Bankruptcy Law, Consumer Bankruptcy

Is It Possible to Refinance a Mortgage after Bankruptcy?

One of the biggest fears expressed by bankruptcy filers is how a bankruptcy case will affect their ability to receive financing in the future.  While having a bankruptcy on a person’s credit report can make it more difficult to qualify for a mortgage, it is possible for someone who has completed bankruptcy to refinance his or her mortgage after the case is successfully closed.

A number of factors can influence how easy it is to refinance after bankruptcy, including the type of bankruptcy, whether it be a Chapter 7 or Chapter 13 bankruptcy. The type of mortgage loan that the borrower is looking to refinance can also heavily influence this.

Consumer Bankruptcy, COVID-19

Consumer Bankruptcy Filings Level Off in August 2021

Bankruptcy filings leveled off last month, according to figures from technology company, Epiq. The company compiled filings through their AACER bankruptcy program which showed that in the month of August, 32,225 new bankruptcy cases were filed, including Chapter 7 and Chapter 13 consumer bankruptcy cases. This figure is down slightly from the 32,391 reported in July 2021.

Despite the fact that consumer bankruptcy filings have decreased, commercial bankruptcy filings have increased approximately one percent from July 2021 with 1,724 cases filed.

Consumer Bankruptcy

Bankruptcy Filings Fall to Levels Not Seen Since 1985

Bankruptcy filings have fallen to levels not seen since the mid-1980’s. The low number of filings are credited to the government aid and stimulus checks issued since the COVID-19 pandemic.

According to statistics from the Administrative Office of the U.S. Courts, 462,309 individuals and companies filed for bankruptcy in the fiscal year ending June 30, 2021, which is a 32 percent decrease from the previous year. The office also noted that this figure was the lowest one reported for a 12-month period since 1985.

Personal bankruptcy filings decreased 33 percent to approximately 444,000 over the course of a year. Business filings similarly declined, although by a lower percentage. Business bankruptcy cases dropped by 17 percent to approximately 22,500 filings.

Credit Card Debt

Three Credit Card Mistakes To Avoid

A credit card can be a useful tool when it comes to improving a consumer’s credit score or financing large purchases. However, when credit card spending gets out of hand, it can be easy for that balance to grow out of control. The following tips can be helpful for consumers using credit cards to pay for daily expenses.

Avoid Maxing Out Credit Cards

Most credit cards come with a maximum spending limit, and while it can be tempting to rely on that figure when making credit card purchases, it is important that consumers avoid reaching that maximum amount. One reason for avoiding this is a maxed-out credit card can reflect negatively on a consumer’s credit score. If a consumer uses more than 30 percent of his or her available credit, his or her credit score will be reduced. This reduction occurs because credit utilization ratios are considered by credit reporting agencies when calculating a person’s credit score. Many credit cards also tack on fees to the person’s balance if he or she goes over the card’s limit.

Credit Card Debt

Should I Contribute to my 401K or Pay Off Credit Card Debt?

Credit card debt is a burden that many consumers struggle with. Without a large influx of cash, it can be difficult to pay off outstanding credit card bills. Many consumers also struggle with deciding whether they should focus first on paying these debts off or whether they should be taking any extra funds and saving for retirement in a 401(k) or similar plan.  

Paying Off Credit Card Debt

Credit cards come with high interest rates, which can make paying the balance off impossible. The larger the balance gets, the harder it can be to pay down, which is why it can often be a good idea to focus on paying this debt down first. Additionally, paying down the credit card balance to zero will also noticeably improve the consumer’s credit score. A better credit score will eventually benefit him or her for when it comes time to make a big purchase, such as a car or a home. It will also eliminate the monthly payment from the consumer’s budget, allowing him or her the chance to save for the future, including retirement.  

Bankruptcy Law, Consumer Bankruptcy

Will Filing Chapter 7 Bankruptcy Prevent Vehicle Repossession?

When someone is behind on his or her car payments, a Chapter 7 bankruptcy case may allow him or her to catch up on these missed car payments, saving the vehicle from repossession. The ability to do this depends on how far behind the borrower is on his or her payments and whether the loan is already in default.   

While a Chapter 7 bankruptcy case will not permanently prevent the person’s vehicle from ever being repossessed, it can provide the borrower a chance to catch up on missed payments or negotiate with the lender before the loan goes into default.  

Bankruptcy Law, Consumer Bankruptcy

The Cost of Filing Bankruptcy in 2021

Filing for bankruptcy comes with its own set of costs. It may seem counterintuitive that a person who is having difficulty paying his or her bills can pay extra costs to receive relief from his or her financial obligations. However, just because someone is not able to pay his or her bills should not prevent them from hiring an attorney to file their bankruptcy case. While “do it yourself” projects may be a good idea around the house, there are reasons to let a professional handle your bankruptcy filing.

Bankruptcy Law

Knowing When to File for Bankruptcy

Making the decision to file for bankruptcy is never an easy one. Many times, it can be difficult to know when the time is right or when it is better to wait.  

A bankruptcy case allows a consumer to receive a much-needed financial fresh start by discharging his or her outstanding consumer debts. The types of debts that are discharged in a bankruptcy case include credit card debt, mortgages, car loans, medical debt, and other unsecured loans.  

Bankruptcy Law

What is a ‘No Asset’ Chapter 7 Bankruptcy Case?

In a no-asset Chapter 7 bankruptcy case, the person filing for bankruptcy keeps all of their property because it falls within the exemptions provided under federal law or the law in their state.

With a Chapter 7 liquidation bankruptcy, a filer surrenders their assets to the bankruptcy estate, which uses them to pay off creditors. But in reality, this is only true of non-exempt property. Many of our cases, are in fact, ‘no asset’ cases. Bankruptcy law recognizes that filers need to retain some property so they can survive the process with something on which to build a future after bankruptcy.

Bankruptcy Law, Credit Card Debt, Debt Collection

Important Tips to Know about Credit Card Debt Forgiveness

Credit card debt plagues so many today. Even with the economic stimulus relief, some consumers are having to utilize credit cards to make ends meet. Escaping the load of credit card debt can seem like an impossible feat. Whenever someone offers a way out or credit card debt forgiveness, it can be easy to jump to accept the offer. The problem is credit card debt forgiveness can be more complicated than simply having the debt forgiven.   

Not All Debt Forgiveness Strategies Are Equal  

Credit card debt is forgiven usually from two strategies, namely debt settlement or bankruptcy. Many consumers try a third strategy, which involves ignoring the amount owed until the statute of limitations has passed for collecting on the debt.  However, the damage that can result to the consumer’s credit score as a result of this failed strategy make it often not worth the wait.