Credit Repair Scams

Common Credit Repair Scams

Getting a New Social Security Number - Individuals are only permitted to have one Social Security number. It is against the law to use a different Social Security number to create a false identity.

Getting a Federal Employer Identification Number (abbreviated as EIN or FEIN) - Proponents of this "file segregation" scam claim that you can obtain a federal tax ID number, as if you are a business, then get a clean credit record under that tax ID number. It is against the law to use an EIN to set up a false identity. Further, a new credit report under an EIN will not show any credit history. It is unlikely that a creditor would regard a new business with no credit history as a good credit risk.

Challenging Every Negative Entry on a Credit History - As a general rule, it is lawful for credit agencies to keep accurate records of negative entries on your credit history for up to seven years, and to keep records of any bankruptcies for up to ten years. There are certain circumstances where truthful negative information may be reported beyond those time periods. As much as you do not like having negative information on your credit report, your ability to object to inaccurate information is not meant to be a license to harass honest creditors in an effort to remove accurate negative entries.

Common Misrepresentations by Credit Repair Companies

"If you have declared bankruptcy, you can't get credit for ten years" - The truth is you can start building a positive credit history as soon as your bankruptcy is resolved. While creditors will be cautious at first, you can gradually demonstrate your fiscal responsibility, and build a history that can lead lenders to view you as a good credit risk long before the bankruptcy drops from your credit history.

Warning Signs of a Bad Credit Repair Company

Do not use any credit repair company that doesn't follow industry standards or regulations.
Do not use a credit repair company that offers to "wipe out bankruptcies", to remove accurate negative information from your credit history, or to obtain credit for you regardless of your credit history.
Do not use a credit repair company that promises to exploit "secret" or "little known" loopholes in the system to remove information from your credit history.
Do not use a credit repair company unless it provides a written disclosure of your rights in relation to your credit history before asking you to sign a contract. The contract should include all the terms and conditions of payment, a detailed description of the services to be provided, including any guarantees of performance and an estimate of how long it will take to perform the contract. The agreement should also include a right to cancel lasting at least three days, in case you have second thoughts.
Do not use a credit repair company that attempts to charge money before it has performed the credit repair services.
Do not use a credit repair company that discourages you from directly contacting the major credit bureaus.

Removing Inaccurate Information From Your Credit History

Although the process can be slow, it is relatively simple to object to inaccurate information on your credit history.

After you obtain a copy of your credit report, review it for any inaccuracies. If you don't understand some of the entries on the report, ask the credit reporting agency what they mean.
Once you have identified any inaccurate entries, notify the credit bureau about the entries you believe to be in error, providing as much information as you can about the error. For example, if you paid a debt which is reflected on your credit report as delinquent, you may wish to provide a copy of a cancelled check reflecting payment. Once you make the report, the credit agency is responsible to investigate any errors at no expense to you, and to either verify the information in the credit report or to remove any information that is inaccurate or which cannot be verified.
You may also contact creditors directly, to let them know of any errors, and to ask that they correct their records and forward accurate information to the credit reporting agencies.
If you are unable to obtain the removal of information from your credit report, and still object to its inclusion, you may submit a written objection (up to 100 words in length) to the credit reporting agency, explaining your side of the story. The explanation will be included in your credit report, and will be distributed to anybody who obtains a copy of the report.

By Aaron Larson

Wage Garnishment Must Stop After a Bankruptcy Case is Filed; You Might Even be Able to Get Money Back

Bankruptcy Stops Wage Garnishment

The minute a bankruptcy cases filed,an injunction called the automatic stay is issued, which prohibits creditors from trying to collect on debts that were included in the bankruptcy. The Ninth Circuit Court of Appeals has called the automatic stay “one of the most important protections in bankruptcy law.” The automatic stay is self-executing, effective upon the filing of the bankruptcy case and requires that all collection calls, lawsuits and garnishments must stop immediately. Creditors who continue with collection efforts face stiff fines and penalties from the bankruptcy court. Section 362(k) of the Bankruptcy Code provides:

An individual injured by any willful violation of a stay provided by this section shall recover actual damages, including costs and attorneys’ fees, and, in appropriate circumstances, may recover punitive damages.

Reference National Bankruptcy Forum

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Can I be Denied a Job Because of Bankruptcy?

The Answer May Hinge on Whether Your Employer is Public or Private

I Need to File Bankruptcy, But I’m Worried About My Job…Can I Get Fired?

If you have a job, need to file bankruptcy, and are worried about getting fired because of it, you probably shouldn’t be. The 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. 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:

a 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

Reference National Bankruptcy Forum

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5 Ways to Deal With Financial Stress

1. Exercise
It may strike some as a bit strange that exercise would be first on the list. However, it’s really a simple equation: exercise relieves stress. Things always look brighter after a good workout. According to the Mayo Clinic, an exercise routine helps to increase the production of your brain’s feel-good neurotransmitters, called endorphins. Any exercise that gets your heart rate going will do: yoga, squash, tennis, running, basketball etc. Regular exercise can increase self-confidence and lower the symptoms associated with mild depression and anxiety. Exercise also can improve your sleep, which is often disrupted by stress; ever stay up at night wondering how you’ll pay the bills?

2. Prayer/Mediation/Mindful Living
Regardless of religious affiliation, a back to basics spiritual approach can help cope with stress. Take the time to focus on your breath. Ask yourself: of all my problems, what problem am I confronting NOW. Although it can be difficult, try not to immerse yourself in too many scenarios about the future. Deal only with what is on your plate, one day at a time. As Mark Twain famously said: ”I am an old man and have known a great many troubles, but most of them never happened.”


3. Full Disclosure
A routine bankruptcy case is stressful enough, believe me, you don’t want to see a “problem” case. For the debtor, bankruptcy is all about their debt. However, it is important to keep in mind that the Court and trustee are more concerned with assets. This post is intended to aid in relieving stress, so I won’t go through the parade of horribles that will ensue if your schedules are filed sans assets. Just follow one rule: tell your bankruptcy attorney about everything you own, you’ll be glad you did.

4. Don’t Go Through it Alone
One very common source of stress for bankruptcy debtors is shame. Many feel that bankruptcy represents failure. This simply isn’t true. Bankruptcy is a legal, ethical and entirely legitimate process which allows for a fresh start. Taking advantage of bankruptcy under the right circumstances is nothing to be ashamed of. To the contrary, it’s a sophisticated move, utilized often by multinational corporations and celebrities. Discussing your concerns with a close friend or family member will allow for an outlet to all the pressure that is building inside of you. Let it out! Worrying about what other people think should be last on your menu of concerns during a financial crisis.

5. Develop a Plan of Attack for Life After Bankruptcy
This is a big one. Putting together a plan of attack for your life after bankruptcy will be important, not only to relieve stress, but to thrive in your new debt free life.  Identify the circumstances that led to bankruptcy, and if possible, take steps to remedy them. Rebuilding credit will be a key, start by taking a look at the articles in the Related Posts section below. Knowing that you have mapped out the beginnings of a comeback will allow you to sleep better at night.

Lastly, try to remember that, while the bankruptcy process is not easy or fun, it has helped millions of people in this country get out from under impossible debt. Talk to a good bankruptcy attorney, disclose all of your assets, breathe, exercise, plan and you’ll get by……with a little help from your friends. Good luck!

Reference Bankruptcy Forum

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How Long Does it Take to File Chapter 7?

Typically, a Chapter 7 bankruptcy case is relatively quick to complete. Your bankruptcy case could be completed and discharged within 3-6 months of filing bankruptcy.

However, there are some important dates that can affect your right to file a case and obtain the relief available. The following filing timeline illustrates the relevant dates in the typical Chapter 7 bankruptcy case. We can help you see what details may affect your case.

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Can You Keep Your Car If You File Bankruptcy?

Many people who file for bankruptcy and own a car are allowed to keep it during and after their case, especially if it is used for getting to and from work.

If you are behind on car payments, you may be able to use bankruptcy laws to keep your vehicle in your possession.

Both types of personal bankruptcy address cars, car loans and vehicles you own outright:

• The automatic stay in bankruptcy is designed to stop repossession. In most cases, this goes into effect right after you officially file for bankruptcy.
• Chapter 7 bankruptcy exemptions may protect your car from a forced sale.
• Filing for bankruptcy under a Chapter 13 may allow you to repay your car loan at a more affordable rate so that you don't lose your car to collectors.

How to Recover from Bankruptcy

Some people fear bankruptcy, others embrace it, and many people think it is an easy way out. It is really none of those. Bankruptcy must be viewed as the last resort and for many people it is. It is scary, but it should not be feared any more than the impending lawsuits and wage garnishments that are certainly in your future. It is also not an easy way out. Bankruptcy is a scarlet letter, something that will haunt you for years to come, but you can recover from bankruptcy if you truly want to change your life for the better.

Steps

1. Look at bankruptcy as a new beginning, not the end of the world. It is a relief from the prison of debt that you have been under. As long as you have learned how to be a good steward of your finances, bankruptcy can be a real life saver for you, your marriage and your family.
2. Avoid immediately opening up lines of credit. During the process and soon after discharge, you will probably start receiving offers for more credit cards and lines of credit. Do not take the bait. It is well known that you are no longer able to declare bankruptcy again for so many years, so these companies know they have you for at least that long.
3. Take a financial management seminar or classes. Bankruptcy might have been completely out of your control, perhaps from a major medical crisis and your insurance just did not cover it. Otherwise, perhaps you feel that you are a good manager of your finances, outside of that medical situation. Regardless of the situation that got you here, you will do much for your future by taking such a course.
4. Accept an offer for a department store credit card if you must. Unfortunately, after bankruptcy knocks your credit down to next to nothing, the catch-22 becomes that you need credit to build credit. If credit cards were your weakness or perceived means of survival, get a department store credit card rather than a regular credit card. In this respect, your purchases will be limited to just what the store sells.
5. Get a new car loan only if you need a new car and if you can afford the payment. If you must, get a cheaper used car loan. A car loan is a quick way to rebuild your credit.

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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!

http://www.markcarterlaw.com

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.

Visit http://www.markcarterlaw.com today! 

Courtesy Bankruptcy Law Network

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.)

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 BankruptcyLawfirms.com, 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!

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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: http://www.myfoxphoenix.com/story/23997256/pay-continues-for-employees-during-bankruptcy-case#ixzz2l7Gz9Ald

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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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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.

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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.

Bankruptcy Basics: When should you throw in the towel?

Bankruptcy is a scary proposition. The word "bankruptcy" itself sounds so ominous. The media bombards us with nightmare tales of seemingly solid business giants going from bedrock to bankrupt. The list of the bankrupt runs the spectrum from personal to corporate bringing together the likes of Donald Trump with Enron.

And gossip columns never tire of dishing on the latest celebrity inches from bankruptcy whether it's Gary Coleman or Mike Tyson having to part with his pet tigers. You might even fear that you're a few steps from going under. After all, we live in an economy in which credit card offers clutter our mailboxes. And living in debt is an accepted norm. But, just how can you tell when it's time to throw in the towel and declare bankruptcy?

Here are a few questions to help you assess your financial danger zone:

• Do you only make minimum payments on your credit cards?
• Are bill collectors calling you?
• Does the thought of sorting out your finances make you feel scared or out of control?
• Do you use credit cards to pay for necessities?
• Are you considering debt consolidation?
• Are you unsure how much you actually owe?

Assess Your Situation
If you answered yes to two or more of those questions, you at least want to give your financial situation a little more thought. Simply put, bankruptcy is when you owe more than you can afford to pay.

To determine where you are financially, inventory all of your liquid assets. Don't forget to include retirement funds, stocks, bonds, real estate, vehicles, college savings accounts, and other non-bank account funds. Add up a rough estimate for each item.

Then, collect and add up your bills and credit statements. If the value of your assets is less than the amount of debt you owe, declaring bankruptcy may be one way out of a sticky financial situation. However, bankruptcy shouldn't be approached casually. After all, it's not a simple, easy cure-all for out-of-control debt.

Courtesy Legal Zoom

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Digging into Detroit's bankruptcy filing

Detroit has once again been in the headlines as the city and its creditors battle in court over whether the city is eligible to receive bankruptcy protection.

Municipal bankruptcy, like just about everything else that contains the word "municipal" or has anything to do with lawyers, is complicated. We checked in with Detroit lawyer Nathan Resnick, a municipal bankruptcy expert, and with his help we'll try to explain what an ongoing court hearing means, and where Detroit stands in its efforts to turn around its finances.

Didn't Detroit already file for bankruptcy? What's the purpose of the hearing?
Detroit did file for bankruptcy protection on July 18, a process that automatically protects the city against any impending action from creditors. But that doesn't mean it definitely gets to remain in bankruptcy.
Judge Steven Rhodes is hearing arguments about whether the city was, in fact, insolvent when it filed for bankruptcy, and whether it negotiated in good faith with its creditors.
Detroit seems pretty broke — $18 billion in debt. Why would anyone argue it shouldn't be able to file for bankruptcy?
Creditors, which include public employee unions and pension funds, say that the city did not try to negotiate with them before filing for bankruptcy.
They say that Michigan Gov. Rick Snyder appointed an emergency manager, Kevyn Orr, to take over city governance with the idea that Orr would force the city into bankruptcy rather than figure out a way to pay creditors. They've been asking the judge to look into who else [the Republican governor] considered for the emergency manager position before settling on Orr, who represented Chrysler in its 2009 bankruptcy, to prove that Snyder just wanted someone who knew a lot about bankruptcy.

What is an emergency manager?
Michigan has had emergency managers for a while now, but they were given more power by a law, Public Act 4, passed by the Michigan Legislature in March of 2011, shortly after Gov. Snyder took office. Public Act 4 allowed the state's governor to appoint an emergency manager to take over from elected officials in any municipality or school district in Michigan undergoing a "financial emergency."

Voters repealed Public Act 4 last November, but the Legislature passed another emergency manager law, Public Act 436, in December. There are currently six cities, and three school districts in Detroit, with emergency managers, according to Stephanie Vaught, a legal analyst with Sugar Law Center in Detroit.

What happens if the judge decides Detroit is eligible for bankruptcy?
If the judge says that Detroit is eligible for bankruptcy, a whole different set of negotiating will begin. The city will submit a plan of reorganization, which then creditors will get to weigh in on. The judge will then decide on various points of the plan.

But if the judge decides that Detroit isn't eligible for bankruptcy protection, the city will need to figure out quickly how to pay its creditors. This trial will end.

In other financially troubled cities, pensions are a big issue. What's happening with Detroit's pension obligations?
This has been one of the more complicated parts of the bankruptcy proceedings. The pension benefits of state retirees are protected by law under the Michigan Constitution. That's why some retirees argued in a separate court filing that the bankruptcy filing violated the state constitution.
But Rhodes, the judge, said he will rule on that issue, which he will address at a later date. He first is looking at the factual issues — whether or not the city is eligible for bankruptcy protection. Then he'll move on to the legal issues.

Can't the city and its creditors just negotiate something and stop spending all this money arguing?
That's another option. A mediator will also be meeting with the city and its creditors in two mediation sessions on Nov. 6 and Nov. 13. Many deals are cut in bankruptcy court, so it's possible the two sides will figure out a way to move forward without making this trial go on any longer. Without mediation, though, the trial will likely continue through early next year.

By Alana Semuels - LA Times

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Filing for bankruptcy: When and how to make use of this legal weapon

Bankruptcy is regarded as the ultimate debt relief solution – one which is chosen only when other debt elimination processes fail to revive the finances of a debt ridden individual. It is a legal process which promises fresh financial start to the consumers by eliminating their outstanding bills and dues. The federal law based judicial course of action either results in the discharge of most or all unsecured debts of an individual or reorganizes the debts with a court-approved payment plan. However, certain bankruptcy cases may also involve loss of the consumer's assets to pay off his creditors.

When can you file bankruptcy?

Bankruptcy might seem to be the best debt solution when nothing else seems to work in your favor. One or more of the following common reasons might prompt you to file for your bankruptcy.

1. You are burdened with enormous debt and not in a financial situation to pay off those
2. None of your attempts to pay off debt worked
3. You risk losing assets to creditors
4. You are unemployed or have lost your job recently

What are the two main types of consumer bankruptcy?

Bankruptcy comes along in various forms. Since bankruptcy leaves a noticeable mark on your financial history, it's extremely important to choose the right form which suits your specific situation. For this reason, it's sensible to sit with an experienced attorney for a pre bankruptcy counseling.
The two most common form of consumer bankruptcy are:

1. Chapter 7 – Straight Bankruptcy/Liquidation: This is the basic liquidation bankruptcy for individuals and businesses. Since it usually involves the discharge of debt, it's considerably a simpler and faster process.
2. Chapter 13 – Adjustment of an individual's debt: This form of bankruptcy adjusts an individual's debt in a way that his debts are repaid, as much as possible. It involves formulation of a court-approved repayment plan for individuals with steady source of income.

Why is it better to hire a bankruptcy attorney than to do it on your own?

It's not necessary that you have to appoint an attorney when you're about to file your bankruptcy. You can evidently represent yourself in the court. However, it's strongly recommended to consult one for bankruptcy help since, after the enactment of BAPCPA in 2005, filing bankruptcy have become much more complicated and time consuming. A minor mistake during the filing process or violation of the bankruptcy laws, may result in rejection of your case.

Thus, before you decide to file your own bankruptcy, check out the following list to understand how an experienced bankruptcy attorney can be a better choice.

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Top Misconceptions About Bankruptcy

Top Misconceptions About Bankruptcy

Bankruptcy law is complex and takes time to master. A basic understanding of the Bankruptcy Code and its principles is essential for effective management of the financial affairs of individuals and businesses. There are many misconceptions about bankruptcy.
  
1. The debtor must be flat broke to file for bankruptcy. Wrong. With limited exceptions, the only requirement to file for bankruptcy is that the debtor cannot pay bills as they come due. A “debtor” is an individual or entity that owes money. 

Because individuals and businesses often wait until they are flat broke to seek bankruptcy advice, this delay limits their options, some of which may help them reorganize their finances and keep part or all of their property. For example, an individual normally waits until the day before a foreclosure sale to seek bankruptcy advice; had he sought advice earlier, his chances of losing the property would have been diminished significantly.
 
2. An individual who files for bankruptcy will not qualify for credit in the future. Wrong. The fact that an individual files for bankruptcy will appear on an individual’s credit report for up to 10 years, which may seem draconian but is not permanent.

Any individual considering filing for bankruptcy probably has poor credit already. Filing for bankruptcy may be the best bet to “get good credit” again, because when a debtor files for bankruptcy under Chapter 7 of the Bankruptcy Code and receives a discharge (a court injunction relieving the debtor of the obligation to repay most debts and preventing creditors from collecting for the same), the debtor cannot receive another discharge under Chapter 7 for at least six years.

3. An individual who files for bankruptcy cannot buy a house. Wrong. Like all lending institutions, mortgage lenders are willing to take risks with a debtor as long as the lender has enough security. This generally means charging higher interest rates and requiring personal guarantees. If a person who had filed for bankruptcy in the past applies for a mortgage and can fund a sufficient down payment, most banks will approve a mortgage loan.

4. Taxes cannot be discharged in bankruptcy. Wrong. Certain taxes are dischargeable in bankruptcy, such as personal income taxes that are more than three years old. As a general rule, fiduciary taxes are not dischargeable. The Bankruptcy Code’s provisions relating to taxes are complex, and differ by chapter.

5. Student loans are nondischargeable. This is generally true, but with exceptions. If the debtor can prove certain hardship, student loans may be dischargeable. 

6. An individual can file for bankruptcy but not include certain creditors. Untrue, unlawful, and fraudulent. One principle behind the Bankruptcy Code is to treat similarly situated creditors equally. When a debtor does not list a creditor in bankruptcy and decides to pay back that creditor, that debtor is necessarily prejudicing the other creditors. When a debtor does this, the court considers this fraud, and the debtor risks losing the discharge and, in extreme circumstances, may face jail time and substantial fines.

7. Family members who loaned money to the debtor will lose out. Wrong. Although a debtor must list all creditors in the bankruptcy, in certain instances the debtor can repay certain creditors after the bankruptcy is filed. This is commonly known as a reaffirmation agreement. All reaffirmations are subject to court approval. Most debtors agree to pay back a debt they have no legal obligation to pay so as to maintain an existing business relationship. The court would probably approve the reaffirmation if the debtor lives with the creditor and may be forced to leave if he does not repay the debt.

8. Signing an agreement stating that a debt cannot be discharged in bankruptcy makes the debt nondischargeable. Wrong. Although there are extremely limited exceptions, these bankruptcy clauses are unenforceable and are a tactic used to scare debtors into not filing bankruptcy.

9. A person can lose his job if he files for bankruptcy. Wrong. The law states that if an individual can prove that an employer fired an employee solely because the employee filed for bankruptcy, the employee can sue the employer. If the debtor/employee looks for another job after filing for bankruptcy, however, a potential employer can use the bankruptcy filing as a factor (not the sole factor) in deciding whether to employ that individual. 

Laws very state to state so give us a call with your questions.  We will be glad to help.

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Debt Collectors Calling?

Bankruptcy's Automatic Stay

When a person files for bankruptcy, they usually receive immediate protection from creditors through a special court order known as the bankruptcy automatic stay.
This means creditors must stop collection efforts.

The Stay is Designed to STOP Debt Collectors

The automatic stay in bankruptcy was designed to:

• HALT foreclosure
• STOP repossession
• SILENCE creditors
• STOP many lawsuits & wage garnishments

Sound like the kind of help you need? Ask a bankruptcy lawyer if filing bankruptcy and could help you.

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Buying a Car After Bankruptcy

While bankruptcy offers an opportunity for many consumers in debt to start their financial lives anew, it may result in temporary financial uncertainty. After filing for bankruptcy, some people wonder how cautious they need to be in their future purchasing decisions.

One of the primary sources of concern for post-bankruptcy consumers is how to go about purchasing a car. The bankruptcy process may have freed them of their debts, but life after a bankruptcy may follow a different script.

To buy a car after filing, you'll likely need to take care of your credit. But the good news is that, with time, many people are able to build their credit up to higher levels than before their filing.
To get answers on how bankruptcy may affect your debt and about life after bankruptcy, speak with a us for free!

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Does Bakruptcy Help?

How Does Bankruptcy Help?

Bankruptcy is designed to provide unique help in a number of ways, but a primary benefit of bankruptcy for many filers is the potential to eliminate their debts.

Filing bankruptcy often acts as a financial cleanser, scrubbing unsightly debts from people's records and allowing them to start fresh with a clean financial slate.

In addition to debt relief, any discussion of how bankruptcy helps people in debt would be incomplete without referring to bankruptcy's ability to stop home foreclosure.

As banks and other lenders force more and more Americans out of their homes, bankruptcy's potential to prevent foreclosure has become increasingly important.

How Bankruptcy Helps Eliminate Debt

How Bankruptcy Helps Eliminate Debt

If your concerns are unrelated to foreclosure, and instead focused on solving your unsecured debt problems, Chapter 7 may be a better fit.
Through Chapter 7 bankruptcy, filers may be able to eliminate some or all of their unsecured debts, including credit card bills, medical debt, and some personal loans. In addition, Chapter 7 also provides the benefits of the automatic stay.
While the automatic stay can stop foreclosure, it may also:

• Stop wage garnishment
• Prevent an eviction
• Put an end to creditors' harassing phone calls and letters

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How does Bankruptcy help stop foreclosure?

How Does Bankruptcy Help Stop Foreclosure?

There are two common types of personal bankruptcy, Chapter 7 and Chapter 13. For people trying to stop home foreclosure, Chapter 13 may be the more powerful choice.
In Chapter 13 bankruptcy, a filer works with the bankruptcy court to create an affordable debt repayment plan. Under this repayment plan, filers pay off debts, including mortgage debts, to their creditors over a course of three to five years.
That, in a nutshell, is how Chapter 13 helps eliminate debt. Here's how Chapter 13 could help stop home foreclosure:

• Automatic stay. Immediately after a person files for Chapter 13, the automatic stay kicks into action. This court order usually temporarily halts foreclosure actions that have been initiated against a filer's home.
• Payment plan. Under the Chapter 13 payment plan, a filer can usually stretch out overdue mortgage payments in a more reasonable payment schedule. This may also allow filers to keep their homes.
• Discharged debts. Once mortgage payments are completely current through the repayment plan, some unsecured debts may be discharged at the end of the process, allowing a person to free up money to continue making regular mortgage payments, rather than pay other debts.

As you can see from the information listed above, there are several potential ways that filing bankruptcy could help stop foreclosure.

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What do I have to do first if I am considering bankruptcy?

In April 2005, the Bankruptcy Abuse Prevention and Consumer Protection Act officially amended the U.S. Bankruptcy Code and is now recognized as the uniform federal law that governs all bankruptcy cases. Today, you must take each of the following steps to officially file a bankruptcy claim:

• Choose and file for a specific type of bankruptcy. There are two types of bankruptcy for individuals or personal bankruptcy — Chapter 7, where your assets are sold off to pay creditors, and Chapter 13, where you can develop an interest-free repayment plan. You must apply for one type or the other, and your eligibility for each is based on your reported income when you file.
• Arrange for official credit counseling. New laws require that you must work with a licensed counselor for the bankruptcy filing to be legitimate.
• Attend a meeting of your creditors. In almost all personal bankruptcy cases, this is the only official proceeding you must attend. Informally called a "341 meeting" (named after section 341 of the Bankruptcy Code), it's designed for you to meet directly with your creditors so you can answer specific questions about your overall debts and property. This meeting usually takes place 20 to 40 days after you file the claim.

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Things NOT to Do Before Bankruptcy

Things NOT to Do Before Bankruptcy

When considering the dos and don'ts before bankruptcy, avoiding actions on the "prohibited" is quite important. Why is this so? Because making poor decisions before bankruptcy may prevent you from getting debt relief.

So, here are some decisions to avoid:

• Transferring assets out of your name. This raises a huge red flag in bankruptcy court, especially if the transfer occurs right before bankruptcy. Plus, hasty asset transfers may be financially risky or even illegal.
• Using a credit card for a large cash advance. Some people decide to max out their credit cards before bankruptcy because they fear losing credit later, or because they assume the debt will be swiftly discharged. If someone does this with no intention of paying the money back, it is considered fraud and punishable by law.
• Paying off a "favorite" creditor. While banks and credit card companies can be seen as faceless entities, it's more difficult when you owe money to someone you know and see regularly. Many people going into bankruptcy try to settle debts with friends or family members as a "favor" to that person. But the court no only frowns on this practice, they may make that person give back the money so other creditors get their fair share.
• Making large purchases. Even though you may be able to eliminate debt in bankruptcy, buying expensive items outside your price range could put you in hot water.

Don't assume that bankruptcy will spare you from all foolish purchases. Before filing bankruptcy, make sound financial decisions. Rash purchases, financial sleights-of-hand, and sneaky credit tricks will usually come back to haunt you.

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Medical Bills Are Often a Key Cause of Bankruptcy

Medical Bills Are Often a Key Cause of Bankruptcy

People who've experienced an illness or injury and found themselves buried in bills (even if they have health insurance) may consider >filing bankruptcy as a way to get out of debt.

Although people tend to have a lot of questions about filing bankruptcy, bankruptcy was created to help people resolve overwhelming bills so they can move forward.

There are two main types of personal bankruptcy: Chapter 7 bankruptcy (debt discharge) and Chapter 13 bankruptcy (debt repayment plan).

Chapter 7 bankruptcy involves the debt discharge, which eliminates unsecured debts, which are debts not tied to property, such as medical bills, credit cards, utility bills and some personal loans.
A Chapter 13 bankruptcy filing is a little different, because it involves setting up the filer on an interest-free debt repayment plan. This is generally best for people who have unsecured debt and secured debt, which is debt tied to property, such as a mortgage, that they want to keep. Chapter 13 bankruptcy has helped millions stop foreclosure, repay their debts and stay in their homes.


When you or a loved one is injured or ill, what's important is focusing on getting better--not worrying about excessive medical bills.

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What are Bankruptcy Exemptions?

Bankruptcy Exemptions

What are bankruptcy exemptions? Exemptions specify property a debtor can keep in a Chapter 7 case outside reach of creditors and bankruptcy trustee, or how much a debtor must pay creditors in Chapter 13.

In Washington, debtors may either use the state's exemptions or the federal bankruptcy exemptions in the Bankruptcy Code. However, debtors cannot pick favorites from each list and combine or mix exemptions. If debtors opt to use the state's exemptions, they can use applicable federal non-bankruptcy exemptions, though.

Washington's state exemptions encompass homesteads, personal property, insurance, pensions, public benefits, tools of trade and wages, as well as miscellaneous categories. There are residency rules for state exemptions. They mandate you reside in the state for a required term. You usually have to live continuously in the state for two years before filing bankruptcy. There are also limits on homestead exemptions for property acquired less than four four years prior to bankruptcy.

Disclaimer

This article provides a brief, general introduction to filing for bankruptcy. You should contact a our office for legal advice regarding your case.

Mark A. Carter Law Office
2414 Main St. P.O. Box 61505
Vancouver, WA 98666
E -mail: banko341@netscape.net
 Phone: 360.694.8955
Fax: 360.695.5032
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Chapter 7 Bankruptcy Advantages and Disadvantages

Advantages to a Washington Chapter 7 filing:

1. You receive a complete fresh start. After the bankruptcy is discharged the only debts you owe will be for secured assets on which you choose to sign a "Reaffirmation Agreement."
2. You have immediate protection against creditor's collection efforts and wage garnishment on the date of filing.
3. Wages you earn and property you acquire (except for inheritances) after the bankruptcy filing date are yours, not the creditors or bankruptcy court.
4. There is no minimum amount of debt required.
5. Your case is often over and completely discharged in about 3-6 months.

Disadvantages to a Washington Chapter 7 filing:

1. You lose your non-exempt property which is sold by the trustee. If you want to keep a secured asset, such as a car or home, and it is not completely covered by your Washington bankruptcy exemptions then Chapter 7 is not an option.
2. If facing foreclosure on your home, the automatic stay created by your Chapter 7 filing only serves as a temporary defense against foreclosure.
3. Co-signors of a loan can be stuck with your debt unless they also file for bankruptcy protection.
4. You can file a Chapter 7 bankruptcy once every six years.

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Chapter 13 Bankruptcy Advantages and Disadvantages

Advantages to a Washington Chapter 13 payment plan:
If you choose and you can afford the payment plan, you can keep all your property, exempt and non-exempt.

While debts are not canceled as in a Chapter 7 discharge they can be reduced under a Chapter 13 payment plan.

You have immediate protection against creditor's collection efforts and wage garnishment.

More debts are considered to be dischargeable (including debt you incurred on the basis of fraud and credit card charges for luxury items of $1,150 or more made within 60 days of filing).

If the Chapter 13 plan provides for full payment, any co-signers are immune from the creditor’s efforts.
You have protection against foreclosure on your home by your lender as long as you meet the terms of the plan.

You have more time to pay debts that can't be discharged by either chapter (like taxes or back child support).

• You can file a Chapter 13 at any time.
• You can file repeatedly.
• You can separate your creditors by class where different classes of creditors receive different percentages of payment. This enables you to treat debts where there is a co-debtor involved on a different basis than debts incurred on your own.

Disadvantages to a Washington Chapter 13 payment plan:
You create a payment plan where you use your post bankruptcy income. This ties up your cash over the Chapter 13 plan period.

Legal fees are higher since a Chapter 13 filing is more complex.

Your debt must be under $1,000,000 (e.g., unsecured debts are less than $250,000 and secured debts less than $750,000).

Your plan and therefore your debt will last for 3 to five years.

You are involved in the bankruptcy court process for the term of the 3-5 year plan.

Stockbrokers, and commodity brokers cannot file a Chapter 13 bankruptcy petition.

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Welcome to our Blog

Since 1994, Attorney Mark A. Carter has provided superior, cost-efficient and value-oriented legal services in a compassionate and respectful manner and Federal court specializing in Chapter 7 and Chapter 13 Bankruptcy in Washington State. I am dedicated to helping people deal effectively with financial difficulties and other legal problems and provide highly professional representation to people in need. I also offer a level of personal attention not found at larger law firms.When it comes to something as personal as handling your Bankruptcy, I will be your ally and advocate — working hard to achieve your goals every step of the way. Contact me to schedule a FREE initial consultation. Mark A. Carter Law Office is a Vancouver Washington based law firm serving Southwest Washington. We focus on bankruptcy protection and debt relief. Our services encompass Clark and Cowlitz Counties including the cities of Vancouver, Camas, Washougal, Ridgefield, Battleground, Woodland, Kelso, and Longview. Visit http://www.markcarterlaw.com for more information. Mark A. Carter Law Office 2414 Main St. P.O. Box 61505 Vancouver, WA 98666 E -mail: banko341@netscape.net  Phone: 360.694.8955 Fax: 360.695.5032 Get Directions