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From: nytimes.com
By: Azi Paybarah
https://www.nytimes.com/2019/10/07/nyregion/nyc-taxis.html

HOW BANKRUPTCY HELPS YOUR CREDIT
COLLECTION COMPANIES AND CREDITOR LIE TO BORROWERS ABOUT THE IMPACT OF BANKRUPTCY ON THEIR CREDIT

A creditor has no right to come into your home
For more than three decades I have heard horror stories spread by collection companies and creditors about bankruptcy and a credit score.  First, always consider the source – collection agents make a percentage of each dollar they collect – sometimes upwards of 25%, plus bonuses.  The creditor’s employees are paid to collect the debt and many have no respect for the truth.  Years ago a collector for an American Express debt told my client, a newly widowed senior citizen, that the law requires her to allow the collector to come to her home and take her property.  He said he would be there that afternoon and that she must let him into her home.  (I don’t believe he was actually employed by American Express because I have never heard a similar story since.)  Of course, she believed this creep, but fortunately she called us before falling into his web of deceit.  I explained the law – no creditor can take anything without a court order and even then the basic necessities (such as social security, furniture, small vehicle, etc.) are exempt (protected).  That afternoon, my paralegal went to her home and spent time talking over tea and cookies.  (She sent some home and they were really good!!)  The next week we filed bankruptcy for this sweet woman and stopped all the calls and harassment.  I can only hope there is a special spot in hell for this young man who terrorized this innocent woman at a horrible time in her life (she was married for than 50 years and her husband took care of the finances).
Does bankruptcy really help rebuild your credit score?
After bankruptcy, credit scores go steadily up, says a 17 year study released by the Consumer Financial Protection Bureau.

• Median credit scores increase steadily from year-to-year after consumers file a bankruptcy petition. Median scores for Chapter 7 filers recover more quickly than those for Chapter 13 filers possibly due to the much quicker and more likely discharge of Chapter 7 filings. (See charts below prepared by Consumer Financial Protection Bureau)

As more time passes after bankruptcy the higher your credit score
You can see from the charts above that your credit score will continue to rise after bankruptcy.  The longer you wait, the higher your score.  There are things you can do to increase your score.
Credit reports are notoriously wrong
It is very important to pull your credit reports 6 months after filing a bankruptcy and look for errors.  Attorney Mike Cardoza lays out how to do that in How To Spot Credit Report Errors After Your Bankruptcy & Fix Them.
Have a plan and stick to it.
Don’t get so fixated on your credit score that you forget to use common sense.  Don’t take on debt that you cannot afford to repay.  Be very careful in signing up for more than two credit cards.  Always pay the balance on the credit care BEFORE the date that credit card reports to the credit bureau.  Never carry more than 20% of the available credit on any one credit card.  Do plan ahead – it you want to buy a home or vehicle then to commit lots of time to rebuilding your credit score (that will save you thousands of dollars in the monthly payment).
Stay away from the “debt repair” companies – they are scams!!  Learn to recognize scams.
Never use a credit “repair” company – they will be happy to take your money, but never follow through with their promises.  Most fill increase your credit score for 30 days, after which all the debt will be back on your credit report and you will be out hundreds, if not thousands of dollars.

• FTC is cracking down on credit repair scams
• Illegal credit repair schemes
• $2 Million Fine for Misleading Consumers and Illegal Fees

MUSINGS FROM DIANE:
Always be smart when asking someone for their help.  What is their motive?  How do you feel about them (trust your gut)?  Never work with someone who contacted you first (I guaranty it is a scam and will put you in worse shape than before you hired them). Always ask questions and insist on getting answers.  Don’t borrow from yourself (take money out of your retirement) or continue to use credit to pay credit (a true symptom that financial collapse).

How Can I Help You?
The post How Bankruptcy Helps Your Credit Score appeared first on Diane L. Drain - Phoenix Bankruptcy & Foreclosure Attorney.

By Steven P. Taylor, J.D.
Founder of the Law Offices of Steven P. Taylor P.C.

If you become entitled to receive an inheritance after you file for bankruptcy in Indiana, it may be part of your bankruptcy estate. In a Chapter 7 bankruptcy case, it can become part of the assets that the Chapter 7 bankruptcy trustee can take unless it’s protected by an exemption. In a Chapter 13 case, receiving an inheritance does become part of the bankruptcy estate and may increase the amount you have to distribute to your unsecured creditors.

Becoming Entitled To Inheritance Within 180 Days of Filing Bankruptcy

With respect to a Chapter 7 bankruptcy, whether or not an inheritance becomes part of your bankruptcy estate depends on the timing of the inheritance. If you become entitled to the inheritance (not receive) within 180 days after you filed, the inheritance becomes the property of the Chapter 7 bankruptcy estate. 11 U.S.C. §541(a)(5)(A).  You should immediately advise your attorney and are required to notify the Chapter 7 Trustee and Court.  As you may recall, when you file for Chapter 7 bankruptcy, a trustee is appointed to ascertain whether you have assets which the trustee can liquidate and use those funds to pay your creditors.  Some of the debts get paid and the remainder will get discharge, leaving you free to move on from crushing debt.

Likewise, if you become entitled to the inheritance (not receive) within 180 days after you filed, the inheritance becomes the property of the Chapter 13 bankruptcy estate. 11 U.S.C. §541(a)(5)(A). With respect to a Chapter 13 bankruptcy, the consequences of becoming entitled to receive an inheritance also depend on the proposed distribution to unsecured creditors in your plan.   In a Chapter 13 Plan, you must provide a dividend to your unsecured creditors equal to the amount they would receive as if you had filed Chapter 7.  If your dividend is now insufficient, you will need to modify your plan to increase the dividend.  This can be done by an increase in your monthly payments or by devoting a portion of the inheritance when received to the Chapter 13 Trustee to satisfy this requirement.

Potentially losing an inheritance can be an emotionally upsetting time; however, remember that you must be completely honest and disclose all debts and assets to the court.   If the court finds that you misled the court about an inheritance, the Court could impose monetary penalties, dismiss your case and still be required to give up all or some of your inheritance.   Potentially, your actions could lead to an investigation by the government for fraud, which can lead to hefty fines or incarceration.  Therefore, if you do become entitled to inherit within 180 days of filing for bankruptcy, you must disclose that fact to the court and trustee by amending your bankruptcy Schedule B, and maybe C.

• You must amend Schedule B and disclosure your interest in underlying assets of the inheritance and an estimated value. If you are claiming the property as exempt in some fashion, you must also amend Schedule C.

As may be gathered, the trigger is that you have become entitled to the inheritance.  It doesn’t matter when you actually collect the inheritance, even if it is after your bankruptcy is supposed to be over. The date that matters is the date entitled to the inheritance become effective (i.e., the date the decedent passed away).

Becoming Entitled to Inheritance After 180 Days of Filing Bankruptcy

With respect to a Chapter
7 bankruptcy, If you become entitled to an inheritance more than 180
days after you file, the consequences are significantly different. The
inheritance is not part of your bankruptcy assets.  Therefore, a Chapter 7 trustee cannot claim
the inheritance and try to liquidate it for the benefit of your creditors.  It is all yours.

With respect to a Chapter 13 bankruptcy, however, the Court and Chapter 13 Bankruptcy Trustee may still require to amend your plan due to becoming entitled to an inheritance, even if more than 180 days have passed since you filed.  This is because under 11 U.S.C. §1306(a)(1), your Chapter 13 bankruptcy assets include all assets acquired until your case is closed, dismissed or converted.  While technically, you are not required to pay an increased dividend to your unsecured creditors by reason of becoming entitled to this inheritance; the Chapter 13 Trustee will require you increase the dividend to the unsecured creditors by some amount.  (By the way, this can happen when your income and assets increase for any reason during the Chapter 13 bankruptcy repayment plan period, from three to five years.)

Steps to Take to Keep Inheritance

If you are aware that you are the beneficiary of a will of a person who may be passing within 180 days of your anticipated bankruptcy filing date, you may want to suggest that your entitlement be left to you as a beneficiary of a spendthrift trust.  Some courts have held that a true spendthrift trust is not part of the bankruptcy estate.  Contrary to conventional wisdom, spendthrift trusts are not solely for the well-to-do.  Having this discussion with a loved ones who want you to have something with they pass can honor their wishes and allow you to avoid the hassle of dealing with bankruptcy trustee in a bankruptcy proceeding.

Find an Attorney

If you file for bankruptcy in Indiana and receive an inheritance, bankruptcy laws require that you disclose the new assets to the court and trustee. If you anticipate that you may inherit property while in bankruptcy that you really want to keep, you may wish to discuss your case with an experienced Indiana attorney to determine how to protect your inheritance from bankruptcy or how an inheritance will be treated during the bankruptcy.

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Student Loan Change from Forbes Magazine