Category Archives: Closer look at Bankruptcy

Bankruptcy And Bad Credit Issues No Longer Means No Mortgage

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Just because you have been bankrupted doesn’t mean it’s impossible to become a home owner again soon. This articles blows away the myth that you will have to wait 10 years to get a mortgage if you have been personally bankrupted.

In the past, traditional mortgage lenders have automatically rejected people who had declared personal bankruptcy.  Many potential home-buyers felt they must wait at least seven to 10 years after a bankruptcy to be eligible to become homeowners. This is a common misconception for many who believe their chance of home ownership is a long way away.

While some people declaring bankruptcy have had trouble managing their money, a large number of those declaring have simply experienced unfortunate events. Americans are filing bankruptcy at record-high levels over the last 10 years.

There are some ominous signs out there…

Though a bankruptcy is certainly a blemish on a credit report, it does not necessarily disqualify a borrower. Recognizing that sometimes bad things happen to good people, some select loan officers are becoming more willing to take a calculated risk.

Some lenders use a securing system to determine whether potential buyers are a worthwhile risk. Unfortunately, bankruptcy gives a low rating. However, select lenders are beginning to look beyond the rating and look at the individuals in need.

Instead of waiting two or four years after being discharged from bankruptcy, some mortgage professionals are willing to give a home loan much sooner. Those who have declared bankruptcy liquidation may be eligible for a loan one year after discharge.

Another common misconception is that a previous bankruptcy on your credit report will require you to have a large down payment and pay extremely high interest rates. There are currently programs available with as little as 5 percent down with very attractive rates.

Some lenders are even pre-qualifying buyers for a loan, saving time and making the home-buying experience easier and more efficient. When a buyer pre-qualifies they will have the advantage of greater negotiating power.

No matter what the situation, select mortgage professionals have a program that will work for the buyer with a bankruptcy history. If a buyer cannot get approved, there are customized plans that can re-establish credit to help the buyer become mortgage-ready, ensuring home-ownership in the future.

Because of new options, bankruptcy no longer needs to stand in the way of getting a home loan. With the help of more creative lenders, those who have experienced financial difficulty will have an easier time getting a mortgage.

For a free consultation call Firebaugh and Andrews. 734-722-2999

Here Is Exactly Why People Who File Bankruptcy Are Smart

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Today the biggest financial calamity looming ahead of 50 percent of people is not their immediate debt but the failure to set sights further down the road and look at the retirement crisis to come. Putting off dealing with your debt can cost you the very money you will need to retire and be able to afford to eat and live even just a moderate life. If you want to see what limping along in a failed debt relief strategy will cost you,  It is a legal choice made when the debt situation is hopeless. I am certainly not recommending bankruptcy as a casual solution and I’ve seen very few people who use it that way. In fact the percentage of people who file bankruptcy more than once is very small.

If you’ve decided to move ahead with bankruptcy then here are some good tips shared with me by Rick Abelmann, a bankruptcy attorney in Hawaii.

What Not to Do Before Bankruptcy

Debt can creep up on you. Perhaps you had a credit card that started out with a low interest rate. You have that credit available, so why not buy a couple of things that you wanted for a while, but haven’t been able to afford? Or, perhaps you’re using it to buy something essential. Either way, that interest rate suddenly balloons, or the amount you owe grows larger every month, until you simply cannot keep up.

That is the point when you might want to consider filing for bankruptcy. That’s a scary word these days, but the truth is it is meant to provide some protection, and a way forward, for people who are unable to pay their debts. Speaking with a lawyer or financial planner can be helpful, but if you find yourself in over your head, filing bankruptcy may be your only option.

That are lots of guides, and lots of people, out there that can help you navigate the first few steps in the filing process. However, there are some things that you definitely do not want to do before filing for bankruptcy.

1. Don’t Pay Creditors
Avoid making any large or unusual payments. This can seem counterintuitive, but is an important point. It may seem like you should pay creditors if you are able, but it can cause problems later on. This is not to say you shouldn’t make routine payments or pay bills. You should still pay your monthly credit card bill, if you can, and your electric bill and so forth. However, large payments to single creditors, or paying off a whole debt, can cause problems after you file. These are called ‘preferential transfers,’ meaning that one creditor has benefited unfairly over others. This is particularly true if the debt you pay off is to a relative or friend. These creditors can be sued later by the court, and have the money taken away.

2. Don’t Run Up New Debt
It may be obvious, but it is worth saying. Do not, if you plan on filing for bankruptcy, run up new debt unless it is absolutely necessary. As the saying goes, if you find yourself in deep, the first thing to do is stop digging. The consequences of running up new debt can be serious. The new creditor can claim you took out that loan, opened the credit card, or ran up the balance on an existing card, without intending to pay it back. This can legally be considered fraud, and that debt, in particular, will not be discharged in bankruptcy proceedings. You will still owe the whole of that debt.

3. Don’t Make Any Unusual Transactions
Again, you should continue to pay routine bills. No one will object to you paying for food or other expenses that cannot be avoided. Any transactions beyond the routine should be avoided, again, unless necessary. Some people try to transfer money or assets to relatives or friends in the hope that this will prevent the court from seizing them. This is an incorrect belief, and the court may end up suing for the return of the assets. If you own a business, in whole or in part, do not try to transfer it or remove your name. Do not transfer titles of cars or homes. Definitely do not buy new luxury goods or make unnecessary purchases. All of these things can be classified as fraud, and have unpleasant consequences.

4. Don’t Keep It to Yourself
You may be considering bankruptcy because you are being sued, or because creditors are threatening to sue. If this is the case, do not wait to tell them you are filing, or considering filing. Creditors may attempt to garnish wages or seize assets to discharge a debt, which could be avoided by filing for bankruptcy. Money and assets can be retrieved in some cases after filing, but it is difficult and can be expensive. It is better to avoid the problem by informing creditors of your plans before any of these problems arise.

5. Don’t Provide Inaccurate Information
You are required, in the process of filing for bankruptcy, to provide full and complete information. Any debt, assets, accounts, and other financial information has to be provided. Attempting to hide information can, again, be considered fraud. Fraud is a serious issue, and can prevent debts from being discharged in bankruptcy proceedings. It can also potentially lead to criminal charges.

7. Don’t Drain Retirement Funds
In many cases, you are allowed to retain retirement funds and accounts. Rather than draining these accounts to pay debts, it may be preferable to file for bankruptcy and keep your retirement funds intact. The specifics of which accounts are safe from bankruptcy proceedings and which are not will vary depending on the specifics of the situation and the laws of your particular area. It is usually a good idea to consult with a lawyer before making decisions in regards to retirement funds.

8. Don’t File If You Are About To Receive A Large Sum
Perhaps this is another no-brainer, but you should not file for bankruptcy if you are about to receive a large sum of money that will allow you to pay your debts in all or in part. Bankruptcy can be helpful in many cases, but if you can resolve your financial situation without filing, that is probably preferable. This money may be seized by a court representative and used to pay your debts, also, when you might have been able to reach another arrangement with your creditors.

The primary factor in many of these cases is time. Many jurisdictions have a specific time period, usually 70 to 90 days, before filing, during which you should not make any major changes or transactions. However, it can be dangerous to think you can out maneuver the court and find sneaky ways to retain your assets. Being honest and upfront is the most likely way to reach a positive outcome.

Call Firebaugh & Andrews for your free consultation 734-722-2999

Bankruptcy Rules For Alimony, Spousal and Child Support

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Divorce often puts tremendous strain on both spouse’s finances. One spouse is suddenly paying alimony, spousal or child support, while the other may be scrambling to find a job after staying home with the kids for years. Both have increased living expenses with the move to two separate residences.

Either of the parties may consider bankruptcy as a way to get rid of some of their debt burden from the marriage and move on. Filing for bankruptcy can free an individual from many of the debts they currently owe and help them start over. But if you’re divorced — especially if you pay alimony or other support — consider carefully whether bankruptcy is the right step for you.

You should be aware that your court-ordered obligations to pay alimony or other forms of support won’t go away in a bankruptcy. Court-ordered support cannot be discharged or eliminated in a bankruptcy.

After the bankruptcy concludes, you will still owe the same alimony or support payments you did previously, just as if the bankruptcy never happened. Other, unsecured debts such as personal loans or credit-card bills can be eliminated in a bankruptcy, possibly putting you in a better position to pay your ongoing support responsibility.

On the other hand, if you are the spouse collecting support payments, know that this money will be considered income in determining whether you can repay any of your debts. This helps determine what type of bankruptcy you will file.

If you have some ability to repay your lenders, you will need to use the Chapter 13 bankruptcy structure. In Chapter 13, you work out a repayment plan to pay off your debts over time. You must stay current in your alimony or support payments to keep your Chapter 13 repayment plan in effect and conclude your case. Property settlements from a divorce may be dischargeable under Chapter 13, though.

If your income is inadequate to pay off even part of your debt over time, Chapter 7 liquidation will be more appropriate. You will be able to resolve many debts in Chapter 7, but your child support or alimony payments will not be affected.

If you’re considering filing for bankruptcy in Michigan, call Firebaugh & Andrews for your free consultation. 734-722-2999.

Can you file Emergency Bankruptcy Filing Without Full Fee ?

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t is possible to file bankruptcy without paying the attorney fee in full. Generally, the attorney fee must be paid in full prior to filing the bankruptcy. This is because any fee owing at the time the bankruptcy is filed is discharged. Sometimes a client needs to file bankruptcy immediately due to an emergency such as a utility shut-off, garnishment or property seizure. In those cases it is possible for the attorney to file a case and bifurcate his services.

Firebaugh & Andrews in this case will provide certain services such as an emergency bankruptcy petition filing for a set fee. The client will then need to sign a second retainer for the attorney to provide additional services such as completion of the schedules and representation at the creditor’s examination. If you are facing an emergency situation which requires the immediate filing of a bankruptcy petition but do not have the full fee required to file the case, this option should be explored.

In filing Ch 13, it is not necessary to pay the attorney fee in full. Often times the attorney can file the case for the filing fee of $331.00 . The Firebaugh & Andrews can provide for the remainder of his fees to be paid through the Ch 13. In such a case the attorney is essentially accepting zero down towards his fee to file the case. This is often helpful for clients who are facing serious financial problems and need quick relief.

Call Firebaugh & Andrews for your free consultation 734-722-2999

Do I Have to List All My Credit Cards in my Bankruptcy?

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The Bankruptcy Code requires a debtor to treat all like creditors alike. This means  you cannot chose to list some creditors in a bankruptcy while keeping other creditors out of the bankruptcy. The Bankruptcy Code requires a debtor to list all creditors or people they owe money to in the bankruptcy.

However, if you have a zero balance on a credit card at the time you file the bankruptcy then that particular company is not a current creditor of yours because you do not owe them any money. Therefore, you are not required to list them as a creditor in your bankruptcy.

However, just because you do not list a particular credit card does not necessarily mean you can keep using that account. Credit card agreements almost always have provisions that allow the credit card company to close the account in the event of a bankruptcy or may close or suspend an account for any other reason permissible by law.  So even though you do not list a particular credit card on your bankruptcy if they discover you have filed a bankruptcy (and they do have ways of checking for bankruptcy filings) they may close your account.

Questions call Firebaugh & Andrews for your free consultation 734-722-2999

Will Bankruptcy Affect My Job or Future Employment?

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If you plan to file for bankruptcy, you may be worried about what affect it might have on your job. Will your employer find out about your Chapter 7 or Chapter 13 bankruptcy? Can you be fired because of the bankruptcy? And what if you are applying for a job — can a  employer deny you a job because you filed for bankruptcy?

Although in some cases your employer will find out about your bankruptcy filing (especially with Chapter 13 bankruptcies), rest assured that in most situations your bankruptcy won’t affect your current employment. However, it may come into play if you are applying for a non-government job.

Will You Lose Your Job?

No employer — government or private — may fire you because you filed for bankruptcy. Nor may an employer discriminate against you in other terms and conditions of employment  — for example, by reducing your salary, demoting you, or taking away responsibilities — because of your bankruptcy.

However, if there are other valid reasons for taking these actions, the fact that you filed for bankruptcy won’t protect you. In other words, an employer who wants to take negative action against you can do so provided there are other valid reasons to explain the action — such as tardiness, dishonesty, or incompetence. But if you are fired shortly after your bankruptcy is brought to your employer’s attention, you may have a case against the employer for illegal discrimination because of your bankruptcy.

How Employers Find Out About Bankruptcy Filings

In practice, employers rarely find out about a Chapter 7 bankruptcy filing. However, if a creditor has sued you, obtained a judgment, and started garnishing your wages, your employer will get the news. The bankruptcy will stop the wage garnishment, and your employer will be notified about it. In such a situation, your employer (or at least the payroll department) already knew you were having financial problems and will probably welcome the bankruptcy as a way for you to take affirmative steps to put your problems behind you.

If you file for Chapter 13 bankruptcy, your employer is likely to learn of your bankruptcy case. If you have a regular job with regular income, the bankruptcy judge may order your Chapter 13 payments to be automatically deducted from your wages and sent to the bankruptcy court. (This is called an “income deduction order.”) In effect, your employer will be pressed into service as a sort of collection agency, to make sure you honor your Chapter 13 plan.

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Solve Your Personal Bankruptcy with Chapter 7 In Westland Michigan

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Solve Your Personal Bankruptcy with Chapter 7
Chapter seven of the bankruptcy cases are very popular amongst individuals too who either own a business or run a corporate house. When such enterprises fail, it is then that a Westland Michigan Bankruptcy Lawyer is often hired by an individual to try and save as much of property as can be saved. In fact, these professionals have specialized in chapter seven and know about the pros and cons of such a filing. Also, additionally, the Westland Michigan Chapter 7 Bankruptcy Attorney has fought many such cases and knows the variations which can affect an individual fighting such a case.

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Closer Look At Bankruptcy in Westland Michigan

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Do you have a hard time paying your credit card bills? Starting to get notices from waiting creditors to pay? Worried that you might lose your properties like your house because of credit debt? Chin up: Dealing with credit card debt is not as hard as you may think.

More and more consumers today find themselves in the uncomfortable situation of only being able to afford the minimum payments on their credit cards. Or, even worse, not being able to afford even the minimum payments. In today’s world, it is often easy to get in over your head and find yourself spending more than you make. It seems that everything is going up but wages, and it is all too easy to fall behind. Learn more ways to reduce debts today.

There are numerous types of debt, including basic loans, syndicated loans, bonds, and promissory notes. Debt, especially large sums of debt, can also be secured through a mortgage or other security interest over some of the debtor’s property, in which case the creditor will have some rights over that property in the event that the debtor becomes unable to repay the debt and defaults on the loan.

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Bankruptcy-Chapter 13 Or Chapter 7?

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The main purpose of bankruptcy laws is to give people hopelessly overburdened with debt a financial fresh start. Bankruptcy filings are public records. However, under normal circumstances, no one will know about the bankruptcy. Credit Bureaus will maintain a record of the bankruptcy and it will remain on the credit record for 10 years.

The most common reasons for bankruptcy filings are unemployment, large medical expenses; seriously overextended credit; marital problems, and other large unexpected expenses.

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Bankruptcy Law Changes Designed To Hold Debtors Accountable

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Under pressure from retailers and other companies claiming losses from increased bankruptcy filings, congress took steps a few years ago to make it more difficult for individuals to file for bankruptcy. Initially, bankruptcy laws were designed to help people, whose financial debt got out of control and were meant to be a method of giving them a new start.

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