With the recession showing no signs of abating very soon, many people continue to tighten their belts and grit their teeth to try to endure these tough times. Are you one of them? In my business as a lawyer, I make it a point to fight for justice and it pains me to see hardworking folks like you having to struggle for a living just because interest rates have skyrocketed. And worse still, it disturbs me to see you being hounded by debt collectors and creditors who are only thinking of their cash flow and couldn’t care less about you and your family.
That’s why I set up this blog. It is to give you information to fight back and take control of your finances. One of the things most people do to overcome their debt problems is to borrow more money. After all, they are already working multiple jobs and yet it is insufficient to cover their loan repayments. But is this the best move to make?
To help you decide whether you should sign on the dotted line on another loan agreement, consider these factors:
1. Is there room to negotiate on your existing loans?
Instead of borrowing a fresh loan, you should firstly look into negotiating better terms for your existing loans. You could negotiate an extension to the repayment term or ask for lower interest rates in exchange for collateral etc. Talk to the officer from your financial institution. They would much rather recoup a lesser repayment from you than have to sue you for the money if you cannot repay at all.
2. Do not apply for the maximum amount of loan
Suppose you feel you need another loan. The very least you should do to safeguard yourself is to apply only for only the amount you need and not max out the loan limit. This would protect you in the event that interest rates are raised in future. If a conservative amount of loan is still not enough for your needs, then you should file for bankruptcy instead.
3. Make sure your loan repayments do not exceed 25% of your gross income
Suppose you are able to get a loan from a friend or relative for which you do not need to pay interest. Still, you should not bite off more than you can chew. You owe it to your friend or relative to repay your loan within the agreed time frame. To give you the best chance of doing so, you should ensure your total loan repayments (including your existing loans) do not exceed 25% of your gross income. That is the general rule for all financial institutions and you should apply it to yourself also. If your total repayments already exceed 25% of your gross income, then you should not apply for another loan and instead, you should seriously consider filing for bankruptcy.
If it is not wise to apply for another loan, what are the benefits of filing for bankruptcy, then?
There are many but let me briefly put forth a few:
1. Bankruptcy enables you to repay your debts over a scheduled payment plan
2. You can have certain unsecured debts forgiven after repaying all you are able to repay
3. Your creditors are prohibited from contacting you the moment your bankruptcy filing goes through
4. Bankruptcy protects certain assets that the bankruptcy court declares cannot be liquidated
If you wish to file for bankruptcy, call us for a free consultation at (813) 200 4133 and we will help you plan a strategy for you to overcome your debts, whether they are individual or corporate ones.
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Filed under Chapter 7 (Tampa) by on Dec 8th, 2011. Comment. 
Bankrupt investment bank Lehman Brothers has sued JPMorgan Chase & Co. alleging that J.P. Morgan illegally obtained billions of dollars from it in the days prior to their bankruptcy filing. J.P. Morgan was Lehman’s one time ‘clearing bank’ or middleman between Lehman and its investors and creditors. This, according to Lehman, allowed J.P. Morgan to be privy to the financial condition of Lehman, especially when it continued to weaken. Lehman further alleged that J.P. Morgan’s Chief Executive James Dimon and other top executives took advantage of this insider information to get Lehman to turn over $8.6 billion in collateral in September 2008, an act that significantly contributed to its lack of liquidity and its subsequent downfall.
Lehman’s lawsuit goes on to allege that J.P. Morgan siphoned billions of dollars out of Lehman by demanding more collateral to cover its risks. This in turn ensured that J.P. Morgan would have the advantage over all other Lehman creditors, not just for its clearance exposure, but for all possible exposure that would have resulted from Lehman’s bankruptcy.
On its part, Lehman felt the need to give in to J.P. Morgan’s demands, fearing that should J.P. Morgan stop its clearing activities, it might have precipitated Lehman’s immediate collapse.
Although the lawsuit did not come as a surprise to industry players, J.P. Morgan spokesman Joe Evangelisti described it as ‘ill conceived and meritless’ and said the company will vigorously challenge it.
In a recent report, a bankruptcy court examiner found that Lehman could pursue a legal claim against J.P. Morgan for making excessive collateral requests albeit not a very strong claim. In his report, the court examiner said that Lehman could recoup $6.9 billion of the $8.6 billion pledged to J.P. Morgan. At the same time, the court examiner chided Lehman for using certain accounting techniques to hide its leverage and deceive the market before it ultimately fell into bankruptcy. All the while, J.P. Morgan was among the only institutions to continue lending to Lehman before and after its bankruptcy.
Evangelisti used the bankruptcy court examiner’s report to refute Lehman’s allegations and claimed that it was due to Lehman’s own poor decisions in taking on leverage and exposing itself to subprime mortgages that led to its eventual downfall and not any inappropriate use of confidential information on the part of any J.P. Morgan employee.
As it turned out, when Lehman could no longer get itself out of its downward spiral, the government declined to rescue it, forcing Lehman to file the largest bankruptcy in US history.
Filed under Chapter 7 (Tampa) by on Aug 7th, 2010. Comment.
Is it possible to rebuild a good credit standing after bankruptcy? The answer is an emphatic yes! Filing for bankruptcy does not mean you will never be granted credit or given a loan again. It all boils down to doing the right things to rebuild your credit after a bankruptcy.
Rebuilding your credit means having to re-establish your standing before the credit bureaus. To do so, you have to show yourself to be prompt and faithful in paying your dues. There is practically no way for an individual by himself to deal with credit bureaus and because of that, you need to go through an intermediary like a credit card company. Credit card companies submit regular reports on their clients to the credit bureaus.
So the first step would be to apply for a credit card. Since you have been a discharged bankrupt, some banks might impose certain restrictions and conditions in issuing you a credit card. For example, you may be granted a secured credit card i.e. one that is backed up by some collateral put up by you. Another example may be a bank issuing you a prepaid credit card which is a credit card where you are given credit only upon paying the bank. Some banks might even issue you a credit card that is only valid in certain countries and not worldwide.
Once you have been issued with your credit card, you should seek out a regular payment schedule where you can pay using your credit card. Then all you need to do would be to use your credit card to pay the regular payments each month. As long as you regularly pay each month’s payments on time with your credit card, your credit score will eventually rise as the credit company reports your payments to the credit bureaus.
Another means of increasing your credit score is to obtain a mortgage. This may be difficult due to your bankruptcy but there are some mortgage products you may qualify for. It may be one with a higher interest rate or you may need to take up an interest-only loan in order to get a mortgage. You cannot afford to be picky. Just choose a mortgage arrangement that is within your means to repay and start repaying on schedule. This will also improve your credit rating over time.
If possible, try to get a good mix of credit arrangements without biting off more than you can chew. For example, if you can secure a store account, a car loan and housing loan, it goes to show to the credit bureaus that you can manage different types of credit well. Such a credit mix will augur well for you in increasing your credit score.
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Filed under Chapter 7 (Tampa) by on Jul 15th, 2010. Comment.
Is it possible to rebuild a good credit standing after bankruptcy? The answer is an emphatic yes! Filing for bankruptcy does not mean you will never be granted credit or given a loan again. It all boils down to doing the right things to rebuild your credit after a bankruptcy.
Rebuilding your credit means having to re-establish your standing before the credit bureaus. To do so, you have to show yourself to be prompt and faithful in paying your dues. There is practically no way for an individual by himself to deal with credit bureaus and because of that, you need to go through an intermediary like a credit card company. Credit card companies submit regular reports on their clients to the credit bureaus.
So the first step would be to apply for a credit card. Since you have been a discharged bankrupt, some banks might impose certain restrictions and conditions in issuing you a credit card. For example, you may be granted a secured credit card i.e. one that is backed up by some collateral put up by you. Another example may be a bank issuing you a prepaid credit card which is a credit card where you are given credit only upon paying the bank. Some banks might even issue you a credit card that is only valid in certain countries and not worldwide.
Once you have been issued with your credit card, you should seek out a regular payment schedule where you can pay using your credit card. Then all you need to do would be to use your credit card to pay the regular payments each month. As long as you regularly pay each month’s payments on time with your credit card, your credit score will eventually rise as the credit company reports your payments to the credit bureaus.
Another means of increasing your credit score is to obtain a mortgage. This may be difficult due to your bankruptcy but there are some mortgage products you may qualify for. It may be one with a higher interest rate or you may need to take up an interest-only loan in order to get a mortgage. You cannot afford to be picky. Just choose a mortgage arrangement that is within your means to repay and start repaying on schedule. This will also improve your credit rating over time.
If possible, try to get a good mix of credit arrangements without biting off more than you can chew. For example, if you can secure a store account, a car loan and housing loan, it goes to show to the credit bureaus that you can manage different types of credit well. Such a credit mix will augur well for you in increasing your credit score.
Filed under Chapter 7 (Tampa) by on Jul 1st, 2010. 1 Comment.
Is it possible to rebuild a good credit standing after bankruptcy? The answer is an emphatic yes! Filing for bankruptcy does not mean you will never be granted credit or given a loan again. It all boils down to doing the right things to rebuild your credit after a bankruptcy.
Rebuilding your credit means having to re-establish your standing before the credit bureaus. To do so, you have to show yourself to be prompt and faithful in paying your dues. There is practically no way for an individual by himself to deal with credit bureaus and because of that, you need to go through an intermediary like a credit card company. Credit card companies submit regular reports on their clients to the credit bureaus.
So the first step would be to apply for a credit card. Since you have been a discharged bankrupt, some banks might impose certain restrictions and conditions in issuing you a credit card. For example, you may be granted a secured credit card i.e. one that is backed up by some collateral put up by you. Another example may be a bank issuing you a prepaid credit card which is a credit card where you are given credit only upon paying the bank. Some banks might even issue you a credit card that is only valid in certain countries and not worldwide.
Once you have been issued with your credit card, you should seek out a regular payment schedule where you can pay using your credit card. Then all you need to do would be to use your credit card to pay the regular payments each month. As long as you regularly pay each month’s payments on time with your credit card, your credit score will eventually rise as the credit company reports your payments to the credit bureaus.
Another means of increasing your credit score is to obtain a mortgage. This may be difficult due to your bankruptcy but there are some mortgage products you may qualify for. It may be one with a higher interest rate or you may need to take up an interest-only loan in order to get a mortgage. You cannot afford to be picky. Just choose a mortgage arrangement that is within your means to repay and start repaying on schedule. This will also improve your credit rating over time.
If possible, try to get a good mix of credit arrangements without biting off more than you can chew. For example, if you can secure a store account, a car loan and housing loan, it goes to show to the credit bureaus that you can manage different types of credit well. Such a credit mix will augur well for you in increasing your credit score.
Filed under Chapter 7 (Tampa) by on Jun 3rd, 2010. Comment.
