https://www.bankrate.com/finance/credit-cards/how-long-after-bankruptcy-credit-card/

 https://www.reuters.com/world/us/upside-down-again-omicron-surge-roils-us-small-businesses-2022-01-16/

A Breakdown of the Bankruptcy Petition What is a bankruptcy petition, exactly? Find out from noted Philadelphia bankruptcy attorney David M. Offen what a bankruptcy petition is and how it works in the bankruptcy process. If you are researching bankruptcy petitions online, you are likely considering filing bankruptcy and want to know more about it. An educated debtor is a successful debtor. Find out even more about your options considering your unique financial situation by scheduling your free, no-obligation consultation with the Law Offices of David M. Offen. Call (215) 625-9600   and let us help you get free of bills. Bankruptcy Petition Definition The bankruptcy petition is the first form in a package of forms you must file in order to open your bankruptcy case. The information you disclose on your petition introduces you to the court and the Trustee. In your petition, you set forth identifying information, the identity of your co-debtor if you have one, your address, what Chapter you intend to file under, and general information about your financial situation. You will file many other forms with your petition when you file bankruptcy, and the entire filing may also be referred to as “the petition” or “the petition and schedules.”  On your Schedules, you disclose your income, assets, expenses, and debts, and co-debtors, and swear to the best of your knowledge that the information you’ve disclosed is true and correct to the best of your knowledge.  You also complete forms attesting that your social security number is correct, a statistical summary of your assets and liabilities, and certifications that you completed your credit counseling course, and later in your case, the financial management course, also called the debtor education course. Last, you complete your Statement of Financial Affairs. If you have a lawyer filing for you, the attorney will put together the paperwork for you based on the information you provide.  You then sign that the information is true and correct to the best of your knowledge. Chapter 7 Bankruptcy & Chapter 13 Bankruptcy Chapter 7 bankruptcy is a four- to six-month process during which you disclose your income, assets, expenses, and debts to the court and receive a discharge of your unsecured debt. You must pass the Chapter 7 means test in order to income qualify to file under Chapter 7. In other words, if you complete the means test and find that you have disposable income, you must file under Chapter 13, except in certain circumstances such as where you were just laid off from a high paying job, no longer have the same income and you need bankruptcy relief right away. Forms specific to Chapter 7 bankruptcy include: Chapter 7 Means TestStatement of Intention (how you intend to deal with your secured debt)Statement of Current Monthly IncomeStatement of Exemption from Presumption of Abuse  A Chapter 7 debtor may also need to file: Application to Pay the Filing Fee in InstallmentsApplication to Have the Filing Fee WaivedStatement about an Eviction JudgmentForms requesting Mortgage Modification (vary by jurisdiction) Chapter 13 bankruptcy is a three- to five-year process and works much the same way as a Chapter 7 filing except a Chapter 13 debtor pays Chapter 13 plan payments each month to the Trustee, who distributes the payments to the debtor’s creditors. Chapter 13 debtors often use Chapter 13 to catch up with past-due payments on their mortgage, car loan or lease, support obligation, student loan obligation, or obligation to pay taxes or government fines or fees. Forms specific to Chapter 13 bankruptcy include: Your proposed Chapter 13 planStatement of Current Monthly Income and Calculation of Commitment PeriodCalculation of Your Disposable Income All debtors are required to provide a list of creditors. These can include credit card lenders, medical providers for unpaid medical bills, holders of deficiency judgments, domestic support obligees such as a child support obligee or an alimony obligee, mortgage lenders, car lenders, car lessors, personal loan lenders, landlords for unpaid rent, second mortgage or HELOC lenders, tax lien holders, the IRS for unpaid income tax, student loan lenders, and the state or federal government. Even if the statute of limitations for debt collection in PA has passed, you should list those creditors. Types of Bankruptcy Petitions Voluntary Bankruptcy Petition for Individuals Most bankruptcy petitions are filed by debtors voluntarily using Official Form 101. Voluntary Bankruptcy Petition for Non-Individuals Businesses or organizations filing bankruptcy use Official Form 201 as their petition. Involuntary Bankruptcy Petition for Individuals Occasionally a creditor forces someone into bankruptcy. Those filing bankruptcy against an individual use Official Form 105 as their petition. Involuntary Bankruptcy Petition for Non-Individuals If a group of creditors wish to force a business or organization into bankruptcy, they will use Official Form 205 as their petition. Requirements of Bankruptcy Petitions Individual debtors filing voluntarily or married individuals filing jointly must disclose: Your legal name and any other names you have used in the last eight years;Your spouse’s legal name and any other names they used in the last eight years, if you are filing a joint petition;The last four digits of your social security number(s);Any business name or Employer Identification Numbers you have used in the last eight years;Your address;The Chapter of bankruptcy you are filing under;How you intend to pay the filing fee, or if you need installment payments or a fee waiver;Whether you have filed bankruptcy in the last eight years;Whether you spouse or business partner has a pending bankruptcy case;Whether you own a business as a sole proprietor;Whether you are filing under Chapter 11 and are a small business debtor;Whether you possess anything that is hazardous;Whether you have been briefed about taking your credit counseling course;Whether your debts are primarily consumer or business debts;Whether you are filing Chapter 7 and have non exempt assets;An estimate of the number of creditors you owe;An estimate of the worth of your assets;An estimate of the total amount of your debt;Your signature “under penalty of perjury;”Whether an attorney or a petition preparer helped you prepare the petition. Be aware that your signature is a sworn statement that everything you’ve disclosed on your petition is true and correct to the best of your knowledge. If you lie on your petition, you have committed perjury, and you may have to pay fines of up to $250,000, face up to 20 years of imprisonment, or both. Just be sure to try to accurately answer any questions that your lawyer asks you. What Happens After Filing a Bankruptcy Petition Once you have filed your bankruptcy petition and schedules, your case will be assigned a docket number and your creditors will be mailed or emailed a notice that you filed, the deadline to object to discharge, and the date of the first scheduled 341(a) Meeting of Creditors. If you have not done so already, you must complete your credit counseling course and provide your attorney with the certification of completion, which your attorney will file. You must also take a financial management course, also called the debtor education course, and have your attorney file that certification of completion. 341(a) Meeting of Creditors The purpose of the 341(a) Meeting of Creditors is not only to give your creditors the opportunity to question you about the debt you owe. The Meeting of Creditors allows the Trustee to verify your identity and ask any questions they have about your filing. In most cases, the creditors do not show up to the meeting of creditors. Your attorney will know if any creditors intend to appear, and will prepare you for the Trustee’s questions. How an Experienced Bankruptcy Attorney Helps Regardless of what Chapter you are filing under, an attorney guides you through the process or completing your bankruptcy petition so that you make no mistakes that could be construed as bankruptcy fraud. Also, an experienced bankruptcy attorney will ensure that the process goes very smoothly, that you attain your financial goal through your bankruptcy filing, and that there are no surprises or unintended consequences from your filing. Call The Law Offices of David M. Offen today at (215) 625-9600 to take advantage of the opportunity to talk with an experienced bankruptcy attorney about your particular financial situation, concerns, and goals – free of charge! Let us help you get a fresh financial start. The post A Breakdown of the Bankruptcy Petition appeared first on David M. Offen, Attorney at Law.

Can I Put My Property In My Spouse’s Name & File For Bankruptcy In Arizona? The Repercussions Of Putting Your Property In The Name Of Your Husband Or Wife & Filing Bankruptcy Our Phoenix Bankruptcy Lawyers and Tucson Bankruptcy Attorneys discuss the repercussions of putting your property in the name of your spouse and then filing bankruptcy in Arizona. Our experienced Phoenix debt relief attorneys define Chapter 7 Bankruptcy and chapter 13 Bankruptcy. Additionally, they dive into different scenarios of property transfers and declaring bankruptcy in Phoenix and Tucson, Arizona. Bankruptcy can be a powerful tool that reorganizes or eliminates your debts. Erasing thousands of dollars of unsecured debt could give you several new opportunities in life. Filing bankruptcy also triggers the Automatic Stay, which stops your creditors from taking actions like repossessing your vehicle, garnishing your wages, foreclosing your home, and more. But you can’t take advantage of these massive benefits if you have the financial means to pay your debts on your own. There are strict requirements you must meet to be eligible to file Chapter 7 bankruptcy in Arizona, which is the type of consumer bankruptcy that doesn’t require you to pay back your debts. And while not a strict requirement, any assets that aren’t protected by state bankruptcy exemptions are at risk of being taken by your bankruptcy trustee to pay your creditors. So sometimes, clients come to us with what they believe is a novel workaround- filing bankruptcy without their spouse, and transferring non-exempt assets to their spouse beforehand. Read on to learn more about how using this strategy could work out when you file an Arizona bankruptcy. Arizona Bankruptcy Basics It’s almost impossible to continue without first giving a brief overview of some bankruptcy basics. Most people in Arizona file either Chapter 7 or Chapter 13 bankruptcy. If you are married, you have the option between filing as an individual or as a married couple. A bankruptcy trustee will be assigned to oversee your case, making sure you aren’t hiding assets that could be used towards your debts. You will need to attend a hearing known as a 341 Meeting of Creditors, in which you will meet with the trustee and any creditors that choose to attend. Filing Chapter 7 Bankruptcy In Phoenix, Arizona Chapter 7 bankruptcy is what most people think of when they hear the word “bankruptcy.” It clears away unsecured debts like credit cards, medical bills, and personal loans. To qualify for such an enormous benefit, you must meet one of two income requirement tests. The first is a comparison of your income to Arizona’s median income based on your household size. For a single individual, this is $55,839 per year. If you are married or have one minor child, it is $69,975. This increases to $75,560, $85,714, $94,714, and so on, for each additional family member. Only a spouse and children under the age of 18 count as family members for bankruptcy calculation purposes. If you make more than the Arizona median income for your household size, you will need to qualify for Chapter 7 bankruptcy using the Means Test. The Bankruptcy Means Test in Arizona is a bit more complicated than comparing your income to the state median income. If you aren’t paid on a salary basis, you will first find your average monthly income over the previous 6 months. Then, you will subtract necessary expenses from your average monthly income. This includes a wide variety of expenses, like rent or mortgage payments, utilities, student loans, child support and spousal maintenance, taxes, and more. The number you calculate, which represents how much spare income you have that could be used to pay your debts, is known as your disposable monthly income. If this number is negative, or falls within Arizona’s limits, you can file Chapter 7 bankruptcy. If you can’t qualify under either of these methods, you will need to instead file Chapter 13 bankruptcy. Qualifying For Chapter 7 Bankruptcy in Arizona Another major concern besides income qualification when filing Chapter 7 bankruptcy is protecting your assets. Each state has its own bankruptcy exemptions, which represent how much equity you can hold in certain asset categories. Unlike some other states, Arizona doesn’t allow for use of federal bankruptcy exemptions. Your bankruptcy trustee has the right to seize any assets that aren’t protected by exemptions to sell and pay your debts. They also have a great incentive to do so, as they also receive a percentage of the proceeds. The homestead exemption, or the exemption used to protect your house, RV, etc., is $150,000. For motor vehicles, the exemption in Arizona for married couples is $6,000 each for two vehicles or $12,000 for one vehicle. The exemption for household goods and furnishings is also $6,000. For engagement and wedding rings, the Arizona exemption is $2,000. Only $20,000 of life insurance proceeds are protected in an Arizona Chapter 7 bankruptcy. However, all child support and spousal maintenance payments are exempt. One important Chapter 7 bankruptcy exemption to note in Arizona is for bank accounts. Arizona only allows $300 on the day of filing for an individual, and $600 for a married couple. This means carefully timing your bankruptcy petition to make sure there aren’t nonexempt funds in your account on the day of filing. Contact our firm for your free consultation if you need additional information about Arizona’s bankruptcy exemptions. Filing Chapter 13 Bankruptcy In Phoenix, Arizona Chapter 13 bankruptcy is usually available to those whose income exceeds Arizona’s Chapter 7 income limits. It reorganizes debts into a payment plan that is divided and paid off in four categories of debt. For someone who qualifies for Chapter 7 bankruptcy, the payment plan will last 3 years. For those who don’t, it lasts 5 years. You are safe to keep paid in full assets in a Chapter 13 bankruptcy because you will be paying off most of your debts in your payment plan. Only some of your unsecured nonpriority debts may be discharged at the end of your payment plan. So if your assets aren’t protected in a Chapter 7 bankruptcy, you may want to consider filing Chapter 13 instead. If I Transfer a Non-Exempt Asset To a Relative Or Non-Filing Spouse, What Happens If My Chapter 7 Bankruptcy Trustee Finds Out? Some resourceful Chapter 7 filers consider the idea of transferring an asset such as a vehicle or real estate to a loved one that won’t be included in the bankruptcy before filing. This might seem like a creative solution to the issue of non-exempt assets being taken in a Chapter 7 bankruptcy to pay creditors. But your bankruptcy trustee will have an eye out for these types of maneuvers. The trustee can review 2-4 years of prior transfers to make sure you haven’t hidden any assets that could be used to pay debts. It’s always best to be honest and give full disclosure of prior property transfers on your bankruptcy petition. Your bankruptcy trustee may “claw back” preferential payments to your family members, as well as recover any other property like a vehicle or expensive watch. If the transfer was money, but the money is now gone, you will most likely be required to pay that sum to the trustee or face case dismissal. In serious cases, you could even be charged with bankruptcy fraud, which would result in massive fines and even prison time. Protect Your Interests With a Dedicated Phoenix Bankruptcy Attorney Whether or not you’ve made a “creative” transfer in recent years, it’s always best to proceed with the guidance of a professional when it comes to bankruptcy. And if your bankruptcy trustee catches you in a sketchy transfer, your case could be dismissed and make your financial situation even worse. You could even face felony charges for lying on your bankruptcy petition. Make sure your petition is filed in accordance with state law by filing with a knowledgeable and experienced bankruptcy attorney. Our team of Phoenix and Tucson bankruptcy attorneys has collective decades of experience helping our clients achieve their bankruptcy goals and move forward with a fresh start. Furthermore, we will guide you through each step of the process, starting with your free initial consultation. Our free consultation is confidential and is the perfect opportunity to have all your questions about filing bankruptcy in Arizona answered. It’s also your opportunity to interview us. During your free consultation, we will check your bankruptcy qualification, as well as see if you qualify for our Zero Down Bankruptcy Payment Plan. Let us know when is most convenient for you through our online form or at 480-833-8000; telephone appointments available.     Arizona Offices: Mesa Location: 1731 West Baseline Rd., Suite #100 Mesa, AZ 85202 Office: (480) 448-9800 Email: info@myazlawyers.com Website: https://myazlawyers.com/ Phoenix Location: 343 West Roosevelt, Suite #100 Phoenix, AZ 85003 Office: (602) 609-7000 Glendale Location: 20325 N 51st Avenue Suite #134, Building 5 Glendale, AZ 85308 Office: (602) 509-0955 Tucson Location: 2 East Congress St., Suite #900-6A Tucson, AZ 85701 Office: (520) 441-1450 Avondale Location: 12725 W. Indian School Rd., Ste E, #101 Avondale, AZ 85392 Office: (623) 469-6603 The post Can I Put My Property In My Spouse’s Name & File For Bankruptcy In Arizona? appeared first on My AZ Lawyers.

 Bankruptcy Deadlines must be observed! The recent case of In re U-Haul, 21-bk-20140, 2021 Bkr LEXIS 3373 (Bankr. S.D. W. Va. Dec. 10, 2021) demonstrates this rule. In the U-Haul case, a creditor needed to file a proof of claim for $53 million and their attorney  waited until the last moment to do the filing. Unfortunately the attorney  did not have the proper password and the proof of claim was filed approximately 9 hours late.Counsel for the Debtor objected to the late filed claim. Creditor counsel argued “excusable neglect” (the argument usually made by attorneys  when deadlines are missed see  Pioneer Inv. Servs. v. Brunswick Assocs. Ltd P’ship, 507 U.S. 380 (1993)) and creditor counsel lost. For those that do bankruptcy work on a day to day basis, this is a painful case to read. A lesson for all lawyers is to prepare for deadlines, observe deadlines, do not wait until the last minute to file and prepare and plan for the unexpected. Jim Shenwick, Esq.

What Does the Bankruptcy Trustee Investigate? Every person considering filing Chapter 13 bankruptcy or Chapter 7 bankruptcy is concerned about running afoul of the Trustee. You’ve probably heard that the Trustee has the power to seize your assets or dismiss your case. This is true, under certain circumstances. Learn from noted Philadelphia bankruptcy lawyer David M. Offen who the bankruptcy Trustee is, what their duties are, how and when you and your attorney interact with the Trustee, and how your bankruptcy lawyer helps you navigate the bankruptcy process and provide everything the Trustee requires so that you have a successful bankruptcy filing. Call us if you have any questions. You can discuss your concerns with us free of charge. We have over 20 years of experience helping our clients satisfy the Trustee and successfully complete their bankruptcy case. We can help you too. What the Bankruptcy Trustee Is A bankruptcy Trustee is an officer of the Department of Justice appointed by the United States Trustee to represent each debtor’s estate in their bankruptcy proceeding. Bankruptcy Trustees evaluate debtors’ cases and investigate, make recommendations, and take action in accordance with the United States Bankruptcy Code. What a Bankruptcy Trustee Investigates in Chapter 7 The Chapter 7 Trustee has many duties, among them inspecting the debtor’s filing, inspecting creditors claims, confirming the identity of the debtor, and holding the 341(a) Meeting of Creditors. Without the approval of the Chapter 7 Trustee, no one can complete a Chapter 7 case and receive a discharge. These are the questions that trip up Chapter 7 debtors the most: Did the Debtor Pass the Chapter 7 Means Test? The Chapter 7 Trustee’s first obligation is to confirm that the debtor is eligible to file Chapter 7. The Trustee examines the debtor’s completed and filed means test as well as the financial information and documentation the debtor provides. If the Chapter 7 Trustee has concerns or requires further information or documentation, they will contact the debtor’s attorney or ask for what they require at the 341(a) Meeting of Creditors. If the Chapter 7 Trustee finds that the debtor is ineligible to file Chapter 7, they will recommend either case dismissal or case conversion. That is why before you file for Chapter 7 your attorney wants to make sure that you pass the means test, or have very special circumstances that would permit the Chapter 7 to proceed even if you do not pass the means test. Does the Debtor Have Nonexempt Assets? Another of the Chapter 7 Trustee’s primary duties is to protect the interests of creditors. If the debtor’s attorney has applied all applicable exemptions and there are non exempt assets left over, the Chapter 7 Trustee has the power to seize and sell those assets for the benefit of the debtor’s creditors. If there are no such assets, the Trustee files a Notice of Abandonment with the court. If there are no non-exempt assets that you wish to keep, then your attorney may recommend that you file for bankruptcy protection under Chapter 13. Is the Debtor Entitled to Chapter 7 Discharge? The final and perhaps most crucial step the Trustee takes is to determine whether the debtor is entitled to a discharge. The Chapter 7 Trustee may object to discharge if: The debtor has previous recent bankruptcy filingsThe debtor filed bankruptcy in bad faith (example: to unreasonably delay creditor action)The debtor lied on their petition or schedulesThe debtor lied under oath at the 341(a) Meeting of CreditorsThe debtor failed to disclose incomeThe debtor failed to disclose assetsThe debtor attempted to conceal or destroy propertyThe debtor incurred debt fraudulentlyThe debtor incurred debt in contemplation of filing bankruptcyThe debtor failed to cooperate with the Trustee’s requests  What a Bankruptcy Trustee Investigates in Chapter 13 In addition to what the Chapter 7 Trustee investigates, a Chapter 13 Trustee must verify that the debtor has sufficient income to fund their plan, that the debtor’s creditors are receiving as much through the plan as they could have gotten had the debtor filed Chapter 7 and had nonexempt assets, and the value of any property affected by the plan, such as a car or real property. What a Bankruptcy Trustee Has Access To A bankruptcy Trustee has access to the debtor’s complete filing and has the power to demand just about any kind of supporting documentation of the debtor. The Trustee can also subpoena third parties to testify under oath about the debtor’s finances. Because the Trustee has wide-ranging power, there is little a debtor can do to hide income or assets or cover up fraudulent behavior. Failing to Divulge Information in Bankruptcy Failing to divulge all financial information in their bankruptcy filing is the most common way debtors fall afoul of the Trustee. Often what looks like fraud or nondisclosure to a Trustee is simply a mistake or oversight by the debtor.  An experienced bankruptcy attorney helps a debtor avoid any such question or allegation by discussing their financial situation in detail and planning well in advance of actually filing.  Things Bankruptcy Trustees Look for at the Meeting of Creditors The Trustee requires proof of identity such as a driver’s license and Social Security card, and will ask some or all of the following questions, among others: Is the address on the petition your current address?Is the signature on the petition, schedules, statements, and related documents your own (pointing to your filed documents)?Did you review these documents before you signed them?Are you personally familiar with the information contained in your filing?Is the information contained in your filing true and correct to the best of your knowledge?Are there any errors or omissions in your filing that you want to bring to my attention at this time?Are all of your assets identified on the schedules? Have you listed all of your creditors on the schedules?Have you previously filed bankruptcy? If so, when?Who is your current employer?What is the address of your current employer?What do you do for your employer?Have you filed any amendments to the recent tax returns you provided to me?Do you have a domestic support obligation? If so, to whom?Are you current with your domestic support obligation?Have you read the Bankruptcy Information Sheet?Do you own or have any interest whatsoever in any real estate?Have you made any transfers of any property or given any property away within one year prior to filing bankruptcy? Does anyone hold property belonging to you?Do you have a claim against anyone or any business?Are you the plaintiff in any lawsuit?Are you entitled to life insurance proceeds?Are you entitled to an inheritance?Does anyone owe you money?Have you made any large payments to anyone including family in the year prior to filing?At the time of the filing of your petition, were you owed a tax refund from the federal or state government?Do you anticipate that you might realize any property, cash or otherwise, as a result of a divorce or separation proceeding? If the Trustee is dissatisfied with any response, they have the power to reschedule the 341(a) Meeting and demand additional information or documentation.  What if Creditors Show Up at the 341(a) Meeting? Creditors have the right to appear at the meeting and ask questions of the debtor under oath. This can happen if a creditor suspects that the debtor incurred debt fraudulently, asserts that a debt listed as unsecured is actually secured, or is hiding income or assets. For example, an ex-spouse may appear and ask the debtor about undisclosed income or assets, or a business partner of the debtor may appear to ask about company property or funds.  The debtor must answer the creditor’s questions truthfully or risk federal prosecution for lying under oath. Depending upon who the creditor is and what questions they ask, the creditor may take additional actions against the debtor such as filing an objection to discharge or an adversary proceeding to determine that the debt is nondischargeable.  If a Bankruptcy Trustee Suspects Fraud If a Trustee suspects fraud either through their own assessment of the debtor’s case or through the debtor’s responses to creditor questions, they have a number of ways to investigate and take action against the debtor, if warranted. Rule 2004 Examinations If a Trustee suspects fraud but does not yet have the evidence they need to object to discharge or move to dismiss a debtor’s case, they can compel the debtor to testify or to produce documents during an examination of the debtor allowed by Bankruptcy Rule 2004. The Trustee may ask about anything and everything having to do with the debtor’s filing, financial behavior before and during their bankruptcy case, and testimony under oath.   Objections to Discharge If a Trustee finds any evidence that the debtor is not entitled to a discharge, they may file an objection. Such evidence may fall short of fraud but may show that the debtor had a previous discharge shortly before filing this case, or that the debtor did not pass the means test. Adversary Proceedings If the Trustee finds evidence to support a finding of fraud, they may file a lawsuit against the debtor or a third party within their bankruptcy case. This lawsuit is called an adversary proceeding.  Again, two of the primary duties of the bankruptcy Trustee is to determine whether the debtor is entitled to discharge and to protect the interests of the debtor’s creditors. To these ends, the Trustee may ask the bankruptcy court to: reverse prepetition preferential transfersset aside prepetition fraudulent transfers obtain hidden or undisclosed property owned by the debtor revoke discharge if the debtor failed to disclose inheritance or other windfall received shortly after their bankruptcy case closedobtain property or funds from employees or officers who have wrongfully taken assets of a business that filed bankruptcyrecover property that has been wrongfully seized by creditors Refer Bankruptcy Crimes to the Office of the United States Trustee for Prosecution Bankruptcy fraud is a federal crime punishable by fines and incarceration. Examples of bankruptcy crimes a debtor may commit include: Knowingly concealing assets or incomeLying under oathBriberyEmbezzlementFiling a fraudulent petition or schedules Creditors in a bankruptcy case may also be prosecuted for fraud if they file a false claim or otherwise lie under oath. The Trustee refers bankruptcy crimes to the Office of the United States Trustee who in turn refers it to the United States Attorney, the Federal Bureau of Investigation (FBI), or other appropriate federal agency for prosecution in federal court. How a Bankruptcy Lawyer Helps Your Case This article is in-depth because as someone considering filing bankruptcy, you need to know what you may be in for. Many innocent debtors get caught up in Trustee allegations of wrongdoing or fraud because they did not know what the Trustee would be looking for and failed to plan for that. Let experienced bankruptcy lawyer David M. Offen guide you through the filing process so that your bankruptcy goes as smoothly as possible. During your initial consultation, Mr. Offen identifies any potential problems that the Trustee might spot and advise you as to how to deal with them in advance. Put his over 20 years of experience to work for you and get a fresh financial start. The post What Does the Bankruptcy Trustee Investigate? appeared first on David M. Offen, Attorney at Law.

Alternatives to Bankruptcy: Money Management Credit Counselling For high income people who can’t quite handle their debt, “credit counselling” can be an alternative to bankruptcy. Credit counselling services–the kind I’m talking about anyway–have agreements with the major credit cards on what payments they will accept through their program.  Professional and ethical standards for credit counselling […] The post Alternatives to Bankruptcy: Credit Counselling Debt Management by Robert Weed appeared first on Northern VA Bankruptcy Lawyer Robert Weed.

Stress May Be Your Heart’s Worst Enemy That’s a headline in today’s New York Times.   I pass that on because as a bankruptcy lawyer I see people defeated by the stress of debt’s they can’t pay.  Good people go for years dragging around bad debts they can’t pay, before they finally take advantage of the […] The post Stress and Your Heart by Robert Weed appeared first on Northern VA Bankruptcy Lawyer Robert Weed.

If you are struggling financially, you are likely researching your options. Should you try debt consolidation or file bankruptcy? Both options have pros and cons, which Philadelphia bankruptcy lawyer David M. Offen will explain in depth. If you have further questions, call the Law Offices of David M. Offen at (215) 789-4749 for your free, no-obligation consultation to discuss how your unique financial situation might best be solved. Debt Consolidation Explained Debt consolidation is the term used when an individual’s debts are compiled and then paid off over time, usually by a company providing this service. A debt consolidation company enters into contracts on your behalf with each creditor and pays them a pro rata share of what you pay the agency every month until the debt is paid. Sometimes creditors will accept somewhat less than you owe – this is called debt settlement. Be advised that you may incur some income tax liability if a creditor forgives part of your debt. This is not the case if you get that same debt discharged in bankruptcy. Debt Consolidation Loans If you have equity in your house or a high credit score and are looking to simply consolidate your debt into one monthly payment, you might consider taking out a debt consolidation loan. A debt consolidation loan will carry a much lower interest rate than any credit card and may make paying off your debt more affordable, especially if you have suddenly experienced financial hardship such as a reduction of work hours or job loss. A debt consolidation loan is not “debt consolidation,” which is a payoff plan brokered by a private company on your behalf. A debt consolidation loan pays off your creditors so that the debt is marked “paid as agreed” on your credit report.  If you can obtain a debt consolidation loan, it often carries less interest than the debt that you want to consolidate, so it is a money-saving option. However, a low credit score will preclude many people from being approved for such a loan. Advantages of Debt Consolidation One low monthly paymentInterest rate is often lower than the debts you are consolidatingOne due date – you don’t have to keep track of when multiple bills are dueThe fewer creditors you have, the more successful debt consolidation can be Issues with Debt Consolidation Your creditors are not required to participate in your debt consolidation plan, meaning that you may attempt to consolidate your debt only to have one or two creditors refuse and insist on being paid individually. If you cannot afford to pay these creditors as well as your monthly debt consolidation payment, they can still put your account in collections, harass you with phone calls and collection letters, and sue you. If they obtain a judgment against you, they can  levy your bank accounts, and in some cases, garnish your wages. If even one creditor does not accept the consolidation plan as often happens, and you can’t pay the creditor as well, then the whole approach of debt consolidation will falls apart  A debt consolidation plan, whether successful or not, negatively impacts your credit score because you are not paying these debts as you agreed in your contracts with individual creditors. This impact can last up to seven years on your credit report. Bankruptcy Explained Bankruptcy is a federal legal process through which individuals and businesses can reorganize their debt and get unaffordable debt discharged, meaning, they are no longer responsible for paying that debt.  Chapter 7 bankruptcy and Chapter 13 bankruptcy are most commonly filed by individual debtors. Businesses may liquidate through Chapter 7 or may file Chapter 11 to reorganize their finances. Advantages of Bankruptcy All of your creditors are legally required to comply with the bankruptcy process;The automatic stay prevents your creditors from taking collection actions against you, including phone calls, letters, lawsuits, garnishment, and bank account levies, as well as foreclosure and eviction;You are discharged of unaffordable debt such as credit cards, medical bills, and personal loans, and you may be able to get income tax discharged;You can legally surrender any unaffordable collateral, such as real property or a car that you do not wish to keep. People do this when, for example, their house has gone way down in value or needs a lot of repairs, or their car needs expensive repairs. You can then have the underlying debt discharged;You can pay off past due debt such as child support, spousal support, student loans, mortgage payments, and car loan or lease payments over time through a Chapter 13 plan;You can strip off second mortgages or HELO Cs as unsecured in Chapter 13;You can cram down your car loan to the current retail value of the car and pay that amount off in your Chapter 13 plan, at prime plus 1-3% interest;You can pay off your car lease balloon payment in your Chapter 13 plan. Filing for Bankruptcy In exchange for the protection of the automatic stay and opportunity to discharge unaffordable debt and catch up with past due debt, you must disclose your income, assets, expenses, and debts in your bankruptcy filing. To be eligible to file Chapter 7 you must pass the Chapter 7 means test. To file Chapter 13, you must show steady earnings or regular monthly income such as regular support from family members in an amount that covers your expenses and the monthly Chapter 13 plan payment. Which is Better: Debt Consolidation vs Bankruptcy There is no firm answer to this because every individual’s financial situation, including liabilities and goals, is unique to them.  Consider the advantages and disadvantages described in this article and discuss your situation with an experienced bankruptcy attorney. They will help you understand what each of these options offer you and whether you have additional options, such as taking out a home equity loan to pay your debt. You need to consider that if you take out a home equity loan and are unable to make the required payments, the creditor is permitted to file a mortgage foreclosure action against the home. You might also consider refinancing or modifying your mortgage, or pursuing debt settlement negotiations. How Either Affect Your Credit Score Both debt consolidation plans and bankruptcy have an impact on your credit.  Debt consolidation, even if successful, can remain on your credit report up to seven years, as can a Chapter 13 bankruptcy filing. Chapter 7 bankruptcy can remain on your credit report for up to ten years. That said, many who successfully file bankruptcy find that their credit score rises somewhat because their debt-to-income ratio improved dramatically following discharge. There are steps you can take to rehabilitate your credit following any action you take to deal with your debt situation. For example, you might take out a secured credit card, use it for usual expenses such as groceries, and pay it off each month to build credit. And while you are not eligible for the most advantageous interest rates, you might take out a car loan and by making those payments in full and on time each month, further build good credit. Talk with an Experienced Bankruptcy Attorney There is no one-size-fits-all solution to solving debt problems. You deserve to have your individual financial situation and goals assessed by a seasoned professional with over 20 years’ experience helping people solve their debt problems. Call us today and discuss your case, free of charge. The post Debt Consolidation vs Bankruptcy appeared first on David M. Offen, Attorney at Law.

Life is full of regrets, big and small. Generally speaking, the most regrettable behavior results from poor planning or a simple...