How to Get Creditors off Your Back through Bankruptcy

One of the main benefits of filing a bankruptcy petition is automatic stay. Automatic stay means a court-ordered stay of all collection efforts by all creditors. This also includes wage garnishment. Sounds good? That’s exactly what you’ll get when you file for bankruptcy. This reprieve from harassment by creditors will give you much needed relief from stress as you grapple with your financial problems and find a solution.

The great thing is that bankruptcy itself is your solution to financial problems. Through bankruptcy, all your debts can either be paid off or forgiven, giving you a fresh start financially. When you file your petition the bankruptcy court will send a notice to your creditors making them aware of your filing status. Creditors will have to immediately comply with the automatic stay.

But sometimes, you may still receive calls or bills in the mail because the creditor(s) is not aware of your bankruptcy petition yet. But if they continue to harass you by phone or mail even after knowing you have filed for bankruptcy, you should immediately contact your bankruptcy attorney. You do not have to entertain any calls or emails from any creditors once bankruptcy proceedings begin.

You can call us at (813) 200 4133 for a free consultation on bankruptcy and for help to get creditors off your back. You should keep a record of all collection attempts by the creditors and discuss it with us. In some cases, some creditors may attempt to collect from you after the debt has been discharged, which is illegal. You can take legal action on the creditors if collection attempts continue during your bankruptcy. This may include taking the creditor to court and or being awarded punitive damages for violation of the bankruptcy code.

4 Options to Avoid Foreclosure

If you fall behind on your mortgage, you should take remedial actions as soon as possible. Depending on which state you reside in, your lender may not have to take you to court to foreclose on your property. They merely have to give you sufficient notice and then set the motions in place for foreclosure. Your first course of action should be to contact your lender to work out a plan. There are basically 4 options available to you to avoid foreclosure.

If your inability to honor your mortgage payments is only temporary, you should consider asking for forbearance. This is an arrangement where your lender agrees to postpone your mortgage payments to a later date. But you have to pay up all your missed payments once this date comes about. Your lender would require a forbearance agreement to be signed. So if you know you would be able to make up your missed payments at a later date, go for a forbearance arrangement.

If you think you can no longer afford your mortgage, you can consider a mortgage modification. Under this arrangement, the terms of your mortgage will be changed. Most of the time, a new mortgage agreement would have terms and conditions that require a trained eye to scrutinize. So I would advise that you seek professional help so that the new terms and conditions do not actually cost you MORE than the original mortgage. Call us at (813) 200 4133 for a free consultation on these matters.

Another option is to arrange for a deed in lieu of foreclosure where the lender repossesses your property to sell it and recoup his loan. If the sale is insufficient to cover the loan, you may have to pay off the balance, depending on the agreement in the mortgage.

Finally, there’s the short sale agreement. This is where your mortgage lender will agree to sell your property for LESS than the mortgage owed on the home and the balance of the mortgage loan is forgiven by the lender. But the drawback of a short sale agreement is that the forgiven loan balance may be taxable. Check with a tax attorney to find out the current tax laws regarding short sales. Again, you can call us at (813) 200 4133 for a free consultation on short sales.

Whichever agreement you come to with your lender, you should have everything in writing.

Will You Lose Your Tax Refund when filing Bankruptcy?

If you are expecting a tax refund before filing for bankruptcy protection, you would understandably be concerned about whether you will lose your refund when you file. The good news is I can show you what you can do to keep your refund even after filing for bankruptcy. Everything hinges on the timing of when you file your bankruptcy petition and doing some things that will ensure you get to keep your refund or use it the way you choose.

A tax refund is considered part of your assets. Here are some of the things you can do to avoid losing your tax refund to the bankruptcy trustee.

• Adjust your withholding to reduce your refund amount

The other consideration is the timing of when you file for bankruptcy. If you intend to file for bankruptcy within one year, adjusting the amount of withholdings from your paychecks can help reduce your tax refund amount which in turn enables you to get more in your paycheck, yet be enough to pay taxes based on what you earn. This action may also make your refund too small for the trustee to consider it for creditors.

• Spend the refund on necessary expenses like food, amenities, medical expenses or accommodation

If you receive your refund just before filing for bankruptcy, you should spend it on necessary needs. If you are unsure of which expenses are considered necessary expenses, you should consult a bankruptcy lawyer. Call us at (813) 200 4133 for a free consultation.

• Seek exemptions that protect the refund when filing

If you are expecting a refund after filing for bankruptcy, may be able to keep it if it is based on funds earned before you filed. The amount exempted may vary depending on the state you live in.


What Happens to Inheritance in Bankruptcy

If you inherit an asset while in bankruptcy, does your inheritance become part of the bankruptcy estate? This depends on when exactly the inheritance is passed on to you and upon which type of bankruptcy you file. The timing would make a difference in Chapter 7 bankruptcy, but not Chapter 13 bankruptcy. The law says that if you receive an inheritance within 180 days from making your Chapter 7 bankruptcy filing, the inheritance becomes part of the bankruptcy estate. Therefore, you would have to inform your bankruptcy trustee of the inheritance.

Usually, the will of the deceased who gives the inheritance to you would stipulate that you are the inheritor. That means technically the inheritance is yours once the testator passes away. So it does not matter when you actually receive the inheritance; what matters is when it passes on to you i.e. the point of death of the testator.

As an example, suppose your aunt passes away and leaves you all the money in her IRA amounting to $300,000 but you only received the money 1 year later after all the legal procedures are over. This $300,000 would still be part of your bankruptcy estate if your aunt died within 180 days after you filed your Chapter 7 bankruptcy petition. Needless to say if your aunt died before you filed for bankruptcy, then the inheritance (or whatever is left of it) at the point of filing your bankruptcy petition becomes part of the bankruptcy estate. So in cases when you an inheritance is passed on to you before you file for bankruptcy and within 180 days after you file, the bankruptcy trustee can use it entirely to repay your creditors.

But if your aunt died more than 180 days after you filed for bankruptcy, then the bankruptcy trustee would have no right over the money.

As for chapter 13 bankruptcy, whether an inheritance is passed to you before or after the 180 days it will simply be used to calculate how much you should pay creditors i.e. your monthly repayment amount.

Bankruptcy – an Alternative to Foreclosure

If you have trouble paying for your mortgage, you must negotiate a deal with your lender so that you can avoid foreclosure. But sometimes, that’s easier said than done. So if you run into a lender that is determined to foreclose on your home and is not open to negotiations, there’s only one thing you can do to save your home – file a bankruptcy petition.

Bankruptcy will protect your assets from creditors’ actions including foreclosure. The type of bankruptcy you ought to go for is Chapter 13 bankruptcy. Chapter 13 bankruptcy is called the workmen’s bankruptcy that allows you to pay off your debts via a payment plan over 3 to 5 years. Chapter 13 bankruptcy also covers other debts like credit card balances, medical debts, personal loans and court judgments. When your Chapter 13 bankruptcy is confirmed, the bankruptcy court puts into effect automatic stay of all collection efforts including wage garnishments, seizure of your bank accounts and legal actions.

It’s important that you do not just take the advice of just anyone. Most states publicly publish the names of homeowners in foreclosure and this attracts direct mail campaigns offering assistance from every Tom, Dick and Harry. Sadly, many people facing foreclosure have literally lost their homes because they paid attention to bad advice. Those who are out to fleece you of your money will often demand large sums of money upfront and guarantee that they can save your home from foreclosure; but then they disappear with your money having made no effort to save your home. Also, non-attorneys are not subject to the State Bar code of ethics so it will be difficult to receive recourse if they cheat you. Battling foreclosure is an arduous task, so you should seek professional help. Call us at (813) 200 4133 for a free consultation on how to save your home through bankruptcy.

Finally, I urge you to keep going on and not give up. You will face many obstacles but saving your home is worth it all. Many people have successfully beaten foreclosure through bankruptcy and you can do it, too.

Bankruptcy and Gentlemen’s Handshake Loans

If you have borrowed money from friends or family members with whom you did not sign any formal agreement, it’s considered a gentlemen’s loan i.e. a loan sealed verbally on a handshake. If you have such a loan outstanding when you file for bankruptcy, should this informal loan be declared among your list of liabilities?

The answer is “yes”. When listing your liabilities, you must state ALL debts outstanding, whether formal or informal. These informal loans will be handled differently depending on the type of bankruptcy you file for.

The most important thing you should bear in mind is that the bankruptcy court treats all creditors equally and fairly, and it does not favor family or friends over others. So you should not take any action on this loan that can be interpreted as favoring your family member or friend over other creditors. For example, if you intend to file a bankruptcy petition, you should not pay towards your loan before filing as this could be viewed by the court as showing favoritism. Such an action could even be considered a form of bankruptcy fraud.

On the other hand, having such a loan from family or friends can be a source of conflict if you are not able to repay and have to file for bankruptcy. To keep things above board and ensure fair treatment of all creditors, you may consider signing a reaffirmation agreement with your creditor family or friend. This agreement would stipulate the terms of the loan and its current status and may include a payment arrangement.

If such a reaffirmation agreement is not drawn up, bankruptcy offers additional options. If you file for Chapter 7 bankruptcy, this gentlemen’s loan may be fully or partially discharged through a sale of property or personal asset. On the other hand, filing for Chapter 13 bankruptcy may include the loan in the repayment plan, with part if not all of the loan being repaid based on disposable income and secured debt obligations.


4 Benefits You Get When You File for Bankruptcy

One of the benefits when filing for bankruptcy is it can help prevent creditor harrassment and ease the stress associated with overwhelming debt. Most people often incorporate bankruptcy as the ability to remove or wash away debt to achieve a new beginning. Yet, the filing process has other benefits such as property protection, which can make thing easier for debtors while recovering fincances back in order. To better understand how the process can help in improving financial situations, the following 4 points will highlight the advantages you can obtain from filing:

1. Most debts qualify for a discharge – In many cases, debt can be eradicated in a matter of months with a Chapter 7 filing. Other debts may qualify for discharge at the end of Chapter 13. Most debts qualify for a discharge, such as unsecured debt, which are eligible to be wiped away; meaning a debtor will be no longer liable to pay the debt. Although certain debts may not qualify for a discharge, those that do may help you deal with other financial obligations more efficiently.

2. Legal protection of assets including income and property from creditors – Many people who have filed bankruptcy have been able to keep their home, vehicle, jewelry and other personal property of value. Filing bankruptcy help you safeguard your assets through state and federal exemptions.

3. Options for handling secured debts – Chapter 13 is a court-approved repayment plan which can aid you in keeping your vehicle or home if you’ve fallen behind in payments. However, outstanding loans with secured creditors may be prevented depending on circumstances.

4. Instant protection from creditors through the automatic stay – Upon filing a bankruptcy, the stay automatically goes into effect which hinders further collection attempts from creditors such as eviction and utility shut offs, garnishments, and repossessions.

Consult an experienced bankruptcy lawyer. Call us at (813) 200 4133 for a free consultation.

Related Blogs

    What Chapter 13 Bankruptcy Can Do For Your Unsecured Debts

    Chapter 13 bankruptcy is a court-approved repayment plan. It is commonly filed by those who want to hold their property such as their home or vehicle while getting caught up on payments. There are particular debts that can only be paid by filing Chapter 13. Usually, this type of repayment plan has a duration of 3 to 5 years to help debtors repay debt obligations.

    Mortgage or vehicle loan, being a secured debt, are included in the repayment plan. If you also have missed payments in which you are facing foreclosure or repossession, Chapter 13 can also be filed to help you make payments you missed by repaying overtime. You don’t have to worry about losing your property as long as you make payments according to your plan. These type of debts are certain debts which have higher priority than others in Chapter 13 bankruptcy.
    When a debt is a priority in bankruptcy it is enforced to be paid. Examples of debt that are priority in Chapter 13 are back child support, spousal support or alimony, and back taxes. Although unsecured debt may not be a priority in Chapter 13, it still depends on the amount of disposable income you have left over which can then be placed toward the debt. The amount of money left after making necessary payments is called disposable income.

    Payments made to unsecured creditors relies on what you can afford and not by the amount of debt owed. As long as the debtor makes required payments during repayment plan period, then unsecured debt in Chapter 13 would be discharged.

    We offer free consultation on this and other matters on bankruptcy. Please call us at (813) 200 4133.

    Related Blogs

      Never Hide Your Assets in Bankruptcy

      When filing a bankruptcy, all assets and other personal properties must be disclosed properly to avoid any jeopardy in the outcome of your case and to prevent yourself from facing criminal prosecution. Hiding such assets and personal property may not discharge your debt. Also, not withholding details about personal property cannot be stressed out enough as doing this may compromise your possibility of discharging debt in subsequent bankruptcies. A lot of debtors are afraid to give out details regarding their personal property when they file because they might lose property of value to their creditors. Yet, failure to provide all the necessary information can hinder you from using exemptions that will protect your assets legally.

      Common ways of concealing valuable possessions when filing includes lying about ownership, transferring property title to another person just before filing, and falsifying documents pertaining to the value of your assets. If your bankruptcy attorney or trustee finds out that assets are being hidden you could experience the following:

      – Lose privilege to debt discharge. In other words, you will be financially liable for repaying outstanding debt.

      – Your case could be dismissed. In some cases, your case will continue to be active but the hidden asset in question may be utilized to compensate creditors as a result.

      – A granted discharge gets revoked. This happens if the trustee knows the debtor had hidden assets after they filed bankruptcy and granted a discharge.

      – Lose the right of discharging debt in a future filing. If you filed bankruptcy and included debt that was previously revoked or denied a discharge, you may be accountable to repay the debt. Meaning, it may not qualify for a discharge if listed in a future filing.

      – Face federal charges. Failure to provide correct and valid information anytime during your case may result to criminal charges such as imprisonment and hefty fines.

      For more information, please call us at (813) 200 4133 for a free consultation

      Related Blogs

        How Chapter 13 Bankruptcy Repayments are Determined

        One of the most frequent questions I get asked by bankruptcy petitioners is how much their Chapter 13 repayments will be. Obviously, each petitioner’s repayment amount would be different and there’s no simple formula to calculate it. So how does the bankruptcy court determine your repayment amount? Basically, there are four factors that help determine how much monthly repayment you will pay under a Chapter 13 bankruptcy.

        The first factor is called “Chapter 7 Liquidation Analysis” which hypothetically examines what would happen to your unsecured creditors if you filed for Chapter 7 bankruptcy. If money would be leftover to pay the unsecured creditors in a Chapter 7 bankruptcy then at least that amount would be added to your Chapter 13 bankruptcy repayment plan.

        The second factor is the “Means Test”. This is where an average household income is determined according to the state you live in. Then your current monthly income over the past six months is compared with the state’s average. The amount by which your monthly income exceeds the average household income is used to calculate what you have to repay your creditors under your Chapter 13 bankruptcy.

        The third factor is the “Disposable Income Test”. The calculation is based on the amount obtained when your regular monthly expenses is subtracted from your monthly income. This sum of money is known as your disposable income. Expenses in this calculation do not include things such as credit card payments, student loans or any other payments to unsecured creditors. The bankruptcy court may order you to use all of this disposable income amount to repay your creditors in Chapter 13 bankruptcy.

        Finally, the amount you repay in Chapter 13 bankruptcy will include “required payments to priority and secured creditors”. These are priority payments that you are obligated to pay in full in your Chapter 13 bankruptcy. The type of payments in this category will include child support, taxes, student loans etc.

        Call us at (813) 200 4133 for a free consultation on bankruptcy and how it can help you be rid of your debts.


        Related Blogs