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Uncertainty is no fun, especially when it’s your financial future. Peer into the crystal ball to set your mind at ease.
When you file for bankruptcy, it’s usually because there’s no better option for you to get your finances under control. Your credit’s shot, your phone’s ringing off the hook and the mail is piling up.
You sit down with your bankruptcy attorney and plot out a course for completing the process. But the end of the case is the beginning of a new chapter in your life.
Here’s how it plays out.
Enjoy The Silence
One thing you may have noticed once you filed for bankruptcy was that the phone stopped ringing with collection calls. The mailbox was no longer jammed with unwanted letters demanding payment.
After bankruptcy, that trend continues. Enjoy the silence – you earned it.
If, however, someone calls or writes about a debt that was wiped out in your bankruptcy case then you need to get on the phone with your attorneys immediately. Any contact by a creditor or debt collector about a bill that was discharged in your bankruptcy case is against the law.
Mop Up The Remaining Debt
After bankruptcy, some of your debts may still remain enforceable. Things like student loans, some taxes, and domestic support orders may remain outstanding. If there’s a bill you need to take care of, by all means so do as soon as possible.
You’re going to want to sit down with your bankruptcy lawyer to be sure of which of those debts are yours to handle after discharge, just in case you forget something that could be important.
Check Your Credit Reports
It’s frustrating to go through your bankruptcy only to realize months or even years later that some of the discharged debts are still being reporting as outstanding. Lots of my clients have this problem, and it’s one of the reasons why I go through every credit report with my clients after the case is completed.
Checking your credit reports is easy, free once a year under federal law, and can save you a ton of hassle later on.
Rebuild Your Savings
The best way to avoid getting back into debt is by keeping a rainy day fund. Now’s a great time to start working on yours.
You may not be able to put a ton of money into your savings account each month, but even a few dollars goes a long way over a few years.
Remember, none of this is going to change your world overnight. But if you start now, things will be better in the future than they are the day after bankruptcy.
Image credit: Mathieu Struck
What Happens After 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.
Bankruptcy is known for helping people prevent vehicle repossession when they file before the lender attempts to take the property. But what happens if the repossession has taken place before your petition was filed? Can you get it back? There is a possibility you can get your vehicle returned to you after beginning the filing [...]
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If you are considering filing a Chapter 7 or Chapter 13 bankruptcy it is important to be able to classify your debts as secured and unsecured. These debts are treated very differently in both Chapter 7 bankruptcies and Chapter 13 bankruptcies. If you file a Chapter 7 the unsecured debts will be discharged in the [...]
What the FDCPA is and to Whom It Applies
Are you being contacted by a debt collector? Whether you are behind on payments, or a creditor wrongly thinks you are, you have rights under the Fair Debt Collection Practices Act (FDCPA). Enforced by the Federal Trade Commission, the FDCPA prohibits third-party debt collectors from using particular kinds of collection practices, such as abusive, unfair, or deceptive collection conduct. The Texas Debt Collection Act is similar in many ways to the FDCPA and applies to anyone trying to collect a consumer debt.
Debt collectors may be contacting you about a credit card debt, a car loan, medical bill, mortgage, or any other debt you may have. The FDCPA covers all personal or household debts, but it does not apply to business debts.
Who Are Debt Collectors?
Under the FDCPA, a debt collector is someone, other than the original creditor, who regularly collects unpaid debts. A debt collector could be a lawyer, collection agency, or a company that buys debts and tries to collect them. The FDCPA does not apply to original creditors seeking to collect on their own accounts. But, as mentioned above, many of the protections provided by the FDCPA are also provided by the Texas Debt Collection Act, which does apply to original creditors.
Some examples of debt collectors include:
- Advantage Assets
- Arrow Financial Services, LLC
- Asta Funding Inc.
- B-Line, LLC
- Bluebonnet Financial Assets
- Bureaus Investment Group
- CACH, LLC
- Dan Young
- Ecast Settlement Corp.
- Encore Capital Group
- Equable Ascent Financial
- Global Acceptance Credit Company
- Midland Funding
- NCO Portfolio Management Inc.
- Portfolio Recovery Associates, LLC
- Sherman Financial Group, LLC
- Unifund CCR Partners
A few examples of original creditors are:
- Ally Financial
- American Express
- Bank of America
- Capital One Bank
- Citibank
- Discover Bank
- FIA Card Services
- Ford Motor Credit
- HSBC
- JPMorgan Chase
- Target National Bank
Enforcement of the FDCPA
FDCPA violations are fairly widespread and largely go unreported. If you know your rights, you can fight back when debt collectors violate them. You can sue violators in state or federal court, individually or as part of a class action. You may also file a complaint with the Federal Trade Commission (FTC).
As of February, the FTC brought or resolved seven large debt collection cases within the last year. Four of those involved companies who allegedly used deceptive or abusive collection practices to bully consumers into paying their debts. Three of the seven cases involved collectors who allegedly tried to collect on non-existent debts or debts consumers did not owe to them.
The companies involved in the four cases mentioned include Forensic Case Management Services, Inc./Rumson, Bolling & Associates; Luebke Baker; Goldman Schwartz; and AMG Services, Inc. The alleged activities of these operations are deplorable but unfortunately not uncommon. Just some of the claims include:
- Threatening bodily harm
- Threatening desecration of deceased family members
- Threatening death to pets
- Falsely threatening to garnish wages
- Falsely threatening imprisonment
- Falsely claiming affiliation with law firms
- Using insults
- Charging unauthorized fees
- Masking collector agency identity
Some of these cases continue in litigation, but the FTC has won a $1.1 million dollar judgment and an order banning one collection agency from future debt collection activity.
The other three cases involved American Credit Crunchers, Pro Credit Group, LLC, and Broadway Global Master. In these cases, the defendants allegedly defrauded consumers and collected money that was either not owed or not applied to actual debts. Litigation continues in two of the cases, and the FTC has won a $170,000 judgment in the other.
Additionally, the FTC closed an investigation of RJM Acquisitions, which was collecting on legally unenforceable debt. RJM continues to attempt to collect on the debt, but now the collector discloses to consumers that they cannot be sued on the debt.
See Related Blog Posts:
Be Aware of Common Debt Collection Scams
FTC Releases Report on Debt Buyer Practices
The post The Basics – Fair Debt Collection Practices Act: Who and What appeared first on AKB.
Bringing you the most up-to-date news, tips and blogs throughout the web. Here’s your Bankruptcy Update for March 26, 2013 Dionne Warwick files for bankruptcy: Singer owes over $10 million, has just $25K in assets ‘Upscale’ Revel N.J. casino files bankruptcy Otelco files for bankruptcy after losing key contract
In short, if you file for bankruptcy before getting married your future spouse will not be affected. This is a common concern for a debtor to bring up during their consultation with an attorney. For some reason, many people are under the impression that a couple shares a credit score or there is a “joint [...]
As many of our clients filing personal bankruptcy get older, we often see clients who have taken reverse mortgages on their homes. Either because they needed income to live on or to deal with a spouse’s end-of-life care, I meet with a growing number of bankruptcy clients who have turned to these types of loans in order to get by. And no wonder, the banks have been pushing reverse mortgages aggressively for several years now. Daytime television is now inundated with commercials for reverse mortgages. I’m not going to get into the financial wisdom of these loans in this post, but I do want to focus on how reverse mortgages are treated in bankruptcy, particularly in Chapter 7 bankruptcy.
Reverse mortgages generally fall into different categories. There are those where the homeowner takes a lump sum from her home equity, and those where she might receive monthly payments that accrue as a loan against her home equity. Typically, the reverse mortgage loan becomes due and payable within a specified time after the homeowner’s death. At which point, either the decedent’s estate representative must either sell the property in order to pay off the reverse mortgage loan, or if the estate is unable to sell the property after a given period of time, then the lender will generally have a right to foreclose on the property in order to recover the balance of the loan.
So, what if the homeowner needs to file bankruptcy? In bankruptcy a reverse mortgage loan is treated no differently than any other mortgage or home equity loan, to the extent that the bankruptcy attorney together with his client must provide a current fair market value for the property that is subject to the reverse mortgage and determine the current total payoff balance of the reverse mortgage loan. After determining these values, the bankruptcy attorney must analyze how much equity the bankruptcy client has in the property. The amount of the bankruptcy debtor’s equity is critically important to exemption planning for a Chapter 7 bankruptcy, and is likewise central to a liquidation analysis in Chapter 13 bankruptcy.
Say we have an elderly widow who needs to file bankruptcy in San Jose, California, because she has incurred some large unsecured debts, including credit cards and substantial medical debts uncovered by insurance. She now lives only on social security income. Several years before she and her late husband took out a reverse mortgage on their home in San Jose, which at the time had been paid off and had a value of $450,000. They took a lump sum from their equity of $150,000 to pay for in home nursing care for him and to pay off other debts. Since then it has depreciated significantly and has a current value of $375,000. The reverse mortgage payoff balance has risen steadily over the years as interest has accrued on the loan, and now stands at $210,000. Hence, the bankruptcy debtor now has only $165,000 of equity in the home.
Assuming that our bankruptcy debtor in the example above is over the age of 65, then for purposes of her Chapter 7 bankruptcy in California, the homestead exemption will protect up to $175,000 of equity in her home. She would, therefore, be able to entirely protect her home from the Chapter 7 trustee.
Before filing such a case, however, it is imperative that the bankruptcy attorney communicate with the lender and review the original reverse mortgage contract language to ensure that the mere filing of a bankruptcy case by the borrower will not be treated as an even of default. In my experience, most reverse mortgage lenders will not call their note due solely because of a bankruptcy filing, but again, it is imperative that debtor’s counsel confirm this with the lender prior to filing. Just another reason why if you are contemplating filing bankruptcy in the Bay Area, that you contact one of our experienced San Jose bankruptcy attorneys.
Whether an illegal or undocumented immigrant in the United States may file for Bankruptcy apparently hinges on whether or not the immigrant has an Individual Taxpayer Identification Number (ITIN) according to attorney Drake Shunneson.
Shunneson provides that a Social Security number or ITIN must be present inorder to proceed with the bankruptcy. Obviously, many immigrants are unable to obtain a SSN because of their illegal status. Thus, obtaining an ITIN is typically the only other way to obtain a discharge of debt through bankruptcy.
Roughly more than half of the 11 million undocumented immigrants in this country have ITIN’s. Many of these ITIN holders file their income taxes each year despite their potential illegal status. The road to citizenship often rests on proof of paying taxes and an ITIN would provide the only identification number to do so. Thus, it may be presumed that only some undocumented immigrants in this country may file for bankruptcy depending on whether they file taxes or at least have an ITIN.
Shunneson also cautions against filing for bankruptcy even if the immigrant has an ITIN if there is a pending lawsuit against them. Pending lawsuits, depending on the nature of the suit, may prevent continuation of the bankruptcy process and may open up potential issues with Immigration authorities. It is advised to speak to an attorney if this is the case.
Regardless, there are many reasons why an undocumented immigrant should obtain an ITIN. For tax purposes, you may receive your federal withholding back. You may be required to show proof of paying taxes for purposes of the Naturalization process in a N-400 Citizenship application, and, if in dire financial straights, an ITIN may qualify you, even if illegal, to receive a discharge of your debts.
Obtaining an ITIN number is free and easy. You should caution against paying someone to receive an ITIN because the process is so simple and free.
You may find out more about how to receive an ITIN on the IRS website here:
Whether an illegal or undocumented immigrant in the United States may file for Bankruptcy apparently hinges on whether or not the immigrant has an Individual Taxpayer Identification Number (ITIN) according to attorney Drake Shunneson.
Shunneson provides that a Social Security number or ITIN must be present inorder to proceed with the bankruptcy. Obviously, many immigrants are unable to obtain a SSN because of their illegal status. Thus, obtaining an ITIN is typically the only other way to obtain a discharge of debt through bankruptcy.
Roughly more than half of the 11 million undocumented immigrants in this country have ITIN’s. Many of these ITIN holders file their income taxes each year despite their potential illegal status. The road to citizenship often rests on proof of paying taxes and an ITIN would provide the only identification number to do so. Thus, it may be presumed that only some undocumented immigrants in this country may file for bankruptcy depending on whether they file taxes or at least have an ITIN.
Shunneson also cautions against filing for bankruptcy even if the immigrant has an ITIN if there is a pending lawsuit against them. Pending lawsuits, depending on the nature of the suit, may prevent continuation of the bankruptcy process and may open up potential issues with Immigration authorities. It is advised to speak to an attorney if this is the case.
Regardless, there are many reasons why an undocumented immigrant should obtain an ITIN. For tax purposes, you may receive your federal withholding back. You may be required to show proof of paying taxes for purposes of the Naturalization process in a N-400 Citizenship application, and, if in dire financial straights, an ITIN may qualify you, even if illegal, to receive a discharge of your debts.
Obtaining an ITIN number is free and easy. You should caution against paying someone to receive an ITIN because the process is so simple and free.
You may find out more about how to receive an ITIN on the IRS website here:
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