Starting Anew after Bankruptcy (and how to avoid past financial mistakes)

After having your debts discharged through bankruptcy, it is time to start anew financially. After all, that is the purpose of filing a bankruptcy petition. Bankruptcy wipes your slate clean and allows you to become debt free again. But now that you have been given a new lease of life financially, it is time to start off on a right footing and not repeat your past mistakes.

You should know that a bankruptcy filing will stay on your credit record for between 7 to 10 years. This is unavoidable but it is remediable. In other words, you may have this “blemish” wiped off your record in less than the customary 7 years. If you are interested in improving your credit score after bankruptcy, read on.

The first thing to do to remedy your credit score is to check to see if all your debts have been recorded as discharged by the credit agencies. Sometimes, errors can occur and some of your debts that have been discharged may not be recorded as such and this would jeopardize your credit score. In such an event, write to the credit agencies formally and inform them of the oversight. Make sure they correct the error and show that your debts have been discharged by your bankruptcy.

One of the most effective ways to improve your credit record is to start a new record of good and prompt payments of your credit each month. So contrary to what you might think, your credit card actually becomes your ally not your enemy after bankruptcy. By all means use your credit card, BUT make sure you pay up more than just the minimum payments on time every month.

If you are not eligible for a normal credit card, you can apply for a “secured” credit card, which is one that is issued against some collateral as a deposit. This collateral will then become your balance limit.
Another way to avoid past financial mistakes is to have regular savings. Setting aside some money each month is a good way to save for a rainy day. You never know, this saving may help you avoid another bankruptcy in future should any unexpected emergencies occur such as high medical bills.

If you keep control of your debts by making regular payments on all of them and also set aside some savings regularly, you are well on your way to a life of financial prudence.

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    Know When to File for Bankruptcy

    Filing for bankruptcy protection is often the last resort for anyone in dealing with insurmountable debt. While it is often understandable that one looks to other options before considering bankruptcy, yet bankruptcy should not be so easily discounted. Sometimes, it makes more sense to file for bankruptcy than to keep trying to overcome your debts by yourself. For example, if you cannot afford to pay more than the minimum payments on your credit cards every month, it is only a matter of time before your credit runs out and you end up in default. In such a case, it would be more cost-effective to file for bankruptcy sooner rather than later.

    So when do you file for bankruptcy? Here are some indicators that point to the necessity of filing for bankruptcy.

    Firstly, examine your debt and repayment history over the past one year. If you have not made any significant reduction in your debt amount the past year, then what makes you think you can do better this year? If the pattern continues, your debt situation will only likely get worse. Even if you have managed to reduce your debts over the last year by a little, it might take decades before you bring your debts down to zero.

    So if you do not see any improvement in your total debt amount, or worse still if your debts have been increasing over the last year, then you should seriously consider cutting your losses by filing for bankruptcy.

    Secondly, consider the less obvious signs that you should file for bankruptcy, such as a loss of health, higher stress and depression. You stay awake at nights, you constantly fall ill or you suffer unseen illnesses like hypertension etc. It is pointless prolonging the inevitable, which is being sued by your creditors. These tell-tale signs show that it is better to file for bankruptcy than continue living under a huge burden of debt.

    Finally, if you are constantly receiving phone calls and notices from your creditors or visits by debt collectors, then it is a bad sign. All these experiences lead only to more stress and frustration. If you are in such a situation, then it is better to file for bankruptcy than have to go through these endless financial problems every day.

    These are just three of the many indicators that it is more beneficial to file for bankruptcy than to try to sort out your financial problems on your own. Bankruptcy is your right under the law so you should take advantage of what the law affords when you need it.

    If you need a bankruptcy lawyer that will fight to protect your assets and rights, call us at (813) 200 4133 for a free consultation.

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      Can I File for Bankruptcy if I do Not have a Job?

      To most people filing for bankruptcy is a decision to rid oneself of financial debts and start anew. But what if you do not have a job? Can you still file for bankruptcy? Do you need to be employed to service your debts while in bankruptcy?

      If you have recently been fired from your job, the first recourse would be to look for a new job. But in this tough economy, landing a suitable job may be difficult. In the meantime, your bills and debts keep piling up and your savings start to run out. Before you know it, you receive lawyers’ letters in the mail informing you of imminent legal action if you do not pay up your dues. What’s more, if you do not secure employment before your savings run out, then you will be in a precarious position.

      In such a situation, one good option to take is to file for bankruptcy. A bankruptcy petition will protect you from creditors’ collection efforts and give you a much needed reprieve in settling your debts. The type of bankruptcy you should file for while unemployed would be Chapter 7 bankruptcy because this means selling off your non-exempt assets to pay off your debts. Any debts that remain unpaid after your assets have been liquidated will be cancelled.

      The other option most people can choose is to file for Chapter 13 bankruptcy. But Chapter 13 bankruptcy would need you to be gainfully employed because it is a payment plan where you repay your debts over a period of up to 5 years based on your salary and amount you can afford.

      So if you apply for Chapter 7 bankruptcy, you will need to pass a means test. A means test is to see if your total household income is lower than the mean household income set by your state. If you are unemployed, the means test may include reviewing income earned over the last 6 months prior to filing. This could have a big effect on whether or not you are able to file.

      Even if you gain employment and work out a payment agreement with creditors, you can still file for bankruptcy. The best thing to do would be to consult a bankruptcy attorney to work out the best way to get rid of all your debts through bankruptcy.

      If you intend to file for bankruptcy (or are thinking about it), call us at (813) 200 4133 for a free consultation.


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        Can Credit Card Companies Block your Bankruptcy Petition?

        If you file for bankruptcy, it is important to know the potential obstacles to getting a successful filing. One of the quarters that is likely to file a protest and block your bankruptcy filing is your credit card company. To be forewarned about this allows you to take pre-emptive measures to avoid it.

        The reason the credit card companies is empowered to file a protest when you apply for bankruptcy is that the Bankruptcy Abuse Prevention and Consumer Protection Act 2005 (BAPCPA) has a provision in it that allows credit card companies to do so. This means they can claim you do not deserve to file for bankruptcy because of the way you have spent on your credit card.

        Here’s how to get around their argument.

        Do not buy any luxury items or make any purchases with your card that are not considered “necessary” expenses. Expenses for food, groceries, amenity payments are considered “necessary”. If you charge only such items to your credit card, no card company would be successful in disputing your bankruptcy petition. But just in case, you ought to keep all receipts and credit card statements to prove that your expenses were for necessities.

        If you happened to have bought an item considered a non-essential, you should return it and claim a charge back to your credit card. This is especially if you have made such a purchase within 90 days prior to your bankruptcy filing. According to the law, you are only required to answer for your credit card purchases up to 90 days before you file for bankruptcy. Nevertheless, credit card companies are at liberty to dispute any of your expenses up to 1 year before your bankruptcy filing. But if you have charged your card earlier than 90 days before your filing, the chances of them successfully blocking your petition is quite low.

        The larger the outstanding balance on your card written off by bankruptcy, the higher the chances your credit card company will dispute it. While there is no hard and fast rule as to how much is the ceiling above which credit card companies will file an objection, it is usually understood that if your outstanding balance exceeds $10,000 it would trigger a dispute. So keep short accounts on your credit card spending especially if you are about to file for bankruptcy.

        For further details on this matter or if you are looking for a bankruptcy attorney, call us at (813) 200 4133 for a free consultation.

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          Saving your Home through Forbearance or Bankruptcy

          In the state of today’s ailing economy, it is very common to find lenders tightening credit which in turn makes paying for your home more difficult. Once you fall behind on your payments by more than a couple of months, the banks will start collection efforts. One unpleasant thing banks do to recoup their money is initiate foreclosure to take possession of your house and sell it off. If you bank is about to launch foreclosure proceedings against your home, you should take action to keep your home.

          The first thing you should do is to approach your bankers to inform them of your financial difficulties. The bank may be willing to adjust your payment plan. Alternatively, you can try asking for forbearance. Forbearance is where your banker agrees to stall foreclosure proceedings and negotiate an agreement with you. A forbearance agreement can take several forms. It may be in the form of a postponement of monthly installments or a reduced payment amount or even an extension of the repayment period.

          If you default on your forbearance agreement, your banker will have the right to foreclose your property immediately. Forbearance is a good way to deal with temporary financial difficulties such as a major illness or loss of job. It is generally not a solution for longer term financial problems.

          If you have already gone through the process above and you still cannot keep up with your monthly payments, the best option would be to file for bankruptcy. There are two options in filing for bankruptcy – Chapter 7 or Chapter 13 bankruptcy. Chapter 7 bankruptcy is where your non-exempt assets are sold off to pay for your debts and any debts that are not settled after all your non-exempt assets have been sold will be cancelled. In Chapter 13 bankruptcy, the court will enforce a payment plan for you to clear your debts over a period of up to 5 years.

          To file for Chapter 7 bankruptcy, you must pass the means test i.e. your household income must be below the average income set by your state. In addition, you also have to be current with your mortgage payments to be eligible for Chapter 7 bankruptcy.

          If you are already defaulting in your mortgage payments or if your banker has already initiated foreclosure, it is advisable to file for Chapter 13 bankruptcy which is essentially a restructuring of your debts. The bankruptcy court will put you under a payment plan that is more affordable for you.
          So if you want to keep your home but cannot afford to make your mortgage payments due to some long term problem, then you might as well file for bankruptcy instead of negotiate forbearance. You should not wait till the last moment to file a bankruptcy petition.

          Call us at (813) 200 4133 for a free consultation on how bankruptcy can save your home from foreclosure.

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            What You Should Find Out from a Bankruptcy Lawyer

            Shopping for a bankruptcy lawyer? It would be to your best interests to interview a few potential bankruptcy lawyers who can represent you before hiring one for yourself. Bankruptcy protection can be a rather complex process so it is imperative that you hire a bankruptcy lawyer that is both competent and caring towards your case. Here are some things you should find out from a bankruptcy lawyer before hiring him or her.

            Find out the obstacles he expects to encounter in filing for your bankruptcy. Do not ask a close-ended question that only requires a “yes” or “no” answer. When you ask an open-ended question like this one about the obstacles in bankruptcy, you have the opportunity to discover what the lawyer knows about the common problems in filing for bankruptcy. This is a good indication of the lawyer’s competence and experience or lack of it.

            Ask if another lawyer will be handling your case. It is quite common for lawyers to delegate certain cases (or parts of cases) to junior lawyers or other employees. When you ask this question, you give the lawyer the chance to inform you of any other lawyer involved in your case. If there is (and there likely will be), then ask about the qualifications and experiences of the other (junior) lawyer. This causes everything to be above board right from the start of your petition.

            Do not be afraid to ask specific questions about fees. But you should ask for the breakdown of the lawyer’s fees and not merely the total figure. This is because the lawyer would likely charge for incidental and out-of-pocket expenses as they come along. Once you know the specifics of the fee, you can decide on whether to hire the lawyer or look for someone with more reasonable fees.

            When you take the trouble to find out these things before engaging the lawyer, you will ensure that you get the best legal service for your money.

            If you are looking to file for bankruptcy, call us at (813) 200 4133 for a free consultation.

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              Foreclosure and Bankruptcy

              One of the main concerns of any homeowner is foreclosure of his or her primary home. Foreclosure is normally the course of action taken by lenders when you fall behind on your mortgage payments. Foreclosing the mortgage means the property is sold to pay off the loan taken against it. The usual option taken by home owners to avoid foreclosure is to apply for forbearance from the lender. But if forbearance is not possible for any reason, the other option would be to file for bankruptcy protection.

              Can bankruptcy fend off foreclosure?

              The good news is that bankruptcy can stall foreclosure for several months, giving you time to hammer out a solution with your lender that could save your home. If foreclosure proceedings have begun, bankruptcy can postpone the proceedings until the bankruptcy is completed. This happens because of the automatic stay against creditors that comes when you successfully file for bankruptcy. Automatic stay means all your creditors are ordered by the bankruptcy court to cease collection efforts from you. As such, the foreclosure process can be affected by bankruptcy but the outcome may depend on which chapter is filed.

              If you file for Chapter 13 bankruptcy, all your debts (including your mortgage) will be listed together and restructured to enable you to pay them off over a period of time according to a set payment schedule. If you have a second or third mortgage, Chapter 13 bankruptcy may list them as an unsecured debt since your first mortgage is secured to the value of the home. This may eliminate the second and third mortgages on your home. The same applies if a lien is filed against your home. Filing for Chapter 13 bankruptcy may remove the lien also. All you have to do is keep up with payments towards your debts according to the payment plan in your Chapter 13 bankruptcy.

              On the other hand, if you file for Chapter 7 bankruptcy, it would entail selling off your non-exempt assets to repay your debts. Your primary home is usually exempted from being liquidated. Thus, your mortgage debt that is secured by your home may be cancelled after all your non-exempt properties have been liquidated.

              For a more detailed discussion on how bankruptcy can fend off foreclosure of your home, call us at (813) 200 4133 for a free consultation.

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                How to File for Chapter 7 or Chapter 13 Bankruptcy

                Filing for Chapter 7 or Chapter 13 bankruptcy can be daunting. As such, it is highly recommended that you hire a bankruptcy attorney who will help you through the process. If you are considering filing for bankruptcy, call us at (813) 200 4133 for a free consultation. We will help you through the entire process. In general, the procedure in applying for Chapter 7 or Chapter 13 bankruptcy is as follows:

                1. Go through credit counseling
                This is a requirement before you can make your bankruptcy petition. A credit counselor may give you other options to consider. Otherwise, he or she may advise you to file for bankruptcy.

                2. Engage a qualified bankruptcy attorney
                While you are allowed by law to file for bankruptcy by yourself, it is highly recommended that you hire a bankruptcy attorney (this is what most people do). You should ask for recommendations from friends or family members or check up the attorneys’ websites and online resources. There are independent rating agencies like for lawyers that you can refer to in checking up on an attorney you are considering hiring.

                If you need an attorney for your bankruptcy filing, call us at (813) 200 4133 for a free consultation.

                3. Decide on which type of bankruptcy to file for
                Your bankruptcy attorney will give you all the details of the two types of bankruptcies that are available to you. The two types of bankruptcies are called Chapter 7 and Chapter 13 bankruptcies. Chapter 7 bankruptcy is liquidation bankruptcy where your non-exempt assets are sold to pay for your debts. Thereafter, any debts left unpaid will be forgiven. On the other hand, Chapter 13 bankruptcy is where you restructure your debts and repay them over a period of 3 to 5 years. There are requirements to be met to file for both these types of bankruptcies.

                4. Direct all communication from creditors to your attorney
                Once you have hired a bankruptcy attorney, he or she will be responsible for acting on your behalf in communicating with your creditors. Thus any communication (phone calls, letters of demand etc) from your creditors should be directed to your bankruptcy attorney. Once bankruptcy has been filed, the court will grant you automatic stay which prohibits creditors from making any more collection efforts and all creditors must abide by it. If any creditor violates automatic stay, you have the right to take legal action against that creditor. All this will be handled by your attorney.

                For further information and to discuss how you can use bankruptcy to be freed from your debts, call us at (813) 200 4133 for a free consultation.


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                  Your Questions on Bankruptcy Answered

                  Bankruptcy is a provision in the bankruptcy code that allows the bankruptcy court the right to declare your personal debts (or business debts) resolved either through liquidation of your assets or gradual payment via a payment plan. With the prolonged economic recession more and more people are contemplating filing for bankruptcy to overcome their tremendous financial debts. For most people, a bankruptcy filing would be a once-in-a-lifetime experience as you would not want to have to do it multiple times. In view of that, if you are contemplating filing for bankruptcy, it would be natural to have some questions about the process. Here are some of the most common questions about bankruptcy.

                  Can bankruptcy relieve me of all my debts?
                  Most of your debts can be resolved either through payment from the sale of assets or payment plan, but some debts cannot. Some examples are child support and certain tax debts.

                  What are the types of bankruptcies that apply to individuals?
                  The bankruptcies that apply to individuals are Chapter 7 and Chapter 13 bankruptcies (named according to the sections of the bankruptcy code that govern them).

                  What are the differences between Chapter 7 and Chapter 13 bankruptcies?
                  Chapter 7 bankruptcy is known as liquidation bankruptcy and it is where the court orders you to liquidate your non-exempt assets to pay of as much of your debts as possible. The remaining debts after liquidation are forgiven. Chapter 13 bankruptcy is known as the wage earners’ bankruptcy and is technically a court-ordered payment plan where you get to keep your assets but repay your debts over a period of up to 5 years.

                  What effect will filing for bankruptcy have on my credit rating?
                  Your credit rating will show that you have filed for bankruptcy before and such a rating will be on your record for between 7 to 10 years. However, this does not mean that you would not be able to obtain credit. If you keep up your payments promptly, you will repair your credit rating and will be able to obtain credit in due course, often even before the expiry of 7 years.

                  Which type of bankruptcy should I file for?
                  There are certain prerequisites you have to fulfill in order to qualify for each type of bankruptcy. So which type to file for would depend on your personal financial situation. Generally, the prerequisite to be eligible for Chapter 7 bankruptcy is more stringent than Chapter 13. The best thing to do would be to discuss your situation with an experienced bankruptcy attorney. Call us at (813) 200 4133 for a free consultation.

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                    Your Questions on Bankruptcy and Divorce Answered

                    One of the most potentially difficult steps to take in anyone’s financial world is to file for bankruptcy. If this difficult but crucial step is coupled with the pain of divorce it can be even more unnerving and devastating. Nevertheless, sometimes you have to bite the bullet and get these things done for your own financial survival. If you have been struggling with massive debts and considering (or going through) a divorce, then you should read on as I answer some common questions regarding how to deal with both.

                    As a bankruptcy attorney, my job is to ease your passage into bankruptcy so that you can come under the protection from your creditors that bankruptcy affords you under the law. One of the most common questions regarding bankruptcy and divorce is whether you should file for divorce first or bankruptcy first. The answer is it depends. If you and your spouse have mutually consented to the divorce, then filing for bankruptcy and divorce together is generally advisable. This might save your costs and ease the divorce settlement process.

                    On the other hand, if you file for bankruptcy before filing for divorce, the pending divorce may slow down the bankruptcy process as there are some legal issues within the bankruptcy such as division of debt and ownership of property that need to be settled by the divorce. In view of these different combinations of factors that come into play, it is advisable for you to seek legal counsel for your unique circumstances. You can call us at (813) 200 4133 for a free consultation.

                    Another question is what the implications are when both spouses file a joint bankruptcy as opposed to only one spouse filing bankruptcy. Certain debts incurred during marriage can be the joint responsibility of both spouses. So if only one spouse files for bankruptcy, the creditors would naturally focus collection efforts on the spouse who did not file for bankruptcy. In such a case, the non-bankrupt spouse may choose to file bankruptcy on his or her own to avoid collection attempts.

                    Finally, another common question is what happens if your ex-spouse files for bankruptcy after the divorce. In this case, your ex-spouse will have his or her debts discharged or paid through the bankruptcy process but if you are owed child support or alimony, you do not have to worry as these two expenses cannot be discharged by bankruptcy.

                    If you need help in deciding on crucial matters pertaining to divorce and bankruptcy, call us at (813) 200 4133.

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