The Truth About Bankruptcy In 2018

Many people these days find themselves in serious financial trouble and things have gotten so bad that they feel that they don’t know what to do anymore. Being in that situation has to be extremely scary as your creditors are not likely going to be understanding when you cannot pay them even the minimum amount due.

It gets even worse for you if you own your home and you are not able to afford your mortgage and the bank is threatening to take away your home. There is are not really whole on of things for you to do if you have gotten to the point where you can longer afford make all of your payments. One of the last resorts is a legal proceeding called bankruptcy.

What is bankruptcy

A bankruptcy is a legal proceeding in which you face a judge and you tell them that you no longer have the means to continue to pay your debts. The judge will appoint a trustee and they will evaluate your debts and your income in order to determine if they think your debts should be discharged. Fortunately, if you own your home, a foreclosure can be stopped, and you will not lose your home. However, there are certain debts that are not covered by bankruptcy and you will still responsible for paying them once your bankruptcy has been discharged.

Here are a few examples of debts that cannot be discharged by a bankruptcy;

Student Loans
Tax debts, fines or penalties from the government
Court-ordered child support payments
Court ordered alimony payments

Filing Bankruptcy will temporarily stop the harassing phone calls from creditors wanting their money, but once you have filed bankruptcy, they must immediately cease all forms of contact until after your bankruptcy has been finally decided by the judge. All decisions by the courts are final and when they discharge your case you will ready to start over.

However, you might really want to be sure that you think it completely through because you will have poor credit for many, many years once it hits your credit report. Once it is where it normally stays for at least 7 years and it will likely keep you from getting any new credit.

There are things that you can consider before taking the bankruptcy route that will not put your credit at risk and that includes finding a lender to request a debt consolidation loan. This will make it possible for you to pay off the debts and stave off foreclosure and bankruptcy.

Bohikian Law Group specializes in chapter 7 and chapter 13 bankruptcies in Michigan. Contact us today to find a bankruptcy attorney that will help you in debt relief at http://www.bohikianlaw.com/ today.

Getting Your Financial Future in Order with Bankruptcy

Although we don’t intentionally do it, sometimes we make ill-advised financial moves that lead to bankruptcy. While filing for bankruptcy can provide a reprieve for those who are unable to repay their debts, there are consequences which may affect your future, for instance:

Bankruptcy may place some restrictions on your employment or running a business
It doesn’t necessarily release from all debts, and your trustee may sell all your assets
Your name may permanently appear on the National Personal Insolvency Index (NPII)
You must inform a credit provider of your bankruptcy when trying to obtain future credit
While bankruptcy lasts for three years and a day, your trustee can lodge an objection to extend the bankruptcy for up to eight years

Do not be discouraged because there is life after bankruptcy. First, a good bankruptcy attorney can help you in initializing a debt management plan and ensure that you attend credit counseling sessions where you can receive free advice on important steps to take in the future to help you abate the damaging impact of insolvency.

There is no denying that bankruptcy can be a daunting and very emotional decision, however, having a bankruptcy lawyer by your side, he or she can help you find various debt relief options that may be available to you and most importantly, he or she can stop creditors from harassing you. It is also your bankruptcy attorney’s duty to help you negotiate, review and sign any reaffirmation agreements on secured property that you want to keep. Your bankruptcy attorney may appear in further court required appearances on your behalf to satisfy the bankruptcy court’s administrative requirements. While that is happening, consider the following ways of getting your financial future in order after filing for bankruptcy:

Stick to a budget

If living beyond your means is what may have got you in a bankruptcy pickle, creating and sticking to a realistic budget will help you become extra vigilant about your finances and prevent you from incurring unnecessary debts.

Set up automatic bill payments

One of the single, most important things you can do to restore your finances and your credit is making it a priority to pay all your current bills on time and offset any existing bills that you may have accrued in the past.

Get a secured credit card

By obtaining a secured credit card, you start depositing a prearranged amount of money into a bank account, which becomes your credit limit. Charging small amounts each month and repaying your debts as agreed is yet another strategy to rebuild your credit rating after bankruptcy.

Save

Now that you’re free from most of the debt, it’s up to you to manage your money. Start by building an emergency fund. Also look for financial coaching offered by various financial advisers to help you in managing and keeping your finances in check.

The Best Bankruptcy Option For Your Situation

Have you ever been overwhelmed by debt? Have you ever considered if bankruptcy was the next step in your financial recovery? There are numerous advantages and disadvantages that come with filing for bankruptcy. We will look into common myths that surround bankruptcy and when it may be the best option for you.

Bankruptcy is an arrangement in federal law that allows individuals and businesses to get a reprieve from their debts and to get a fresh financial beginning. This system allows honest individuals who have fallen on hard times to get on with their lives without the harassment that comes from creditors.

There are two common categories within bankruptcy law that can be declared: chapter 7 bankruptcy and chapter 13 bankruptcy. In the most basic terms chapter 7 bankruptcy liquidates non-exempt assets and the proceeds are used to pay off creditors. This is a solid option when there is a large amount of unsecured debt to be covered by a small income. Chapter 13 bankruptcy helps individuals and businesses to reorganize and adjust their debts while using a repayment plan to cover the outstanding debt. This is a good option for those debtors that have an income and want to avoid foreclosure and catch up on outstanding bills.

A major advantage of filing for bankruptcy is that creditors are on notice to stop trying to collect outstanding debts from you. This means that they no longer can call you, send you letters, file lawsuits, garnish wages or seize your assets.

A major disadvantage in declaring bankruptcy is the devastation it wreaks on your credit score. Another issue that arises in bankruptcy is that certain non-exempt assets can be sold and debts from mortgages, student loans, taxes, alimony and child support cannot be discharged.

There are many myths in bankruptcy. One myth is that by just stating you want to file bankruptcy you have declared bankruptcy. This is not true. For bankruptcy to be legal you must file the right paperwork, go to credit counseling and pay the fees. It all reality it is best that a bankruptcy attorney is hired to facilitate the process to avoid legal complications from arising with improperly filed paperwork.

Another common myth is that you can go to jail for owing money. This is untrue. It is not against the law to owe money no matter how aggressive the debt collector is. One myth is that by just stating you want to file bankruptcy you have declared bankruptcy. This is not true. For bankruptcy to be legal you must file the right paperwork, go to credit counseling and pay the fees. It all reality it is best that a bankruptcy attorney is hired to facilitate the process to avoid legal complications from arising with improperly filed paperwork.

Another common myth is that you can go to jail for owing money. This is untrue. It is not against the law to owe money no matter how aggressive the debt collector is. Yes, creditors can sue you or take you to court but they cannot send you to jail.

Consider filing for bankruptcy if you are unable to meet your financial obligations. If you have been work for an extended period of time, delinquent on your taxes, nearing foreclosure on your home, having your wages garnished or pending a law suit on delinquent bills it may be time to meet with a bankruptcy attorney to further look into the benefit bankruptcy may have for your financial future.

Reasons Behind Filing For Bankruptcy

Why do people end up filing for bankruptcy? This is a question that is often posed to bankruptcy attorneys and the answer people expect to get back is that people just aren’t responsible with their credit cards. This however, more often than not, is not the reason people end up faced with the option of bankruptcy. In fact most people that are facing bankruptcy dread being there. It isn’t a decision that has been made freely. In fact, most people are almost forced into it after spending months on end of harassing calls from creditors and such.

One of the most commonly seen explanations for people looking into bankruptcy is because of illness or disability. When a family member becomes ill the entire family has to adjust. This may mean that the family is left without the same budget that they have become accustomed to. An illness can fall on a parent or child contributing to a change in income.

Not only does the expense of medical care come into play but the loss of income when time off is needed to provide care. This leaves many families falling behind on bills as payments that were being made were based off of the excepted income to stay the same. This is a common development that bankruptcy attorneys see in family’s seeking debt relief under federal bankruptcy.

Another common reason that people find themselves filing for debt replied is unemployment. When individuals are out of work and unable to find a source of income it becomes pretty difficult to pay your bills. Often what we see is that people will go a period of time without a job and begin to fall short on paying their bills. As payments start to add up, even after a person does find employment it is difficult to dig them out of the hole they have found themselves in. For instance, a thirty thousand dollar debt at twenty percent interest is difficult at best to pay off when making only forty five thousand a year. The debt starts to become overwhelming and leads to desperation.

About thirty percent of people that are going through bankruptcy have also divorce within the past five years. The ramifications of a divorce aren’t often felt till a few years after the dust has settled on the process as a whole. This is especially true of women who find they are raising children in a single parent home collecting less than needed to live and raise children. They begin to fall back on the old standby of payday loans, credit cards and personal loans. Eventually this catches up to them and they find that there is nowhere else to turn.

There are a number of myths that surround individuals finding they are at need to look into bankruptcy debt relief. Don’t fall victim when it comes to categorizing things in a simplistic manner. Most people going through bankruptcy are doing so because they are all out of options and they have nowhere else to turn.

Misconceptions Surrounding Bankruptcy

There are several misconceptions surrounding bankruptcy and the individuals who seek the relief it can offer. The biggest one of them is assuming that all individuals who are seeking financial reprieve through bankruptcy have done so because they couldn’t fight the urge of credit card spending. This however, is not the case for many of the people that find that they are in need of filing bankruptcy. Here’s a look at some of the other folklore surrounding bankruptcy.

Individuals that file for bankruptcy are financially irresponsible: Although there are some cases in which individuals need to file for bankruptcy because of their own financial irresponsibility this is not always the case. It is more likely that an individual finds themselves in this situation because of one of the following events: job loss, divorce or illness.

Bankruptcy clears away all past debts: If you are looking for a be all to end all for debts, bankruptcy is not where you will get it. Not all debt can be cleared away when filing for bankruptcy. Several, including alimony, child support, restitution from a crime, tax debt and student loan expenses are just a few of the debts that cannot be expunged. Although bankruptcy does give individuals a fresh financial start it does not completely clear you from all of your outstanding debt.

It’s a good idea to spend with reckless abandonment before bankruptcy: People should not assume that just because they are about to file for relief that they can max out their current credit. In the eyes of the court, this type of behavior is seen as fraudulent. Many times the debt that is racked up in the ninety days before your discharge will need to be paid back. You will not get away with spending recklessly and expecting it to be discharged.

Bankruptcy permanently ruins your credit: Although it is more difficult to obtain credit in the months after you have filed for bankruptcy it is not impossible. Most bankruptcy attorneys and financial advisors recommend obtaining a secured credit card when you first are relieved of your debt through bankruptcy. A secured credit card can be obtained through a bank or other financial institution. This type of credit card requires a bank deposit to be drawn against.

If you are considering bankruptcy to get relief from debt that is piling up and creditors hounding there are still some things to think about. First is the expense of filing for bankruptcy. Hiring an attorney to represent you in filing for bankruptcy is the best option. This can cost between nine hundred and fifteen hundred dollars depending on your attorney and the area in which you reside.

It is also crucial to consider the difference between chapter 13 bankruptcy and chapter 7. In chapter 13 bankruptcy the court will assist you in reorganizing your debt and you will be in charge of paying expenses, like your house payment and such while living very modestly. Chapter 7 discharges certain debts but in doing so you could have to sell secured assets to assist in paying some of your debt back. Talk with a local bankruptcy attorney to see what option is the best for your situation.

Is It Finally Time To Talk With A Bankruptcy Attorney

How do you know if it is finally the time for you to throw in the financial towel and start a serious discussion about filing for bankruptcy? The term itself is one that invokes an array of emotions: failure, sadness, defeat, relief, disappointment and more. Bankruptcy doesn’t just involve individuals it is also something that can occur to corporate companies. In a world where living in debt seems to be the norm how do you know when it is time to finally call it quits and meet with a bankruptcy attorney to seek relief.

When assessing if you are in the financial disaster zone there are a few questions to ask yourself.

1) Is it only financially possible for you to make the minimum payment on your credit cards?

2) Do you have bill collectors calling you on a regular or semi-regular basis?

3) When you think about sitting down and working out a plan for your financial future are you scared? Do you feel like your life is spinning out of control?

4) Are you using your credit cards for necessities such as gas and groceries?

5) Have you considered debt consolidation?

6) Does it make you nervous to total the amount you actually owe?

If you have answered yes to more than one of the questions about it is possible that you need to give our financial situation a serious look. Bankruptcy is a very viable solution when you actually owe more than you can afford on a regular basis.

The first step is to make a list of your liquid assets. This should include items such as real estate, stocks, bonds, college savings accounts, non-bank assets, real estate and more. A rough estimate of these figures should be good enough for these purposes.

The next step is to create a detailed list of bills and credit card statements. When the value of your assets is less than the amount of debt that you owe one way out of this situation is speaking with a bankruptcy attorney and declaring bankruptcy. This is not an issue that is ever easy. Bankruptcy is not a simple, sure all for debt that is spinning out of control.

Bankruptcy can happen in two different manners. The most common routes for individuals and corporations is to voluntarily consult with an attorney who will assist you through the proper channels in filing bankruptcy. A second manner in which bankruptcy is filed is that creditors ask the court to order individuals into bankruptcy.

Mistakes To Avoid When Filing For Bankruptcy

If you are contemplating the need to file for bankruptcy then it is important to avoid these common pitfalls that can affect the success of your bankruptcy. Some of the financial actions and various behavioral actions can affect your ability in achieving a Chapter 7 or Chapter 13 bankruptcy discharge.

By providing erroneous, partial or deceitful information on either your bankruptcy paperwork or at your 341 Meeting of Creditors you will be charged with perjury. Misrepresenting the information that will be used in the judgement of your discharge can lead to criminal prosecution. You also need to make sure that all of your bankruptcy paperwork is filled out correctly. The bankruptcy attorney that is representing your needs to make sure that the paperwork is complete in full. If any of the boxes are left empty you will need to make sure that amendments and additional paperwork is done to correct the issue.

Make sure to list all of the creditors and debt that you wish to discharge. If at some point it is realized that an asset is not included a Chapter 7 trustee make choose to repossess the property. The case may be dismissed if you forget any of the much needed schedules or forms that are needed. If you forget a debt then this debt will not be considered in the discharge agreement. Similarly if you forget to list an asset it may be taken away from you. The process of completely filling out paperwork for your bankruptcy is needed to guarantee a smooth bankruptcy proceeding.

Next you must make sure that you have filed tax returns for the two years prior to filing for bankruptcy. Better yet make sure you are up to date in filing all of your federal and state tax returns to ensure proper processing. You will not be able to move forward with the bankruptcy proceedings unless you file the past tax returns.

You should also never continue to rack up new debt when you are about to file for bankruptcy. Any debt that is racked up between seventy and ninety days prior to filing for bankruptcy this debt may be denied in the discharge of your bankruptcy. Any luxury item that is bought on credit within ninety days of filing for bankruptcy in an amount greater than six hundred dollars may also be denied discharge as well. Creditors may claim that there was an intention to deceive and that there was no intent to repay the debt.

There are several other unique situations your bankruptcy attorney will advise you to stay away from in the months before you begin the process of filing for divorce such as: moving assets around, selectively repaying only certain loans, ignoring impending collection actions or file for bankruptcy just before you are about to get a substantial payout or asset.

Creating A Life After Bankruptcy Second Installment

In our previous installment on life after bankruptcy we discussed the curveball filing for bankruptcy can throw at you. In this installment we will continue to review ways in which you can rebuild your financial life after filing for chapter 7 bankruptcy or chapter 13 bankruptcy.

Bankruptcy attorneys recommend that individuals who have filed for bankruptcy begin to re-establish their credit as soon as they possibly can. One way to accomplish this is by establishing a personal line of credit that is secured through a savings account. This helps to establish credit without the risk of spending more than you have available to spend. The one element to remember is that the interest you will pay for the line of credit will far outweigh what you will earn in interest on your savings account.

Hold off on buying a car until you have built there has been time to establish credit again. It takes about two years to get to the point when you should start searching out loans such as home loans and automobile loans. Continue re-building credit during this time to ensure you can obtain a loan when you start looking into larger financial purchases.

If a credit card is obtained use it only for emergency situations. Do not card hop between credit card companies either. Stick with one or two companies to help improve the long term credit record that is being established.

Be cautious of scams after filing for bankruptcy. Many scams exist and scam artist prey on individuals who they believe to be susceptible. Vulnerability is often a symptom experienced after an experience like bankruptcy. Don’t give into it. Never believe that anyone that promises to fix your credit. There is no magic method in establishing credit after your bankruptcy is settled.

Rebuilding credit after bankruptcy takes time. While you are re-establishing your financial life be wary of any offers that sound too good to be true. Your bankruptcy attorney will recommend taking time before accepting any offers of extended credit or instant credit fixes. Research all companies offering anything. It is more likely than not that a quick online search will offer you a great deal of information on any and all companies that are known to be scam artists.

After researching an offer, if there is still any doubt don’t go further with the deal being presented. Walk away from offers that aren’t a hundred percent above board. When re-establishing your credit it is your financial reputation on the line be sure to protect it at all costs.

Creating A Life After Bankruptcy

Bankruptcy can literally throw a curveball into your life when you really need a fastball up the middle. It may look like a dead end at the end of a long bumpy road but in reality bankruptcy is the yellow brick road to getting your financial life back on track. When you go through with a bankruptcy no matter if you file for Chapter 7 bankruptcy or Chapter 13 bankruptcy there is a process in which to get back on your financial feet.

It is crucial that you begin by creating a budget. Take into consideration the source and amounts of income coming in verse the debt source and amount of debt going out each month. When creating a budget it is crucial to set a realistic goal of saving and spending. The most important piece in any budget is saving as much as you can and decrease the number of disposable expenses that is feasible.

After bankruptcy you learn that cash is actually the best method of spending that you can use. Paying with cash allows you to only purchase those things that you absolutely need. It allows you to save for those items that aren’t necessary; allowing you time to really consider the purchase. It isn’t that credit needs to be feared, as eventually you will need to rebuild your credit in order to purchase a home or car, credit is not necessary to live on a daily basis.

After bankruptcy it is vital that you pay all of your bills on time. Even the smallest of bills, including utilities should always be paid on time. Overdraft fees and bounced checks show up on your credit report and affect your overall credit rating.

Keep a constant eye on your credit report. Equate it to being on a diet. When you are on a diet it is crucial you check in on your weight regularly the same is true of your credit. As you are building your credit it is important to see the increase in your score on a regular basis. The numbers increasing will only help to boost your pride exactly like seeing the scale decrease increases your ability to continue to lose weight.

This may seem like an oxymoron but apply for a credit card to help you establish your credit. There are a few options: a secured credit card which works like a debit card or an unsecured card however get one where you only are approved for a very small credit line. Don’t accept credit line increases until you are one hundred percent sure that your budgeting skills are on track.

This is just the beginning. In our next installment we will continue exploring rebuilding your financial life after bankruptcy.

Rebuilding Life After Bankruptcy

The task of rebuilding your life after you have filed for bankruptcy can seem quite overwhelming. It is important to recognize that your life is in the midst of a transformation. Bankruptcy allows individuals to start over; it provides a clean slate where you are in control of your life unlike your previous life which was being ruled by your debt. This article will talk about restructuring your credit rating, finances and emotional health.

Individuals, who have recently filed for Chapter 7or Chapter 13 bankruptcy need to come to terms with their pasts, put it behind them and begin to chart a course of action to regain financial stability. Bankruptcy offers a second chance to individuals. A key element to ensure this second chance is not wasted is commitment. Commit to recovering. The post bankruptcy steps listed below will help to preserve the calm that you feel right after bankruptcy.

The first thing individuals must realize is that they are not alone. Let go of any shame or guilt that you may be feeling. Many individuals find themselves in a financial predicament where they must seek protection with bankruptcy. There is no reason to be disappointed or to allow the feeling of humiliation to takeover your future. To ensure success you must move forward with a positive mindset. Make peace with your past and let it go. There are many reasons that people declare bankruptcy: medical bills, divorce, losing a job and various other personal stumbling blocks. Learn from the mistakes that were made and move towards your fresh start do not allow yourself to dwell in the past.

The next step individuals must take after bankruptcy is to create a realistic financial house with a professional support team in place. It is time to create a budget and concentrate your efforts on making a plan that allows you to pay your bills on time, build an emergency fund and account for the future. Live under your means to ensure that you never find yourself in an unpredictable financial situation again.

Next it is crucial that you begin to rebuild your credit rating. The simplest way to achieve this is through paying your bills on time. Once you have begun routinely paying your bills on time it is important to establish a line of credit. This may mean taking out a car loan or obtaining a small line of credit. It is important to note that after bankruptcy you make need a cosigner and may be required to pay higher than average interest rates. It will take some time but you will once again prove yourself to be credit worthy once again.

Remember to fact check. Never believe anything you hear about bankruptcy without fact checking with your attorney. There are many myths and misconception that surround the bankruptcy process. Bankruptcy attorneys are the best source of truth.

One of the most well known myths is that filing for bankruptcy will automatically disqualify you from receiving a mortgage for ten years. This is false. It is also not true that when you file for bankruptcy you have to wait at least seven years to obtain a credit card. In fact ninety six percent of bankruptcy filers are offered a new credit card within the first year of declaring bankruptcy. Separate fact from fiction with help from your bankruptcy lawyer. They can help guide you through all of the falsehoods that surround building a financial future after bankruptcy.

Dickron Bohikain Law Group

Brighton, Howell & Southfield Michigan Bankruptcy Attorney

Category: Debt Relief