Friday, November 29, 2013

Filing Bankruptcy puts an Immediate Halt to Wage Garnishment

Filing Bankruptcy puts an Immediate Halt to Wage Garnishment

Struggling with debt can often go from manageable to a tailspin in a heartbeat. One of the most common ways this happens is when a creditor wins a judgment and is allowed to start garnishing your wages.

Millions of Americans live paycheck to paycheck, just barely keeping their heads above water. When a creditor begins taking money directly out of that paycheck, it becomes difficult to keep everything afloat.

Luckily, there is a legal option against aggressive creditors. Bankruptcy is designed to stop creditor collection efforts, including wage garnishment. If your paycheck is getting "hacked", talk to us about your legal options!

Wednesday, November 27, 2013

Buying a house after filing bankruptcy

When can I buy a house after filing bankruptcy? As a bankruptcy attorney, many of my clients are concerned that once they file bankruptcy they wont be able to buy a house. Or at least they wont be able to do so for the ten years a Chapter 7 bankruptcy stays on their credit report.

Truth is that many lenders shy away from lending money to people who have recently sought the protection of bankruptcy. But that actually doesn’t last very long. My clients find that after a year to a year and a half, the credit industry is back knocking at their doors with credit card offers, home loan offers, etc.

Recently, a client called 3 months after the bankruptcy filing and before her case was even closed, wanting to know if there was any reason she shouldnt accept the credit card offer she had just received!

Mortgage lenders generally look at three things to determine legibility to get a home loan: FICO score, regular income level, and the percentage of the purchase price you are able to put down. After filing bankruptcy, your FICO score will take a dip. Often that is caused by late payments more than the actual bankruptcy filing. Generally, with no overdue payments anymore, the FICO score comes back pretty quickly  a year or so.

The regular income level is based on your job and how long youve had it. Its easier to get a loan if youve been working in one place for a while on a steady income. The loan committee used to also take a close look at the amount your payments on the house will be in relation to your total income.
Thus, it used to be that you couldn’t get a loan if more than 30% of your income was going to go to the house payment. (Relaxing that standard so loans were given out based on 50 or even 60% on ones income level was one of the contributing factors to the mortgage crisis we are currently facing.)
Finally, the amount you can put down towards the purchase of the house makes a big difference. The higher the percentage of down payment, the more protection for the bank. (Allowing minimal or no down payments and relying on appreciation were also factors that led to our current mortgage crisis.)
So, what does this mean? If you want to buy a house after filing bankruptcy, you can. If may be you will need to wait a year or two until your income and expenses stabilize and until you can sock a few dollars away for a down payment, but thats probably a sound economic policy anyway.

Courtesy Bankruptcy Law Network

Monday, November 25, 2013

Rebuilding your credit after Bankruptcy

Don't despair if you have wrecked credit after filing for bankruptcy––you can take measures to rebuild it. Here's how to get your finances together, whether you've filed bankruptcy or you just need help stabilizing your money.

  1. Open a new checking and savings account. If you do not already have both a checking and a savings account, open one of each at a local bank or credit union. 
  2. Get a secured credit card. Once you have a little money put away, you can put some of it toward a secured credit card. A secured card functions essentially like a debit card in that you pay the bank the money beforehand, but your payments should be reported to all three major credit bureaus and go toward pumping up your credit score.
  3. Get a retail or gas credit card. When you're back on track with a secured card, you can try applying for a retail or gas credit card.
  4. Pay off your balance every month. You might have heard that carrying a balance is great for your credit score, but that's not necessarily true. Especially if you have bad credit, the credit bureaus want to see that you're capable of paying off the balance as often as necessary. Only buy what you can afford at the end of the month.

  5. Get copies of your credit report from all three major bureaus. You can get one report a year from each bureau for free. Figure out where you are now, and where you'd like to be in two years. This can help you evaluate how drastically you need to restructure your finances.
  6. Pay your bills on time. If you tend to be late paying your bills and incur late fees, now's the time to stop. Draw up a calendar with all of your due dates (or enter it into your phone), and check it religiously. Make sure the money is ready ahead of time, and try to mail payments or do online transfers a day or two ahead of the deadline
  7. Dispute incorrect information on your credit reports. Make sure you follow up with any reporting agency who lists incorrect information on your credit report or who continues to allow discharged debt to appear on the report. To dispute incorrect information on your credit report listed by the bureaus listed above, you can use the online dispute form on Equifax, the credit maintenance services page on Experian, and the dispute section under the personal services category on TransUnion.

  8. Budget for essentials. Sit down and figure out how much money you absolutely must spend every month. Try to be as strict as possible when it comes to differentiating between needs and wants––for instance, you might want unlimited texting but you don't need it to live. Once you know how much money you need to live, you can start figuring out how to leverage the rest of it toward rebuilding your credit. 
  9. Use your remaining money to rebuild your credit. Whatever you have left over after you pay your living expenses can be used to rebuild your credit and purchase items that aren't absolutely necessary (such as entertainment, gifts, etc.)

Thursday, November 21, 2013

Bankruptcy Basics

If you are thinking about filing for Bankruptcy, we understand how frustrating and complicated the process can be. If you are facing foreclosure, wage garnishments, harassing creditor calls, or just overwhelmed with debt. At, our attorneys can represent you in all phases of your bankruptcy proceeding. They can walk you through every step of the way and keep you informed of everything you need to know about bankruptcy (Chapter 7 bankruptcy and Chapter 13 bankruptcy), as well as other alternatives for managing your debt. If you are filing for bankruptcy for the 1st time, we understand what you are going through, especially if you consider yourself a responsible hard working individual.

We know how the law works, what it can (and can't) do, and whether bankruptcy might be a good option for you. We are here to help you. You will receive a Free Evaluation to find out how bankruptcy works, what it can (and can't) do, and whether it might be a good option for you. You will talk to an attorney directly with specialized knowledge and experience in all areas of bankruptcy law.
We have the largest network of licensed bankruptcy attorneys across the United States. After selecting an attorney, you will receive one-on-one personal attention during the entire process. Let the law work for you and file for bankruptcy protection with someone you can trust.

Types of Bankruptcy

As an individual filing for bankruptcy, you'll most likely choose between two types: Chapter 7 and Chapter 13. Chapter 7 involves the liquidation of assets in order to pay back creditors, while Chapter 13 revolves around debt consolidation. Depending on your financial situation, our attorneys want to help you protect all of your assets. We will work on a custom plan to determine which bankruptcy is right for you.

Once you have made the decision to retain a bankruptcy attorney, going forward, you will no longer need to speak to your creditors. Your attorney, on your behalf, will effectively put an end to those annoying, harassing phone calls and letters. Once your attorney has filed on your behalf, "Automatic Stay" goes into effect. This will halt all actions by creditors to collect debts during the bankruptcy process.

Call us today - we can help!

Tuesday, November 19, 2013

In the News

ALBUQUERQUE, N.M. (AP) - A federal judge has ruled that employees of the Roman Catholic Diocese of Gallup can continue to be paid and receive benefits during bankruptcy protection proceedings.

The Albuquerque Journal reports that a Bankruptcy Court judge issued the order Friday during a hearing on the diocese's filing last week for Chapter 11 reorganization.
The diocese had announced in September that it planned to file in bankruptcy court because of mounting claims of clergy sex abuse.

The diocese includes parishes in six counties in New Mexico, three counties in Arizona and seven American Indian reservations.

Diocese attorney Susan Boswell says 105 people have been identified who may file claims in the case. Claimants attorney James Stang says fairness, justice and healing are issues in the case along with money.

Read more:

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Monday, November 18, 2013

You've declared bankruptcy. Now what?

Life after bankruptcy
  • Adopt a no-frills lifestyle.
  • Rebuild good credit.
  • Pay all bills on time.
  • Build up a savings account.
  • Get a credit card and pay off every month.
  • Focus on the end result: free of debt.
You have a fresh start, and some new challenges. Your credit rating, which probably wasn't all that great already, has taken a hit. The bankruptcy will stay on your credit report for 10 years. Lenders see you as a bad risk because you've legally written off at least some of your past debts. For a period of time you may not be able to get a loan or credit card. Once you do, the interest rates and fees attached will be punishing.

"The purpose of filing is a safety valve," says Roger M. Whelan, resident scholar of the American Bankruptcy Institute, a nonprofit professional organization. "Thank God, the day in which it was like wearing a blazing star on your forehead is over."

Slimmed-down lifestyle

If you've filed a Chapter 13, it means you're paying off some of your debts in what's known as reorganization. For three to five years, the court allows you a set amount to live on and a court-appointed trustee divides the rest among your creditors each month.
That means a very no-frills lifestyle. Sometimes it means changing the basics in your life, like how much you pay for shelter and groceries every month. And you can't take on new debt like a credit card or car loan without the court's permission. At the end of reorganization, your obligations are gone and your money is yours again. But the fact that you've declared bankruptcy, even though you paid back at least some of your debt, will stay with you for 10 years from the date you filed your case.

If you filed a Chapter 7, you walked away from most of the debt. Your salary is yours, if you have one, but the bankruptcy stays on your credit reports for 10 years. You have to start living on cash, rather than counting on any form of credit, and building an emergency fund is key.

It's the double-edged sword of post-bankruptcy life: mismanaging credit may have gotten you into trouble (or just magnified other problems), but you have to get credit to rebuild your financial life. After your bankruptcy has been discharged, you need to re-establish good credit, right away for a Chapter 7 or after reorganization for a Chapter 13. The rule of thumb: there are no rules. How fast you build back your credit will depend on a lot of factors that vary widely.

It also depends on what resources you have. Obviously, if you have a high-dollar income, you have an edge. If you managed to hang on to your house, paying your mortgage on time will improve your credit report, so long as you reaffirmed the loan while your bankruptcy case was active. If you did not reaffirm the loan, the lender will not report future payments to the credit bureaus.

Ironically, people who file a Chapter 7 may have an easier time re-establishing credit.

Courtesy Bank Rate
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Tuesday, November 12, 2013

What exactly is bankruptcy? Will it wipe out all my debts?

What exactly is bankruptcy? Will it wipe out all my debts? Bankruptcy is a federal court process designed to help consumers and businesses eliminate their debts or repay them under the protection of the bankruptcy court. Bankruptcies can generally be described as "liquidation" (Chapter 7) or "reorganization" (Chapter 13). Under a Chapter 7 bankruptcy, you ask the bankruptcy court to wipe out (discharge) the debts you owe. Under a Chapter 13 bankruptcy, you file a plan with the bankruptcy court proposing how you will repay your creditors. You must repay some debts in full; others may be repaid only partially or not at all, depending on what you can afford.
When you file either kind of bankruptcy, a court order called an "automatic stay" goes into effect. The automatic stay prohibits most creditors from taking any action to collect the debts you owe them unless the bankruptcy court lifts the stay and lets the creditor proceed with collections.

Certain debts cannot be discharged in bankruptcy; you will continue to owe them just as if you had never filed for bankruptcy. These debts include back child support, alimony, and certain kinds of tax debts. Student loans will not be discharged unless you can show that repaying the debt would be an undue burden, which is a very tough standard to meet. And other types of debts might not be discharged if a creditor convinces the court that the debt should survive your bankruptcy.

For more information call us today!

Friday, November 1, 2013

Advice on Bankruptcy & Foreclosure

Advice on Bankruptcy & Foreclosure

Foreclosure and bankruptcy can be two of the most formidable problems a homeowner can face. If you’re close to either one of these possibilities, it probably means you’re in serious financial difficulty. The concepts are daunting, but understanding the process of both concepts–and knowing to whom you should turn in this crisis–could make all the difference in emerging from both without losing everything.

Talk to the Bank

The Federal Trade Commission recommends talking to your lender as much as possible when you fall behind on your mortgage payments. Your lender will likely ask questions such as why you fell behind on your payments and whether your problem is short term or long term. Keep notes from the conversation, follow up on any requests your lender makes and meet any deadlines your lender gives you. The more you talk to your lender, the more time you may have to save your home or delay the process of either foreclosure or bankruptcy.

Know Your Options

The FTC outlines several options that don’t involve traditional foreclosure or bankruptcy in order to keep your home. You can negotiate a repayment plan with your lender. You can file for a forbearance, which suspends mortgage payments for a time while you save the money to catch up. You can apply for loan modification, either through your lender or through government programs designed for mortgage relief. There are also ways to avoid both foreclosure and bankruptcy, but they involve giving up the property through a traditional sale, a short sale–where you sell and your lender forgives the shortfall–or a deed in lieu of foreclosure, where you sign the home over to the bank.

A Serious Choice

If you have fallen behind at least 90 days on your home payments, you have a decision to make, which may involve either declaring bankruptcy or having the bank foreclose on your home. At the 90-day point, your bank can begin the foreclosure process. Neither choice is a great option, according to John W. Schoen, a senior producer for MSNBC. Of the two, bankruptcy is likely to stay on your credit longer, up to 10 years. Foreclosure stays on your credit report for seven years. Schoen quotes a Dallas-area financial counselor as saying that banks look at foreclosure with greater wariness than bankruptcy when determining loan eligibility after the fact. Most experts advise avoiding either scenario, if possible.

If You File, When To File

Once the foreclosure process begins, there isn’t much you can do to stop it, aside from making the loan right. But one way to delay it is to file bankruptcy, because it comes with an automatic stay. Once you file for bankruptcy, your creditors cannot continue to pursue actions against you to reclaim your debt until your case is resolved. This action probably won’t save your home if you file for a Chapter 7 bankruptcy, which liquidates all non-exempt assets, but it can delay the foreclosure process for up to three months. But you must file before your home is sold in a foreclosure auction, or the bankruptcy will do you no good.