How To Dissolve An Llc
Every state has different requirements for dissolving an LLC. In general, you must complete the following steps:
Luxury Credit Card Purchases And Cash Advances
If you’re using credit card purchases to get by, you might run into a problem. It’s fine to use credit for the necessities of life, such as food, utilities, and rent. However, luxury purchases of $725 and over made from the same creditor within 90 days before bankruptcy are presumed fraudulent.
Similarly, cash advances from a single creditor exceeding $1,000 taken within 70 days of filing are presumed fraudulent, as well. In either case, the creditor could file an adversary proceeding asking the court to exclude the debt from your discharge.
Also, keep in mind that making purchases on credit with no intention of repaying the debt is also considered fraud. For instance, if you knowingly max out your credit cards with the plan of waiting 90 days to file for bankruptcy, you end up facing a fraud suit. If you’re not sure whether you should file for bankruptcy, it’s a good idea to meet with a local bankruptcy attorney.
Job Loss And Bankruptcy Should I File Now Or Later
Timing is important when facing Job loss and bankruptcy. The amount and type of debt you have makes a difference. Even the difference between renting or buying your home can have a dramatic impact on your choice.
The first question I always ask my clients is how long they expect they will be unemployed. In recent years, the answer is that job search takes two to ten times longer than it used to. Add Corona virus to the picture, and the answer becomes even more difficult. Still, you have to make the best estimate you can.
Create your disaster plan. What is your worst-case job replacement scenario? What can you afford not to pay, and suffer the least serious consequences. This is not the time to worry about your credit score. Food, shelter and transportation are the most important things to pay. All else has low priority.
For extended planning, if you own your home, you can request a forbearance. See if your car loan can be extended. Dont worry about credit cards and personal loans for now.
Hold out as long as you can. See a bankruptcy specialist to make a plan. But, you might want to old off as long as you can, ideally until you income is replaced, before you file. That way you can wipe out all the debt you have in your bankruptcy.
Looking for More Articles on Bankruptcy?
Looking for more insight and articles on Bankruptcy? Head over to the Bankruptcy Learning Center for more information.
Recommended Reading: Which Is Better Chapter 7 Or 13 Bankruptcy
Keeping Your Home In Chapter 7 Bankruptcy
In a Chapter 7 bankruptcy, the court will liquidate most of your unsecured debts thats debt like credit card debt and personal loans, that isnt attached to an asset like a house or a car. Once that debt is out of the way, it should make it easier to make your mortgage payments.
If you cant pay your mortgage after bankruptcy, the result will be the same as not paying it before bankruptcy you eventually will lose your home.
If you know you are going to file for bankruptcy and want to keep your house, you can see if your mortgage lender would work with you on modifying your mortgage agreement in a way that would allow you to catch up on your payments. Do this before you file for bankruptcy. Once you file, the court takes over your assets and its out of your hands.
Here are some of the things that make it more likely your house will be protected if you file for Chapter 7 bankruptcy:
- You are up to date on mortgage payments
- All, or most, of your equity is protected with an exemption
- You owe more on the house than its worth
- You demonstrate to the court you can make your mortgage payments on time
- You negotiate with your lender before you file for bankruptcy on a loan modification.
Bankruptcy Filing: When To Wait After Losing A Job
You may feel panicked after losing a job and watching debts increase. Filing for bankruptcy often needs the right timing to qualify, and an experienced bankruptcy attorney can tell you the best time to file for your situation.
You should consider these questions before you file or speak to an attorney:
- When did I lose my job?
- How long do I predict I will be unemployed?
- Was I making good money that will last me for a few months?
- What am I getting through unemployment compensation and unemployment insurance?
- Does a new job look promising?
- Is my job industry in demand?
- Will I receive Social Security benefits soon?
- Will I be unemployed for months or years due to injury or illness?
- Will medical debt grow while I am unemployed?
Typically, you need to wait to file if you just had a high-earning position because you will fail the Means Test. You might also want to wait to file if you need more medical care. A bankruptcy discharge only works on your debt when you file, so any major medical debt in the future would not be discharged. Wait until your medical procedures or care is complete, so you can see a full view of your medical debt.
Read Also: Can You File Bankruptcy On Business Taxes
What Happens To Your Mortgage When You File For Bankruptcy
A mortgage is a secured debt that means that if you pay, you keep the security on it, which is your house. If you dont pay, you lose it. Bankruptcy, of course, complicates that.
Under Chapter 7, if its determined you cant pay your mortgage, then the bank will foreclose. The house will no longer be yours, and youll have to move out. You dont make any more payments in most cases.
With Chapter 13, you continue to make monthly mortgage payments, and also make past due payments, keeping the mortgage alive. But its not easy more Chapter 13 cases were dismissed in 2020, which means finished without being completed, than were discharged. When a case is dismissed, its as though the person never filed. The majority dismissed cases was because homeowners didnt or couldnt make their payments. Whatever the reason, the debts are still owed, which puts you right back where you were before filing.
Whether you stick with the payment plan or cant, you are still responsible for paying your mortgage or you will lose your house.
Can You Be Denied Housing Because Of Bankruptcy
Another common concern individuals have is how a bankruptcy filing will affect their current and future housing situations. While there are certain things that landlords are not allowed to take into consideration when granting or denying someone housing – like race, religion, mental condition, income, or sex – they are allowed a great deal of discretion when it comes to your credit history. This includes being allowed to deny an individual housing because of bankruptcy. This means that when it comes to applying for housing after bankruptcy, it often depends on the landlord.
Landlords have several resources at their disposal for screening potential tenants. Not only can they perform a credit check on you, but there are also services dedicated to providing landlords with background information when you apply for housing.
The best thing to do? Be honest. Since your landlord is going to learn about your bankruptcy filing no matter what, it is likely in your best interest to have an initial conversation with them at the beginning of your filing process. This is not only a show of good faith but also gives you a chance to explain your situation and the steps you are taking to improve it.
Think of it this way: Having your debts discharged means you’ll have even more free cash flow. A prospective tenant that applies for housing, but owes a great deal of debt, will be more of a risk to a landlord than a tenant who has just discharged all of their debt.
Read Also: What Happens If You Declare Bankruptcy Uk
You Will Have A Trustee That Will Manage Your Bankruptcy
A trustee is the person or entity that manages your bankruptcy. They work with you, and your creditors, to achieve a fair and reasonable outcome for all. During bankruptcy, you have an obligation to provide information to your trustee, including changes to your circumstances. This may involve supplying books, bank statements and other documents that the trustee asks you to provide.
When you apply for bankruptcy, you can choose a registered trustee. If you do not choose a trustee, your bankruptcy may initially be administered by either the Official Trustee or a registered trustee.
What Are The Income Requirements For Chapter 7
To file for bankruptcy relief, you must complete a bankruptcy form called the Means Test. The Means Test calculates your average income and compares it to the average income for households in your state. If you have four members of your household, your income is compared to the average income for a household of four in your state.;
If your average income is higher than the median income for your state, you fail the Means Test and may not qualify for debt forgiveness under Chapter 7.;Each state has different median income levels based on data gathered from the U.S. Census Bureau and the Internal Revenue Service. The figures are updated every few months to ensure that the income levels reflect current median income levels for each state. The most recent median income and household size by your state for filing on or after April 1, 2020 can be found here.
To calculate your median income for the Means Test, multiply your average monthly income by 12. The Means Test has two sections. You could pass the second section of the Means Test to qualify for Chapter 7 even if your median income is above the state median income. We discuss the second section of the Means Test below after we explain how to calculate your average income.
Don’t Miss: Are Medical Bills Dischargeable In Bankruptcy
Bankruptcy Normally Lasts For 3 Years And 1 Day From The Day We Accept Your Bankruptcy Form
Your bankruptcy period starts from the day we accept your bankruptcy application. If a creditor makes you bankrupt, the bankruptcy period starts from the date you file a statement of affairs that we accept. In some cases, your trustee can lodge an objection to extend the bankruptcy for up to eight years.
Tips For Securing Housing After Bankruptcy
Tell your story. While the thought may be intimidating, one of the best things you can do to improve your chances of securing housing is to have a candid conversation with a potential landlord. Being open, honest, and upfront about your situation will help build a personal connection with them. An initial conversation gives you a chance to provide context to your filing as well as explain the steps you are taking to make the most of your fresh start.
Show your rental history. A good track record is something to be proud of. Try presenting records from previously paid rents. If you were making timely rental payments consistently, it will give potential landlords more confidence in you.
Show your recent credit history. Building up a solid credit history shortly after your bankruptcy filing is another great way to show landlords that you are working to improve your situation. Your most recent credit history is much more relevant than older bankruptcy filings, so use this to your advantage and take steps to increase your credit score.
Offer references. And lastly, have references available that can vouch for your creditworthiness. These references can be previous landlords, employers, and roommates. Anyone who’s known you personally and can testify to your character makes for a good reference.
Read Also: How Soon Can You Get A Loan After Bankruptcy
Filing Bankruptcy Without Your Spouse: What Happens To Debts & Property
If youre married and considering bankruptcy in Indiana, youre probably wondering whether you can file alone and how this could impact your spouse. This is one of the most common questions for bankruptcy attorneys.
Yes, you can file bankruptcy without your spouse. But there are some important things you should know because bankruptcy can affect your debts and property in unexpected ways.
What If I Cant Afford Payments During Unemployment
A lack of income can force you to fall behind on payments to your creditors. Late payments over 30 days late can cause several issues. Late payments can be recorded on your credit record where it can take time to be removed. A late mortgage payment, credit card payment, auto payment or any other late payment can also result it additional fees. Depending on the policy of the creditor you are dealing with, there can be various amounts of late fees you will be responsible for in addition to the original debts that you owe. There may also be penalties in your rate of interest. Some creditors will raise your interest rate due to late payments. Creditors may also sue you in court to collect on the debt that is owed to them. After a judgment is granted to a creditor, they can levy your bank account or attach a lien to your property. It is important to limit your exposure to such activity when you are unemployed.
Don’t Miss: How To Get Rid Of Bankruptcy On Credit Report
How To Know If Your Home Is Exempt
Figuring out whether your home is exempt is a simple math problem if you owe more than the market value, its exempt. Be sure to check what the exemption rules in your state are, because thats part of the math. Less simply, the paperwork you fill out requires you to list what you owe, the exemption and your equity. You file the items you believe are exempt in Schedule C. This not only includes your house, but you also get an allowance for your car, and items like furnishings, things necessary to do your job, and more. Its always a good idea to get help from an expert in bankruptcy wholl guide you through this complicated procedure.
What Should You Do
Ideally, you should try to keep your job while youre filing for bankruptcy. If you must quit your job, line up another source of income as soon as possible, and make sure you are prepared to deal with potential ramifications of losing your job during the process. You may need to fill out new paperwork or file for an adjustment to your current payment arrangements in order to balance your debts with your new financial position. If you do lose your job for reasons beyond your control, look for a new source of income as soon as possible. In some cases, you may be able to put bankruptcy proceedings on hold while you seek new employment.
Are you struggling to hold on to your job while filing Chapter 13 bankruptcy? Do you need advice about the bankruptcy process and what it will mean for you? We can help.;Contact us;today to learn more.
You May Like: How Long Will Bankruptcy Be On My Credit Report
What Does Quitting Your Job Mean For Chapter 13 Bankruptcy
While you can leave your job while filing for Chapter 13, that does not necessarily mean that its a good idea. When you file for bankruptcy, you face a number of challenges. In Chapter 13 bankruptcy, you will set up a payment arrangement that allows you to pay down certain debts. This may include paying down a second mortgage, taking care of car payments, or getting rid of domestic debts that have left you struggling. Generally, this repayment will take place over a 3-5 year period, during which you will have much less trouble making improvements to your credit than you would if you file for Chapter 7 bankruptcy. This offers a number of advantages to many individuals, making it the preferred type of bankruptcy for many.
If You Need Bankruptcy Protection Make It Count
There’s a limit on how often you can apply for bankruptcy, which is why Tadross recommends his clients think very carefully about it before going that route. The danger of jumping into a bankruptcy head-first right now is that you may end up incurring more debt over the next few months. If that happens, and you’ve already filed, then you won’t have a lot of options to wipe out your new debt.
If you file a Chapter 7 bankruptcy and receive a discharge of your debt, you can’t file again for eight years. If you file for Chapter 13, you’ll need to wait six years before you can file for a Chapter 7 bankruptcy. If you want to re-file for Chapter 13 bankruptcy again, the waiting period is two years.;
It’s important to consider the timing. Will you see any benefit now? For example, if you’re about to lose your home or your car is going to be repossessed, then filing for a Chapter 13 and stopping the immediate foreclosure may help. Several states and cities have halted foreclosures and those with federally-backed mortgages are protected for now, but many homeowners who aren’t covered by these measures.
If you just lost your job or were furloughed because of the coronavirus, but expect to be rehired once business resumes, then it may be best to wait, says John Rao, an attorney and bankruptcy expert with the National Consumer Law Center.;