Why You Need A Chapter 7 Lawyer

September 25, 2009 – 5:00 pm

If you find yourself as one of millions of Americans who are today thinking of filing for bankruptcy, picking a good chapter 7 lawyer could be very important to your case. The fact is that while hiring a lawyer could be expensive, it is the kind of process that requires a high attention to detail and also a knowledge of court practices and significant paperwork, so the right lawyer can make all the difference.



Usually, you might find a chapter 7 lawyer through asking other people you know. This can be hard since declaring bankruptcy still has something of a stigma attached to it, and it can feel very embarrassing to admit to someone that you are in need of a bankruptcy lawyer. But keep in mind that many people are just a couple paychecks away from bankruptcy themselves these days, so it’s likely that more people than you know have already talked to lawyer or considered bankruptcy themselves.


Getting a recommendation is one way. Another way is to contact your local bar association which his the professional organization of lawyers in your town or state. Most lawyers are members and you might think twice about hiring someone who isn’t a member! Also these groups usually have specialty groups for different practice areas like bankruptcy, so see if you can find the name of lawyers who are members of that subgroup.



When you talk to the bar association, find out if they have a referral service. Usually lawyers also join the referral service so that when consumers call, their names are on the list. Lawyers on these lists also sometimes provide free or low cast initial consultation through these services.



You can always find a chapter 7 lawyer through the yellow pages or by checking online. But if you choose this method, it is more like throwing a dart. BE sure to check what organizations the lawyers list on their website, how long they’ve been practicing bankruptcy law. sometimes these lawyers will publish articles too, and gain recognition in their area of practice.




Once you find a few names that sound good, set up an appointment with each lawyer. If they don’t offer a free initial consultation, then skip to the next lawyer. In bankruptcy, getting a half hour free up front is fairly standard in most areas of the country. When you meet them, determine who you feel most comfortable with, the lawyer that gives you the most thorough information, and listens to your personal, individual situation. It’s a lot like choosing a doctor. You don’t want a lawyer who just tells you to file without going over options, or who seems to think in cookie-cutter mode. Every person’s financial situation is different, and considering what you’ll be paying this person, you deserve personal attention.




As for the cost of bankruptcy, regardless of what chapter you file under, it’s likely that you’ll pay at least $2,000 plus the court’s fees. You may also pay for copying, FedEx or other costs. if you have a complicated financial picture the costs could go higher. This fee may vary around the country, but if you’re meeting with a few lawyers, you’ll see right away what the going rate is in your region. Any good bankruptcy attorney will also tell you right up front what they estimate your total costs will be.




Hiring a Chapter 7 lawyer is an important step, so be sure to ask around, meet with a few different people, and find the person that is the right fit for you.

By Janet Caskey | Posted in Uncategorized | Tagged , , , | Comments (0)

Painlessly Rebuilding Your Credit After Bankruptcy

September 25, 2009 – 9:57 am

After you file for bankruptcy, and your case is discharged, it’s time to start rebuilding your credit. It’s not an easy task, since your bankruptcy will stay on your credit report for ten years, and even if you pay everything on time, that bankruptcy item will stick out like a sore thumb for some lenders. Not all lenders will refuse credit, but you can expect that for at least two or three years, getting new credit will be an uphill battle.

Patience and time will be on your side. Take your time over then ext couple years to get your financial house in order. Learn to live within a budget, and start to regularly put money in savings in any amount. What other steps are there to rebuilding credit after bankruptcy?

First, you may still have some debts that were not discharged. For example, any student loan debt cannot be discharged in bankruptcy, and that will continue to show up on your credit report. It is extremely important that you pay any back amounts due, and get these debts current as fast as you can. For student loan servicers, there are also many options for someone with a financial hardship to take a forbearance, or temporarily suspend payments, or work out a more affordable payment plan. You probably have already spoken to your lender as part of the bankruptcy process, so now just take every step to make these payments current. This will be one of the items that will show up on your credit report as being paid on time.

If you are still in your home, your mortgage payments will also show up on time. In Chapter 13, and sometimes Chapter 7, debtors will keep their home and continue to make payments. Be sure, again, that all of these payments are current. These items will be additional good credit history on your report going forward.

A tougher one is getting unsecured credit. In this financial environment, lenders are not as willing to provide credit cards to high risk customers. Many customers even with good credit are having their interest rates raised and their balances cut. While there are some products on the market such as a bankruptcy credit card to use for rebuilding your credit, the fees and costs can be higher than other borrowers pay, so make sure you’re calculating the cost and benefit of using these products to help your credit.

Some banks will work with you to set up a secured loan for rebuilding credit. For example, you would open a CD or savings account for a certain amount, say $1,000, then get a loan secured by that savings account. You make payments on the loan regularly, the payments appear on your credit report, and this helps create good credit history as well. Not all banks will offer this, and some will only work with you a year or two after bankruptcy, but it’s definitely a way to build your credit back up without incurring ridiculous fees and charges. best of all, you get your deposit back once the loan is paid off!

Consider avoiding getting new credit at this time of your financial life. Start trying to live only with a debit card. Cut back on your spending: reduce costs on some bills, like switching your phone service or finding affordable auto insurance, and limit your unnecessary spending. Then, put the money into a bank account that you once would have spent on things you couldn’t afford – plus interest. You’re now in a unique position to make a fresh start, and using credit wisely at this point is the key to rebuilding your credit.

By Janet Caskey | Posted in Bad Credit, Bankruptcy, Credit Counseling | Tagged , , , | Comments (0)

What Bankruptcy Options Do You Have?

September 25, 2009 – 8:02 am

Before you take the step of filing for bankruptcy, you may want to think about all of the bankruptcy options available to you. There are several types of bankruptcy, as well as alternatives to filing, that you might consider.

The first thing you should consider is whether to file at all. If you have a lot of credit card debt, you may be a candidate for bankruptcy. but if your debt is mostly all student loan debt, for example, bankruptcy won’t help you because you can’t discharge student loan debt in bankruptcy. You also can’t discharge obligations such as back taxes or support payments to a spouse or child. If you have a lot of unsecured debt, you might pursue bankruptcy. But if your debt is secured, such as a home mortgage, and you want to try to save your home, you will want to possibly use bankruptcy as a way to set up a payment plan and avoid foreclosure.

Once you decide to file, your bankruptcy options as an individual are mainly two. First there is a Chapter 7 bankruptcy, where you are permitted to discharge most debt. This option however is usually limited to people without a regular income. If you are working, you will have to pass a “means test” to determine whether your living and other expenses coupled with debt payments are just not possible given your income. However, if you have regular income and you do not pass the means test, the court may move your case into Chapter 13 bankruptcy, since you have some income to pay your debt. In this chapter, you will set up a repayment plan that lasts from three to five years. This can help you save your home, or other assets you don’t want to lose.

Chapter 13 is fairly detailed in that you will have to provide a lot of detail about your present expenses, your income, your debt payments, and so on. It is also not a guarantee that you will be able to keep the assets you choose. For either type of filing, you will also have to do credit counseling prior to filing. During that process, you may find there are other ways to pay down your debt and not have to file for bankruptcy.

How do you decide whether to file or not? One rule of thumb is that is your total debt is greater than your annual income, you are probably a candidate, since it will take such a long time to pay off your debt after your regular living expenses. Some financial advisor however say you should do everything you can to avoid filing for bankruptcy, since it will damage your credit for a long time – it’s on your credit report for ten years. Pick up a second or third job, slash your living expenses, and work out repayment plans with your creditors on your own. This is one of your legitimate bankruptcy options, and can even help you prevent having serious credit problems in the future.

By Janet Caskey | Posted in Bankruptcy, Chapter 7, Credit Counseling, Uncategorized, bankruptcy alternatives, chapter 13 | Tagged | Comments (0)

After Chapter 7 Bankruptcy, What Happens Next?

September 24, 2009 – 11:52 am

Well you decided to file bankruptcy under Chapter 7, and a few months and a few meetings and a couple thousand dollars later, your debts are now discharged. What happens next to your credit, and what can you do after Chapter 7 bankruptcy to rebuild your financial life?

The idea behind a Chapter 7 filing is to give you a fresh start. If you were able to file Chapter 7, it’s likely that you don’t have a regular source of income, since anyone with income may be moved into Chapter 13 to repay some debts within a bankruptcy plan. So, if you now find yourself after Chapter 7 bankruptcy discharge, you probably need to consider how to get some significant, regular income coming in, and figure out how to pay any debts that were not discharged in your bankruptcy.

For example, if you had any student loans, you will still be responsible for those. So, you may want to talk to your loan servicing company to see if you qualify for any kind of hardship forbearance, or other way to pay less on your monthly payments. You want to try to keep these current though. At this point, you may not easily be able to get any other credit due to your filing, and these student loans will help you by giving you something current to appear on your credit report. So don’t let these payments get behind!

You may want to start getting credit again, to try and rebuild your credit file. But it will be hard to get lenders to approve you with the bankruptcy on your file, and also if you have no regular income. Getting that regular income is of primary importance right now. Try everything you can think of to get back into a job. And don’t jump too quickly into another credit nightmare either. Learn to live within your means by using a monthly budget, and learn to get past the desire to buy whatever you want, based on your old credit card habits. Remember that buying things on credit means you can’t really afford it anyway, or you wouldn’t need the credit!

After Chapter 7 bankruptcy, you now have a clean slate, and you should make the most of it by fixing your financial resources, getting steady income in place, and working to pay any left over debt on time. Everything else can wait until you are successful in building back your credit by paying on time the debts you still have.

By Janet Caskey | Posted in Bankruptcy, Chapter 7 | Tagged | Comments (0)

Is Personal Bankruptcy Your Only Hope?

September 24, 2009 – 8:13 am

Right now millions of Americans are dealing with financial distress. Loss of jobs, income freezes, mortgage foreclosures, lack of health insurance, divorce – any of these can cause a family to find itself in the bring of disaster. Personal bankruptcy is a way to put some of your debt burden behind you and start on a new footing to rebuild. But is it the right choice for you?

Some of the bankruptcy chapters that apply to individuals are Chapter 7 and Chapter 13. When you’re making a decision to file for bankruptcy under either one, there are many considerations to think about. For example, not everyone can file a Chapter 7 any longer, since the laws were changed in 2005 to require a means test. In other words, you have to provide you really can’t make payment son your debt. If you fail the means test, the bankruptcy judge can move your case into a Chapter 13 filing. A personal bankruptcy then could happen under either of these sections.

With a Chapter 7, you are able to discharge most of your debts and get rid of for example credit cards, other unsecured debt, and so on. Keep in mind though that you will also probably lose your cars (if you do no reaffirm your car loan debts) and possibly your house (if you aren’t able to make the mortgage payments). In Chapter 7, the court basically sells everything you have, or returns it to the lenders, in order to pay what can be paid, then wipes away the rest of your debt. Under certain state law, you may be able to keep some items, for example cars that you need to get to work. Best to check with an attorney to see what can be done in your state.

With a Chapter 13, you submit a repayment plan, and then you have thee to five years to follow your repayment plan. In this case, a debtor with a regular job will probably have to repay some debts, and not be able to discharge them as in Chapter 7. This can help though if you want to try to keep your home, or car or other assets.

One thing you must remember is that filing personal bankruptcy will not remove all of your debt. If you have support obligations for spouse or children, or if you have back taxes you owe, or student loans, those are just some of the debts that can’t be avoided. So if that is the bulk of what you owe, bankruptcy may not be for you. Better to try to figure out a way to work out repayment plans directly with the lender or the tax authority.

By Janet Caskey | Posted in Bankruptcy, Chapter 7, chapter 13 | Comments (0)

Pros and Cons of Chapter 13 Bankruptcy

September 15, 2009 – 9:54 am

A previous post here described for you the details about filing an Chapter 7 bankruptcy, which is also referred to as “liquidation”. Chapter 13 bankruptcy is different from liquidation, in that you file a repayment plan to help manage your debt.

I found the following interesting article that gives the details you need to help you decide whether to file bankruptcy under Chapter 13. If you’d like to read more about Chapter 13 bankruptcy we recommend the book, “Chapter 13 Bankruptcy” from Nolo Press.

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What is Chapter 13 bankruptcy and what are its pros and cons? by Puneet

Filing Chapter 13 bankruptcy can benefit you if you have failed in all your attempts to get rid of your outstanding debt. With the help of Chapter 13, you can avoid foreclosure and also repay some or all of your debts over a specific time period; it usually takes 3 – 5 years to repay your multiple debts. Chapter 13 is also referred to as reorganization bankruptcy or a wage earner’s plan.
When do you need to file Chapter 13?

Filing Chapter 13 would be helpful to you if you’re experiencing one or more of the following situations.

* You want to protect your assets from liquidation. * You want to pay off your secured debts. * You’re not able to pay your monthly mortgage payments. * Your property lien is more than the value of your collateral. * You’re not able to discharge your debts by filing Chapter 7 bankruptcy. * Your income is much higher than what is required for filing Chapter 7.

What are the eligibility criteria?

You need to satisfy some factors in order to qualify for filing Chapter 13. The eligibility criteria are as follows.

* You should have a regular income so that you can make your monthly repayments. * You should’ve enrolled yourself in a credit counseling session within past 6 months before filing bankruptcy. * According to the bankruptcy rules, you shouldn’t have exceeded USD 307,657 and USD 922,975 in your unsecured and secured debts respectively. * You gross monthly income is required to be more than the State Median Income of your family size. * You cannot file Chapter 13 within 2 years from the previous filing; you need to wait for 4 years if you’ve filed Chapter 7 previously.

How does Chapter 13 bankruptcy function?

As a debtor, you need to prepare a repayment plan and attach the proposal along with your bankruptcy documents while filing Chapter 13. Then, you should send the proposal to all your creditors. Your repayment plan should comprise of all your debts, that is, the priority claims along with your secured and unsecured debts.

What are the pros and cons of filing Chapter 13?

The pros and cons of filing Chapter 13 are as follows:

Pros: * It stops any legal action against you. * You may get rid of some of your debts. * You’re able to save your real estate and personal property. * You can pay back your debts through a structured repayment plan. * You’ll get no more calls from your creditors or collection agencies.

Cons: * It will stay in your credit report for 7 years. * Your credit score may drop down by 200 – 250 points. * You need to bear the costs of hiring an attorney and a trustee. * You’ll have to pay the regular fees for filing Chapter 13.

It is really important to do the required documentation under the guidance of an experienced bankruptcy lawyer because the court has every right to dismiss your case if there is any mistake.

About the Author
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By Janet Caskey | Posted in Bankruptcy, chapter 13 | Tagged , , , , , , , , | Comments (0)

Start Rebuilding Credit After Bankruptcy

September 15, 2009 – 3:28 am

After bankruptcy, how to rebuild credit is usually the most important concern you may have. It’s not easy, especially in today’s economic environment. In past years, banks were more willing, even eager, to lend to what we all now call “sub prime” borrowers. These clients will low or poor credit could get bad credit loans, bad credit credit cards, and even home mortgages. Those days are now past. So what are your options if you want to know how to rebuild credit after bankruptcy?

First you need to remember that a bankruptcy stays on your credit report for ten years. This means that even if you successfully raise your credit score through other methods, a lender will always see that public record notice of your bankruptcy on your credit report. Also, having this on your credit report will always depress your score somewhat (although no credit reporting agencies will ever tell you by how much.)

Many people think the best bankruptcy rebuild credit steps include getting back into debt, and getting a new credit card for rebuilding credit, or a loan for the same purpose. Yet it’s important to note that these cards and loans, even secured loans, come with extremely high fees and interest rates – rates that allow the lender to make money while expecting you to default again. A better option than getting immediately back into debt with a bad credit product is to take a breath, and wait for a bit to do other things to slowly recover your financial footing.

For example, one excellent thing to do is to subscribe to a credit watch service, where you can review your credit reports, see your score, and get notified when your score improves. One such service is FICO Quarterly Monitoring
which costs less than ten dollars a month. You should review your credit report for errors, to clean up whatever you can other than your bankruptcy, and these services help you to do that.

Next, start using a budget. Rebuilding credit is not just about using credit cards, but managing your debt wisely. People who are financially organized use budgets, and these people are less likely to go into bankruptcy. Make yourself a promise not to use debt as a replacement for income. Start using cash and debit cards, and avoid credit for the time being. That’s not to say that eventually you’ll want to apply for a rebuilding credit cards product, but right now, figure out your financial capacity to do so first.

Plan to put together a budget and stick to it for six months. Within that budget, determine what credit you still have. In bankruptcy, not all debt is discharged. You may have been on a payment plan, and kept some assets. Start paying those on time every single month. Even in a Chapter 7 bankruptcy, you may have some student loans after bankruptcy that you can pay on time, every month. You may even be able to consolidate loans or get a slightly better rate after a few months of on time payments.

One avenue to use to rebuild bad credit after bankruptcy is a small secured personal loan with your bank. Some banks are willing to work with you a year or two after your bankruptcy is discharged. You deposit a small amount of money in a savings account or CD, and the bank gives you a loan in that amount secured by your deposit. The loan payments appear on your credit report, which helps with rebuilding your credit, and once it’s paid off, you get your deposit back with interest. Talk to your banker, since loans of this type through other lenders can have high fees attached.

Finally, consider using less credit or no credit in the future. Banks are now much more wary of any borrower who has even moderate credit let alone bad credit. With a bankruptcy in your past, banks will be less likely to approve you for credit for two to five years. But banks are also treating even good customers badly these days – raising credit card interest rates to ridiculous heights, cutting back lines of credit or closing accounts. Do you want to be a slave to this attitude by banks?

Take this as a challenge. Start living without credit, and rebuild your credit after bankruptcy by keeping debt to a minimum. Don’t be a slave to FICO scores and borrowing. Instead, add money to savings each month instead, since after bankruptcy, as many of your old debts may now be gone, and you have some breathing room.

By Janet Caskey | Posted in Uncategorized | Tagged , , , , , , , , , , , , , , | Comments (0)