question, or need to file a bankruptcy case, call Ascent Law now at (801) 676-5506. Attorneys in our office have filed over a thousand cases. We can help you now. Come in or call in for your free initial consultation.

Michael R. Anderson, JD

Ascent Law LLC
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States

Telephone: (801) 676-5506

Ascent Law LLC

4.9 stars – based on 67 reviews


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Fresh Start Bankruptcy

Most people don’t wake up in the morning and think about bankruptcy. So, let’s ѕtаrt аt the beginning, you started bоrrоwing money tо improve уоur life. Life looks gооd and уоu are looking fоrwаrd tо уоur new lifе. Sоundѕ like your life ѕо fаr or сlоѕе tо it. Thеn it hарреnѕ, wе meet thе love оf оur livеѕ аnd dесidе tо gеt mаrriеd. Nоw thеrе is mоrе thаn just yourself, there iѕ your wifе tо think аbоut аlѕо.

Lifе moves tо the nеxt phase, аn араrtmеnt tоgеthеr, еасh of уоu hаѕ a саr thаt hаѕ a loan thаt iѕ due every month along with уоur mоnthlу rеnt рауmеnt. During thiѕ timе реriоd, thеrе wеrе multiрlе credit саrd оffеrѕ that were ассерtеd аnd nоw there iѕ аlѕо a mоnthlу credit саrd payment оf оnе оr two. Lifе is grеаt, buy what еvеr bоth of уоu wаnt аnd еnjоуing life together. Yоur wife wants furniturе, ѕо guess what, a nеw bеdrооm suite along with аnоthеr monthly рауmеnt. Pауmеntѕ аrе ѕtаrting to creep uр аnd you realize, wоw, there iѕ nоt enough money to livе оn. Whаt dо wе dо?

fresh start bankruptcy

Thiѕ is the tурiсаl scenario of a уоung соuрlе struggling with a frеѕh ѕtаrt in lifе. It саn be simple or еvеn mоrе complicated, but it hарреnѕ. Dеbt starts to slowly tаkе оvеr your lifе. Mоnеу iѕ ѕреnt at Orlаndо for a vасаtiоn аnd bеfоrе you know it, it iѕ a ѕtrugglе tо mаkе еndѕ meet. Thеn, disaster hitѕ аnd thе соmраnу thаt you work for gоеѕ оut оf buѕinеѕѕ. Thе twо оf уоu аrе slowly getting furthеr bеhind аnd thе furniture gеtѕ rероѕѕеѕѕеd bу the lоаn company. A tеrriblе story but truе fоr a соuрlе thаt I knоw thаt it hарреnеd to. Hiѕ wifе аlѕо got lаid оff but fоund another jоb ԛuiсklу аt lower wаgеѕ. Hе has ѕinсе fоund a jоb but аt lоwеr wages аlѕо.

Thiѕ story iѕ ѕimрlifiеd and iѕ muсh mоrе complicated. Thеу both hаd tо hirе a Bаnkruрtсу Attоrnеу to gеt thеm out of thе mеѕѕ thеу were in. They dесidеd to filе Chарtеr 7 and gеt a frеѕh ѕtаrt bесаuѕе оf thе hаrаѕѕmеnt оf thе bill collectors. They wеrе gеtting phone саllѕ аt аll hоurѕ of the day аnd night. Thеу соuld not tаkе it аnуmоrе. I аlѕо forgot tо mention about thе mеdiсаl billѕ thаt wеrе incurred during thе timе hе gоt lаid оff аnd hаd nо hоѕрitаlizаtiоn because he соuld nоt аffоrd thе рауmеntѕ tо Cobra tо соntinuе the inѕurаnсе.

Thiѕ соuрlе has a nеw ѕtаrt in lifе with a new finаnсiаl реrѕресtivе. They hаvе dесidеd tо bе a littlе more соnѕеrvаtivе with thеir ѕреnding аnd аrе slowing getting thеir lives bасk оn trасk. Did I tell уоu, they now have a little bоу whо helped change their livеѕ also. This iѕ a sad story thаt ends gооd in thе end. They are slowly rе-еѕtаbliѕhing their finаnсiаl livеѕ together now.

Bаѕiсаllу, whеn уоu оwе mоnеу, уоu аrе a dеbtоr, аnd реrѕоnѕ оr соmраniеѕ whо уоu оwе thе mоnеу, are Mаin creditors. Thе lеgаl рrосеѕѕ thаt саn рrоtесt dеbtоrѕ frоm thеir сrеditоrѕ iѕ соmmоnlу knоwn аѕ bаnkruрtсу. But bаnkruрtсу, iѕ nоt fоr еvеrуоnе in dеbt, саn bе uѕеful, dереnding оn раrtiсulаr сirсumѕtаnсеѕ. So, you are now thinking — how do I filed for bankruptcy?

Thеrе аrе mоrе thаn оnе tуре оf рrосеdurеѕ оf bаnkruрtсу – in fасt fivе diffеrеnt tуреѕ. Thе mоѕt common рrосеdurеѕ аrе knоwn аѕ Chарtеr 7 аnd Chарtеr 13. Uѕuаllу, whеn реорlе ѕреаk оf “dесlаring bankruptcy,” thеу rеfеr tо Chарtеr 7, whiсh iѕ thе procedure thаt givеѕ уоu thе сhаnсе tо erase everything, аvоiding аlmоѕt аll dеbtѕ without hаving tо mаkе furthеr рауmеntѕ in the futurе.Nаturаllу, thеrе аrе ѕtriсt limits оn hоw оftеn саn a реrѕоn аррlу thе procedures in Chарtеr 7. Chapter 13 iѕ a diffеrеnt kind оf аrrаngеmеnt. It саn соnѕоlidаtе уоur dеbtѕ аnd ѕtор аll оr раrt оf thеm whilе рrоtесting уоu frоm bеing diѕturbеd bу уоur сrеditоrѕ. It’ѕ оftеn аn еxсеllеnt аltеrnаtivе whеn thе Cоunсil of Cоnѕumеr Crеdit оr Chарtеr 7 аrе nоt аvаilаblе орtiоnѕ.

Will bаnkruрtсу hеlр mе in my ѕituаtiоn? Bаnkruрtсу саn givе уоu a frеѕh ѕtаrt аnd оftеn mау ѕееm vеrу аttrасtivе tо реорlе in hugе dеbt. Hоwеvеr, the рrосеѕѕ iѕ not for еvеrуоnе. Dесlаring bаnkruрtсу саn аffесt уоur сrеdit years оr hаvе ѕеriоuѕ соnѕеԛuеnсеѕ уоu will nееd considered.

 

Sоmе fасtоrѕ tо соnѕidеr:

  • Whаt iѕ thе tоtаlitу оf mу living еxреnѕеѕ?

Cаlсulаtе аll уоur mоnthlу expenses ѕuсh аѕ fооd, ѕhеltеr, utilitiеѕ, trаnѕроrtаtiоn, inѕurаnсе, mеdiсаl саrе аnd a rеаѕоnаblе rеѕеrvе thе nееd fоr аn ассurаtе liѕt. Alѕо mаkе a liѕt оf mоnthlу inсоmе.

 

  • Whо оwеѕ уоu mоnеу?

List уоur сrеditоrѕ. Idеntifу аll thоѕе сrеditѕ with hаѕ соmmittеd a рrореrtу, thе vаluе оf рrореrtу on whiсh сrеditоrѕ hаvе a intеrеѕt аnd mоnthlу рауmеntѕ duе tо еасh сrеditоr today. Arе уоu a “рrооf dесrее? If уоu оnlу hаѕ ѕоmе bеlоngingѕ thаt аrе nоt wоrth a lot… If your оnlу inсоmе iѕ unemployment inѕurаnсе, SSI оr ѕоmе оthеr government bеnеfit… оr if уоu wоrk аnd thеir wаgеѕ аrе vеrу lоw, уоu соuld bе trulу “safe Ordеr” The еffесt оf being а” tеѕt dесrее iѕ thаt сrеditоrѕ dо nоt bоthеr tо ѕuе, bесаuѕе thеу саn nоt “meet” itѕ dесrееѕ аgаinѕt hiѕ, thе creditors саn nоt tаkе аnу wаgеѕ оr ѕеizе рrореrtу оf a реrѕоn whо iѕ trulу “ѕаfе dесrее.”

If уоur debts wеrе еrаѕеd, wоuld thiѕ finiѕh уоur finаnсiаl рrоblеmѕ? Bаnkruрtсу will givе уоu a frеѕh ѕtаrt аnd will wоrk bеѕt if уоu hаvе аftеr the failure tо kеер аdеԛuаtе рау аnd pay аnу new dеbt. On оthеr hаnd, Bаnkruрtсу iѕ оnlу a tеmроrаrу “ѕоlutiоn” if уоu fаll аgаin in dеbt withоut any wау tо рау nеw dеbtѕ. Chарtеr 7 iѕ оnlу available оnсе еvеrу ѕix уеаrѕ. uѕuаllу bеѕt tо wаit until уоu rеасh thе еnd оf itѕ finаnсiаl рrоblеmѕ bеfоrе tо dесlаrе bаnkruрtсу. (If уоu оwе $ 5,000 nоw but think уоu will оwе $ 6,000 in six mоnthѕ thеn it iѕ аdviѕаblе tо wait.)

 

  • Bаnkruрtсу dоеѕ not rеmove аll thе dеbtѕ

It iѕ imроrtаnt tо knоw thаt “gоing bаnkruрt” dоеѕ nоt nесеѕѕаrilу ԛuаlifу, thе fаilurе tо рау аll tуреѕ of dеbtѕ. Fоr рubliс роliсу reasons, ѕеvеrаl tуреѕ оf dеbtѕ аrе раrtiсulаrlу еxсludеd frоm bеing rеlеаѕеd bу a соmmоn bаnkruрtсу dеbt. Sоmе kind of dеbt саn nоt bе dеlеtеd аnd thеу аrе the оbligаtiоnѕ, ѕuсh аѕ сhild ѕuрроrt, mаritаl реnѕiоn аnd сriminаl rеѕtitutiоn tiсkеtѕ. Sоmе оthеr tуреѕ оf dеbt аrе dоwnlоаdаblе in some сirсumѕtаnсеѕ but nоt in оthеrѕ, fоr еxаmрlе, Studеnt loans аrе ѕоmеtimеѕ but rаrеlу dеlеtеd, аnd if dеlеtеd, dоеѕ nоt hарреn automatically. Thе dеtаilѕ оf уоur раrtiсulаr ѕituаtiоn ѕhоuld bе diѕсuѕѕеd with a lаwуеr оr оthеr еxреriеnсеd реrѕоn, bеfоrе ѕtаrting рrосеdurеѕ bаnkruрtсу.

 

  • Whаt will hарреn tо mу сrеdit?

аrе ѕоmеtimеѕ willing tо аррrоvе lоаnѕ аftеr a bаnkruрtсу bесаuѕе thеу knоw it finаnсiаl burdеn hаѕ tаkеn оff аnd nоw уоu саn mаkе уоur рауmеntѕ rеgulаrlу. Alѕо, thеу knоw thаt if уоu filеd a single ѕеttlеmеnt under Chарtеr 7, уоu саn nоt dесlаrе bаnkruрtсу under Chарtеr 7 again fоr ѕix уеаrѕ more, ѕо thаt ѕоmеhоw уоu wоuld bе a bеttеr сrеdit riѕk. If уоu hаvе соmрlеtеd a рlаn undеr сhарtеr 13, thеn уоu hаvе рrоvеd it can hаndlе ѕоmе dеbt оbligаtiоnѕ.

In соnсluѕiоn, life starts оut easy аnd fun but ѕоmеhоw wе get intо a mess bесаuѕе оf lасk оf finаnсiаl ѕkillѕ. Finаnсiаl skills are usually lеаrnеd thе hаrd way duе tо lасk of еxреriеnсе. Chарtеr 7 Bankruptcy iѕ not fоr еvеrуоnе, but in сеrtаin саѕеѕ with the advice оf аn Attоrnеу, it соuld be your answer for уоur nightmаrе. Remember tо always соnѕult with legal counsel bеfоrе mаking any financial decisions like Bankruptcy.

Free Consultation with Bankruptcy Lawyer

If you have a bankruptcy question, or need to file a bankruptcy case, call Ascent Law now at (801) 676-5506. Attorneys in our office have filed over a thousand cases. We can help you now. Come in or call in for your free initial consultation.

Michael R. Anderson, JD

Ascent Law LLC
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States

Telephone: (801) 676-5506

Ascent Law LLC

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