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13-Sep-2010

Posted by : Hunter Goff

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Can I Keep A Credit Card When I File For Bankruptcy?

Category : Bankruptcy

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The idea behind the bankruptcy law is to allow the honest debtor a fresh start financially by eliminating all of the debts owed by the debtor.

So, if you are filing bankruptcy, why would you want to hold on to one of your credit cards?

To me, it appears the answer is simple: Emergencies. Many people are afraid that if they don’t have access to a credit card, they won’t have funds for an emergency. This brings to mind my freshman year of college. As an 18 year old, I was taken in by that free t-shirt! I did ask my parents if I should get a credit card. Their answer, “It’s a good idea to have one for emergencies”. The only thing wrong with this statement, I found that I found myself in a lot more situations I felt qualified as “emergencies”, where I would use that dependable credit card.

No doubt, there are legitimate emergencies in life. And, it is nice to have a credit card there to help bail you out of an unexpected mess. But, wouldn’t it be even nicer if you could bail yourself out of that emergency situation? Why not take that fresh start you’re being offered through the bankruptcy process and use it to rid yourself of the mindset that credit cards are the answer to life’s emergencies? After all, once your debts are discharged through the bankruptcy, you are free to pay yourself a “minimum” payment of, say, $100/month and to send that payment to your savings account instead of sending it to the credit card companies. This will also allow you to focus on rebuilding your credit without falling into the same trap.

With a little consistency, you will have a nice emergency fund built up in no time. Refrigerator acting up? No need for a credit card. Need to fly across the country to visit your sister after an accident? Now you can make that trip with your emergency fund, and not be still be paying for that plane flight and the interest accrued on it a year from now.

The court requires that all people filing bankruptcy list every creditor they owe money to on their bankruptcy petition. When signing their petition, I advise all clients filing Chapter 7 or Chapter 13 that they are declaring they have done so under penalties of perjury. I am not an 18 year old college freshman anymore, so as much as I would like to think that my advice is being followed, I know that is not always the case.

I know, for example, that some clients have tried to keep a credit card out of their bankruptcy in the hopes that they could use it. Problem is, even if you don’t list a credit card in your bankruptcy petition, your creditors will know you’ve filed (they subscribe to services that flag accounts of their customers who file for bankruptcy) and they will deactivate the account. Then, you’ve got no credit card and no disclosure of the debt in your bankruptcy. Not good.

So, create your OWN emergency fund. One that will take your dependence off of that credit card to get you out of a jam and let you rely on yourself, putting you in control of your financial future.

Learn more about bankruptcy. Stop by K. Hunter Goff’s site where you can find out all about this bankruptcy lawyer and what he can do for you.

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10-Sep-2010

Posted by : Hunter Goff

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Considering Filing Bankruptcy? Here Are 5 Do’s And Don’ts To Consider

Category : Bankruptcy

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As an Orlando bankruptcy lawyer, I often find myself advising clients not to do things they were planning on doing before they came in to see me. After all, that’s why they are in my office, to get advice on how to handle their debt issues. Some of the actions they contemplate, if they did carry through with them, would result in disastrous outcomes for their bankruptcy. What follows are 5 quick Do’s and Don’ts for anyone considering filing bankruptcy.

1. DO: Disclose all of your assets and all of your creditors in your Petition

When someone files bankruptcy, they fill out a lot of paperwork known as the bankruptcy petition, which is prepared and filed with the Court by their bankruptcy lawyer. In that document, the Debtor (person filing bankruptcy), must acknowledge all of their assets and their debts. This is the core principal in bankruptcy, that everyone who files bankruptcy must provide full disclosure. Therefore, if you are filing bankruptcy, all of your possessions (no matter who purchased them originally) and all of your creditors must be listed on the petition.

2. DON’T: Contact the Trustee’s office if you have an attorney.

Recently I attended a “brown bag luncheon” (us bankruptcy lawyers aren’t the “wine and dine” type) with the Chapter 13 Trustee. At the luncheon, the Trustee made it very clear that if a client calls her office, only bad things could come of that call. In fact, she advised every Orlando bankruptcy lawyer to go back and tell our clients NOT to call her office. When a client calls in to the Trustee, their file immediately pops up on the screen. The person viewing that screen then looks for any little thing that may have gone unnoticed in the client’s case. Is a Plan payment a little late? Was there a tax refund that previously went uncollected?

3. DO: Keep your bankruptcy lawyer updated about changes in your Income during a Chapter 13 case

When you enter into a Chapter 13 bankruptcy, it can go on for up to 5 years. Think of a Chapter 13 as a partnership between you and your bankruptcy lawyer. To reach the intended successful outcome, each party must perform their duties. One of the obligations of a person filing bankruptcy under Chapter 13 is to ensure their bankruptcy lawyer is aware of any changes in their income, whether an increase, or decrease, during the entire case. While you may be hesitant to let your bankruptcy lawyer know about an income increase, you must keep in mind that it does not always result in an increased plan payment.

4. DON’T: Give away expensive assets you own before you file your case.

This may be the most important DON’T. You must admit, it doesn’t sound like something you should do, does it. Just re-read the statement after “Don’t”… As you see, it doesn’t sound like something you should do because it is not. The bankruptcy Court labels the transferring of property out of your name prior to filing your bankruptcy case FRAUD. Let me repeat, DO NOT remove property from your name prior to filing bankruptcy, no matter which family member or friend tells you it is a good idea.

5. DO: Be honest and Disclose

Disclosure is always important when you are talking about the law. People filing bankruptcy are better off listing everything on their bankruptcy petition, so when it doubt, disclose. If you are uncertain about whether or not something really counts as an asset, it is better to be safe than sorry. In other words, list it. It may be that it is not something important and nothing was lost by your disclosure. However, there is a great deal to lose if the Trustee appointed to your case finds out about something that you didn’t list, and decides that you were trying mislead the court with your non-disclosure. In which case, you could have gotten yourself into a real mess. So, let your bankruptcy lawyer know everything.

While there are many, many more Do’s and Don’ts when filing bankruptcy, these 5 will get you well on your way to a successful bankruptcy case.

Looking for help with filing bankruptcy? Then visit www.khuntergoffpa.com to find the best Orlando bankruptcy lawyer for you.

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04-Sep-2010

Posted by : Hunter Goff

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Who Pays The Debt? Credit Cards In Divorce And Bankruptcy

Category : Bankruptcy

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A sad truth that any bankruptcy lawyer can tell you is that filing for bankruptcy and filing for divorce go together like peanut butter and jelly. As an Orlando bankruptcy lawyer, I have represented clients with money problems for many years and can tell you that many people file bankruptcy as a result of a divorce.

The issue of divorce and bankruptcy is so common with my clients, and the two are linked so well, I will be publishing more articles on the matter. However, this article will be devoted to the effect of filing bankruptcy and filing for divorce has on an individual spouse and any credit card debts they may owe.

The most important thing to remember when discussing divorce and credit card debt, is that the only ones party to your divorce are you and your spouse. That is, a third party, like your and your spouse’s creditors, are NOT part of your divorce proceedings and consequently, are not obligated to abide by your marital settlement agreement.

It is normal for couples who are separating to specify which of them will be obligated to pay for each of the marital debts once the divorce is complete. To bind them to these terms, the spouses sign a marital settlement agreement. While the ex-spouses are bound by the terms of the agreement, the creditors in question depend solely on their credit card agreement, car loan, mortgage, etc. that each spouse signed when credit was given. To be honest, your creditors do not care how you distribute your debt obligations between you when you split up, they just want to be paid, and they are supported by law.

You see, in the end, no matter how you and your ex determine who is taking over which debt, if you each signed the credit agreement, you will each continue to be responsible for the debt.

Should one the the ex-spouses discharge their debts by filing bankruptcy, the other spouse, who has not filed for bankruptcy will continue to be legally bound by the credit agreements and therefore liable for the debts, no matter what the marital settlement agreement said. To get rid of their debt liability, the non-filing spouse must either try to work something out with the creditors, or filing bankruptcy themselves is also an option.

Bankruptcy and Divorce invite many complex legal issues. Over next weeks and months I will be discussing the common issues faced in Bankruptcy and Divorce in my blog.

If you are considering filing bankruptcy, you probably have a few questions, please check out my FREE E-COURSE.

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31-Aug-2010

Posted by : Hunter Goff

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What Can Credit Card Companies Do If I Stop Paying My Credit Card Debt?

Category : Bankruptcy

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As an Orlando bankruptcy lawyer, one of the first things I advise my clients to do when they decide they are filing bankruptcy and hire me is to stop paying on their credit cards. Recently, though, before I could offer that advice, a client asked me: “What happens when I stop paying my credit cards?”

The short answer is, the collection process will begin. It usually goes something like this:

1. You will receive frequent phone calls from the original creditor, as will your family and your employer, attempting to convince you to make a payment over the phone. The collection agent will try to intimidate you, by saying they will ruin your financial life unless you pay up.

2. In about 90 days, your original creditor will give up and sell your account to a debt collector. This third party agency will then repeat the actions above.

3. Then, around 180 days from the time you stop making payments, you may hear from an attorney. This attorney will simply try to collect on the debt, following the same protocol in 1 and 2 above.

4. Finally, the attorney may file a lawsuit against you seeking a judgment that would allow the creditor to attempt to collect on the judgment. By the way, then, and only then, can your wages be garnished.

Kind of a long process until a judgment is obtained, right? Over 6 months from the time payments stopped being made if I added correctly. So why, as a bankruptcy lawyer, do I advise my clients to stop paying on credit cards when they hire me?

Because the idea is for my client to be filing bankruptcy sometime well before the judgment is entered. Garnishment is taken out of the equation. This way, my client uses the payments they would have made to an abusive debt collector, for a credit card debt, to catch up on a car payment or a house payment they want to keep through filing bankruptcy, or to start building that safety net their Orlando bankruptcy lawyer advocates creating as part of your fresh start strategy when filing bankruptcy.

As for those rude and abusive debt collectors, why not sue them? You see, here in Florida, we have some of the toughest laws in the country to protect consumers. These laws are intended to protect you from the abuse described above, which debt collectors use on a regular basis to coerce you into paying your debt. Aside from the Florida laws, there is also a Federal Law which prohibits third party debt collectors from those same abusive acts. To enforce your rights, you can sue your creditors.

If you let it be, the collection process can be an intimidating experience. But, if you know how it all works, and you know your rights, it can empowering one. Once you recognize the hollow threats tossed around by debt collectors for what they are, and they become laughable; and are often actionable in court.

Check out my Free eCourse to learn more about how an experienced bankruptcy lawyer can help successfully navigate you through the debt collection process and help you get a fresh start financially.

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27-Jan-2010

Posted by : Amber Deanwater

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The Pros and Cons of Bankruptcy

Category : Bankruptcy

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If you are considering bankruptcy, you should research all aspects of the process and the possible outcomes. This article is meant to be a very brief summary of the pros and cons of bankruptcy.

If you are having trouble making ends meet, you might be considering bankruptcy as an option to getting out of the financial tailspin in which you find yourself. This option may be for you; however, prior to jumping head first into this process, you should perform some research to make sure you really understand what bankruptcy is and how it will affect you.

Bankruptcy is a legal process whereby a person or company files bankruptcy in the Bankruptcy Court to obtain relief from their financial situation. This is normally done voluntarily and as a result of being unable to pay their creditors. Depending on which chapter of bankruptcy a person files, the person seeks either to have the debt discharged so he can begin fresh (Chapter 7) or the person seeks to reorganize, keeping his assets but arranging a payment plan to pay back his creditors (Chapter 13).

The primary reason people consider bankruptcy is so they can begin anew. The completion of the bankruptcy will mean that the debtor can take a step back from the financial chaos that was consuming his life and start over. Thankfully, this means there will be no more threatening letters and phone calls. And, hopefully, the bankruptcy will leave the debtor in a position whereby he will be able to live within his means.

There are, however, some misconceptions related to bankruptcy. For starters, bankruptcy should not cause you to lose your job nor your social security benefits. Also, though your credit score most certainly will take a huge hit, it can be repaired.

It is important to note that as soon as your credit score plunges downward, you will find it extremely difficult to obtain any type of credit products. It is also important to understand that a bankruptcy can remain on your credit report for up to ten years.

Depending upon which chapter of bankruptcy you file, you may lose some of your assets. There are, however, some assets which are considered exempt. A bankruptcy attorney will discuss this with you when you meet with him.

You should also consider the cost involved. To begin with, there is a filing fee which must be paid when the case is filed with the Bankruptcy Court. Also, there are attorney’s fees. These can range anywhere from $1,000 to $2,000, or more. So, it makes sense that if your total debt is just a few thousand dollars, you might want to negotiate a payment plan with your creditors rather than file bankruptcy.

If you are considering bankruptcy, you should obtain professional advice from a bankruptcy attorney prior to moving forward. A bankruptcy attorney can explain the different chapters of bankruptcy and will be able to recommend which one you should file.

Lexington Law Fixed this Man’s Bad Credit and Raised His Score by 163 Points. See Why it Works at www.lexingtonlawreviews.com.

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22-Jan-2010

Posted by : George Jones

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Is It Possible To Pick Up A Credit Card Following Bankruptcy?

Category : Bankruptcy

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In spite of the stigma and possible embarrassment of filing for bankruptcy, many folks have mitigating circumstances that make it often their only option to bypass repeated court proceedings against them. One thing that often worries these people is the obtaining of a Credit Card after Bankruptcy.

However regardless to what some may think obtaining a credit card after bankruptcy isn’t impossible. There are companies willing to provide this although normally you can expect high interest rates and additional annual fees.

Did you know that once you have filed bankruptcy you cannot do so again for an additional seven years? This is why you will find some companies willing to provide you with a credit card.

Thanks to this credit card companies have a legal recourse to use to collect any debts the credit card holder may end up with. Credit card debts are normally unsecured, however when someone cannot file bankruptcy, wage attachment can be used by the company to get back their money.

Although these credit cards are available after bankruptcy they can be a risky option for some. Not only will you be dealing with higher interest rates but you will be charged on late payments and this can quickly add up.

Credit cards after bankruptcy are very often offered by companies supposedly as an option to help rebuild ones credit rating. People will very often pick these cards up in the hope of getting back on their feet. This is despite the fact that total annual fees can sometimes even equal that of their initial credit limit.

For some things quickly get worse and worse

Here is a little example for you: Say a person has a credit card after bankruptcy with initial fees of $290 with an initial credit limit of $300. If this person is even one day late with a payment he or she could be looking at a late fee of around $30!

In turn this would push-up the liability to $320 which would cause another $30 fee for being over the limit, this means that the credit card holder would now have a debt of $350!

On top of all this since you have failed at this point in your obligations, your interest rate on your card can very quickly go to the maximum allowed by law.

You also would have no way out except to pay the balance on the card and some companies will make the demand that the balance be paid in full within 30 days or face collection action.

Daily phone calls, court proceedings, you name it, from here on in things can really get ugly and fixing the mess often takes several years.

So as you can see although it is possible, it comes with some possible hefty consequences! The bottom line is, it will depend on your situation and your ability to keep in check on your payments as to whether it would be for you or not.

Was our Best Credit Card After Bankruptcy info useful? Take a look at our other How To File Bankruptcy info.

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