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October 09, 2014

Is There Credit After Bankruptcy?

Is there credit after bankruptcy? Yes. You can and will be able to get credit after bankruptcy. Bankruptcy is thought to be an absolute barrier to future credit, but it's not. There are so many myths and misinformation out there about getting credit after bankruptcy that the most frequent answer you may hear on the street to this question is more than likely "no", which is simply not true. Yes, filing for bankruptcy will have a negative effect on your credit score. But if you are considering bankruptcy, your credit score may already be as bad as it can get - or soon will be.
No future creditor wants to see bankruptcy on your report, but the damage to your credit score depends on where your credit is now. If your credit rating is in the dumps now, bankruptcy will improve your future credit rating.
If you live check to check with no hope of paying off your old debts, you should consider your total situation. It's a choice between horrible credit and always being in debt, or a clean slate with your debts wiped out and a bright financial future.
Even if you have good credit now, you can probably see that your circumstances are getting worse. You know you can't keep on going the way you are now. It is always better to be proactive rather than reactive. How much worse will your credit score be if you wait two more years before you realize that you have no choice of every paying a $20,000 hospital bill? You can't make decisions now about your current financial situation based solely on whether you can get credit in the future. Realizing where you are today and what is coming will allow you to be proactive and file for bankruptcy to get the clock started sooner rather than later.
Everyone's situation is different. Bankruptcy law is complicated and involved. Do the smart thing and consult with a highly qualified bankruptcy attorney. Do it now, before things reach a crisis. Find out what it is all about and what it can do for you. Get the information you need to decide what is best for your situation now, and how to rebuild in the future.

Tagged: Bankruptcy

March 26, 2014

Will I be able to buy a car after filing bankruptcy?

One of the most common questions I'm asked by my clients is if and when they will be able to buy a new vehicle after they file bankruptcy. Most believe that they will never be able to buy a car again or that they will have to wait for 10 years to get a new car. Not true at all. You can get a new car and it won't take you 10 years.
It is true that many lenders may not want to finance a car for you right away, or if they do, you can bet the interest rates will be sky high. But within a year or so, the credit lenders will be filling your mailbox with offers for credit cards, loans, and solicitations from mortgage companies and car dealers.
Automotive financing companies look at 3 things when you want to buy a new or used vehicle. They look at your FICO score, your income, and your down payment.
Your FICO score will rise quickly during the year or so after bankruptcy due to no more past due accounts or late payment activity.
As to your income, lenders want to make sure you have enough money left over after your other bills to pay the car note, plain and simple.
How much money (cash and/or trade in) are you willing to put down on the new vehicle? The more money you put down, the less your credit score or the fact that you filed bankruptcy even matters. There should also be dealer money available to add to your down payment.
Don't forget about other methods of buying a vehicle without going through a finance lender, such as buying a car from a family member or friend, or paying cash.
So if you want to get a new vehicle, the bankruptcy is NOT going to prevent you from getting one.

Tagged: Bankruptcy, Legal question

March 25, 2014

Will I be able to buy a house after filing bankruptcy?

Many of my clients want to know if they will ever be able to buy a house after they file bankruptcy. Or they think they will have to wait 10 years. Yes, you can buy a house and no, it won't take you 10 years.
Yes, it is true that lenders may not want to loan you money right away. But within a year or so the credit companies are filling your mailbox with credit card offers, along with solicitations from finance and car loan companies.
Mortgage companies look at 3 things when you decide to buy a house. Your FICO score, your current income, and your down payment.
With no more late payments and past due accounts, your FICO score will come back up pretty quickly over the next year or so after bankruptcy.
As to your current income, they will want to know a few things. Do you have enough money to make the mortgage payments along with your other living expenses? Did you pay your rent on time? This is important to mortgage lenders. If you paid your rent on time, you will more than likely pay your house note on time.
How much money are you willing to put down on the house? The more money you put down, the less anyone cares about your former credit score or the fact that you filed bankruptcy.
Don't forget about other methods of buying a home without using a traditional mortgage lender, such as owner financing, wrap around mortgages, and lease purchase options.
So, if you want to get a house, you can. You may need to wait a couple of years, but it is not something you want to jump right into anyway. Owning a house is not always the best thing for you at every stage of your life. Owning a house ties you down and carries a lot of extra expenses. But rest assured, if you want a house, filing bankruptcy won't prevent you from getting one.

Tagged: Bankruptcy, Legal question, Mortgage and Lending Laws

March 25, 2014

What have you heard about bankruptcy?

Contacting a bankruptcy lawyer is something people never want to think about. The hardest thing I have to do is to convince people to come and see me sooner rather than later. People will do everything they can to keep from discussing bankruptcy. As a result, there are many lies and half-truths about bankruptcy floating around. Debt collectors also spread these lies hoping that people will believe them. Your friends and family may also repeat some of this false information unknowingly because it is what they have been told to believe. Stop listening to other people. You can never be sure if they know what they are talking about and are in most cases wrong, even if they have filed bankruptcy before.
See if you recognize these top lies and myths about bankruptcy:

Tagged: Bankruptcy, Legal question

February 11, 2014

Will filing bankruptcy affect my checking and savings accounts?

You will need to think About Your Checking and Savings Account. Financial planning before you file bankruptcy may include closing your bank accounts and moving your money to a different bank or credit union.
There are many reasons to change banks or credit unions:
First of all, you don't want to keep your money at a bank where you owe money. You want to avoid a "set off". Banks have the right to reach into your account and take money out to pay some other debt you may owe them - like credit cards, overdrafts and loans. It is not uncommon for a bank to claim money from your bank account and apply it as a "set off" against other money you owe.
Second, banks like Wells Fargo will freeze any accounts that have your name on them once you file bankruptcy. In theory, the banks say they are protecting assets for the bankruptcy court. The reality is, this type of bank policy creates a huge inconvenience for customers and does little to preserve any assets. The bankruptcy court did not ask the banks to do this and doesn't want them doing this. If you are considering bankruptcy, avoid banking with Wells Fargo, Wachovia, Bank of America, Union Bank and any financial institution which freeze accounts.
If your account if not at one of the banks that freeze accounts, you will need to stop all automatic withdrawals. You may have set up automatic withdrawals from your bank account to pay medical or credit card bills that will be debts which are eliminated through filing bankruptcy. Even telling your bank to stop the draft or paying the stop payment fees is no guarantee that withdrawals will stop. It is so much easier just to close the account than to try and get money back from a creditor. In many cases you can close one account and open another one at the same bank, if you are satisfied with the bank's service and you don't owe the bank any money.
There are many other reasons as well that can pertain to your specific situation, which underscores the importance once again of speaking with a bankruptcy attorney to create a strategy that best meets your financial situation.

Tagged: Bankruptcy

October 30, 2013

34 Things NOT to do when preparing to file Chapter 7

I know a list of 34 things sounds like a lot but it's better to be as comprehensive as possible when discussing the option of filing a Chapter 7 bankruptcy. When I discuss this option with my clients, timing when to file is one of the most important things we go over. I always advise them to contact me at the beginning of financial difficulty rather than wait. Having a plan A or B (maybe even C and D) never hurts. Once we have a plan, then we prepare.

Tagged: Bankruptcy, Legal question

July 15, 2013

Is Green Tree Harassing You?

Green Tree Servicing is one of the biggest servicers of mortgage loans in the United States. They specialize in collection of subprime home mortgage debts. When they call you they are very aggressive in their collection methods. Green Tree is based in St. Paul, Minnesota, and operates 29 offices for its collection operations. Green Tree Servicing, LLC, is owned by Walter Investment Management Corp. In recent months Green Tree has acquired hundreds of thousands of loans. Bank of America recently sold mortgage servicing rights on 650,000 mortgage loans worth around $93 Billion to Walter Investment Management Corp. Bank of America has recently been sued for preventing loan modifications and paying bonuses to employees to foreclose on homeowners.

Tagged: Bankruptcy, Foreclosure, Mortgage and Lending Laws

June 18, 2013

Does Filing Bankrupty Trigger A Tax Audit?

No. The IRS will only verify that you have filed all tax returns that were due at the time you filed your bankruptcy case. There are 10 indicators that you should be aware of that can trigger an IRS audit.

Tagged: Bankruptcy, Legal question

May 31, 2013

My Debt Was Charged Off. Do I Still Owe It?

If you have reviewed your credit report and see that an unpaid debt shows "Charged Off", this doesn't mean that the debt is now gone. It is a common mistake that many people make thinking that when the debt reflects this status (Charged Off) that it's been cancelled by the creditor, all is forgiven and the debt has disappeared forever. This isn't true. You still owe the debt. "Charge Off" is an accounting term that means the debt has been "charged off to profit and loss".
Banks and credit card companies are legally required to remove delinquent accounts from their books after 180 days, or six months. That does not mean, however, that the debt is no longer valid. At this point the account is usually sold to a debt collector for further collection efforts. The charged off debt is still an obligation, will affect your creditworthiness, and can cause you to be ineligible for new debt.
Charged off debts also often cause confusion on your credit reports. Charged off debts are sold from one debt collector to another, resulting in numerous entries on your credit bureau reports and multiple organizations contacting you for payment. A charge-off remains on your credit report for seven years from the date it was charged off.
A lawsuit can be filed to gain a judgment against you which then opens the pathway for the creditor to garnish wages, etc. Filing bankruptcy stops all collection at whatever point in the debt collection process your debt is in at the time the bankruptcy is filed. The debt is then wiped out by the court and cannot be collected.

Tagged: Bankruptcy

February 12, 2013

Is it possible to file bankruptcy on my own?

Sure, you can file your own bankruptcy. The law does not require you to have an attorney in order to file bankruptcy. It also does not require you to have a doctor to fix your broken leg or to have a doctor deliver your baby - you can do just about anything you want to on your own. I'm being a little humorous but seriously - the question is -do you really want to do these things on your own?
Do you have the training to ensure it's done right? Do you have the information, tools, and knowledge needed to ensure your success?
Bankruptcy laws are complex and full of pitfalls. If you make a mistake, whether by recording something inaccurately or failing to report something at all, it can cost you your discharge and possibly your property. You could even land in jail for misrepresentation or dishonesty in your bankruptcy filing. Let's talk about the preparation and filing of a bankruptcy case.
The preparation involves 50+ pages of details surrounding your income, property, debts, financial transactions, etc. All lawyers use software to assist and ensure all forms are completed per court requirements, just like your tax preparer uses tax software to ensure they comply with the IRS forms, and just like your doctor uses a software program to track your medical history.
Utilizing a software program to print the forms and papers for the court sounds simple enough. (Not really but lets say it is for the sake of this discussion.) But most of the action occurs after you have filed the papers with the court. Once they are filed, both the U.S. Trustee and the case Trustee as well as the court clerks all begin reviewing your papers to see how to kick out your case, deny your discharge, or otherwise disqualify your case so that you cannot receive the benefits provided through bankruptcy.
Why? It's not personal. It's their job. They are the gatekeepers that ensure compliance to bankruptcy law. Many people misunderstand thinking that the Trustee is on their side - fighting for their right to bankruptcy. No. That's your attorney's job. Your attorney is the only one in this process on your side - fighting for you - looking after your best interest. Everyone else has other obligations - to the law itself, to the creditors, etc.
If they object to your case, do you know how to defend your position? Do you know how to even provide a response to a filed objection? Do you know how to file objections to claims filed by creditors? There are motions, objections, notices, and on and on and on.
Some bankruptcy cases are full of this type of activity and some are not. Some are very basic and are quickly completed. Every case is unique because people are unique. There is so much more to filing bankruptcy than just filing papers. The real work involved in filing bankruptcy starts with advising the client on all their legal options, helping devise a legal strategy that will benefit you the most, gathering all the information required by the courts, reviewing it, evaluating the situation, explaining the process, leading you through the court system, and most importantly protecting you, your income, your property, and your financial future.
When you need a fresh financial start - it's critical that you are successful in getting just that. You need an experienced bankruptcy lawyer to advise you and guide you through this process. Bankruptcy law is an area which is complex and continually changing. It is not something you want to go through alone.

Tagged: Bankruptcy, Legal question