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The ending of a marriage requires you to address all of the debts that you acquired during your marriage. Even if you were able to handle your debts during the marriage, you might not be able to handle them after a divorce. This is because of economies of scale; basically, it’s cheaper for two people to live together than it is for them to live separately. This means that financial planning must be part of your divorce planning.
One question is whether you should file bankruptcy; and then, whether it makes more sense to file bankruptcy before your divorce or after your divorce. There is no right answer. Here are some factors to consider if you want to file bankruptcy before your divorce.
- It’s Cheaper To File Bankruptcy Together: A married couple can file jointly; and they can pay a single filing fee and a single attorneys’ fee. If you file bankruptcy after the divorce, you will pay twice as much because you are paying for two separate bankruptcy cases.
- You Don’t Have To File Bankruptcy Together: Even if you are not divorced yet, you can still file bankruptcy and still reap many of the benefits of a getting a divorce after a bankruptcy is complete. It may be to your advantage to file bankruptcy before the divorce is complete, even if your spouse does not file with you.
- It Will Simplify Your Divorce: Washington State is a community property state. This means that all property acquired during a marriage and all debts acquired during a marriage are share equally between the spouses. The Divorce Petition requires you to divide the community debts. If you file bankruptcy before the divorce, then the division of debts can be handled with ease. This will save you time and attorneys’ fees in the divorce.
- It Will Simplify the Division of Community Property: I have seen many Divorce Decrees that are extremely complicated because the community property division is full of offsets for debt. By simply getting rid of the debt ahead of time, you can simplify the community property division. This will save you time and attorneys’ fees in the divorce.
- It Will Make It Easier To Find A Family Lawyer: If you have lots of debt that you have to pay each month, it will be harder to pay for your divorce lawyers. Also, if you file bankruptcy before getting a divorce, your family lawyer will not be worried that you’ll file bankruptcy on their attorneys’’ fees. This makes it easier to find a family lawyer and pay for that family lawyer.
- It Will Make The Divorce Less Stressful: Divorce is stressful enough, without having to worry about whether bills are being paid. It is easy for a credit card bill or a medical bill to slip through the cracks during a divorce. Taking care of your debt before you get divorced means you don’t have to worry about your creditors.
- You Will Rebuild Your Credit Sooner: Divorce tends to hurt people’s credit scores. This is because it is easy for a bill to slip through the cracks and go to collections or it is easy to fall behind on bills because it is more expensive to live as a single person than as a married couple. What many people do is get divorced, suffer through several months or years of just scraping by, and then file bankruptcy. Then they have to wait for their credit score to rebound from the bankruptcy. The sooner you file bankruptcy, the sooner your credit score will start to rebound.
If you want to file bankruptcy first, and then get a divorce there are a couple of requirements:
- You Have To Sign A Conflict Waiver: You need to inform your attorney that you are planning on getting a divorce so that your attorney can prepare a conflict waiver for you. A conflict waiver is required so that both of you understand what happens if you can’t agree on something during the bankruptcy or if you want to keep information from your spouse.
- You Need To Be Able To Be Able To Work Together: Bankruptcy is a collaborative process. You will need to be able to communicate and work together to prepare the bankruptcy questionnaire, meet with your bankruptcy attorney, and attend the 341 meeting of creditors.
- If You Don’t Think That You Can Work Together: Even if you cannot work together or if there is a major conflict of interest, it is still possible to file bankruptcy before you get divorced. You will just need to file bankruptcy on your own.
If your marriage is ending and you have more debt than you can manage, it may make sense for you to file bankruptcy before you get divorced. Waiting to do your divorce after the bankruptcy process is complete can greatly simplify the process, reduce the stress, and reduce the costs of a divorce.s
For many consumers in both Oregon and Washington, an upcoming eviction often represents the last straw in coping with creditors prior to filing bankruptcy. Thankfully a bankruptcy filing will stop a residential eviction for non-payment of rent in its tracks
If the landlord does not already have a judgment against a tenant before the bankruptcy filing, and the landlord wants to either initiate or continue eviction proceedings, he is barred from doing so by the imposition of the automatic stay. The landlord may, however, file a motion for relief from automatic stay to either initiate or continue an eviction. Washington and Oregon Bankruptcy Courts often grant these requests.
If you are on the cusp of getting evicted from your home or you are slated to appear in court on an eviction matter, please feel free to contact the Northwest Debt Relief Law Firm so that we can go over your options.
The original post is titled Bankruptcy Relief For Eviction in Oregon and Washington , and it came from Oregon Bankruptcy Lawyer | Portland, Salem, and Vancouver, Wa .
Chapter 13 bankruptcy is a court-approved repayment plan based on the debtor’s ability to repay. While the plan is not for everyone, it offers different benefits that debtors may find useful depending on their personal situation. While the plan can last anywhere from three to five years, this aspect alone is enough to discourage debtors [...]
You will not go to jail for failure to pay a bill. There simply is no debtors’ prison anymore and you don’t have to be in fear that you’re going to go to jail if you don’t pay your bills. However, you must appear in court if you are notified to appear either in state or federal court. If someone winds up getting in trouble with the court, it’s going to be for contempt of court for failing to appear.
Here’s how it works in Illinois: once you are served with a summons and you do not appear, there is going to be a judgment entered against you. Approximately 30 days after the judgment is entered, the creditor can bring what’s known as post collection procedures. Those involve a Citation to Discover Assets whereby you have to come into court with particular documentation and answer questions under oath to the creditor explaining where you work, what you have in terms of bank accounts, what you have in terms of property.
If you fail to show up for the Citation to Discover Assets, there will be a second court date called a Rule to Show Cause. The Rule to Show Cause is to explain to the court why you should not be held in contempt for failure to appear before the court pursuant to the court’s order. If you miss both the Citation to Discover Assets and the Rule to Show Cause court dates, then a Writ of Body Attachment can be issued against you. It is from that order that you can be picked up for contempt of court and temporarily jail.
So you don’t go to jail for paying your bills. You go to jail for contempt of court for not appearing before the court. You want to make sure that you appear in court and if you have any questions, contact your attorney whether or not you need to appear for future court dates after your bankruptcy cases filed.
The minute you hire a law firm, this is even before your case is filed; but the minute you hire a law firm and retain an attorney, you have the ability to refer your creditors to that attorney. Under the Fair Debt Collection Practices Act, once a creditor is made aware that you are filing for bankruptcy or that you have representation to file bankruptcy, they are prohibited from contacting you and they must go through your attorney.
The great thing about this is that the minute that you hire my law firm, you are going to be listed on our computer system and you have the ability at that point to refer creditors to us. So a lot of people don’t answer their phone because they know it’s a bill collector or they don’t open their mail because they know it’s a bill and they just pitch it. Once you hire the law firm, you have the ability to tell creditors on the phone that you are filing for bankruptcy, your attorney is Dave Siegel, this is his number, call him. And you also have the ability to open up a bill and send them a quick note notifying them that you no longer wish to be contacted and under the Fair Debt Collection Practices Act, you have an attorney, David Siegel, who is going to be helping you with your debt. So creditors must stop once they receive notice or once you inform them.
Now, there are going to be some creditors that violate the law and will continue to call and continue to send you letters when you tell them to cease and desist. If that is to happen, you want to make sure that you get the name, address, and information on who you spoke to or if you are receiving something in the mail, you give that to your attorney so that your attorney can send a letter advising the particular creditor that you have been retained and that you no longer wish to be contacted. If creditors continue to harass you, your attorney will be able to bring a motion before the court or file a separate lawsuit under the Fair Debt Collection Practices Act.
Purchasing a home, obtaining a mortgage, financing for a house is definitely available after a bankruptcy cases filed. The typical time period that one has to wait to qualify for a decent mortgage is two years. If you can wait two years, you’re going to have a decent down payment hopefully and you are going to get a decent rate. Now, your rate is not going to be as good as someone who had perfect credit and who never had to file for bankruptcy. However, you can start with a halfway decent rate two years after filing your bankruptcy and then look to refinance a year or two or three down the road as your income increases and as your credit history improves.
The more you do to enhance your credit after a bankruptcy filing will pay dividends for you in terms of lower interest rates in the future. I recommend three trade lines after your bankruptcy cases filed. One trade line could be a vehicle purchase. Another one could be a furniture purchase. And another one could be some sort of line of credit or secured credit card that eventually turns into an unsecured card.
If you can maintain a good credit payment history after your bankruptcy case is filed, then within two years, you will qualify for a decent mortgage. If you struggle with debt after your bankruptcy case is filed, then you’re going to find it difficult to get good offers for credit and it will be difficult for you to qualify for a decent mortgage. So it’s very important, when you get your fresh start on a Chapter 7, you take advantage of that fresh start and you don’t do anything that’s going to harm your credit report. If you have a utility bill, you have to pay it on time. If you have a medical bill, you have to make sure you pay that as well. Make sure that you are making all your timely payments after your bankruptcy case is filed so that no new negative information can go on your credit report after your case is filed. This will improve your ability to get credit in the future, including purchasing a home two years after filing.
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It is possible to have your life insurance policy be protected in bankruptcy under certain circumstances. While there are different types of life insurance, this information pertains to simplified whole life and term life insurance policies since a wide majority of consumers have these types most often. There are factors to review in understanding how the insurance [...]
In its first-ever criminal referral, the new Consumer Financial Protection Bureau, the federal consumer watchdog agency mandated by Dodd-Frank, has referred a case for criminal prosecution against a debt settlement company, Mission Settlement Agency. The indictment was filed in the U.S. District Court in Manhattan, charging that the debt settlement company’s manager and three employees “systematically exploited and defrauded” customers who sought to settle their debts. Rather than offering any real debt relief, according to the indictment Mission Settlement Agency, took about $14 million from its customers between mid-2009 and March 2013, keeping the lion share and paying out only $4.4 million to creditors. And of an additional $2.2 million in fees charged to customers, the government’s indictment states that the debt settlement company “never paid a single penny” to creditors. Read more here.
Those of you who have read my blog any amount of time, know that I harbor little love for the debt settlement industry. That’s because I see so many folks who need to file personal bankruptcy after having tried unsuccessfully to settle their credit card and medical debts through debt settlement companies. Frequently our bankruptcy clients come to us after having been sued by one of the credit card companies, or one of the many litigious assignees of delinquent debt, like Cach, LLC; Midland Funding, LLC; Portfolio Recovery Associates; Persolve LLC; the list goes on and on. Despite having paid hundreds or thousands to a debt settlement company, they still got sued by their creditor.
These clients are shocked that their debt settlement company was unable to prevent them from being sued by one of these collectors. They were led to believe that the debt settlement company was doing everything it could to settle their debts so as to prevent such a lawsuit. Now, after wasting thousands of dollars in monthly payments to the debt settlement company, the client finds that it was all for nothing. They often could have obtained real debt relief within the legal structure of our consumer bankruptcy laws, but now they’re worse off than ever. So when I read that the indictment against Mission Settlement Agency alleges that it “falsely and fraudulently” took advantage of its customers, I can’t say that I was surprised that one of these outfits is finally seeing criminal prosecution.
As I’ve also written before, even where debt settlement companies do manage to settle a debt, the customer then gets the unhappy surprise that he or she may now owe taxes on the amount of the debt that was cancelled by such a settlement. This is never true if a debt is discharged in bankruptcy.
As a San Jose bankruptcy attorney, I am constantly trying to educate my clients and my community about the protections offered by our bankruptcy laws as well as to dispel myths about filing for bankruptcy. Many see debt settlement as a somehow more honorable solution than filing bankruptcy, and the debt settlement agencies frequently play up that angle. There is no shame in filing for bankruptcy protection. Nor is it a panacea. If you can afford to pay some of your debts, then Chapter 13 bankruptcy offers a powerful set of protections that let the debtor do just that while being protected from lawsuits.
If you live in the Bay Area, our bankruptcy attorneys offer free one-hour consultations for anyone who wants straight advice about bankruptcy.
When you have successfully completed your chapter 13 plan, you receive what is referred to as a discharge. When you receive a discharge, it means that all of the debt you included in your chapter 13 filing has been legally paid. After the discharge, creditors who were part of the process are not allowed to [...]
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