Bankruptcy can Raise Your Credit Score

Posted on August 1, 2013 by Staff Writer

We have all heard the horror stories about what bankruptcy can do to your credit rating. Unfortunately, your credit rating is probably suffering from things much more negative than a bankruptcy. If done right, bankruptcy could actually raise your credit score.

Whether your credit rating will qualify for credit with a specific company or a certain utility is very difficult to determine. It will be subjective and completely determined by the underwriting guidelines of the creditor. This is why a straight answer to the question is so hard to find. It may not exist.

From my personal experiences, I know that secured credit, to buy things like cars and houses, is available but it will cost more and likely come from an unconventional source like Lending Tree and not from a bank. Unsecured credit, like credit cards, is available from places like Orchard Bank, but expensive and low limits. It will take some time to develop good terms with credit card companies.

No matter what kind of credit you apply for, someone will have to read your credit report and make a determination if you qualify. Right now, your credit report probably shows some negative references . Each one of these negative marks will count against you. There is also a section of the report dealing with public documents and filings. This is where judgments and bankruptcy show up. These will really count against you because there is less of a chance they are a mistake. However, bankruptcy has a redeeming quality.

When bankruptcy is reported on your credit report, it will count against you. However, you are then able to re-classify all of the other negative reports to “Discharged in Bankruptcy” instead of “Delinquent” or other negative terms. This might take a few letters to the credit bureau, but it will be worth it. You will also be able to classify other judgments the same way. Now you only have one thing counting against you instead of several.

Another way bankruptcy can help is that it will dramatically change the amount of outstanding debt as well as available debt. Too much of either of these is normally a bad thing.

Really good bankruptcy attorneys will offer packages to rebuild your credit. They can explain it and help rebuilt it. Schedule a FREE CONSULTATION with a really good bankruptcy attorney now.

Am I Only Allowed to File Bankruptcy Once in my Lifetime?

Posted on March 25, 2013 by Staff Writer

You are permitted to file bankruptcy more than once in your life; however, there are mandatory waiting periods between bankruptcies. The waiting period depends on what chapter of bankruptcy you filed previously and what chapter of bankruptcy you would like to file this time. If you previously filed a Chapter 13 bankruptcy and would like to file another Chapter 13 then you must wait 2 years from the discharge date. If you previously filed a Chapter 13 and would like to file a Chapter 7 then you must wait six years from the date of filing the 13.

For people who previously filed a Chapter 7 bankruptcy then the waiting periods are a little different and the time is measured from the date of filing. If you previously filed a Chapter 7 and would like to file a Chapter 13 then you cannot received a Chapter 13 discharge within 4 years of filing the Chapter 7. If you previously filed a Chapter 7 bankruptcy and would like to file another one then you must wait 8 years to file the second bankruptcy from the date the first bankruptcy was filed.

The waiting periods only apply for people who actually received a discharge from their previous bankruptcy. So if you filed a bankruptcy and it was dismissed then you are not required to wait before filing another bankruptcy. If your case is dismissed then it is as if you had never filed bankruptcy because you did not get a discharge of debt.

Detroit on the Verge of Bankruptcy

Posted on March 22, 2013 by Staff Writer

Detroit has been always been known as the Motor City – years of popping out automobiles made this city flourish. Jobs were a plenty and industry was booming. However, the past few years have destroyed Detroit’s value. Since 2005, the city has been in a downward spiral to a deficit that no one is really sure if they can get out of.

Michigan’s Republican Governor, Rick Snyder, has already taken control of Benton Harbor, Ecorse, Pontiac, Flint and Allen Park and school districts in Detroit, Highland Park and Muskegon Heights with emergency managers to get back on their feet. He just needs to make sure they are in a financial emergency. The past few months the state’s appointed review team has declared Detroit as a financial emergency city. They will need a make a plan to get out of this dreary situation.

The cash crisis they are under could have reached $900 million last year but Detroit did some serious borrowing of money. Their long term liabilities are also adding up to $14 billion. All problems together are difficult to solve because the city’s bureaucratic structure is so hard to work through.

Governor Snyder has 30 days now to decide if the city is in a financial emergency. After that, Mayor Dave Bing has 10 days to request a hearing to appeal. All of this is for the formation of an emergency manager who would be responsible for overseeing all of Detroit’s spending and decide all financial matters. This manager would then be the one who could authorize bankruptcy.

City and other government bankruptcy issues are complicated. Individual and corporate ones are just as complicated. If you are in need of filing for bankruptcy, contact a bankruptcy lawyer today. An Arizona attorney can walk step by step with you through this process.

Image courtesy of freedigitalphotos

Can I be Employed by the Government if I file for Bankruptcy?

Posted on March 21, 2013 by Staff Writer

No federal, state, or local government agency may take your bankruptcy into consideration when deciding whether to hire you. No employer, whether that involves the government or a private company, 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, many jobs require a security clearance. If you are a member of the armed forces or an employee of the CIA, FBI, another government agency, or a private company that contracts with the government, you may have a security clearance. The good news is that you most likely do not risk losing your security clearance if you file for bankruptcy. In fact, the opposite may be true. According to credit counselors for the military and the CIA, a person with financial problems, particularly someone with a lot of debt, is at high risk for being blackmailed. By filing for bankruptcy and getting rid of your debts, you substantially lower that risk. Bankruptcy usually works more in your favor than to your detriment.

If Bankruptcy is going down does that mean the economy is going up?

Posted on March 17, 2013 by Staff Writer

Although there is a correlation between the economy and the number of bankruptcy filings, the strength of the economy cannot be ascertained by the number of filings alone. Many factors contribute to the number of bankruptcy filings, including the health of the economy.

In the case of consumer bankruptcies (which comprise the vast majority of bankruptcy cases), it seems reasonable that more people will file bankruptcy if they are experiencing the ill effects of a weak economy. After all, someone who has lots of debt and is struggling to earn an income sufficient to pay those debts, may very well turn to bankruptcy for relief. Bankruptcy filings fluctuate just as the economy fluctuates—and not necessarily in synchronicity. Far too many variables are involved to say that one is a clear indicator of the other.

Bankruptcy is more closely related to debt levels than it is to the actual state of the economy. A good economy may bring consumer confidence, availability of credit, and people taking on new debt as opposed to paying off old debt. A strong economy may result in an overall increase in consumer debt levels. Consequently, the number of bankruptcy filings may increase.

The inverse of this scenario further illustrates the relationship between the economy and bankruptcy filings. In a weak economy consumer confidence may be low, credit availability may be limited, and people are less inclined to take on new debt. Despite a weak economy, debt levels among the general populace can stabilize and lessen the need for bankruptcy.

This is not an absolute rule, but illustrative of the difficulty in linking a direct correlation between the strength of the economy and the number of bankruptcy filings. In difficult financial circumstances, many people will turn to their current credit resources to pay their bills when they have no other means to do so. Out of necessity they may have to increase their debt load, not b/c they have consumer confidence or a desire to make purchases on credit.

Although general observations can be made about the economy and bankruptcy filings, it is sensible to view bankruptcy on a case by case basis. An individual that has insurmountable debt and cannot afford to pay her bills—regardless of the state of the economy—should speak with an attorney about the potential benefits of filing bankruptcy.

Southeast Arizona Medical Center Files for Bankruptcy

Posted on March 14, 2013 by Staff Writer

On February 8, 2013, Southeast Arizona Medical Center (SAMC) filed for Chapter 11 bankruptcy. Chapter 11 allows reorganization under the bankruptcy laws of the United States.

This is not the first time they’ve gone through the process, according to this article from the Douglas Dispatch. SAMC also filed Chapter 11 in 2000, so when employees were told about it, many of the long-term workers weren’t too concerned. SAMC also mentioned that they are not planning to cut hours or lay off any employees. However, they will not be filling any new positions unless the vacancy has a significant role for the Center.

A consultant was hired through a $25,000 grant (provided by the Arizona Health Facility Authority), who helped bring in a new computer billing system and some aquatics programs to build revenue.

The Center had applied for Arizona Health Care Cost Containment System’s Safety Net Care Pool in 2012, and it was submitted to the Centers for Medicare and Medicaid Services before the bankruptcy announcement. If the application is approved, the bankruptcy will not go into effect.

For 90 days after the filing, Sierra Vista Regional Health Center (SVRHC) will help SAMC with costs. They have already loaned SAMC over $1 million, which will be paid back once a new company is chosen to operate SAMC.

Annie Benson, Chief Executive Officer of SAMC, believes Obamacare will have a positive impact on the future of the hospital. The short-term goals of the Center, according to Benson, are making it through the next 90 days and working with someone to get back on track. Long-term, Benson dreams of opening up another hospital in Douglas, Arizona.

Filing for bankruptcy can seriously affect your life, whether you’re filing personally or as a corporation. To learn more about Arizona bankruptcy laws and get a free consultation, contact our law firm today. We have multiple offices to make it easier for you.

Image courtesy freedigitalphotos.net

Why do I need a lawyer to file a bankruptcy?

Posted on March 12, 2013 by Staff Writer

Bankruptcy is a legal process that can be done on a pro se basis (i.e., the filer represents him or herself). Just as with any legal proceeding, there are risks involved in representing one’s self. Although a debtor can file bankruptcy without an attorney, there are many reasons why hiring a bankruptcy attorney is the best decision and a worthwhile investment.

Bankruptcy cases vary in difficulty and complexity. Nonetheless, even a straightforward case must adhere to the bankruptcy code and proper filing procedures. A wealth of information can be found on the web about bankruptcy, but the specifics an attorney learns from experience will trump the general information and instructions found online. Google is not a guarantor of accuracy.

Similarly, an individual who has gone through bankruptcy is not necessarily an expert at bankruptcy. Just because two separate filers’ have similar financial situation, their bankruptcy cases are not necessarily the same. One should not assume that a friend or acquaintance who has filed bankruptcy will be able to provide all the tools and information needed to successfully complete a bankruptcy. Cases that are similar on the surface can have important distinctions that may only be known by someone experienced in the field.

Incorrectly filing a bankruptcy case can lead to dismissal of the case, thereby stopping the protection of the bankruptcy stay. There are limits on when a case can be filed or refiled. Depending on the reason for dismissal of the case, a debtor may not be able to refile bankruptcy for several months after dismissal.

In Chapter 7 Bankruptcy, a debtor can file once every eight years. A debtor may not have the choice of refiling a case that should have been filed at a later date because the Bankruptcy Court decides whether a case is dismissed or not. The Court will not dismiss a case just because the debtor decides that she should have waited to file when the bankruptcy would be more beneficial to her.

For example, the Court will not dismiss a bankruptcy case when the debtor failed to liquidate nonexempt property prior to filing. The debtor can lose the nonexempt property to the bankruptcy and the Trustee will liquidate the property to repay creditors. The filer would have been better off liquidating the property on her own to pay for the necessary and essential expenses she had prior to filing.

An attorney is vital to review the debtor’s assets, recent purchases or transfers, and current financial situation prior to the filing of her bankruptcy case. An attorney will also make sure that the proper procedures are followed when the case is filed. Numbers of other issues can be avoided when an attorney guides the debtor through the process.

Students Loan on Debate in Legislation for Bankruptcy Qualification

Posted on March 11, 2013 by Staff Writer

Bankruptcy was put into place to assist people with getting their finances back on track and freshly doing over debts that were making them drown in financial problems. However, student loans have not been part of the bankruptcy plan – for federal loans, since 1978, and for private loans, 2005. Legislators now want to reverse a law put into place in 2005 to allow students to put private student loans on bankruptcy to eliminate these types of student loans.

The Fairness for Struggling Students Act of 2013 cosponsored by Senators Dick Durbin (D-IL), Sheldon Whitehouse (D- RI) and Jack Reed (D-IL), looks to allow students to eliminate their private student loan debt. Student loans happen to be the largest consumer debt – over a $1 trillion nationally, which is not allowed to go under bankruptcy. The interesting thing is that federal loans have better rates in comparison to private loans where it typically has a double digit interest rates and no income based repayment options. Allowing private loans to be dismissed in bankruptcy would greatly benefit those who are financially struggling.

There are many organizations that are in support of this bill such as American Association of University Women, Consumer Financial Protection Bureau, the U.S. Department of Education, FinAid.org publisher Mark Kantrowitz, The Institute For College Access and Success, and Sallie Mae all are seeking some sort of reform and change to assist those who struggle with the repayments in financial hardships.

Bankruptcy lawyers are here to help understand this new law and other aspects of bankruptcy. If you have questions and/or need assistance, please contact an attorney in the Nevada area.

Which is worse: foreclosure or bankruptcy?

Posted on February 8, 2013 by Staff Writer

Many people facing foreclosure are worried about whether a foreclosure or bankruptcy is worse for their credit. To state the obvious, neither a foreclosure or bankruptcy are good for your credit. They both have long lasting negative impacts. One difference between a foreclosure and bankruptcy is that a foreclosure stays on your credit report for 7 years and a bankruptcy for 10 years. I wouldn’t recommend basing your decision solely on how it will impact your credit.

If you are behind on your mortgage payments, then a bankruptcy may be a good option. A Chapter 13 bankruptcy allows you to pay back any arrearages through the bankruptcy plan. Plus, by filing bankruptcy, an Automatic Stay of Protection is created. This Automatic Stay prevents the bank from foreclosing on your property. So you can literally file bankruptcy the day before it is to be foreclosed and the sale will be cancelled.

If you no longer want your home and know that you don’t need to file bankruptcy then you may consider a short sale or deed in lieu of foreclosure. A short sale is when you sell your home for less than is owed and the bank forgives any differences. A deed in lieu of foreclosure is basically surrendering the property back to the bank. Or you want to consider a mortgage modification. If you are granted a modification you may be able to reduce your payments and make the future payments more manageable.

If you are behind on your mortgage payments don’t wait until it is too late! Speak with one of our attorneys now so you can get all the facts.

How soon can I buy a car after I file for bankruptcy?

Posted on February 5, 2013 by Staff Writer

Technically speaking, you are free to purchase a vehicle as soon as your bankruptcy has been filed. However, if you want to finance your next vehicle purchase you will need to wait until after the bankruptcy has been filed. A bank will not finance a vehicle purchase before the bankruptcy has been discharged. So if you need to purchase a car after the bankruptcy has been filed but before it is discharged you will need to pay cash for it.

Believe it or not, once you file for bankruptcy you will get inundated with offers from car dealerships to sell and finance you a new car. Bankruptcy records are public and so car dealerships buy lists of everyone who has filed for bankruptcy and send them mailers. These car dealerships aren’t willing to extend you credit because they want to help you to improve your credit score or because they’re trying to help you get back on your feet. They do it in large part because you are not able to file bankruptcy again for 8 more years. This means that if for some reason you are not able to make your car payments, they will repossess your car. The bank will be able to sue you for their losses and garnish you wages. The difference now is that there is nowhere to run and nowhere to hide; you will not be able to seek shelter in bankruptcy. You will be garnished until you pay them in full.

Be sure that you can afford the new vehicle you are buying and that you are not starting the debt cycle all over again. These post-bankruptcy car loans come with very high interest rates and in turn inflated car payments. Filing for bankruptcy gives you the opportunity for a fresh start and a second chance; don’t squander the opportunity to live debt free because someone is willing to sell you a shiny new car.

So if you need to purchase a car after filing for bankruptcy you best bet is to purchase something for cash.