Filing bankruptcy can be overwhelming. Suddenly you’re thrust into a world of legal terms and mounds of paperwork you can barely understand. Is there help available? There sure is! Whether you can afford to hire a bankruptcy service or not, you can find the help you need to make this important decision easier to make – and manage. Here are a few places to start:
Credit Counseling:
Credit counselors have been trained to help you delve through your financial record and determine if bankruptcy really is your only alternative. All-too-often overburdened people who don’t know how to handle bill collector’s panic and file for bankruptcy before they really need to.
A credit counselor can advise you as to any alternatives you may have including debt consolidation; how to have a portion of your debt forgiven and setting up repayment schedules with your creditors. In addition, they often offer help in setting up a budget and learning to stick to it.
Some credit counselors charge hefty fees for their services, but there are plenty of not-for-profit agencies throughout the United States eager to help those facing financial ruin. Check your yellow pages or local college or bank for information on any near where you live.
Debt Consolidation Services:
The purpose of these services is to help you consolidate your current debt into one lower monthly payment that is more easily managed. The danger to using these services is, that unless you also undergo intensive budget training you’re apt to be right back in financial trouble in no time. Be sure when consolidating that you use this opportunity to break the cycle of spending that got you into trouble in the first place.
Another option some services perform is debt forgiveness. They contact each of your creditors, and try to convince them to forgive a portion of your current debt – sometimes as high as 60% — with a promise of quick repayment. This is especially useful when consolidating debt since the less you have to pay back, the less you have to borrow in the consolidation loan.
Why would a creditor agree to take less than you owe? The answer is simple: if you indeed file bankruptcy, they aren’t guaranteed anything, or may have to settle for pennies on the dollar, so it’s in their interest t get as much as possible now. While many will not forgive actual debt, most will forgive all of those late fees and interest charges.
Bankruptcy Lawyers:
Once you decide to file bankruptcy, hiring a qualified lawyer who specializes in the field will ensure that your case is handled in the best possible way and your paperwork will all be filed properly. This is not the time to try and save a few bucks.
Hiring the wrong bankruptcy lawyer can cost you thousands in time and money in the long run. This is one of those times when you get what you pay for, so choose carefully – your financial future is at risk.
Bankruptcy help is available, if you take the time to look for and ask for it. Don’t try t go it alone. Get the help you need to ensure that you can move forward with the confidence that you can learn from your mistakes and move on…
I don’t know about you, but I’m tired of seeing those bankruptcy lawyer advertisements that say, “Low Cost,” “Cheap Bankruptcy,” and “$100.00 Starts.” For $100.00 dollars that lawyer will do nothing more than deposit your money into their business account. Always remember that advertising is advertising even when a lawyer does it. We just have more rules than the rest of the marketplace. I start with the fact that we must declare that,
“We are a debt relief agency. We help people file under the Bankruptcy Code,”
in all our advertising because Congress said so and the Supreme Court upheld this in a recent decision.
The truth is that there are costs that you must pay when filing bankruptcy. First, you must take a pre-filing credit counseling course that costs anywhere from $5.00 to $50.00 depending upon whether you’re filing a single or joint case, or on an emergency basis. There is also a post-filing financial management course that is required with costs in the range of $25.00 to $50.00. Then, there is your filing fee of $299.00 for a Chapter 7 case, and $274.00 for a Chapter 13 case. The total so far is over $300.00 and we haven’t even begun to talk about whether you’ll hire a petition preparer or an attorney.
Remember that you can file bankruptcy without a lawyer, but I suggest that you at least get a free consultation before you go it alone, or Pro Se. You can also find important information from our local court’s website to guide you along this process; just click on “don’t have an attorney?”.
You can hire someone to prepare your petition that is not a lawyer. A petition preparer service has pitfalls to it because they cannot tell you how to answer the questions and what information to include in your petition. Also on the court’s website, under news and publications, you can locate a list of enjoined petition preparers that have fowled up many a debtors cases. Be sure to do your research before you hire someone to prepare your petition for you.
If you decide to hire an attorney to represent you, be sure you meet with them personally. Many of these low cost starting campaigns are run by law firms that mill you through the process and have you work with non-lawyer staff. They’re a breeding ground for malpractice and you miss out on having an attorney review your entire financial situation to partner with you toward your strategic goal of financial freedom from your debts. You need a partner, not another creditor.
Caveat Emptor~~Buyer Beware!
Anyone who’s ever struggled to pay medical bills or put off a visit to the doctor for fear of how much it would cost can likely sympathize with James Richard Verone. If you don’t recognize the name, you may have heard of his now-infamous recent exploits. Reports note that:
While few people have gone to such lengths as Mr. Verone, many of us have found ourselves in the lurch when it comes to medical expenses and bills. In fact:
The good news is that medical bills are dischargeable in bankruptcy court. That means that people who file for Chapter 7 bankruptcy can, in many cases, expect to have their medical bills legally eliminated by the court.
In Chapter 13 bankruptcy, medical debt might be partially repaid as part of a repayment plan, but it might also be discharged.
The real irony of the case of the one-dollar bank robber is this: sources note that after he very peacefully “robbed” the bank, the teller who handled the event was so upset by the incident that she had to visit a hospital for treatment.
The visit, no doubt, was subsidized by her health insurance.
The Euro is weaker because the head of the International Monetary Fund is accused of “attempted rape, criminal sexual assault and unlawful imprisonment”.
Now, I know I’m naive, but I’d think that a guy smart enough to run the IMF would also be smart enough to avoid imprisoning the maid.
But I guess I’m just old-fashioned.
If your debts have become so large and unmanageable that you feel like you’re in over your head, you might be tempted to file for one of the three types of bankruptcies available to individuals and business owners in the United States.
After all, that would mean getting all of your creditors off your back so you can start over and build yourself up again. Although that could conceivably happen, the process doesn’t often unfold as quickly or as smoothly as you’d like.
In addition, any bankruptcies that you file will stay on your credit record for 7-10 years and will make it difficult for you to get loans or credit cards at reasonable interest rates during that period of time. In other words, you should consider a bankruptcy alternative before committing yourself to such a drastic step.
There are several bankruptcy alternatives that can help you pay off your debts while allowing you to maintain a reasonably comfortable lifestyle. The first thing you can try to do is negotiate with your creditors. You can either do this yourself or hire a professional credit counselor to do it for you.
Most of the time, you’ll find that your creditors will be more than happy to accept 75 or 50 cents on the dollar for the amount of your debt because they realize it’s better than getting nothing at all.
A second bankruptcy alternative that you should consider is refinancing your home. When you refinance your home, you’re basically getting a new loan to pay off your original one. Depending on how much equity you’ve built up, you might be left with enough cash to settle all of your other outstanding debts.
In addition, if your new loan has a lower interest rate than your old one, you’ll probably have lower monthly payments, too. There’s no question that refinancing your home is a great bankruptcy alternative, so be sure to check out this option thoroughly.
Refinancing is wonderful, but that’s assuming you own a home. If you don’t, you’ll have to continue looking for other bankruptcy alternatives, such as debt consolidation. There are lots of consumer credit counseling services that can help you with debt consolidation. Instead of paying your creditors directly, you’ll send a single payment to the credit counseling service and they’ll divvy up the money to all of the people or organizations you owe.
The credit counseling service might also offer you the chance to take out a personal loan, which doesn’t have to be secured by collateral. Depending on the interest rate, you might consider applying for one. If you’re approved, you’ll be able to pay off your high-interest credit card debts and save money that way.
Another sound bankruptcy alternative would be to downscale as much as possible. This means moving into a smaller house or apartment, taking on roommates, driving a less expensive car, selling off any assets that you can part with, etc. The more money you can scrape together on your own, the less additional debt you’ll have to incur in the future.
As you can see, there are several sound bankruptcy alternatives for you to choose from. Everybody makes financial missteps from time to time; however, you shouldn’t compound your problems by declaring insolvency and blowing off your creditors. Instead, choose the bankruptcy alternative that sounds the best for your particular situation and start working to repair your credit now…
Here’s a relatively simple, but common, question I was asked by email this past week. The writer makes payments on his daughter’s car titled in his daughter’s name. The writer (the parent) wants to file Chapter 13 bankruptcy and asks whether his monthly payment for his daughter’s car can be included in his expenses so as to reduce the amount of his monthly Chapter 13 plan payment.
The answer depends upon whether the parent signed the loan. If the parent co-signed the daughter’ s car loan then the parent may include as an expense the loan payment, maybe. The Chapter 13 trustee may challenge inclusion of the secured loan for a car which the parent does not use and which is not necessary. The extra car should not be paid for, in effect, by the debtor’s unsecured creditors. If the debtor’s plan pays 100% of his creditors then the car payment on the daughter’s car should not be a problem.
If the parent did not co-sign the loan then the parent’s monthly payment is in effect a gift to the daughter. The debtor cannot include the gift as an expense because the debtor has no legal liability of payment. Even if the debtor proposes a 100% repayment plan the Chapter 13 trustee may disallow the “expense” so that the creditors are paid back in shorter time.
You know Zimbabwe, right?
It’s the country that printed so much paper money that it became worthless.
But Zimbabwe was much more considerate than the Weimar Republic, which forced its citizens to use wheelbarrows to get money to the grocery store.
Zimbabwe issued bills of greater and greater denomination, and now has a 100 Trillion Dollar Bill!
Now, Zimbabwe has a new concern, and that concern is that U.S. money may become worthless because we’re printing so much of it.
Hey, Zimbabwe oughta know, right?
And in a public statement, public officials in Zimbabwe have said that the “days of the U.S. dollar as the world’s reserve currency are numbered.”
Question: I had a consultation today and I was advised that I should be paying 100% of my debts over 5 yrs due to a past bankruptcy. My total unsecured debts are $72,000 weekly take home income is $1475.00 only assets are 2 vehicles worth about the same or less than owing and $260,000 home with a $250,000 mtge, Does this sound right? all I have read about consumer proposals points to a lower payback.
Answer: Yes, that sounds correct. A single person in Ontario in 2011 is allowed to earn $1,926 per month. If you earn more than that you are required to pay half of the amount you are over (it’s called surplus income). If your take home pay is $1,475 per week, that’s $5,900 per month, so you would be $3,974 over the limit, requiring you to pay about $1,987 per month.
Since this is your second bankruptcy you will be bankrupt for a minimum of two years, and since you have surplus income your bankruptcy is extended for an additional year, so you would be required to pay $1,987 for 36 months, or about $71,532.
Since that is the total amount you owe, there is no chance that the creditors would accept less than that in a proposal (they would not accept a proposal if they would get more in a bankruptcy). You can read a more detailed explanation in this article on how much would my consumer proposal cost.