Month: April 2020

Should You File for Chapter 7 Bankruptcy or Chapter 13 Bankruptcy?

Chapter 7 bankruptcy and Chapter 13 bankruptcy are two common legal options with different consequences, but both are helpful for borrowers who have accumulated too much debt. Chapter 7 ba

Chapter 7 bankruptcy and Chapter 13 bankruptcy are two common legal options with different consequences, but both are helpful for borrowers who have accumulated too much debt. Chapter 7 bankruptcy can help clear some or all of the debt. However, if you file for this type of bankruptcy, you will have to surrender assets such as cash or property. Chapter 13 bankruptcy helps you get some of the debt discharged, but you get to keep your property, and you can repay your debts through a repayment plan. If you have accumulated too much debt and want to file for bankruptcy, you would want to determine which type of bankruptcy would be right for you. We will help you with this.

Should You File Chapter 7 Bankruptcy

If you have very little disposable income, you could consider filing for Chapter 7 bankruptcy. Here are a few things that you should consider if you are struggling to decide whether you should file for Chapter 7 bankruptcy or not.

·         Less Debt-Repayment Load

Chapter 7 bankruptcy discharges some or all of your debt. This means that you won’t have to pay money towards credit card bills or loans, and you can use that cash for other things such as basic household expenses.

·         Relief from Collectors

If you are struggling to pay your debts, Chapter 7 bankruptcy can stop debt collectors from taking any legal action against you. When you file for Chapter 7 bankruptcy, some of your creditors would be restricted from contacting you, collecting cash from you, continuing wage garnishment, and starting lawsuits against you.

·         Loss of Assets

One of the major consequences of filing for Chapter 7 bankruptcy is the potential loss of assets. You might have to give up your property or cash, depending on the laws in your state.

Should You File Chapter 13 Bankruptcy

If you want to keep the property that you own, Chapter 13 bankruptcy might be a better option for you. Here are some things that you should consider to determine whether Chapter 13 bankruptcy is right for you or not.

·         Repay the Debt

Chapter 13 bankruptcy can help you repay your debt in a more cost-effective and convenient way. Through it, you will create a plan to repay some or all of your debt. You can make monthly payments towards all your debts based on the repayment plan. Your monthly payments might be reduced, which would make it easier for you to repay them.

·         Discharge Your Debts in Three to Five Years

With Chapter 7 bankruptcy, your debts will be discharged quickly, but this doesn’t happen with Chapter 13 bankruptcy. Under Chapter 13 bankruptcy, your debts won’t be discharged until the completion of the repayment plan, which generally takes about three to five years.

·         You will have to file for Chapter 7 Bankruptcy if You Have Sufficient Income

You will only qualify for Chapter 7 bankruptcy if you can prove that you don’t have the money to repay your debt. If you have sufficient income, then you won’t be able to file for Chapter 7, and Chapter 13 bankruptcy will be your only option.

Final Thoughts  

Bankruptcy is a very important decision with some serious consequences. You should consider your options and determine whether you should file for Chapter 7 bankruptcy or Chapter 13 bankruptcy.

How to File for Bankruptcy in an Emergency

Bankruptcy is most often the last resort for people who have nowhere to turn to and no protection against the creditors that are coming after whatever they have left. In a lot of cases, it’s a burning bridge kind of strategy. But even in the worst-case scenario, it offers you a chance to start anew. And more importantly, it pulls you out from the strain caused by constantly harassing creditors.

Filing for bankruptcy is a thorough and lengthy process. It requires a lot of documentation, jumping through several legal hoops and waiting for at least a few months to completely get it over with. But in a lot of cases, you don’t have a few months. You might be severely in debt, with creditors about to take last-resort collection actions against you. In these scenarios, it can be in your favor to know how to file for bankruptcy in an emergency.

Emergency Bankruptcy Filing

When you are short on time, or you need to stop creditors from taking action against you, you can file an online emergency bankruptcy. It’s also called a skeleton filing. The name is apt because, in an emergency bankruptcy filing, you submit the bare bones of the documents and issues. This filing only requires you to send in a few of the basic documents to start the process.

After that, you get a 14-day window to submit the rest of the forms. If you fail to do so, your bankruptcy case can be thrown out.

Important Documents and Steps of the Process

For an emergency bankruptcy filing, you need to send the following documents:

  • Your Bankruptcy petition – It should contain all the necessary identifying documentation, chapter details, and other important information.
  • List of creditors – It’s called a creditor mailing list, and it should be a complete overview of what you will be filing in the later forms.
  • Disclosure for attorney fees.
  • Form B121 – It’s your statement about your social security number.
  • Electronic filing declaration

In most cases, these documents constitute your emergency bankruptcy filing. But it would be better if you check in with your court’s clerk or visit their website on the exact procedure and documents you need to submit for an emergency bankruptcy filing. You will need to file the original forms and a set number of copies with the court clerk. Ideally, you can submit the whole fee, but if you can’t, you can submit a fee waiver application or a request for submitting the fee in installments.

Final Words

It might be too tenuous a task to perform on your own, especially if you are already under a financial strain. At the law office of Sean T. Flynn, we can help you understand and complete the emergency bankruptcy filing procedure. If you have any queries, consultancy requests, or if you require our assistance in filing for bankruptcy, don’t hesitate to give us a call. We will do our best to help you through this tough stage and get a clean start.

How Bankruptcy Stops Your Creditors

When you are burdened with debt and the creditors keep harassing you and asking for their money back, you might have no option but to file for bankruptcy. When you take this action, an automatic stay is ordered by the court. This stops civil lawsuits that are filed against you as well as specific collection actions that are being taken against your property by a government entity, collection agency, or a creditor.

How the Automatic Stay Helps

Here’s how automatic stay can offer some protection to you:

·         Stops Utility Disconnections

You might be behind on a utility bill, and the company’s representatives might be threatening to disconnect your telephone, gas, electric, or water service. The automatic stay can prevent this disconnection by the company for a period of at least twenty days.

·         Stops Foreclosure

If your house is being foreclosed on, then the automatic stay can stop the proceedings. However, what happens next will depend on the type of bankruptcy you file. If you file for Chapter 13 bankruptcy, you would be able to keep your home and catch up payments in a repayment plan. However, if you go for Chapter 7 bankruptcy, the relief provided by the automatic stay will be temporary, and you might have to give up your home soon.

·         Stops Evictions

The automatic stay might provide some temporary relief from eviction. However, if your landlord already holds a judgment of possessions against you at the time you file for bankruptcy, the eviction proceedings will not be affected by the automatic stay. The landlord will continue, and if they allege that you have been endangering their property, the automatic stay won’t be able to help you in any way.

·         Stops Wage Garnishments

Filing for Chapter 7 bankruptcy stops most wage garnishments. You get a full salary, and you’ll also be able to discharge qualifying debts like personal loans and credit card balances. It is worth noting that commonly garnished debts like alimony and child support won’t be discharged.

What the Automatic Stay Doesn’t Prevent

·         Loans from Your Pension

Despite the presence of automatic stay, money may be withheld from your income for repaying a loan from different types of pensions, such as IRAs and job-related pensions.  

·         Criminal Proceedings

An automatic stay won’t stop criminal proceedings. For instance, if you are sentenced to community service, you will be obligated to do community service, and the automatic stay won’t be able to stop it.

·         Support Actions

An automatic stay doesn’t stop a lawsuit against you to establish, collect, or modify alimony or child support or to establish paternity.

If you are being harassed by collectors for payment, filing for bankruptcy might be the right thing to do. However, before you take this step, consider seeking advice from an attorney.

Can You Get a Car Loan After Bankruptcy?

Getting a Car Loan after Chapter 13 Bankruptcy or Chapter 7 Bankruptcy

Consumers can file for Chapter 13 and Chapter 7 bankruptcy. With a Chapter 13 bankruptcy, you get to keep your possessions and pay the debt through a three to five-year repayment plan. This plan is approved by the court and involves paying a fixed amount on a biweekly or monthly basis. Chapter 13 bankruptcy can stay on your credit report for a maximum of seven years. If you file for Chapter 7 bankruptcy, certain debts might be discharged while the remaining may be paid by liquidating your property and some of your possessions.

While a bankruptcy hurts your credit score, you can still get approved for a car loan. Here’s how you can get a loan for buying a car after bankruptcy.

·         Check Your Credit

Before you apply for a car loan, review your financial health by checking your credit report. Request a free copy of your credit report from Equifax, TransUnion, or Experian. While there isn’t any minimum credit score required for getting a car loan, you will have some difficulty getting approved by a certain lender if you have a low credit score.

·         Improve Your Credit

Once you have reviewed your credit report, take some time to rebuild your credit if it is low. This might help you get approved for an auto loan at a lower rate. To improve your credit after bankruptcy, get a secured credit card and pay all your bills on time.

·         Save Money for a Down Payment

A down payment can improve your chances of getting approved for an auto loan and may even lower your interest rate. There isn’t any specific amount that you should put towards the down payment for a car. However, if you want to secure low interest rates, try to put 20 percent down on the new car.

·         Search for the Best Offer

When you have rebuilt your credit, saved money for down payment, and are ready to buy a car, search for the best offer by contacting different lenders. Compare loan terms and rates from various lenders to find the ideal deal for your situation.

Final Thoughts

Getting a car loan after bankruptcy isn’t impossible. If you can improve your credit score and save enough money for a down payment, you should be able to secure an auto loan and get behind the wheel of a new car.

How Bankruptcy Affects Your Credit

Most people don’t file for bankruptcy because they want to avoid its detrimental effects on their credit. Bankruptcy stays on the credit reports for a maximum of ten years, and it can seriously hurt your credit. However, if you don’t file for bankruptcy and let your debts go to collections, it will also negatively affect your credit. Whether you file for Chapter 7 bankruptcy or Chapter 13 bankruptcy, your credit score will decrease from 160 to 230 points. Since most lenders require a good credit score, bankruptcy will make it harder for you to be eligible for home loans, credit cards, and car loans.

Time is the only remedy for this, but there are a few measures that you can take to enhance your credit score. If you can manage new debts well, your credit score will increase gradually, and you will be able to improve your financial situation even if the bankruptcy is still present on your credit report.

How Long Will Bankruptcy Stay On Your Credit Report

Chapter 7 Bankruptcy

A Chapter 7 bankruptcy stays on the credit report for a maximum of ten years. Since all debts associated with this type of bankruptcy are discharged after filing, they should be taken off the report a few years before bankruptcy itself. Generally, discharged debts drop off a credit report after seven years. As the items on the report associated with your bankruptcy get older, they’ll have less effect on your credit.

Chapter 13 Bankruptcy

The bankruptcy and debts associated with the Chapter 13 bankruptcy will be displayed on different sections on the credit report. A Chapter 7 bankruptcy stays on the credit report for a maximum of seven years. Discharged debts also stay for the same period after they’re discharged.

How to Manage and Improve Your Credit Score after Bankruptcy

·         Review Your Credit Score

It is best to check your credit report on a regular basis if you have recently filed for bankruptcy. Keep a list of all the debts that are included in the bankruptcy and review them after a couple of months. If you filed for Chapter 7 bankruptcy, these debts would show a balance of $0. If you notice that something is wrong in the credit report, ask the issuer of the report to make the required changes.

·         Reestablish Credit

Once the bankruptcy is discharged, you should try to rebuild your credit score. There are a few methods to start this process:

  • Make Timely Payments

Make timely payments to rebuild your score. Several factors make up the credit score, and making on-time payments is one of the most important ones. This is why you should try to make payments on time to improve your credit score.

  • Get a Secured Credit Card

Try getting a secured credit card. Then, make a deposit that is equal to the credit limit allowed on the card. For example, a $200 credit limit requires $200. Make sure to manage the new credit card properly.

Can a Bankruptcy Case Be Reopened?

Who Can Request a Reopening of a Bankruptcy Case?

Any party in interest of reopening the case can file a motion with the court to have it reopened. This category includes you, the bankruptcy trustee and your creditors. Depending on the individual, the legitimate basis for reopening a bankruptcy case can vary. The court has broad discretion on whether or not to abide by the request and reopen the case. Some of the common reason why a close case may be reopened is discussed in the section below.

Common Reasons for Reopening a Bankruptcy Case

Trustee or Interested Party

Even after you have been given a discharge, the bankruptcy trustee or any interested party that was involved in the case may want to get it reopened if they:

  • were harmed as a result of not getting a notice of your bankruptcy
  • found assets belonging to you that you didn’t disclose during the bankruptcy posses
  • discovered any significant mistake in your bankruptcy paperwork

Bankruptee

 The most common reason why a bankruptee may want a case reopened is to fix a mistake on their petition. This can include:

  • forgetting to list all their assets or debt
  • making significant errors in the bankruptcy paperwork
  • failing to file the mandatory debtor education certificate

Other common reasons could include:

  • to avoid a judgment lien
  • for addressing a violation of their discharge

How to Reopen a Bankruptcy Case

To have a closed bankruptcy case reopened, first you need to file a motion with the court and state the reasons why you want it reopened. In many U.S jurisdictions, you can file it without giving notice to other parties – also called an ex parte motion.

In addition, you may be required to submit a proposed order, which the judge will sign if they agree to move forward with your request. Depending on your stated reason, you may also be requested to file additional legal paperwork.

Get Legal Help

Can a Bankruptcy Case Be Reopened? The answer is definitely yes but it can be a complicated and difficult process. However, with the help of a qualified legal professional, you can better navigate through the whole ordeal and reach outcomes that are more in your favor.

If you are in need of personalized legal service to help you reopen a bankruptcy case, contact The Law Offices Sean T. Flynn at 512.640.3340 or contact directly online.

Bankruptcy Insider – Why is This Status Important?

Why is the Bankruptcy Insider Status Important?

In arriving at their judgment, a bankruptcy court would take into account any instances of preferences (e.g. favoritism towards any specific creditor in debt repayment) or fraudulent transfers. The status of an insider implies that information from the said person or entity is needed in the bankruptcy case to:

a) affirm what the debtor had stated regarding their transaction to be true.

b) affirm that any recent asset transfers were at their fair market value and not fraudulent.

c) Any inappropriately made transaction made by the debtor for the benefit of the insider. In which case, the lookback period is extended to one year from the standard 90 days.

d) recover the amount within the transaction with the insider and distribute them to all creditors, in the case of favoritism.

c) find evidence of any assets not disclosed in the bankruptcy case.

Who Qualifies as a Bankruptcy Insider?

Although the concept of insider is defined in 11 U.S.C. § 101(a)(31), there is no concrete rule of who or what entity can qualify as a bankruptcy insider. This is determined by the bankruptcy court on a case by case basis. However, there are some categories that tend to be common in the majority of bankruptcy cases. Below is their listing.

1) if the Debtor is an Individual

  • Debtor’s relatives
  • Any general partner
  • Any partnership in which the debtor is a general partner
  • any corporation in which the debtor is a director, officer, or person in control

2) If the Debtor is a Business Entity

  • Directors, officers or persons in control of the entity
  • Any general partner
  • Partnerships in which the debtor is a general partner
  • Relatives of a general partner, director, officer, or person in control of the debtor

3) If the Debtor is a Partnership

  • General partners
  • Relatives of a general partner in
  • General partner of, or person in control of the debtor
  • Persons in control of the debtor


In addition, common to all three include an affiliate of a debtor and managing agents.

Seek the Help of a Legal Attorney

Bankruptcy laws can be complicated and not always easy to understand. In filling a bankruptcy case, one can ill-afford room for making errors. This is why is always recommended to seek the aid of a legal attorney who can give better advise you on how to go through with your bankruptcy case. For a free consultation with an experienced lawyer, book an appointment with us online or call 512-640-3340.

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