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If you’re filing for Chapter 7 bankruptcy, you may want to keep your car or your home. Luckily, you’ve got a few options.
When you file for Chapter 7 bankruptcy protection you’re looking to wipe out debts and keep as much of your property as possible. For you, that may include a home or car.
You’ve got a few things to consider, and some options to help accomplish your goals.
Is It Safe?
When you file for Chapter 7 bankruptcy protection you get to keep property if the equity can be exempted.
For a house, you’ll want to get a fair market valuation or appraisal so that you know how much it’s worth.
If it’s a car you’re looking to keep, make sure you look up the value before filing.
From there, you can see if there’s an exemption to cover the difference between the value and amount due on the mortgage or car note.
Here are some of the useful items on this site about bankruptcy exemptions:
Option 1 – Reaffirmation
Reaffirmation is a new promise to pay a particular debt in spite of the bankruptcy filing.
It’s as if you and the creditor both pretend as if your bankruptcy never happened at all.
Once you sign a reaffirmation agreement and it’s approved by the bankruptcy court, you know for sure that you can keep the property after your Chapter 7 bankruptcy is cover.
Option 2- Redemption
Let’s say you want to keep the car but it’s worth less than the amount due on the loan.
You can ask the court to require the lender to give you clean title in exchange for you paying the current value of the property.
There are limits to how this gets done, but if you can get your hands on a lump-sum payment then it may save you a tidy amount of money.
Option 3 – Surrender
Don’t feel like making payments anyone? Just tell the creditor to pick up the car or foreclose on the house.
That’s “surrender.” It doesn’t mean you’ve given up title (the lender still needs to repossess or foreclose in order for that to happen), it just means you’re offering to give it back.
Once the Chapter 7 bankruptcy discharge is issued by the court, your obligation to make payments is wiped out.
Option 4 – Do Nothing, Keep Paying
Why sign a document or cough up big money you don’t have?
In the old days, you could simply do nothing and continue making payments after your Chapter 7 bankruptcy. The lender got paid, you kept the car or house. It was a classic win-win situation.
Not necessarily so anymore, though. Depending on the type of property, the lender and the specific facts of your case it may not work for you to keep making payments and hope to keep the property.
You and I will need to talk about this option if that’s the one you want to take. The last thing I want to see is a situation that blows up in your face, spoiling your plans.
Image credit: maclauren70
Options For Keeping Your Home Or Car After Chapter 7 Bankruptcy was originally published on Consumer Help Central. If you're seeing this message on another site, it has been stolen and is being used without permission. That's illegal, a violation of copyright, and just plain awful.
Hiring a bankruptcy attorney to help you complete the filing process is often recommended to ensure a successful outcome. Many who claim they are unable to pay on their outstanding debt will wonder how they can afford legal representation. This is a common reason why debtors will try to file for protection on their own [...]
Under the Fair Debt Collection Practices Act, a debt collector is specifically barred from contacting a consumer where the debt collector knows that the consumer is represented by an attorney with respect to the debt and can reasonably ascertain the attorney’s contact information unless the attorney fails to respond within a reasonable period of time to the collector. While the FDCPA is not clear as to what constitutes a reasonable period of time, at least one court rejected the argument that an attorney had to respond within fourteen days. The legislative history of the Act itself suggests that it was never contemplated that an attorney would have less than a week to respond to a collector.
The fact is once a collector learns that an Oregon or Washington consumer is represented by our law firm, the collector must deal exclusively with our attorneys and the consumer may not contact you even to confirm that you have retained us or to provide other legal notices.
If you live in Washington or Oregon and you don’t want to hear from collectors anymore it is likely time to retain an attorney. Contact one our Oregon or Washington offices today so that we can help. I will look forward to hearing from you.
The original post is titled Collector is Contacting Me But I Hired An Attorney , and it came from Oregon Bankruptcy Lawyer | Portland, Salem, and Vancouver, Wa .
Your credit report is one of the most important documents out there. As a financial resume of sorts, you should take care to watch it closely.
It drives me nuts when I find out my client hasn’t taken a look at his credit report for … well, in so long he can’t even remember when the last time was that he saw his credit report.
After all, this is a document that amounts to a financial resume – where you’ve been, how you’ve paid back debts, and what you’ve been doing with your life for the past decade or better.
It’s like getting your bills every month and shoving them into the sock drawer. All of your bills. For a decade.
Probably not a good idea. Here’s why.
Your Credit Report Could Uncover Identity Theft
When you look at your credit report, you can make sure there aren’t any questionable accounts listed.
If there’s an account you don’t recognize, you may be the victim of identity theft. Monitoring your accounts to be sure that there isn’t anyone playing fast-and-loose with your credit history is always a good idea.
Nip Credit Report Errors In the Bud
About 40 million Americans have errors on their credit reports, according to a 2013 study.
Mistakes happen – it’s a fact of life. When it comes to credit report errors that may be a bad account, an incorrect address, or even a wrong employer.
Getting those mistakes fixed can be easy or difficult depending on the nature of the mistake, but one thing’s for sure – you can’t take corrective measures if you don’t know about the issue.
Know Before You Apply
You never know when you’re going to need your credit report. Not only do potential creditors check your credit, so do employers, insurance companies and a landlords.
Checking your credit report gives you a window into what those folks are going to see. If there’s a problem, better to know in advance so you can take steps to explain the issue and get it resolved quickly.
How Often To Check Your Credit Reports
Under federal law, you can get a free credit report from each of the three nationwide credit reporting companies (Equifax, Experian and TransUnion) once every 12 months.
It’s your choice whether to get the reports all at once or one at a time, and different folks have different opinions on which way to go.
Some people say that you should get one credit report from each of the major bureaus every four months. In doing so, you can monitor your credit file at no cost more frequently throughout the year.
I usually get my own free credit reports once a year from all three bureaus because it’s easier to sit down and handle any errors all at once. I don’t need to think about sitting down every four months to worry about my credit.
Whichever way you handle the free reports, I recommend that you get the free ones whenever possible. You should also get your credit reports from all three major bureaus (and pay for them) whenever you:
- are looking for a new job;
- are looking for a new place to rent;
- are considering getting a new mortgage (purchase or refinance);
- get a strange phone call about an unpaid debt; or
- are thinking about a new car.
Keep your records clear, double-check for errors, and you’ll be less likely to suffer from needlessly difficult times in the future.
Image credit: AlphaTangoBravo / Adam Baker
Why Check Your Credit Report (And How Often) was originally published on Consumer Help Central. If you're seeing this message on another site, it has been stolen and is being used without permission. That's illegal, a violation of copyright, and just plain awful.
Many of my bankruptcy clients are in sales and are paid on commission. When you file bankruptcy it is important to understand how the bankruptcy code treats commission payments and how you can protect your commissions. The important thing to understand is that if you work with a good Seattle bankruptcy attorney you can protect your future commissions. You should not let the fear of losing your future commissions prevent you from filing bankruptcy.
The biggest area of misunderstanding and concern is how commissions are characterized. You probably think of them as a paycheck, which makes total sense. However, the Bankruptcy Code treats them as an asset. They are an asset because they are an interest in property that you are entitled to receive in the future. The good news is that assets can be protected.
The first thing you have to understand is when a commission becomes an asset. As you know, the sales pipeline is full of customers and potential customers. Just because you have someone in your sales pipeline doesn’t mean that you will get a commission from them or that the commission will be part of the bankruptcy estate. The commission only becomes an asset when you are legally entitled to receive that commission.
Your legal entitlement to the commission is determined by state law. Typically, it arises when the sales contract is signed. In some industries, your legal entitled to a commission only arises when a deal closes. As you know, contract signing and deal closing can sometimes be separated by days, weeks, or even months. During that time a deal can fall through. I am familiar with commission structures and the law governing commissions in real estate, insurance, lending, vehicle sales, outside sales, and inside sales. Additionally, I will work with you to understand your commission structure. The purpose of knowing the law relating to commission income and understanding commission structure is to set up a bankruptcy petition that protects your future commissions.
Once I have analyzed your commission structure, we can setup a bankruptcy filing plan that protects those commissions. The first step is to look at all of your assets and determine how much future commissions can be protected. The second step is to time the bankruptcy petition so that you minimize the future commissions that are actually assets. I work very closely with my clients to determine when to file the case.
The other thing to keep in mind is that your exemptions come first. This is important, because you may not be able to collect all of the commissions that you list on your bankruptcy petition. For example, a sale may not close. The fact that a sale doesn’t close does not reduce your exemption, it reduces the amount available to the trustee.
The bottom line is that sales commissions and sales income can be protected in bankruptcy. If you are concerned about your financial situation contact David Fuller – an experienced Seattle bankruptcy attorney – about how bankruptcy can give you a fresh start and who can protect your future commissions.
The post Sales Commissions In Bankruptcy appeared first on Bankruptcy Attorney Seattle and Kent.
Bringing you the most up-to-date news, tips and blogs throughout the web. Here’s your Bankruptcy Update for June 04, 2013 AMR gets approval to have creditors vote on bankruptcy exit plan In Bankruptcy, Detroit Could Sell Off Its Art Collection Four years after bankruptcy, GM set to rejoin S&P 500
When you file bankruptcy protection you are required to report household income to determine eligibility of the chapter you wish to file. The same is true for married couples who file a joint bankruptcy or a married person filing an individual petition. In other words, you are required to report income of your spouse even [...]
Cash out your equity, get money to pay debts, and live happily ever after. Better watch out.
Last week I spoke with a wonderful woman with $50,000 in credit card debt, medical debts approaching six figures, and no equity in her home. She’s retired, 74 years old, and looking to file for bankruptcy.
We talked about the debts, her assets and, ultimately, the mortgage. Turns out, this was no ordinary mortgage.
Rather, it was a reverse mortgage. And as the name implies, it had gotten her turned upside down.
Reverse Mortgage Basics
A reverse mortgage allows you to borrow against the value of your house, just like a regular mortgage.
The difference is that you don’t have to pay back any of the money until you die or the house is sold.
To qualify for a reverse mortgage, you must be at least 62 years old and live in the property as your primary residence. Any mortgage you have on the property must be paid off with the reverse mortgage proceeds, and the limit on the loan is $625,500 as of this writing in 2013.
There’s usually no minimum income or credit requirement to get a reverse mortgage because s because no payments are required on the mortgage.
How You Get The Money
Once you’re approved, you can choose to either get the money all at once as a lump sum, fixed monthly payments either for a set term or for as long as you live in the home, as a line of credit, or a combination of those options.
The choice is entirely yours, and most reverse mortgages will give you the option and freedom of choice.
Beware The Dangers Of Reverse Mortgages
It all sounds good on paper, especially if you’re strapped for cash. But a reverse mortgage isn’t all wine and roses.
First, realize that you’re probably going to be paying more in fees and interest. This loan isn’t based on your credit, after all; as such, it’s not too far off from those subprime loans that pose such a threat to homeowners.
In addition, the loan’s got to be paid off when you die – often in a short period of time. So if you’re thinking of leaving the house to your children or other heirs, this may pose a problem for them. They’ll need to either sell the house or scramble to get a mortgage to pay off the reverse mortgage. If they’ve got bad credit, this may prove to be difficult.
The Danger Of The Debt Spiral
My client at the beginning of this article came to me with medical debts and no equity in her home. She’d gotten over $250,000 in a lump-sum payment on the reverse mortgage but that was a few years ago – the money went to pay off her old debts.
Now the money was gone, she’d drained her equity and her ability to leave an inheritance, and she was up to her eyeballs in new debt.
There was nowhere for her to turn except bankruptcy.
This is the same problem many other people have when they refinance. The difference here is that my client was elderly and didn’t have the ability to refinance her existing loan again.
That’s not to say that a reverse mortgage is always a bad idea, however. If you can use the funds to get out of debt, understand the risks and costs, and remain debt free then it’s a viable option.
Be sure to remain vigilant and informed.
For more information and resources, check out the following:
- Top 10 Things To Know About Reverse Mortgages (HUD)
- Reverse Mortgages For Seniors (HUD)
- Reverse Mortgages (AARP)
- Reverse Mortgage Information (FTC)
Image credit: Rusty Clark
Reverse Mortgages – Tool For Getting Out Of Debt, Or Recipe For More Trouble? was originally published on Consumer Help Central. If you're seeing this message on another site, it has been stolen and is being used without permission. That's illegal, a violation of copyright, and just plain awful.
Most often when you think about filing bankruptcy the process is completed by the debtor seeking protection. Yet, there are special circumstances in which a debtor may not be able to file a petition due to mental, physical, or financial challenges. It may actually make sense for them to file bankruptcy, but they are unable [...]
Courts have largely rejected a restrictive definition of the term debt allowing coverage of a broad spectrum of “consumer debts” beyond what you might normally expect including such diverse obligation as rent, student loans, utility and insurance bills,condo and attorney fees, judgements, debts already discharged in bankruptcy, car rental agreements and even campground memberships.
Some debts are just not debts for FDCPA purposes including some debts that you might expect to be covered such as taxes, shoplifting civil claims, fines, license fees, car accidents and child support. If a collector is harassing you for any of these non-FDCPA debts, relief still might be found under either Washington or Oregon state collection laws or under the Bankruptcy code, but you cannot seek assistance under the FDCPA
If you are getting harassed by any creditor or collector give us a call today. We can discuss your situation over the phone or, even better, set up an appointment for you to come in either of our Washington offices in Seattle or Vancouver or one of our Oregon offices in Salem or Portland. We will look forward to hearing from you.
The original post is titled Consumer Debts Covered Under the Fair Debt Collection Practices Act , and it came from Oregon Bankruptcy Lawyer | Portland, Salem, and Vancouver, Wa .
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