Tag: Chapter 7 Bankruptcy

Bankruptcy Law, Credit Score

When Can I Apply for a Credit Card after Bankruptcy?

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The type of bankruptcy can affect how soon someone can apply for a credit card after bankruptcy. A Chapter 7 bankruptcy case allows the consumer’s debts to be discharged fairly quickly, within a few months, after non-exempt assets are liquidated and used to pay off the filer’s debts.

A Chapter 13 bankruptcy case takes longer than a Chapter 7 case since it involves a three-to-five-year long repayment plan where the consumer works with the bankruptcy trustee on paying down qualifying debts while discharging what is left at the end of the repayment period.

Bankruptcy Law, Credit Score

Tips for Rebuilding Credit After Bankruptcy

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Sometimes people hold off filing for bankruptcy for fear of what it will do to their credit and financial future. While filing for bankruptcy will impact a person’s credit score, this damage is not irreparable. In fact, with good financial habits a consumer can rebuild his or her credit to better than it was before filing for bankruptcy. 

After the consumer’s debts are discharged at the end of a bankruptcy case, it is recommended that the consumer monitor his or her credit report to ensure that any outstanding or past-due balances are reported as zero if they have been successfully discharged. If any discrepancies are found, these errors should be reported right away to the credit bureaus via a formal dispute.  

Bankruptcy Law

How Will Filing For Bankruptcy Affect My Spouse?

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Filing for bankruptcy when someone is married can be a joint process, or it can be done by only one spouse proceeding with the case. Ultimately, it depends on the type of debt and the financial situations for both spouses. For example, if one only spouse owes a specific debt or debts, then that spouse may be able to proceed on a bankruptcy alone, especially if the other spouse has good credit and very few other debts. Proceeding with a single bankruptcy case while married can be complicated, and in certain situations, it can adversely affect the non-filing spouse, but not always.  

Joint Debts

In any marriage, parties bring in their own, individual debts, and debts are almost always incurred during the marriage, as well. One spouse may choose to take out a loan, not naming the other spouse on the debt, which means only the spouse whose name is on the debt is responsible for what is owed. If that spouse is not able to continue making payments on the debt, he or she can proceed with a bankruptcy to discharge that debt. If the debts listed in that bankruptcy case belong to the filing spouse alone and not the non-filing spouse, discharging the filer’s debts and liabilities should be a straightforward process. It becomes more complicated if any of the debts listed in the bankruptcy case belong to the non-filing spouse. In these situations, these joint debts will normally remain with the non-filing spouse. 

Bankruptcy Law

How to Know which Type of Bankruptcy is Right for You

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Making the choice to file for bankruptcy is not an easy decision to make, but it is the first step towards a financial fresh start. However, choosing which type of bankruptcy to pursue can be a difficult decision to make.  

Typically, consumers choose between a Chapter 7 “liquidation” bankruptcy or a Chapter 13 “reorganization” bankruptcy. Both forms of bankruptcy have their positive attributes, as well as their negative ones, and it ultimately depends on the consumer’s financial situation and the goals he or she wants to achieve as to which type of consumer bankruptcy will be best for him or her.  

Bankruptcy Law

The Pros and Cons of Filing Chapter 7 Bankruptcy in 2020

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For someone struggling financially, a Chapter 7 bankruptcy case can offer him or her a fresh start and freedom from insurmountable debt. The year 2020 has pushed many consumers to the brink financially, and bankruptcy can offer the help a person needs to start the New Year debt-free.  

Pros of Filing Chapter 7  

As soon as a Chapter 7 bankruptcy case is filed, the consumer receives immediate protection from his or her creditors. This protection comes from the automatic stay that is issued by the court upon filing. The automatic stay puts a pause on all collection actions, including collection phone calls, legal proceedings to collect on a debt, wage garnishments, evictions, and foreclosures. The automatic stay also gives consumers a chance to breathe and work with the court and bankruptcy trustee.   

Business Bankruptcy, COVID-19

Stimulus Relief Fails to Save Hundreds of Businesses

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The financial ramifications of the COVID-19 pandemic have been significant for countless businesses throughout the United States.  At the start of the pandemic, federal stimulus funds were issued in various forms to help businesses survive the economic crisis. However, as the virus continues, many of these businesses are being forced to close.  

According to a Wall Street Journal analysis of legal filings and government data, over 300 U.S. companies that received approximately half a billion dollars in stimulus relief have also filed for bankruptcy this year. These 300 companies employ a total of 23,400 workers who are being adversely affected.  

student loan debt, Student Loans

Bankruptcy Court Discharges $200,000 in Private Student Loan Debt for Colorado Couple

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A major victory was scored for student loan borrowers after a U.S. Court of Appeals for the Tenth Circuit issued a ruling stating that a Colorado couple’s private student loan debt could be discharged in their personal bankruptcy case. The ruling allowed $200,000 of private student loan debt to be wiped out, breaking the long-standing stigma that student loan debt, particularly private student loan debt, is near impossible to discharge in a bankruptcy case.

The Colorado couple had taken out $200,000 in private student loans from Navient, one of the nation’s largest student loan issuers. The ruling comes after a similar bankruptcy case, where the borrower also had their student loan debt discharged. In that case, the loan servicer appealed the ruling.

student loan debt, Student Loans

What Borrowers Need to Know About the New Executive Order- “Continued Student Loan Payment Relief During the COVID-19 Pandemic”

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A new executive order signed by President Trump is expected to give additional relief to student loan borrowers during the coronavirus (COVID-19) pandemic. It is important that all student loan borrowers be aware of what these changes entail and how they can affect their outstanding student loan balances.

At the start of the COVID-19 pandemic, Congress passed the CARES Act, a $2.2 trillion stimulus bill, that included relief effort for numerous aspects of the economy. The CARES Act paused all federal student loan payments and stopped interest from being incurred on federal student loans. Additionally, the stimulus bill put a stop to all federal student loan collection efforts. However, this bill was passed at the beginning of the pandemic with the thought that relief would no longer be needed through the end of 2020 with the hopes that the COVID-19 crisis would eventually be subsiding. Given the fact that numbers of positive cases are growing, and states are struggling to manage the crisis, it has quickly become clear that additional relief was needed. The original relief offered through the CARES Act was set to expire on September 30, 2020.

Bankruptcy Law, COVID-19, Small Business Bankruptcy

Personal and Business Bankruptcies Increase in the Month of July

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The number of individuals and businesses seeking bankruptcy protection increased last month, while the coronavirus (COVID-19) pandemic continues. Financial experts have predicted this jump for months since states began to shut down in mid-March.

According to the legal-services firm, Epiq Systems Inc., the number of businesses that have filed for Chapter 11 bankruptcy increased by 52 percent when compared to July 2019. Additionally, the number of personal bankruptcy cases have gone up. The number of personal bankruptcy filings are expected to increase, when the Covid-19 economic stimulus relief is cut or reduced.

Bankruptcy Law

The Benefits of Filing Chapter 7 Bankruptcy

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A bankruptcy case can mean different things to different clients. For many of our clients, it means a chance at a fresh financial start. It also means freedom from crippling debt and an unending barrage of collection calls. It is for this reason that many individuals choose to file for Chapter 7 bankruptcy due to the many benefits this type of bankruptcy offers.

The benefits of filing for bankruptcy can include relief from debt collectors through the automatic stay issued at the start of the case, as well as relief of most of the filer’s debts, including medical bills, credit cards, personal loans, and other unsecured debts. By discharging these debts before they become legal judgments against the filer, he or she can avoid wage garnishment and repossession.