Feb 19, 2015 · So use the money you would have spent paying debt to save up to hire an experienced bankruptcy attorney. Pay more than $600 within 3 months of filing bankruptcy can be a preferential transfer If you are paying any your unsecured debts, which would include your payday loans, credit cards, medical bills, or bank line of credit, $200/month or more, during the …
Jul 11, 2019 · Pick the best attorney you can find and remember one rule: a good attorney is generally never cheap, and a cheap attorney is generally never good so don't choose based on price. If you found this Answer helpful, please mark it as "Best Answer" Please be advised that the answer above is only general in nature cannot be construed as legal advice ...
Whether you should stop paying your creditors will depend on: the types of debt, and; how soon you expect to file your case. If you aren't sure which bankruptcy chapter is best for you, start by learning about the differences between Chapter 7 and Chapter 13. Types of Bankruptcy Debt. Bankruptcy doesn't cancel all debt.
Mar 14, 2018 · If the debtor wishes to save any money on payments before filing for bankruptcy, credit card bills would be the easiest to forego. However, be sure that the debtor’s case is filed soon. If they wait too long, the credit card company may file a collections law suit against the debtor. Medical bill payments work the same.
In a Chapter 7 case, you must continue to pay secured debts after filing bankruptcy or you may lose your property. If you fall behind on payments that come due after the case is filed, your creditor may foreclose or repossess after your case is closed.
If you fail to make your “post-petition” house payments, the mortgage company could ask the bankruptcy court for permission to foreclose.
When you file for bankruptcy, the discharge order—which wipes out your obligation to pay qualifying debt— eliminates your personal liability to pay ...
Bankruptcy doesn't cancel all debt. You'll also have to pay some obligations, called "secured debt," if you want to keep the property that serves as collateral, such as a home or car. Find out more about particular types of debt in bankruptcy.
Therefore, if you want to keep your home, you must continue making your regular mortgage payments during and after the bankruptcy. This is true for both Chapter 7 and Chapter 13. An exception to this rule exists if you are getting rid of a second or another junior lien through lien stripping in Chapter 13 bankruptcy.
Credit cards. Credit card obligations are treated as general unsecured debts in bankruptcy. Your bankruptcy discharge will wipe out card debt. As a result, if you are about to file for bankruptcy, making credit card payments is typically a waste of your money. But be aware that if you don't plan to file your case for a long time, ...
Alimony and child support. Domestic support obligations such as alimony and child support are nondischargeable in bankruptcy. You can't wipe out your obligation to pay these debts through bankruptcy. If you file for bankruptcy, you need to continue making your ongoing alimony and child support payments.
Chapter 13. In Chapter 13, it's less about qualifying and more about having sufficient income to make the required monthly plan payment to your creditors . Both of these calculations can be difficult ...
Chapter 13. In Chapter 13, it's less about qualifying and more about having sufficient income to make the required monthly plan payment to your creditors. Both of these calculations can be difficult and you'll want to certain of your status.
These obligations are not dischargeable in bankruptcy and will follow the debtor regardless of the outcome or type of bankruptcy filed. If a debtor files for bankruptcy, they must continue making all child or spousal support payments as required by the divorce decree or other order of the court.
Bankruptcy deals with different classes of debts, including secured and unsecured debts. A mortgage is considered a secured debt because it is tied to an asset, the home. As a secured creditor, the lender has the right to foreclose on the home if the debtor defaults on payments. While the bankruptcy can discharge personal liability on a loan, it does not remove the lien the bank has to the property. It is for this reason that it is recommended that the debtor continue paying the mortgage if they wish to retain the home.
Like a mortgage, car loans are also secured and are tied to the asset. If the debtor does not pay the obligation, the lender has the right to repossess the property. However, in a Chapter 13 repayment plan, these payments can be part of the repayment plan and can be structured to be more affordable through the repayment plan.
Credit card payments are considered unsecured debts, meaning they are not tied to any one asset . These debts are normally the ones that are liquidated in bankruptcy. If the debtor wishes to save any money on payments before filing for bankruptcy, credit card bills would be the easiest to forego.
If you’re filing for bankruptcy, you may want to stop paying your utility bills ONLY if they are already delinquent. And in that case you may only want to pay for your current usage if you’re at risk of a disconnection. Once you file bankruptcy, your gas, electric and water company will not be able to disconnect your service for nonpayment of bills prior to your bankruptcy. However, if you file bankruptcy and fail to pay your utility bill for usage after you file bankruptcy, you can lose services.
Or your lender would repossess your car. Bankruptcy stops your creditors from taking these actions so you do have some wiggle room here.
Chapter 7, of course, discharges credit card debt against assets that the bankruptcy trustee can liquidate. Chapter 13 involves a repayment plan. But certain debts are prioritized over others and unsecured debts tend to be prioritized the lowest.
Federal student loans play by their own rules and can not be discharged in bankruptcy. You should continue to make payments on these if you can. On the other hand, filing for bankruptcy will temporarily stop creditor actions against you. This, however, won’t last.
For those who have a lot of secured debt (mortgage payments or car loans) Chapter 13 provides the better option. In some situations, even those who qualify under Chapter 7 may consider Chapter 13. This is because you won’t take as much of a hit on your credit report, but the repayment plan has to make financial sense.
Medical Expenses. Medical expenses are considered unsecured debt. If you’re being harried by a creditor who represents a hospital and have been making payments on this debt, you should stop if you’re considering bankruptcy. Don’t feel bad.
One of the biggest benefits of filing bankruptcy is the automatic stay that goes into effect as soon as the case is filed. It means that your creditors (those you owe a debt) are not allowed to keep asking you for money.
Credit cards are the classic example of unsecured debt. If you stop paying them, there is no automatic right for the bank to take something from you, like there is with a car loan or mortgage. Once your bankruptcy has been filed, you should immediately stop making credit card payments (if you haven’t already).
Your living expenses include things like rent, utilities, cell phone plan, and car insurance. These are all bills you pay for an ongoing service, and not debts you owed when your case was filed. You have to continue to pay these expenses even after your bankruptcy case has been filed.
Tax debts, student loans and other non-dischargeable obligations. Some debts simply can’t be discharged in bankruptcy. Since you will continue to be responsible for paying these debts (including 401k loans), you should continue to pay them throughout your case and even after your discharge has been entered.
Some debts simply can’t be discharged in bankruptcy. Since you will continue to be responsible for paying these debts (including 401k loans), you should continue to pay them throughout your case and even after your discharge has been entered.
Bankruptcy gives you a fresh start by allowing you to use your hard earned money on necessities, including living expenses, groceries, gas, or health care costs. Generally speaking, you don’t have to keep making payments on a debt once your Chapter 7 bankruptcy has been filed unless the debt is tied to specific property, like a car loan or a mortgage. If you have student loans or other non-dischargeable debts, make sure you start making payments again once your discharge has been entered, even if you fell behind or stopped making payments before filing.
If you’re ready to walk away from your car and give it back, you can stop making payments on your lease or loan immediately after filing your case. The bank won’t be allowed to ask you to pay the debt, which will be discharged as part of your Chapter 7 bankruptcy.
A Chapter 7 bankruptcy typically shows on your credit report for ten years from the date that your bankruptcy case was filed (not the date of discharge). A Chapter 13 bankruptcy should drop off your report seven years from the date you filed your case.
Check your credit report about three months after you receive your bankruptcy discharge. (It takes a while for the credit-reporting agencies to update your report.) You can get a free copy of your report once a year from each of the three major credit bureaus at www.annualcreditreport.com.
The good news is that there is life after bankruptcy. Here are a few steps you can take to rebuild your credit, ensure your financial future, and make sure you get the most from your new debt-free status.
To start rebuilding your credit, you must (1) get any nondischargeable debts back on track; (2) start building a history of regular on-time monthly payments and responsible use of credit accounts; and (3) avoid taking on unnecessary debt.
One reason debtors often see their credit rating rise soon after bankruptcy is the reduced income-to-debt ratio. In other words, the amount of debt that they have compared to their income is now much lower. The income-to-debt ratio is a significant factor in credit scoring. Therefore, you want to keep this ratio low.
When you surrender a home in bankruptcy, you are informing the court and the creditor that you no longer wish to retain the property.
Can I get a car loan after bankruptcy? Yes, but first let me say that the best car is a paid-off car. Even if you are putting a couple of thousand dollars a year into maintaining an old car, it is still far less than the cost of purchasing a car on credit. (Not to mention the increase in insurance rates that will likely accompany the purchase.) If you can pay in cash for your car, that is almost always the best option. I recommend avoiding vehicle loans or keeping them very small.
If you pay back loans to friends or relatives within one year of filing, or even other creditors within 90 days of filing, then this may be considered a "preferential transfer." A preferential transfer can be "undone" in bankruptcy.
If you ran up debt during the 70 to 90 days before filing bankruptcy, beware (unless it was for life necessities, such as food, clothing, and utilities). The creditor might object to your discharge by arguing that you took out the loan without any intention of paying it back (called fraud). As a general rule, if you took out cash advances or used a credit card to buy a luxury item within 70 to 90 days of filing bankruptcy, then you've committed "presumptive fraud" and might not get to discharge the debt.
Bankruptcy works well to wipe out debt; however, you're only entitled to receive a bankruptcy discharge —the order that wipes out your debt—every so often. So it's a good idea to examine whether now is the time or whether you might need to file sometime in the future. Specifically, you can receive a Chapter 7 discharge: 1 once every eight years, or 2 six years after a Chapter 13 bankruptcy filing.
Bankruptcy works well to wipe out debt; however, you're only entitled to receive a bankruptcy discharge —the order that wipes out your debt—every so often. So it's a good idea to examine whether now is the time or whether you might need to file sometime in the future. Specifically, you can receive a Chapter 7 discharge:
Bankruptcy works well to wipe out debt ; however, you're only entitled to receive a bankruptcy discharge —the order that wipes out your debt—every so often. So it's a good idea to examine whether now is the time or whether you might need to file sometime in the future.
If you already filed a Chapter 7 bankruptcy, you wouldn't be able to do so again. A creditor could garnish your wages (take money out of your paycheck), levy (seize) the funds in your bank account, or take valuable property. Less effective Chapter 13 bankruptcy options would likely be available.
You can protect most retirement funds in bankruptcy. Therefore, one of the most unfortunate financial mistakes that people regularly make before filing for bankruptcy is withdrawing retirement funds to pay off a debt that bankruptcy could wipe out.