Category: Bankruptcy

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When you file for bankruptcy, your unsecured debts might be discharged eventually but your secured debts like a mortgage or automobile loan, etc. cannot be discharged. According to lawyers of Dallas based bankruptcy law firm Recovery Law Group, you can either reaffirm the debt, consolidate it or settle it. If you are thinking of reaffirming the debt, you need to work out an agreement with your creditor regarding new terms. The agreement would then be signed by both, the creditor and the debtor. However, before you go ahead with debt reaffirmation, it is important that you know about the pros and cons of the procedure.

Advantages of debt reaffirmation

• If you wish to keep your property, which is not exempted then you need to reaffirm the debt.
• Reaffirmation of your debt makes you aware of not only your payment amount but also your interest rate, etc.
• Reaffirming a debt helps improve credit rating since it shows sincerity on your part when you make regular payments on your debt.

If the item in question for the debt is anything other than car (electronics, furniture, etc.) you can opt for negotiation. The creditor might agree for payment of a lesser amount since if the debt is not reaffirmed, the property in concern will be auctioned which will end up being costlier to the creditor. The creditor might be open to renegotiation of terms than go through the process of auction.

Disadvantages of debt reaffirmation

• With the signing of the reaffirmation agreement, you again become responsible for the debt.
• The reaffirmed debt if not paid in the future would not be discharged through bankruptcy unless you file again (after a specific time period depending on the previously filed bankruptcy chapter).
• Defaulting on reaffirmed debt might result in wage garnishment by the creditor.

In case you are contemplating bankruptcy and there is any debt that you wish to reaffirm, you should consult with experienced bankruptcy lawyers at 888-297-6023 before doing anything.

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The Star Trek series has acquired legions of fans across the globe. Being inspired by the series, a Star Trek superfan, Tony Alleyne converted his apartment in the UK into a mock set of the Starship Voyager. Though it may seem eccentric, it was apparently a smart business decision. He hoped to attract other Star Trek fans to hire him as a decorator for their homes. Unfortunately, the business decision did not attract many clients and Tony ended up incurring a huge debt of £100,000. Since he had maxed out his 14 credit cards working on his pet project, he had to file for bankruptcy.

Even though the interior of his house was exactly like the ship featured in the Star Trek Series, Tony couldn’t help in saving his home. His apartment, listed on eBay, however, fetched him far more than the expected value (£425,000). Lawyers of Dallas based bankruptcy law firm Recovery Law Group inform that many times people end up filing for bankruptcy because of failure in business. Though Tony’s business plan sounds weird, but it cost him merely £130,000 to convert his home into Starship Voyager. He still ended up making a profit of £295,000! Even a single client’s home conversion would have landed him an annual salary more than that of the UK Prime Minister! This is something to consider and motivate other bankruptcy filers that life can be started again despite hitting a financial roadblock. To know more about your options during bankruptcy, you can call 888-297-6023 to consult experienced bankruptcy lawyers.

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When you file for bankruptcy, you are allowed certain exemptions to protect a certain amount of property so that you can start your life afresh. Generally, any item which is deemed essential for the debtor and their family is protected from creditors. These exemptions include homestead, personal property, retirement accounts, etc. Lawyers of Dallas based bankruptcy law firm Recovery Law Group inform that different states have varied levels of exemptions. In Florida, bankruptcy filers can protect $1,000 in vehicle equity, while financed vehicles can be kept through a bankruptcy case.

However, if you are trying to protect a luxury vehicle during bankruptcy proceedings, it won’t be possible. The rules change when the vehicle in concern has an unreasonably large amount of equity, protecting it under Chapter 7 bankruptcy is not possible. Reaffirming the debt for, say a Maserati, will be unreasonable in case of Chapter 7 bankruptcy. In the case of Chapter 13, you can keep high-value luxury vehicles, however, you need to undergo some tests:

1. Feasibility Test – It is used to test whether the repayment plan submitted for approval is reasonable or not. if you are not earning enough to support the payment for a luxury vehicle, then the plan becomes unfeasible. For example; while earning $1,200 per month, you cannot be allowed to contribute $700 for the monthly payment of your luxury vehicle.
2. The best interest of Creditor Test – Formally known as 11 U.S.C. § 1129(a)(7)(A)(ii), it requires that creditors get as much money in repayment as they would have got if the (protected) asset was liquidated in Chapter 7 bankruptcy. Thus, if you wish to keep a motorcycle, which otherwise you would not have been able to protect through exemptions, you would have to either hand it over to the bankruptcy trustee or pay an amount equivalent to its value to your unsecured creditors over the period of your repayment plan.

Though it may feel you end up losing everything when you file for bankruptcy, there are ways in which you can protect your vehicles, even luxury ones like expensive cars and motorcycles. However, to do so, you might require the assistance of skilled lawyers. To discuss your case with experienced bankruptcy lawyers, you can call 888-297-6023.

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Bankruptcy finds its origins in ancient text like Torah and Old Testament (Book of Deuteronomy, Chapter 15:1-2) and the Mosaic Law. As per the old story, all debts will be forgiven at the end of every seven years. The bankruptcy outlined by founding forefathers states the rights of individuals in courts. Lawyers of Los Angeles based bankruptcy law firm Recovery Law Group inform that even today, Chapter 7 bankruptcy discharge is given to debtors after the end of seven years only.

According to text available in the ancient text, a person who is relieved of debt should be provided a fresh start. This is because getting rid of debts without providing for their immediate future would result in them incurring new debts for surviving. This resulted in providing exemptions which help protect some amount of property so that they can start their life afresh. Understanding bankruptcy is not as simple as it appears. You should seek consultation with experienced bankruptcy lawyers at 888-297-6023 if you are contemplating bankruptcy.

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It often happens that people filing for bankruptcy jointly owe debts with other people. Whether these people are Authorized users or Co-debtors, determines their rights and obligations.

A co-debtor is a person who signs a debt with another person. This means that a co-signer is a co-debtor. There is a separate section for co-debtors in all the bankruptcy petitions.

In bankruptcy, your personal liability on a debt can be removed but the liability of your co-debtor remains the same. Thus, the co-debtors get a notice when a bankruptcy is filed and their obligation to pay remains intact while the person filing for bankruptcy can be free from those liabilities.

On the other hand, authorized users are the ones who only have the authorization to use the debtor’s credit. Thus, they are different from co-debtors. Their credit report doesn’t show any obligations as they don’t use their own credit. In most of the states, including Florida, these users have no debt liabilities despite signing for the transactions. So, they no liability even in case of a bankruptcy filing by the debtor.

Owing debt liabilities are not always distinct. Thus, it is advisable to hire an experienced bankruptcy attorney before making any decisions regarding bankruptcy. You can visit www.staging.recoverylawgroup.com or call on 888-297-6203 to consult the Recovery Law Group, the best bankruptcy attorneys of Los Angeles & Dallas, TX.

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The effect of a raise on your bankruptcy depends on the bankruptcy chapter you file for and also on the amount of raise. In the legal world, the term “Material” is often referred to. In a legal sense, it means “Significant”. The term “Material Witness” can be used for describing a raise. A raise can affect your case if it is big enough to have a “material” effect on your income.

To qualify for Chapter 7, apart from a few exceptions, you will have to prove that your income is less than the average income for the size of your family. This is known as a “Means Test”. Your income will be calculated by adding your income of the last six months and multiplying it by two. This will give a quasi-accurate report of your future income. In case the rise occurs after the filing of Chapter 7 and the qualification happened on the date of filing, there will probably be no effects of the raise on your case. However, in the Means test, you will have to report about the anticipated raise, in case you know it is coming.

The effects of a raise are different in a Chapter 13 case. This type of case allows you to reorganize your debts. The secured creditors get the complete repayment and the unsecured creditors are paid the leftover disposable income. Getting a raise increase will increase your disposable income and the unsecured creditors will get paid more. Thus, you will be unable to use the raise for yourself, as that money will be filing the pockets of your unsecured creditors unless the case is over. However, if your unsecured creditors are getting the complete payments, the raise will help you in paying off everyone sooner, after which your case will close.

For any further queries about the effects of raise in your bankruptcy case, contact The Recovery Law Group (Los Angeles & Dallas, TX) at www.staging.recoverylawgroup.com or on 888-297-6203.