Category: Bankruptcy

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Once you have decided to get rid of your debts through bankruptcy, you need to consult with your lawyer regarding whether chapter 7 or chapter 13 would be your best way to get rid of debts. Once you are through with a bankruptcy, it is important that you develop a strategy to avoid financial strain like this. Dallas based bankruptcy law firm Recovery Law Group provides you with a few simple steps that could make a huge difference after bankruptcy.

1. maintain records

Despite them reminding you of bad financial times, you need to keep your bankruptcy documents in a proper manner. This is to ensure that your creditors do not collect on discharged debts, or your credit reports mention the debts properly. In case you lose your bankruptcy papers, you might have a difficult time proving bankruptcy discharge and prevent creditor harassment. Additionally, getting copies of the documents will be difficult if you lose them.

2. check credit report

Though your bankruptcy is automatically stated on your credit report, there maybe be chances of discrepancy when it comes to debts discharged in bankruptcy. It is important to check your credit report from time to time in order to confirm that your debts are mentioned correctly. If this is not the case, you can contact the concern credit reporting agency to show that your debts for debts were discharged due to bankruptcy. You can do so by mailing them a copy of your discharge letter mentioning the debts discharged in bankruptcy.

3. live within means

Though it is not necessary that overspending caused your bankruptcy, establishing a monthly budget and living within it is one of the best ways to get your finances on track. Try to avoid unnecessary expenditures and continue paying your non-dischargeable debts.

4. change your spending habits

Differentiate between essential expenses and luxury ones. Eating out is not normal, it is a luxury on which you are wasting money which could be utilized elsewhere. Keep your expenditures to the minimum if you wish to crawl out of the hole bankruptcy has thrown you into. Avoid using credit cards for unnecessary expenditures if you wish to avoid the vicious cycle of debt and bankruptcy.

5. work on rebuilding credit

If you think that getting a credit card is all it takes to mend your credit then you are mistaken. Just like you don’t ruin your credit in a day, you can’t build it either. Start with a secured credit card and make payments on time using it. Avoid getting many credit cards as you will lose track of payments. You can build your FICO score (used by credit reporting agencies to determine your credit risk) by making timely payments.

6. save for a rainy day

Ensure that you have an emergency account where you put money every month for sudden unexpected expenditures as these are the reasons why you ended up filing for bankruptcy in the first place. Make sure that you contribute regularly to this saving account, irrespective of the amount.

Though bankruptcy ruined your credit, it does not need to remain this way forever. You can take corrective measures to improve your credit score. You can direct your bankruptcy-related queries to experienced bankruptcy lawyers at 888-297-6023.

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If you are in financial stress, constantly being threatened by creditors and cannot deal with the piling bills, then bankruptcy might be the best option to get rid of your debts, say Los Angeles based bankruptcy law firm Recovery Law Group lawyers. Bankruptcy offers a great way to start your life afresh. One of the most common questions that bankruptcy lawyers face is whether filing for bankruptcy will cause people to lose their personal property?

When you file for bankruptcy under Chapter 7, you can protect several assets. Bankruptcy laws exempt personal property to a specified dollar amount which varies from state to state. Generally, you can keep the personal property up to $1000, if you file individually. The amount is $2000 for joint filing. The amount increases to an additional $4000 if you don’t opt for homestead exemption. This can be possible if you either surrender the property or the home will be foreclosed as you are behind on mortgage payments.

Usually, the exemptions are generous, and you can save almost all your personal property. If however, you have accumulated more property than can be exempted, another factor comes into play; the cost of collecting and selling the assets at an auction. If after auctioning the property and taking in the trustee’s fees, there isn’t much money to pay the creditors, the bankruptcy trustee might not sell the non-exempt assets.

If the non-exempt property is large in number, filing under chapter 13 is a better option. For more options regarding bankruptcy chapters and exemptions, you can call at 888-297-6023 to speak with experienced bankruptcy lawyers.

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When you file for bankruptcy under Chapter 7, you can get rid of several debts including homeowner Association (HOA) fees. Chapter 7 bankruptcy is a great way if you wish to get rid of your home. However, says Dallas based bankruptcy law firm Recovery Law Group the HOA fees which accumulate after a bankruptcy filing cannot be discharged.

When you file for Chapter 7 bankruptcy, you are expected to sign a statement regarding your secured debts. You must inform the court as well as bankruptcy trustee whether you wish to keep your property or surrender it. If you cannot afford the property, you can surrender it in bankruptcy. Any and all debts associated with your home, including homeowner’s fees can be discharged through Chapter 7 bankruptcy.

Sometimes, debtors acquire HOA fees after they have filed for bankruptcy. In this case, they can contact HOA to negotiate a settlement of the fees or surrender the property to HOA. It is recommended that you consult experienced bankruptcy attorneys at 888-297-6023 before making any decision.

When a debtor converts their bankruptcy chapter from 7 to 13, the issue of paying accumulated homeowner’s fees during bankruptcy arises. Usually, courts allow debtors a discharge of debts that were acquired while transiting from Chapter 7 to chapter 13, if the debt would have been discharged during bankruptcy. Thus, HOA fees are generally eliminated when Chapter 7 bankruptcy is filed.

To eliminate these debts, the debtor needs to add any debts acquired in the bankruptcy forms after they had filed for chapter 13 bankruptcy. They also need to file a Statement of Intention for secured debts. Sometimes another set of schedules and forms might also be required by some courts. Generally, in the case of Chapter 13, if people wish to keep their home, they need to pay the HOA fees. If, however, circumstances change and they can no longer afford to make monthly payments as per their chapter 13 repayment plan, debtors can convert the bankruptcy from Chapter 3 to Chapter 7.

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People who are struggling with multiple debts often find it difficult to balance them. The general perception is that you should close any many debts possible before you end up filing for bankruptcy. However, Dallas based bankruptcy law firm Recovery Law Group informs that when you file for bankruptcy, payments made to any creditor at the cost of denying other creditors are considered preferential payment. This is because you decided to pay one creditor in full while giving nothing to others.

While filing for bankruptcy, the debtor cannot show any preference to creditors. The assets of the debtor need to be divided equally among all creditors. In case the debtor paid any creditor in full, the bankruptcy trustee might consider it a preferential payment, if the transaction took place 6 months before bankruptcy filing (the normal creditor). If the creditor was a family member, this duration is 1 year.

According to 11 U.S.C. § 547 preference is defined as:

• Transfer to or for the benefit of a creditor
• Transfer of interest of the debtor in property
• Transfer made when the debtor was insolvent (90 days prior to bankruptcy filing)
• Any transfer made within 90 days (or 1 year in case of family/friend) before the filing of a bankruptcy petition
• For any debt owed by the debtor prior to the transfer
• When a creditor receives more than they would have in case of chapter 7 liquidation proceeding

During bankruptcy, claims made by creditors are paid according to statutes which decide who will be paid and how much. The bankruptcy trustee must receive a pre-filing payment since any payment made to one creditor over others is seen as preferential payment and is unfair to other creditors. However, getting a payment back from a creditor is not easy.

Creditors can deny giving back the payment received to the bankruptcy trustees. As per Section 547 of bankruptcy code, preferential payment is done “for or on account of an antecedent debt.” Thus, if the payment is made for any new value, it cannot be considered a preferential payment. Thus, if the creditor does not apply the payment to a past invoice which is regarding a debt having been discharged in bankruptcy, they will not have to reverse the payment to the bankruptcy trustee.

Another line of defense for creditors is available. This is known as the “ordinary course of business” defense where debt was acquired in the normal course of business between two parties and was paid according to the terms of the business. “Subsequent new value” defense is another strategy for creditors to avoid reversing the payments made to them by the debtor. This can take place if the debtor works for 90 days prior to a bankruptcy filing. If the debt is paid as part of an ongoing business relationship and the debtor might keep some preferential payment.

If you are contemplating bankruptcy, it is recommended that you speak with experienced bankruptcy lawyers at 888-297-6023 to know more about the workings of different bankruptcy chapters.

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Filing for bankruptcy is a great way to get rid of your debts. However, when you file for bankruptcy, everything you own becomes a part of your bankruptcy estate, says Los Angeles based bankruptcy law firm Recovery Law Group. Being part of your bankruptcy estate ensures that the property is safe from foreclosure. However, just like creditors cannot foreclose on the property, you also cannot sell the house without the court’s permission.

In the case of chapter 7 bankruptcy, selling home can be a bit difficult. You are required to convince the court that the sale won’t deny any creditor their dues. The trustee needs to have the court’s approval to sell the home so that they can distribute the money among creditors. In the case of chapter 13 bankruptcy, the debtor can sell their home if it doesn’t cause any financial loss to the mortgage lender.

If you have filed for bankruptcy and wish to sell your home, you need to file in court a Motion to Sell Real Property. The motion needs to be accompanied with detailed information pertaining to the property like selling price, as well as names of creditors with a lien on the property. Apart from this, you also need to provide a detailed report on how the money generated will be used.

In case the bankruptcy trustee believes that selling of the debtor’s home would be able to cater to the creditor’s requirements, then they are also required to submit the above-mentioned details. Apart from this, the bankruptcy trustee is also required to provide information about bankruptcy as well as how the sale proceeds will be distributed among creditors.

Bankruptcy exemptions are available for debtors to protect their property when they file for bankruptcy. If homestead exemptions cover the home’s value entirely or even partially, the trustee might not be able to sell the home. Investment properties, on the other hand, do not get the same exemption as residential homes, since they were not the primary residence of the debtor and were purchased to provide additional income and profit as a result of the appreciation of property. Debtors who file for chapter 7 bankruptcy cannot protect their investment homes from becoming a part of their bankruptcy estate.

People filing for bankruptcy can choose from either federal or state bankruptcy exemptions to protect their assets or equity in them. A skilled bankruptcy lawyer can help you decide which set of exemptions will help protect most of your property. If you haven’t hired a bankruptcy lawyer, you can seek consultation by calling at 888-297-6023.

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When you file for bankruptcy, there are certain debts that are either liquidated (Chapter 7 bankruptcy) or reorganized (chapter 13 bankruptcy); however, Dallas based bankruptcy law firm Recovery Law Group informs that some debts cannot be discharged completely.

Some debts are non-dischargeable unless the debtor can prove to the court that payment on these debts will cause them to undergo extraordinary stress. These debts can include any debt which the bankruptcy filer failed to include in their bankruptcy petition. other debts which are always non-dischargeable include child support, alimony, payroll taxes, federal tax liens, fraud penalties, student loan, homeowner Association fees as well as injury caused by DUI.

A chapter 7 bankruptcy discharge might be denied if the debtor does not follow the bankruptcy court’s procedures and laws. This might result in the dismissal of the bankruptcy petition, which will not give you any discharge on debts. Filing for chapter 7 bankruptcy does not mean that you will get a discharge of all your debts. You are required to follow provisions of Bankruptcy Code, especially section 727(a). not following the rules might give probable cause to any creditor or the bankruptcy trustee to object to your chapter 7 discharge.

Discharge can also be denied in case of Chapter 7 bankruptcy, if the debtor fails to provide required tax documents, failed to complete personal financial management course, tries to defraud the creditors by hiding or transferring assets. Additionally, if the debtor commits perjury, destroys evidence or is found violating any court order then also discharge can be denied. Creditors also have the option of objecting to debt discharge. They can file a motion against the discharge of a debt, which would have been discharged otherwise. Sometimes, if the court does not agree with the issue raised by the creditor, they might go ahead with the discharge.

Usually, the purchase of luxury items using credit cards is the most debated issue between creditors and debtors. Any goods purchased using a credit card for more than $650 (owed to a single creditor) within 90 days of bankruptcy filing can be put under scrutiny by the creditor. The creditor will be able to prevent discharging of these types of debts unless the debtor can prove that they intended to honor the commitment, or the goods were essential and not luxury items. Moreover, the creditor can also convince the court for not discharging the debt, if the debtor received a cash advance of more than $925 within 70 days of the bankruptcy filing.

Bankruptcy procedure can be quite confusing for the layman. To know which of your debts can be discharged during bankruptcy, you should contact bankruptcy attorneys at 888-297-6023.

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Just like individuals, businesses can also go through rough patches. Sometimes, taking control of finances is not easy and you might have to let go of your business to cut your losses. If you are facing financial issues in your small business and have no hope of reorganizing the debts, then Chapter 7 bankruptcy is the best way to get rid of your debts, says Los Angeles based bankruptcy law firm Recovery Law Group.

Small businesses can be either a partnership, a corporation or a limited liability company (LLC). If, you don’t wish to continue your business further, then filing for Chapter 7 bankruptcy will help you get rid of your debts in a faster and easier way. Your business will be closed, and assets liquidated in Chapter 7 bankruptcy. However, if, you are personally liable for any business debt, you might have to file for personal bankruptcy to get rid of those; otherwise, you will remain responsible for those debts. Additionally, there aren’t any exemptions to protect your business’ assets. Moreover, the business will not receive any discharge of debts. The bankruptcy trustee will sell off all the business’ assets to pay the creditors and then shut the business down.

In case you are the sole owner of your business, Chapter 7 bankruptcy can be used to eliminate not only business debts but also personal debt. This is because the business and the owner are considered the same. In this case, you can also use exemptions to protect business assets which can be used to continue running the business after bankruptcy. Sole proprietors also have the option of filing under chapter 13. This will allow you to keep all your assets and repay your debts through a repayment plan. Unfortunately, LLCs, corporations, and partnerships do not have the option of filing a chapter 13 bankruptcy.

If you wish to know more about your options regarding small business bankruptcy, you should speak with experienced bankruptcy lawyers at 888-297-6023.

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It can be very difficult for couples to decide the best time for filing for bankruptcy, especially for the ones who are planning to get married. Although married couples can file for joint or separate bankruptcy, marriage does make it difficult for them to qualify for the bankruptcy which they wish to file for.

A joint bankruptcy filing is a better option for couples, as it allows them to get rid of their debts together in one bankruptcy. Thus, they will not have to go for hearings separately. The filing fees for an individual filing or a joint bankruptcy are the same, so joint filing will help the couple in saving money. Even the attorney’s fees will also be less in joint-filing than the fees for two separate filings.

However, depending on the couple’s assets, income and debts, a joint bankruptcy filing might not prove to be favorable for the couple. Getting married can make it difficult for the couple to qualify for a Chapter 7 bankruptcy.

It is compulsory for an individual or a couple to pass the means test to qualify for Chapter 7 bankruptcy. In this test, the filer’s income is compared with the median income (as per the similar household) of the filer’s state. Married filers are supposed to include their partner’s income too on the means test, even if both the partners are not filing for bankruptcy. Since the median income of a household of two people is not twice of a single household, a married couple might not be able to qualify for a Chapter 7 bankruptcy despite qualifying for it separately. In Florida, the means test of a single household and a household of two persons has a difference of less than $10,000.00.

Also, if only one partner is under debt, a joint filing might not be a good idea. In such a case, it is better for that partner to file for an individual bankruptcy than a joint filing. However, the non-filing partner’s income will also be included in the means test. The couple’s jointly-owned property will be a part of the bankruptcy estate, but the non-filing partner’s individual properties will not be included in it. However, there is one exception to this rule in case of a community property state. In such states, like Texas, the assets of both the filing and the non-filing partners are included. The bankruptcy trustee then decides which assets should be included in the bankruptcy estate and which should not. Florida is not considered as a community property state.

To learn more about filing for joint bankruptcy, consult one of the most experienced bankruptcy lawyers of Los Angeles & Dallas, TX. You can visit them at Recovery Law Group or call them on 888-297-6203.