Bankruptcy Law

Bankruptcy Law, Credit, Credit Card Debt, Debt Relief

Credit Card Debt and the Effects It Can Have on Your Health

Posted on by Admin

Credit card debt can be a necessary evil, especially when it comes to establishing one’s credit score. However, the problems arise when that credit card balance gets out of hand to the point where the cardholder can no longer pay down the balance. The stress of mounting credit card debt can also affect a person’s health, according to a study from CompareCards.com.

The study shows that credit card debt is taking its toll on the health and well-being of many American consumers. According to the report, fewer cardholders can pay their balances in full at the end of each month. Anything left on those balances roll over to the next month and are compounded even more by interest. Before long, those balances inch closer and closer to the allotted credit limit. One in three consumers surveyed by WalletHub reported being fearful that they will max out their credit cards.

Bankruptcy Law, Debt Relief

How Small Business Owners Can Protect Assets in Bankruptcy

Posted on by Admin

Many business owners worry about what will happen to their companies and their business assets when facing bankruptcy or a lawsuit. It is important for any business owner that he or she creates an asset protection plan for these exact types of situations.

The first step is to develop a debt management plan for the business. Having debt is not always a bad thing. The key is to manage the debt in an intelligent manner to stay out of trouble.  Business loans will usually involve offering business assets as collateral, which means that if the business owner ends up defaulting on the loan, the lender can seize the collateral to pay the debt. Some lenders will require borrowers to sign a personal guarantee if the collateral is not enough to cover the debt.

Bankruptcy Law, student loan debt

Betsy DeVos Faces Possible Jail Time for Failing to Forgive Student Loan Debt

Posted on by Admin

Department of Education Secretary, Betsy DeVos, has been under fire for her failure to forgive student loans for more than 150,000 student loan borrowers. These borrowers have filed a lawsuit against both DeVos and the Department of Education, alleging they are being deprived of student loan forgiveness they have earned through the borrower defense.

DeVos has been accused of continuing to pressure former students of one of these institutions, Corinthian Colleges, Inc., to continue to pay their student loan debts. These same students say they were promised that their student loan debts would be forgiven under the borrower defense.

Bankruptcy Law

New Bankruptcy Laws Offer Relief for Veterans, Small Businesses and Farmers

Posted on by Admin

President Trump signed legislation into law on August 23, 2019, that offers bankruptcy relief that will benefit veterans, small business owners and farmers. Now that these changes are being implemented, they will have long-lasting, positive effects when it comes to access to bankruptcy relief for these individuals.

The first piece of legislation is the Family Farmer Relief Act of 2019. It doubles the debt ceiling allowed under the Bankruptcy Code for a “family farmer.”  This relief increases the number of farmers eligible to receive relief under Chapter 12 reorganization bankruptcy, which is a special form of bankruptcy that is designed to meet the needs of farmers facing financial difficulty.

Bankruptcy Law, Debt Relief

How Long Does Bankruptcy Stay on Your Credit Report?

Posted on by Admin

One of the biggest concerns consumers have when it comes to filing for bankruptcy is how long will the bankruptcy remain on their credit report. While a bankruptcy does hurt a person’s credit score, the effect it has depends on several different factors. Ultimately, it depends on the type of bankruptcy being filed and the financial habits exercised by the consumer after the case is over.

Chapter 7

A Chapter 7 bankruptcy case will stay on a consumer’s credit report for ten years from the date of filing. A Chapter 7 bankruptcy case is also known has a liquidation bankruptcy. This form of bankruptcy is normally used by people who have defaulted on their financial obligations and fall below a certain income threshold.

In a Chapter 7 bankruptcy case, the bankruptcy trustee has the authority to liquidate the borrower’s nonexempt assets and use them to pay down qualifying debts. The remaining debts, which are mostly unsecured ones, are discharged. Chapter 7 forgives debts including credit card debts, medical bills and unsecured personal loans. Certain debts, including taxes, criminal fines, child support, spousal support, and student loans, are not discharged usually in a Chapter 7 case. Not all consumers can pursue a Chapter 7 case, however. They must first pass a means test to ensure that their income and asset-to-debt ratios satisfy the requirement to file for Chapter 7 bankruptcy.

A consumer’s credit score can drop by as much as 200 points after filing for Chapter 7 bankruptcy. However, the alternative can be much worse if bankruptcy is not filed and the consumers ends up with multiple defaults and collections on his or her record. By exercising good financial habits over time, a person’s credit score can certainly be rebuilt.

Bankruptcy Law

What are the Credit Counseling Requirements in Bankruptcy?

Posted on by Admin

Whenever a person files for Chapter 7 or Chapter 13 bankruptcy, he or she must submit proof that a credit counseling course from a nonprofit credit counseling agency was successfully completed. The purpose of this course is to help the filer determine whether he or she can pay his or her debt outside of bankruptcy and provide proper financial guidance to prevent an additional bankruptcy filing in the future.

What Is Required?

According to the Federal Trade Commission (FTC), all bankruptcy filers must take an approved credit counseling course prior to filing. The U.S. Department of Justice’s U.S. Trustee Program keeps a list of approved programs if filers are not sure where to go. Proof of completing a program must be submitted before the bankruptcy case can proceed further. In fact, this proof must be submitted within 180 days prior to filing for bankruptcy. The filer will normally walk away from the credit counseling program with a repayment plan, if a plan is realistic, although nothing in the FTC rules requires the filer to follow that specific plan.

Bankruptcy Law, student loan debt

How to Handle Zombie Student Loan Debt

Posted on by Admin

Student loan debt has been known to haunt borrowers for years, if not decades, after that first loan is issued. Many borrowers find themselves on payment plans that can least up to 25 years. To them, a student loan is like a mortgage without the benefit of having the house to live in. Once the debt is paid in full, the last thing that person wants to think about again is that loan. However, for many borrowers, that debt never seems to go away and often comes back in the form of zombie debt.

Most forms of debt are limited by a statute of limitations, which governs how long a creditor can sue the borrower for the debt. Federal student loans were once governed by a six-year statute of limitations until 1991 when that statute of limitations was lifted. Now they are technically collectible indefinitely. Private student loans, however, are still limited by statute.

Bankruptcy Law, Credit, Credit Card Debt

Steps to Remove Judgments and Collections from your Credit Report

Posted on by Admin

Every consumer should review his or her credit report at least once a year to confirm that there are no inaccuracies.  Lenders look to a person’s credit score to determine whether he or she is a lending risk. The lower the score, the harder it will be for that person to obtain financing.  It can also affect the interest rate on the loan.

Certain actions, such as a judgment against the consumer or a collections action, can negatively impact a person’s credit score. However, if a consumer does have judgments or collections actions on his or her report, it is possible to have this information removed.

Bankruptcy Law, Debt Relief

More than 50% of Americans Have Raided Their Retirement Savings Early

Posted on by Admin

When someone is facing a difficult financial situation, it can be tempting to pull money from whatever resources are readily available. Many consumers feel they have no choice but to dip into their retirement savings to pay for financial emergencies or unexpected expenses. In fact, according to a recent study published by Magnify Money, more than half of all Americans have withdrawn money from their retirement savings early.

Twenty-three percent of those surveyed stated that they did so to pay off debt. Another 17 percent used this money to put a down payment on a home, while 11 percent used the money to pay for education costs. Nine percent surveyed reported using money from their retirement savings to pay down medical debt.

Bankruptcy Law

How Long Does the Bankruptcy Automatic Stay Remain in Effect?

Posted on by Admin

One of the benefits of filing for bankruptcy is the automatic stay and the protections it offers filers who are facing a multitude of collection calls from their creditors. It can also protect a person from lawsuits, wage garnishment, repossession, and losing valuable property.  As soon as the bankruptcy petition is filed, the automatic stay goes into effect. After this point, creditors and debt collectors are legally barred from attempting to collect on any debt owed by the filer.

The automatic stay will remain in effect throughout the duration of the bankruptcy case from filing to discharge. However, certain factors can affect the automatic stay and how long it remains in effect.