The other day I had a discussion with someone who is trying religiously to follow Dave Ramsey's advice regarding their personal finances. This person has a system that requires a great deal of discipline and personally seems to be working for them. When the issue of filing for Bankruptcy came up, it was like I had spewed the kind of verbal venom that is reserved for the playground bully.
It would appear that Mr. Ramsey relies on his personal experience and also some types of "studies" that show filing for Bankruptcy is one of the top 5 negative life events a person can experience. I will agree to this point, filing for Bankruptcy doesn't have the same sort of joy associated with your wedding day or getting that first great job, etc. But, I think that either from the point of marketing or a misguided belief, he misses the point. As it is the events leading up to a person needing to file Bankruptcy are often very negative, not the actual process of Bankruptcy. This can be anything from a job loss to an unexpected medical emergency that puts the person into a tough financial spot that they cannot get out of, even with self-discipline. Rebuilding credit after a Bankruptcy can take some time, but chances are if you are contemplating a Bankruptcy filing, your credit is already in really bad shape.
Often times people that I meet with talk about their "moral" obligation to pay back their debts. While this can seem honorable, I often remind people that you have a contractual obligation to pay back your debts, whether those be related to credit cards, mortgages, medical expenses, etc. You have a moral duty to feed your family and if your contractual obligations are making it impossible to meet your true moral obligations, then you are at a spot, where Bankruptcy can be helpful.
To be certain, the process can seem painful, but less painful then the repeat court appearances because you have fallen behind on your bills. Or, no more painful than repeat attempts by creditors attempting to contact you throughout the day. Everyone's situation is different and each situation needs to be evaluated on it's own to determine whether or not Bankruptcy would be a valid solution to your financial problems.
If you are experiencing financial difficulties and want to know more about Bankruptcy, contact my law office today for a Free Consultation.
Saturday, November 26, 2011
Wednesday, August 17, 2011
Reaffirming a Car Debt - South Bend Bankruptcy Attorney
It's common for many people going through bankruptcy to have a car payment. Sometimes, they may be faced with whether or not to keep a car that has an on going payment. As part of an agreement to keep the car the lender may make you sign what is known as a reaffirmation agreement. Is it a good idea?
In a nutshell, it is a contract that basically says you are going to pay off a debt that would have otherwise been subject to a discharge under your bankruptcy case. This contract is filed with the bankruptcy court and essentially re-establishes your liability to pay the debt.
There aren't that many benefits to reaffirming a loan in my opinion. Many lenders may make you sign one as a condition of keeping the car if you have filed for bankruptcy. It may be worth it if you have a low balance and a low monthly payment and can pay off the car relatively quickly. Sometimes people may want to protect a co-signor (which is typically a family member) by reaffirming the loan so that they can continue to make payments and keep the creditor from pursuing the co-signor. One positive to reaffirmation is that the monthly payment should be reported on your credit report, which may help you reestablish credit.
More often than not, reaffirmation is not a good idea in my opinion. Typically, what you owe on the car will be a lot more than what the car is worth. You are better off trying to see what you kind of car you can get for $1500 to $2500. You now also have to worry about being on the hook for any deficiency judgment that may come as a result of a repossession of the car which had a loan reaffirmed. Generally, under bankruptcy the deficiency would be part of the discharge.
The Law Office of Jeffery M. Haupt is located in South Bend, Indiana and helps people handle family law issues such as divorce, parenting time, child support, paternity, and child custody. The information in this blog should only be used for educational purposes and not be construed as legal advice. Nothing in this blog creates an attorney-client relationship between me and any readers of this blog. No attorney-client relationship is created until you have a document from me saying so. We are a debt relief agency, we help people seek relief using the Bankruptcy Laws.
Reaffirmation Agreements
In a nutshell, it is a contract that basically says you are going to pay off a debt that would have otherwise been subject to a discharge under your bankruptcy case. This contract is filed with the bankruptcy court and essentially re-establishes your liability to pay the debt.
Is signing a Reaffirmation Agreement a Good Idea
There aren't that many benefits to reaffirming a loan in my opinion. Many lenders may make you sign one as a condition of keeping the car if you have filed for bankruptcy. It may be worth it if you have a low balance and a low monthly payment and can pay off the car relatively quickly. Sometimes people may want to protect a co-signor (which is typically a family member) by reaffirming the loan so that they can continue to make payments and keep the creditor from pursuing the co-signor. One positive to reaffirmation is that the monthly payment should be reported on your credit report, which may help you reestablish credit.
More often than not, reaffirmation is not a good idea in my opinion. Typically, what you owe on the car will be a lot more than what the car is worth. You are better off trying to see what you kind of car you can get for $1500 to $2500. You now also have to worry about being on the hook for any deficiency judgment that may come as a result of a repossession of the car which had a loan reaffirmed. Generally, under bankruptcy the deficiency would be part of the discharge.
The Law Office of Jeffery M. Haupt is located in South Bend, Indiana and helps people handle family law issues such as divorce, parenting time, child support, paternity, and child custody. The information in this blog should only be used for educational purposes and not be construed as legal advice. Nothing in this blog creates an attorney-client relationship between me and any readers of this blog. No attorney-client relationship is created until you have a document from me saying so. We are a debt relief agency, we help people seek relief using the Bankruptcy Laws.
Monday, July 18, 2011
What is a Section 341 Meeting? - South Bend Bankruptcy Lawyer
The Section 341 meeting is generally referred to as the meeting of creditors. This meeting gives your creditors a chance to ask you questions regarding your bankruptcy filing. The meeting usually involves you, your attorney, and the bankruptcy trustee. Under most circumstances, your creditors will not likely show up. If they do show up they will typically ask a couple of questions. The situation is very professional and much more low key than what you would see in a trial setting on TV.
During the Section 341 meeting the trustee will typically ask you identification questions, questions about your petition, questions about your property, debts, and any potential preferential payments or transfers that you may have made. Which usually is where any problems will arise from your case. What are some of the typical problems that come up during the meeting of creditors? Preferential payments, which generally means you paid one creditor and not the others, will raise questions from the trustee. The trustee will see if they should get the money back from that creditor so that he or she can spread it more evenly to other creditors.
The 341 meeting is usually over in a matter of minutes. Once the meeting has ended, your creditors have a couple of months (60 days to be exact ) to raise any challenges. If nothing has happened during the 60 day period, you will likely receive your charge in a couple of months.
The Law Office of Jeffery M. Haupt is located in South Bend, Indiana and helps people handle family law issues such as divorce, parenting time, child support, paternity, and child custody. The information in this blog should only be used for educational purposes and not be construed as legal advice. Nothing in this blog creates an attorney-client relationship between me and any readers of this blog. No attorney-client relationship is created until you have a document from me saying so. We are a debt relief agency, we help people seek relief using the Bankruptcy Laws.
During the Section 341 meeting the trustee will typically ask you identification questions, questions about your petition, questions about your property, debts, and any potential preferential payments or transfers that you may have made. Which usually is where any problems will arise from your case. What are some of the typical problems that come up during the meeting of creditors? Preferential payments, which generally means you paid one creditor and not the others, will raise questions from the trustee. The trustee will see if they should get the money back from that creditor so that he or she can spread it more evenly to other creditors.
The 341 meeting is usually over in a matter of minutes. Once the meeting has ended, your creditors have a couple of months (60 days to be exact ) to raise any challenges. If nothing has happened during the 60 day period, you will likely receive your charge in a couple of months.
The Law Office of Jeffery M. Haupt is located in South Bend, Indiana and helps people handle family law issues such as divorce, parenting time, child support, paternity, and child custody. The information in this blog should only be used for educational purposes and not be construed as legal advice. Nothing in this blog creates an attorney-client relationship between me and any readers of this blog. No attorney-client relationship is created until you have a document from me saying so. We are a debt relief agency, we help people seek relief using the Bankruptcy Laws.
Sunday, June 12, 2011
South Bend Bankruptcy Lawyer - Will Bankruptcy Ruin My Credit?
One thing that I've heard from many different people is a concern on whether or not filing Bankruptcy would ruin their credit. There's not a real easy answer for that.
Obviously, a Bankruptcy filing will appear on your credit report and creditor's may decline to extend you credit for anything for a period of time. But, the reality for most people is that by the time you get to the point where Bankruptcy becomes one of the few options available to you, your credit score is likely pretty bad off. If you are at the point of filing a Bankruptcy case, your credit report will likely show late payments, charge offs, judgments, collection agency referrals, etc.
First and foremost, fear of what Bankruptcy will or won't do to a credit score should have very little to no impact on your decision to file Bankruptcy. You should never look at your ability to get credit or your credit score as anything more than a tool businesses use in deciding whether or not to lend you money or how much to charge you for loans. Your credit report is not a measure of your worth of a human being, but rather sets forth a number that businesses use to make decisions.
Filing a Bankruptcy case (either Chapter 7 or Chapter 13) is more based on whether or not you can truly afford your debts. Many people file Bankruptcy everyday for a variety of reasons. The reality is that most of the people that file had simple just came upon bad situations where they could no longer afford their debt because of a job loss, divorce, or unexpected medical issues. These are things that can happen to any of us, and that is what Chapter 7 and Chapter 13 Bankruptcy is there for.
As for your credit score, little by little you'll rebuild it after you've received your Bankruptcy discharge and usually to the point where it is a lot better than it has been in some time.
Obviously, a Bankruptcy filing will appear on your credit report and creditor's may decline to extend you credit for anything for a period of time. But, the reality for most people is that by the time you get to the point where Bankruptcy becomes one of the few options available to you, your credit score is likely pretty bad off. If you are at the point of filing a Bankruptcy case, your credit report will likely show late payments, charge offs, judgments, collection agency referrals, etc.
First and foremost, fear of what Bankruptcy will or won't do to a credit score should have very little to no impact on your decision to file Bankruptcy. You should never look at your ability to get credit or your credit score as anything more than a tool businesses use in deciding whether or not to lend you money or how much to charge you for loans. Your credit report is not a measure of your worth of a human being, but rather sets forth a number that businesses use to make decisions.
Filing a Bankruptcy case (either Chapter 7 or Chapter 13) is more based on whether or not you can truly afford your debts. Many people file Bankruptcy everyday for a variety of reasons. The reality is that most of the people that file had simple just came upon bad situations where they could no longer afford their debt because of a job loss, divorce, or unexpected medical issues. These are things that can happen to any of us, and that is what Chapter 7 and Chapter 13 Bankruptcy is there for.
As for your credit score, little by little you'll rebuild it after you've received your Bankruptcy discharge and usually to the point where it is a lot better than it has been in some time.
Thursday, May 19, 2011
South Bend, Indiana Bankruptcy Lawyer - Thinking about cashing in your retirement account to pay bills?
Retirement accounts (401k's, IRA's, Pensions) are great ways to grow your money while reducing your overall income tax burden. Depending on how much you have socked away, the amount that you have in these accounts could be substantial.
Let's say you've become unemployed or have fallen on hard times. Feeling a pinch to cover your expenses and make your regular credit card, car, or house payments, you instead start thinking about this potentially large amount of money that you have "sitting" around as a way to preserve your financial well being for a little while. It's your money, you can cash this account out. But should you?
While it is commendable that you wish to meet your responsibilities and continue to make your monthly payments, you should really think about what it is your are giving up. Chances are once you cash out the account, you'll face significant tax penalties and you have made what is generally untouchable in a Bankruptcy fair game for your creditors because the money is no longer in a retirement account.
Before we even consider how Bankruptcy protects these assets, let's think about how withdrawing from your retirement account will usually only delay the underlying problems. Let's say you have $50,000 in a retirement account and you decide to withdraw that amount. Well, now it is no longer $50,000 because you will have to pay taxes and penalties because of the early withdrawal. So, now you have less money, and depending on your debt, you may catch a few things up, but you are probably only going to find that you are treading water for a little while.
What happens if you decide to go the Bankruptcy route instead of cashing in a retirement account? Usually, the amounts that you have in retirement accounts are exempt under a Bankruptcy and therefore protected by creditors. For instance if you have an IRA and you declare Bankruptcy, you can generally exempt up to $1,000,000 (thanks to the 2005 Bankruptcy law, which specifically included IRAs) worth of assets in the IRA. This means that you get to keep your IRA.
401(k) and Pensions will result in similar exemptions. The benefit is that you get to keep your retirement money for retirement, while avoiding tax penalties and still getting the fresh start that Bankruptcy provides.
So before you cash out a retirement account to attempt to get caught up on a situation that is probably out of control, you should consult with a Bankruptcy Lawyer to see all of your options.
The Law Office of Jeffery M. Haupt is located in South Bend, Indiana and helps people handle family law issues such as divorce, parenting time, child support, paternity, and child custody. The information in this blog should only be used for educational purposes and not be construed as legal advice. Nothing in this blog creates an attorney-client relationship between me and any readers of this blog. No attorney-client relationship is created until you have a document from me saying so. We are a debt relief agency, we help people seek relief using the Bankruptcy Laws.
Let's say you've become unemployed or have fallen on hard times. Feeling a pinch to cover your expenses and make your regular credit card, car, or house payments, you instead start thinking about this potentially large amount of money that you have "sitting" around as a way to preserve your financial well being for a little while. It's your money, you can cash this account out. But should you?
While it is commendable that you wish to meet your responsibilities and continue to make your monthly payments, you should really think about what it is your are giving up. Chances are once you cash out the account, you'll face significant tax penalties and you have made what is generally untouchable in a Bankruptcy fair game for your creditors because the money is no longer in a retirement account.
Before we even consider how Bankruptcy protects these assets, let's think about how withdrawing from your retirement account will usually only delay the underlying problems. Let's say you have $50,000 in a retirement account and you decide to withdraw that amount. Well, now it is no longer $50,000 because you will have to pay taxes and penalties because of the early withdrawal. So, now you have less money, and depending on your debt, you may catch a few things up, but you are probably only going to find that you are treading water for a little while.
What happens if you decide to go the Bankruptcy route instead of cashing in a retirement account? Usually, the amounts that you have in retirement accounts are exempt under a Bankruptcy and therefore protected by creditors. For instance if you have an IRA and you declare Bankruptcy, you can generally exempt up to $1,000,000 (thanks to the 2005 Bankruptcy law, which specifically included IRAs) worth of assets in the IRA. This means that you get to keep your IRA.
401(k) and Pensions will result in similar exemptions. The benefit is that you get to keep your retirement money for retirement, while avoiding tax penalties and still getting the fresh start that Bankruptcy provides.
So before you cash out a retirement account to attempt to get caught up on a situation that is probably out of control, you should consult with a Bankruptcy Lawyer to see all of your options.
The Law Office of Jeffery M. Haupt is located in South Bend, Indiana and helps people handle family law issues such as divorce, parenting time, child support, paternity, and child custody. The information in this blog should only be used for educational purposes and not be construed as legal advice. Nothing in this blog creates an attorney-client relationship between me and any readers of this blog. No attorney-client relationship is created until you have a document from me saying so. We are a debt relief agency, we help people seek relief using the Bankruptcy Laws.
Wednesday, May 11, 2011
South Bend Indiana Bankruptcy Lawyer - Can I Keep Anything After I File Bankruptcy?
This is a question that many people have and for obvious reasons. You are facing financial difficulty, but you still need your car to get to and from work and it would be nice to hang onto a few things.
Don't worry, the Bankruptcy laws allow you to keep a portion of your property. These are referred to as "exemptions" and each state gets to set their own limits, and they do vary change from time to time. Currently, the following exemptions are allowed in a Bankruptcy case filed in Indiana:
$350 (for single) and $700 (for joint filing) intangible personal property. Think of this as the cash you have on hand, in a checking or savings account, or under the mattress. The amount is looked at from the day you file a Bankruptcy Petition.
One common exemption people have heard about is what is referred to as the "Wild Card." The exemption allowed is $9,350.00 for an individual. If you and your spouse are filing then you can claim $18,700.00 in exemptions. The technical term for the "wild card" is the "tangible exemption." This is property that you own, not including real estate. Think of this as things such as your car, jewelry, furniture, guns, etc.
Finally, if you own a home, Indiana allows for a "homestead exemption" of up to $17,600 for an individual filer and $35,200 for couples filing together.
This is a quick overview to just show you that Bankruptcy doesn't require you to give up everything that you owe. You will be able to keep some of the items that you own, while at the same time get a fresh start! Contact a Bankruptcy Attorney today to see what legal options you have.
The Law Office of Jeffery M. Haupt is located in South Bend, Indiana and helps people file for Bankruptcy. I am a debt relief agency. The information in this blog should only be used for educational purposes and not be construed as legal advice. Nothing in this blog creates an attorney-client relationship between me and any readers of this blog. No attorney-client relationship is created until you have a document from me saying so.
Don't worry, the Bankruptcy laws allow you to keep a portion of your property. These are referred to as "exemptions" and each state gets to set their own limits, and they do vary change from time to time. Currently, the following exemptions are allowed in a Bankruptcy case filed in Indiana:
$350 (for single) and $700 (for joint filing) intangible personal property. Think of this as the cash you have on hand, in a checking or savings account, or under the mattress. The amount is looked at from the day you file a Bankruptcy Petition.
One common exemption people have heard about is what is referred to as the "Wild Card." The exemption allowed is $9,350.00 for an individual. If you and your spouse are filing then you can claim $18,700.00 in exemptions. The technical term for the "wild card" is the "tangible exemption." This is property that you own, not including real estate. Think of this as things such as your car, jewelry, furniture, guns, etc.
Finally, if you own a home, Indiana allows for a "homestead exemption" of up to $17,600 for an individual filer and $35,200 for couples filing together.
This is a quick overview to just show you that Bankruptcy doesn't require you to give up everything that you owe. You will be able to keep some of the items that you own, while at the same time get a fresh start! Contact a Bankruptcy Attorney today to see what legal options you have.
The Law Office of Jeffery M. Haupt is located in South Bend, Indiana and helps people file for Bankruptcy. I am a debt relief agency. The information in this blog should only be used for educational purposes and not be construed as legal advice. Nothing in this blog creates an attorney-client relationship between me and any readers of this blog. No attorney-client relationship is created until you have a document from me saying so.
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