Category: Bankruptcy

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If a homeowner has passed due HOA fees and must file for bankruptcy under chapter 7 or chapter 13, then consulting bankruptcy lawyers is important. You need to be aware of the HOA fees which will be due after the bankruptcy filing and what your responsibilities are regarding the same before and after the bankruptcy filing. This can help you determine whether you should opt for bankruptcy or not.

As per lawyers of Los Angeles based bankruptcy law firm Recovery Law Group, when an individual is behind HOA fees, they have the option of either surrendering the property or clearing the dues through a bankruptcy discharge. However, the entire HOA fees are not dischargeable, i.e. any HOA fees due prior to bankruptcy filing will be discharged but that which will be due after bankruptcy will need to be paid.

According to U.S. Bankruptcy Code 11 U.S.C. § 523(a)(16), any fee for a Homeowner’s Association that becomes due after bankruptcy will exist and the fee due prior to the filing of a bankruptcy can be discharged along with other debts of the debtor. However, many times the homeowners surrender the property in bankruptcy, or move out and assume that they aren’t responsible for HOA dues. Receiving a letter of the huge amount of pending HOA dues comes as a rude shock to them since along with HOA dues; you will also end up paying lawyer fees and late fees. A better option is to continue living there and paying the HOA fees until the property is foreclosed or some other solution comes into effect. An alternate solution is to short sell the house and move out of it.

You need to pay the HOA fees prior to bankruptcy filing if you wish to retain your home. This is essential as HOA can place a lien on your home which can later be enforced through foreclosure. As a result of this, you might end up losing your home to HOA foreclosure despite being current on your mortgage payments. Thus, HOA payments are extremely essential and should be kept in mind, especially if you are filing for bankruptcy. if you are planning to get rid of debts through bankruptcy it will be beneficial if you call at 888-297-6023 and discuss your case with experienced bankruptcy lawyers.

Many times, business owners end up filing for personal bankruptcy when their LLC or corporations fail. This is a shock as the creation of LLC was primarily done to avoid having any personal liability to business debts. Los Angeles based bankruptcy law firm Recovery Law Group states that many options are available for people with personal business debt. You can choose your bankruptcy option depending on whether your business is LLC, corporation or sole proprietorship; what’s your personal liability for business debts and what are your future expectations regarding your business.

If you have a corporation that has liability for certain business loans apart from some commercial leases, no assets and you no longer wish to continue running it then bankruptcy can be a way out. to make sure that you are not held liable personally for any of the business’s debts (since you were the guarantor for these debts), you will need the assistance of expert lawyers. You can seek to consult with experienced bankruptcy lawyers by calling 888-297-6023.

• Chapter 7 bankruptcy

People with low income can qualify for this bankruptcy chapter. You can protect most of your assets and get a quick discharge of debts too. It will also clear you of personal liability of corporation’s loans, leases apart from any medical or credit card debt you have. The corporation will remain liable for business debt, for which you need to file a business chapter 7 bankruptcy. You can also consult a CPA regarding revoking your S-Election for becoming a C-Corporation before the bankruptcy filing. This way you can get debt income forgiveness within the business.

• Chapter 13 bankruptcy

If you wish to protect your assets, have debt under $ 1 million and an income which makes you unable to qualify for chapter 7, then chapter 13 is the best chance. Additionally, you can also let go of any personal liability for your corporation’s leases and loans, however, this can be done after completion of your 5-year repayment plan. Reorganization of debts takes place in this case through which you can repay part of your debt unlike liquidation of assets (as in chapter 7). You can also consult your CPA with respect to the advantages of withdrawing your S-Election to become a C-Corporation so that you can ask for forgiveness of debt income inside the business.

• Chapter 11 bankruptcy

In case your income is above the state median and your debt over $1 million, you cannot file for chapter 7 or chapter 13 bankruptcy. Chapter 11 bankruptcy is the only option for you. you can get rid of the corporation’s debts and pay some portion of the debt through the Chapter 11 plan.

To protect yourself from personal liability of business debts, you need to consult experienced bankruptcy lawyers. They will help you decide the best course of action to get rid of unsurmountable debts.

Filing for bankruptcy is an excellent way to not just get rid of your debts but also to stop collection actions by creditors. Wage garnishment is something that people fear the most. One of the major concerns people have while filing for bankruptcy according to lawyers of Los Angeles based bankruptcy law firm Recovery Law Group is whether bankruptcy will stop future wage garnishments or not and if it can also help you get back wages which were garnished earlier.

If the wages are not being garnished as a result of unpaid student loans or child care payments, then bankruptcy can prevent future wage garnishment as well as get earlier garnished wages back. However, there are certain conditions attached to it, like:

• Wage garnishment must have taken place within 90 days prior to the bankruptcy filing and should be $600 or more.
• Exempt wages once returned to you

In case these two conditions are fulfilled, you need to decide whether you want to get the garnished wages back, as you are required to file adversary proceedings within the bankruptcy case. This will amount to additional lawyers’ fees. If the attorney fees are more than the wages being exempted, it is not worth the time and money.

It is important to make the decision before filing for bankruptcy as garnished wages would be included on your bankruptcy schedule and then they need to be exempted. It is important to note that garnished wages will not be returned immediately and will take some months to be returned.

Alternately, you could recover garnished wages through a demand letter to the creditor. An attorney well versed with bankruptcy laws knows that these funds need to be returned to you else adversary proceedings will be filed. However, since adversary proceedings can be filed only till the bankruptcy case is open, you need to file the papers accordingly. Here it is important to note that chapter 7 bankruptcy ends within 120 days!

If the wages were garnished from your pay and not sent to the creditor then they must be with your employer. In such a case, once the employer receives notice of your bankruptcy, they should reverse the garnished wages to you; but you will be able to keep them only if they are exempted in bankruptcy. If wage garnishment is one of the reasons for a bankruptcy filing, you need to contact a bankruptcy attorney. Call 888-297-6023to to discuss your case with experienced bankruptcy lawyers.

Call: 888-297-6203

The Fair Credit Report Act (FCRA) controls what the creditors report to credit bureaus. They are required to report the information accurately. After getting your bankruptcy discharge, the creditors should report the discharged debts as discharged during bankruptcy and have zero balance. Dallas based bankruptcy law firm Recovery Law Group says that the best way to check that your creditors have reported the information accurately is to check your credit report after 30-60 days of receiving a discharge. You need to check all three credit bureau reports for any discrepancy in accounts included in bankruptcy and that they are showing zero balance after a bankruptcy discharge.

In case any creditor reports the status of your accounts incorrectly, you should dispute through FCRA. It is mandatory for the creditor to mention any debts included and discharged in bankruptcy with zero balance. Incorrectly representing them as having balance, late, being active, charged-off or as new debt should be reported to FCRA. In case you file for Chapter 13 bankruptcy, your debts don’t appear as included in bankruptcy with zero balance till the time you get your bankruptcy discharge. This takes place after the end of the repayment plan (5 years). However, as per the credit agreement, after you file for bankruptcy, the creditors stop reporting the debt to credit bureaus. In case they continue reporting, it should be as per the confirmed chapter 13 plan. This results in a slow and steady improvement of your credit report before even you get a discharge. Any dispute can be brought up through FCRA.

There are rules as to how creditors should report any debt that has been included in chapter 13 bankruptcy. In case you are contemplating bankruptcy, a lawyer will help you decide whether Chapter 7 or chapter 13 would suit you better. You can consult with experienced bankruptcy lawyers at 888-297-6023to discuss your case.

Filing for bankruptcy should be taken seriously, and should not be undertaken unless it’s the only option. It is a complex process, thus, it is advisable to hire a competent and extensively experienced bankruptcy lawyer, who can successfully help you to avoid bankruptcy. A lawyer will help in negotiation with the creditors and also in creating a more feasible repayment plan. He can also help you in learning about your consumer rights and can let you know about any statutes of limitation that might be applicable to your debts.

Student Loan Debt

In bankruptcy, obtaining relief from student loan debts is more challenging than other types of debts. In such a case, a good bankruptcy attorney can better assess the chances of having the debt discharged, and can also talk to federal and private student loan providers to avoid bankruptcy or restructure a more feasible repayment plan.

Save Yourself from Debt Consolidation Companies

Financial binding can compel you to give in to the temptation of debt consolidation. Debt consolidation companies are very good at taking advantage of the vulnerability of financially struggling consumers. Many of such companies mislead you with their ‘too good to be true’ claims and also promise you to quickly fix your financial problems.

Ways to Avoid Bankruptcy

Given below are some key ways to avoid bankruptcy as per the U.S. News and World Report.

• Have a negotiation about your debts with your creditors.
• Request your family and friends to lend you some money.
• You can sell your real estate or jewelry.
• Restructure your mortgage in case you own a home.
• Make sacrificial lifestyle changes, like going on trips less often or not at all.

However, in case bankruptcy is your only option, create a property protection plan with your bankruptcy lawyer, and not by yourself. You might end up making unintentional fraudulent transfers of assets or hiding them. Thus, consulting the best bankruptcy lawyers of Los Angeles & Dallas, TX, like the Recovery Law Group, will help you to protect your assets without going against the law. You can reach them at Recovery Law Group or at 888-297-6203.

Call: 888-297-6203

Emerging from bankruptcy might seem like an uphill battle to you. Filing for bankruptcy has a serious hit on your credit score and leaves a negative mark on your credit report for some years. Chapter 7 and Chapter 13 bankruptcy remain on the credit report for 10 years and 7 years, respectively. In many states, even the auto insurance rates increase because of a low credit score.

A low credit score does adversely affect the financial aspects of your life, but you can still work towards re-building them. Given below are 7 tips that can help you in improving the credit score, after declaring bankruptcy.

1. Make sure that you always make timely payments of your complete balance. Otherwise, late payments will stain your credit report for 7 years.
2. Use a secured credit card. You will be asked to make a deposit to act as collateral. This deposit will be returned to you, once your credit score gets improved or you close your account. Making timely payments will eventually make your credit score better, and this will make you eligible for getting a new credit card, having better features and rewards.
3. Showing regular and timely payments will have a good impact on your credit score. So, try to use your credit card at least once every month.
4. Multiple credit applications might decrease your credit score and will also increase the risk of overspending. Thus, keep only one credit card in use.
5. Your credit utilization should be low. It is the ratio of your balance to the credit card limit which should preferably be under 30%. So, in case, you have a credit limit of $1,000 each month, then you must not spend more than $300.
   Individuals, who are coping with Chapter 13 bankruptcy, can maintain a low credit utilization by getting a retirement plan loan. Such loans usually have a low rate of interest and credit bureaus don’t get to know about them. It should certainly be small enough to be easily paid back within 5 years, as unpaid balances are considered an early retirement distribution and are subjected to penalties and taxes.
6. Credit bureaus like it when you exercise restraint. So, keep your credit limit higher, since, though a lower credit limit may feel safer, it will eventually cause a rise in your utilization of credit. For example, your credit limit is $1,000 and you spend $400, then your credit utilization will be 40%. On the other hand, if your credit limit is $500, and you spend $300, the credit utilization will double to 80%, and this won’t impress the credit bureaus.
7. Open a savings account that will aid in making bill payments on time by setting up automatic payments. You can also create a small emergency fund. Making a budget, to properly understand and keep a track of the spending habits, will be an effective way for you to improve credit score.

Keep in mind that credit bureaus can also make mistakes. So make sure that you get a no-cost copy of your credit report and check it for any possible errors. There are chances that you might have been mixed with someone else with a similar name, or the report still shows the status of your closed accounts as open. Even identity theft can cause possible errors in your credit report. Such common mistakes can be corrected, and this will also improve your credit score immediately. So, it’s better to check the credit report consistently.

You can learn more about ill-effects of filing bankruptcy on the debtor’s credit score and ways to rebuild them by consulting one of the most experienced bankruptcy attorneys of Los Angeles, Dallas, TX, either at Recovery Law Group or at 888-297-6203.