Ask Our Team About Filing Bankruptcy On Credit Cards So You Can Keep Your Home
If debt is something you can no longer handle, take the first step toward relief by contacting the seasoned and compassionate Ohio debt-relief attorneys at Fesenmyer Cousino Weinzimmer. We offer a free initial consultation to evaluate your entire financial situation and determine the best fit for your particular circumstances. We will make sure you are aware of all your options to eliminate credit card and other debt and still keep your home. We will be there for you and walk you through the process every step of the way.
Delaying can only worsen your situation, so call one of our conveniently located office branches to set up your free consultation so we can determine what debt relief solutions will work best for you.
Liquidation Requirements For Chapter 7 Bankruptcy
Chapter 7 bankruptcy is also known as liquidation bankruptcy. In Chapter 7, the borrower may be required to sell certain assets as a requirement of the case. Fortunately, not all of a debtorâs assets will be subjected to liquidation by the bankruptcy court. Florida bankruptcy law provides exemptions for many of the assets a debtor might own. If an asset is exempt from liquidation the borrower will not be required to sell the asset. To learn more about which assets may be protected in bankruptcy, .
Contact An Experienced Bankruptcy Attorney Today
If you are facing extensive credit card debt, an experienced bankruptcy attorney can review your situation and help you determine what your best course of action would be to get back on your feet financially. The attorneys at Cornwell Law Firm will take the time to listen to your financial goals and help you get back on track. We will review your debts and help you determine which ones are likely to be secured and unsecured and take the appropriate steps to ensure the best possible outcome. Contact us today to schedule a consultation.
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What Is A Trustee And What Is The Trustees Role
A Licensed Insolvency Trustee is the only professional who can administer a bankruptcy or consumer proposal in Canada. This means that you need to engage a Trustee in order to file your bankruptcy.
Licensed Insolvency Trustees are highly qualified professionals and are federally licensed by the Office of The Superintendent of Bankruptcy. Trustee fees are regulated under the Bankruptcy and Insolvency Act.
The federal government requires the Trustee to perform an assessment of your financial situation to determine if bankruptcy is the best option for you.
With your help, the Trustee will examine your financial situation including your assets, income, expenses, and debt level. You may have additional options, which the Trustee will explain and describe. The Trustee will also fully explain the bankruptcy process so you can decide if you should declare bankruptcy.
If you choose to file for bankruptcy or to file a consumer proposal the Trustee will prepare the necessary paperwork, review it with you, and file it with the Office of the Superintendent of Bankruptcy.
Student Loan Hardship Options
Bankruptcy wont discharge student loan debt. However, there are options to make your payments more manageable.
Borrowers with federal student loans can choose to pursue deferment or forbearance for up to three years total. Depending on the type of student loans you have and the type of relief you choose, interest may still accrue during this time. Through Sept. 30, 2021, all federally owned student loans are automatically under forbearance with no interest accrual.
Neither deferment or forbearance will impact your credit score, but both will be noted on your credit report.
Another option for federal borrowers is to switch to an income-driven repayment plan with a loan forgiveness option. This will extend your repayment timeline, but because the plan bases your student loan payments on your actual income, your monthly payment may be as low as $0. The good news with this approach is that there is no credit check required to initiate an income-driven repayment plan and it will not impact your credit score.
If you have private student loans, you may still be eligible for deferment or forbearance options. This depends on the lender if youre facing financial hardship, call your lender and ask about your options. Deferment programs through private lenders may impact your credit score.
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The Three Types Of Bankruptcy
Chapter7: Commonly called liquidation bankruptcy. Chapter 7 involves the sale of non-exempt property to repay creditors. Not everyone is eligible for Chapter 7, as there are specific income limits that must be met.
Chapter 13: Also known as a reorganization bankruptcy. Chapter 13 involves the creation of a three to five-year payment plan to repay your debts. If you comply with your repayment plan, you should be allowed to keep your property and discharge the debt.
Chapter11: This type of bankruptcy differs from Chapter 7 and Chapter 13 because it is designed to aid struggling businesses and corporations. The company typically continues to operate, but their finances are restructured to maximize repayment to creditors.
Was Your Bankruptcy Due To An Unforeseen Event
Perhaps your bankruptcy was the result of extraordinary circumstances, such as a medical emergency, divorce, job loss or natural disaster, rather than bad money management. In that case, youre more likely to be ready to open a credit card and begin rebuilding your credit.
Just make sure to shore up other areas of your financial well-being such as a stable job and an emergency fund so you can be prepared for any unexpected challenges you may face in the future.
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What Are The Requirements For Bankruptcy
The requirements for bankruptcy depend on the type you’re hoping to file. To file Chapter 7 bankruptcy, for instance, your income in the previous six months must be lower than the median income for households of the same size in your state. If it isn’t, you can undergo a means test that assesses your financial status and ability to pay your debts.
Other factors the court considers include how long it’s been since you last filed bankruptcy, whether you’ve completed a credit counseling course and the reason behind the filing.
Under Chapter 13 bankruptcy, you must have enough income to make the monthly debt payments outlined in the reorganized debt plan. You must have also filed a tax return in all of the previous four years. The court will also consider the amount of your debtyou can’t, for example, have more than $419,275 in unsecured debtas well as whether you’ve completed a credit counseling course and more.
If you’re not sure whether you qualify for bankruptcy, search for an attorney in your area who is willing to do a free consultation to assess your situation and provide you with expert advice.
You Can Keep Some Propertybut Maybe Not All Of It
In addition to the loss of collateral property that secures a loan, you can keep or lose property depending on its status as “exempt” or “non-exempt” property. When you file for bankruptcy, you can keep a certain amount of exempt property, such as the equity in your home. However, property that isn’t exempt can be sold by the bankruptcy trustee to pay off some or all your creditors.
The type of bankruptcy you choose also matters for purposes of determining what property you can keep. If you file for a Chapter 7 bankruptcy, you risk losing your non-exempt property to pay off your debts. If you file under Chapter 13 instead, you can keep all of your property, but you’ll have to repay your creditors the value of any non-exempt property through a repayment plan that is administered by a trustee.
Every state has its own specific bankruptcy exemptions, so be sure to check the ones where you live. For example, in Virginia, you can exempt $5,000 plus $500 per dependent for residential property or personal property. If you’re over 65 or a disabled veteran, that exemption goes up to $10,000. Starting in July 2020, Virginians will be able to exempt an additional $25,000 of real or personal property used as a principal residence.
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What Bankruptcy Can’t Do
Bankruptcy doesn’t cure all debt problems. Here’s what it can’t do for you.
Prevent a secured creditor from foreclosing or repossessing property you can’t afford. A bankruptcy discharge eliminates debts, but it doesn’t eliminate liens. A lien allows the lender to take property, sell it at auction, and apply the proceeds to a loan balance. The lien stays on the property until the debt gets paid. If you have a secured debta debt where the creditor has a lien on your propertybankruptcy can eliminate your obligation to pay the debt. However, it won’t take the lien off the propertythe creditor can still recover the collateral. For example, if you file for Chapter 7, you can wipe out a home mortgage. But the lender’s lien will remain on the home. As long as the mortgage remains unpaid, the lender can exercise its lien rights to foreclose on the house once the automatic stay lifts.
Eliminate child support and alimony obligations. Child support and alimony obligations survive bankruptcy, so you’ll continue to owe these debts in full, just as if you had never filed for bankruptcy. And if you use Chapter 13, you’ll have to pay these debts in full through your plan.
Eliminate most tax debts. Eliminating tax debt in bankruptcy isn’t easy, but it’s sometimes possible for older unpaid tax debts. Learn what’s needed to eliminate tax debts in bankruptcy.
Eliminate other nondischargeable debts. The following debts aren’t dischargeable under either chapter:
Can The Credit Card Companies Sue Me After I File For Bankruptcy
No. Once you file for bankruptcy protection, bankruptcy’s automatic stay prohibits most creditors from continuing collection efforts against you. The stay extends to credit card companies and prohibits them from suing you, sending you collection letters, calling you, or engaging in other collection activities. Learn more about bankruptcy’s automatic stay.
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Medical Bankruptcy: Does It Exist
Medical bankruptcy is not an official legal category of bankruptcy. That doesnt mean filing for bankruptcy cant help with your healthcare bills it just means you dont get to pick and choose which debts to include in your bankruptcy.
When you file for Chapter 7 or Chapter 13, medical debt is only one of the categories that may be involved in calculating your total obligations. The bankruptcy process can also affect outstanding credit card debt or your ability to stay in your home.
Thats why its crucial to know exactly what youre getting into when considering bankruptcy for medical debt. Learning about Chapter 7 and Chapter 13 will help clarify what you could stand to gain and lose during the process.
What You Should Expect When Youre Sued By Your Credit Card Issuer
A large number of people today rely on credit cards to make purchases and pay bills, thus racking up excessive debt which they cannot repay. Instead of having to wait until you are sued by the credit card issuer, declaring bankruptcy is one of the ways you can have the debt discharged. If youre facing this kind of debt crisis in San Diego, CA, contact the San Diego Bankruptcy Attorney Group for guidance.
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What If I Cant Afford Not To Use My Credit Cards And Stay Current With Minimum Payments
Once you know that filing bankruptcy is the debt relief path youâll take, itâs okay to stop making minimum credit card payments if doing so means you can afford necessities. Yes, this will ding your credit score, but you can begin rebuilding that after your discharge is entered.
Itâs better to prioritize your needs for food, shelter, and transportation over your desire to maintain your credit score. Having a few missed payments on your credit report from the months before filing your bankruptcy case is better than not being able to discharge your full debt.
Past-due payments and filing bankruptcy will appear on your credit report and affect your credit score. Once your unsecured debts are erased by bankruptcy, then your debt to income ratio is more favorable.
After discharge, youâre not carrying a large debt load and lenders know you canât file for Chapter 7 bankruptcy again until eight years have passed, so in some ways, you become a more desirable candidate for loans and lines of credit than before bankruptcy.
When you stop making minimum payments on your credit card bills, your creditors will start trying to collect from you. Theyâll usually start with letters and frequent collection phone calls. As soon as you file your bankruptcy petition, the automatic stay takes effect and all collection activity against you must stop.
You Can’t Get Rid Of Credit Card Debt Incurred Due To Fraud
Sometimes the creditor can challenge the discharge of your credit card debt. If successful, the court will not discharge the debt, and you’ll remain responsible for paying for it after your case ends. Here are a few common situations:
- You made a false statement on your credit card application to deceive the creditor that was “material” to the credit card issuer’s decision to extend credit to you. For example, you grossly inflated your income.
- You charged more than $725 to any single creditor for luxury goods or services within 90 days of your bankruptcy filing. In this situation, the law presumes that your intent was fraudulent.
- You got a cash advance from a single creditor totaling more than $1,000 within 70 days of your bankruptcy filing.
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Filing For Chapter 13 Bankruptcy Without Your Spouse
Chapter 13 is considered the repayment bankruptcy. In this filing, the court works out a repayment plan for debt based on your income and financial situation. Creditors may not receive everything they want, but they will receive something.
Chapter 13 bankruptcy includes what is called a co-debtor stay. This is a good thing. It protects your spouse or partner as part of the automatic stay. The co-debtor stay prevents creditors from pursuing debt for the spouse for the duration of the bankruptcy. There is no co-debtor stay in Chapter 7, only in Chapter 13, so consider carefully which is better for you if you need to file. It also only protects individuals, not businesses.
The co-debtor stay does not release the spouse from obligations for joint debts. The co-signer for any debt remains responsible for paying it. As long as the spouse meets those obligations, their credit score will not be affected.
If You’re Wondering About How To Get Out Of Credit Card Debt You’re Not Alone
Almost all credit card debts are unsecured and can and will be discharged in your bankruptcy. It does not matter how much you owe on any one card or whether you are current on payments or delinquent on payments. It is advisable to stop using these cards altogether once you begin to explore your bankruptcy options. Once a decision is made to file a Chapter 7 bankruptcy in Iowa, we will undoubtedly advise you to stop making payments on your credit cards.
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Filing Bankruptcy May Affect Your Credit For Years
Bankruptcy sticks with you for a long time. For example, it will stay on your credit report for up to 10 years. As a result, you’ll probably have a harder time getting a loan in the future because of a bankruptcy filing.
Also keep in mind that you’re limited on the number of times you can file bankruptcy. Chapter 7 bankruptcy can be filed once every eight years, while Chapter 13 can be filed every six years. So, if you do file for bankruptcy, make sure you do it right because it will be a while before you get another crack at it.
Comparing The Best Credit Cards After Bankruptcy: Earning Rate
Of the three cards we’ve chosen, only the Discover it® Secured Credit Card offers users any rewards on their spending.
The Discover it® Secured Credit Card offers users 2% cash back at Gas Stations and Restaurants on up to $1,000 in combined purchases each quarter, 1% unlimited cash back on all other purchases – automatically. Discover will also automatically match all the cash back you’ve earned at the end of your first year. These are great benefits considering there is no credit score required to apply, so you can earn rewards on your responsible use of your card all while working to rebuild your credit.
While the other two cards on our list don’t offer any rewards structure, for consumers who have filed bankruptcy, it’s much more important to focus on responsibly rebuilding your credit than on earning rewards, so these cards are good options, too.
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Pros Of Debt Consolidation
Whether you use a nonprofit credit counseling agency or go it alone, the objective is to turn an assortment of bills into a single monthly payment. If the consolidation loan or debt management program has a lower interest rate than the original debt, you can save money and lower payments. Using debt consolidation will maintain your access to credit and if your plan is successful, your credit score should improve. Plus, you can consolidate your debt online, making the process quick and easy.