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Consumer bankruptcy

Credit Counseling and Debtor Education Requirements

It is required for anyone wanting to file for bankruptcy that they take prebankruptcy credit counseling and predischarge debtor courses. Both courses are taken at different times in the process. Credit counseling, the first course, must be taken before filing for bankruptcy, whereas the debtor education course after filing. Sometimes, an additional class on managing personal finance must be taken before a discharge is issued at the end of the applicant’s case. Very few people qualify for certification and must later bring in an attorney.

We will briefly go over the Prebankruptcy Credit Counseling Course and the Predischarge Debtor Course in this short read.

Prebankruptcy Credit Counseling

This course will provide you with an idea of whether you really need to file or an informal payment process would be best for your economic revival.

Guiding is required regardless of there being a seemingly practical payment. Or you are confronting obligations that you find unjustifiable and don’t have any desire to pay.

The guiding office generally readies a spending plan dependent on your pay and costs and afterward audits your repayment choices. Mostly, the organization informs you that you don’t have any feasible alternatives for repayment; you must, hence, file.

Bankruptcy law requires just that you take an interest in the counseling—not that you oblige whatever the office proposes. Regardless of whether a repayment plan is attainable, you’re not needed to consent to it. Be that as it may, if the organization concocts an arrangement, you should record it alongside your other bankruptcy documents.

Browse through these results to find the prebankruptcy course that suits you.

Predischarge Debtor Education

This course is to be taken after filing for bankruptcy.

The second class, an individual budgetary administration course, is known by a few names — including the Predischarge Debtor Course, the “second” course, and the post-documenting course.

You must enroll in a course offered by an organization affirmed by the Office of the U.S. Chapter 11 Trustee. If you can’t manage the cost of the course, you will be permitted to pay what you can bear on a sliding scale. Course costs differ; however, the Executive Office for U.S. Trustees (EOUST) says that courses costing under $50 are manageable. Any bankruptcy instruction supplier that needs to charge more than that needs endorsement from EOUST.

You can take the course face-to-face, over the telephone, or on the web, and the teacher will give every single required material. On-the-web and telephone courses require agreeable consummation of a test.

You can take the pre-release course together or independently on the off chance that you are hitched, and both you and your mate are experiencing liquidation together. Chapter 11 courts require fruitful fulfillment of the two courses before your obligations can be released.

For detailed information on these courses and other processes involved, visit the official United States Courts website.

Bankruptcy May Actually Help Your Credit Score

Meta Title: Bankruptcy May Actually Help Your Credit Score

Meta Description: Wondering how filing for bankruptcy could help your credit score? You’d be surprised!

Keywords: Filing for bankruptcy, credit score

Bankruptcy May Actually Help Your Credit Score

Bankruptcy laws were formed to help relieve you from creditors by giving you a fresh start to your finances. While there is no denying that this fresh start comes at the cost of a significant hit to your credit, bankruptcy does have some good long- and short-term effects on your credit.

Depending on your credit score, assets, and current financial situation, you can benefit from bankruptcy.

What is a Credit Score?

To put it simply, a credit score is a number that portrays your credit history and decides whether or not you will falter on a debt. Lenders view this score whenever you ask for debt so that they can decide whether or not they want to give you a loan and what interest rate they want to charge.

The most common type of credit score is FICO scores. These can fall anywhere between 300 to 850. A FICO score depends on the information present in your credit report. This includes:

  • Your history of debt repayment
  • The debt you currently have lined up, including your debt-to-credit ratio
  • Different types of credit that you might have obtained
  • The amount of time you have had credit for
  • Whether or not you have new credit that needs to be paid.

A high FICO score is an indication that you are good at managing your finances. However, a subpar FICO score shows that you are negligent with your credit payments, have a number of unpaid debts in line, have recently gone through a foreclosure, have filed for bankruptcy, or experienced other issues in the process of repaying debt.

How Filing for Bankruptcy May Help Your Credit Score

Getting Rid of Delinquent Accounts

There’s nothing worse than making late payments, as these will wreck your credit score. However, filing for bankruptcy will help remove a large percentage of the delinquent accounts that you may have on your credit report.

This means that once you discharge these debts, they do not read as delinquent on your credit report. Instead, they appear as “discharged.”

Changing the Debt-to-Credit Ratio

An individual’s debt-to-income ratio is regularly considered by credit bureaus. This is why if you have more debt as compared to the amount you earn, your credit score will most likely be low.

However, if you manage to remove some of your debt by filing for bankruptcy, your income will stay the same, and your creditworthiness has good chances of improving.

Allow Yourself to Start Fresh

Debt can be crippling. It can make people feel trapped and suffocated, especially if your debt has reached an unmanageable amount, and your income does not match anywhere close to it. During these times, instead of letting yourself drown in hopelessness, it is essential to realize that filing for bankruptcy may actually give you a fresh start.

Once you get a fresh start, you can start regulating your spending and pay close attention to finding ways to improve your credit score.

By taking advantage of bankruptcy protection in your city, you may start to notice an improvement in your credit score. To find out more about Chapter 7 and Chapter 11 bankruptcy, click here (insert link of the website).

Costly Mistakes to Avoid When Filing for Bankruptcy.

Bankruptcy can be a dreary experience. Should you want to rise from the ashes on top, we advise you to do a once over of what is not supposed to be done when filing for bankruptcy. Everybody wants to sneak in unscathed giving false records or hiding assets that would otherwise not aid them in the process if discovered.

No court allows you to go free if you are caught, and will definitely penalize you.

Following chapters 7 and 13 Bankruptcy, these are some prioritized, costly mistakes to avoid when filing for bankruptcy.

Lying About Your Assets and Not Consulting an Attorney

Chapter 7 bankruptcy contains a “means test,” which is essentially a requirement that you provide utmost financial transparency to determine your ability to pay creditors off. You must pass this test; otherwise, in some cases, you could be banned from filing on hidden debts ever again. One way or the other, someone will discover discrepancies or hidden assets. So, here’re three words: tell the truth.

Also, it is essential that you consult an attorney before filing for bankruptcy. No matter how well-educated, civilians cannot and should not file on their own.

Giving Assets to Family Members and Amassing Up Credit Card Debt

A big no-no, never lend cash or property, cars, jewelry, even electronics to blood relatives or friends, assuming that they will return it in the future. Also, if you give your car away to a sibling and you go file for bankruptcy is a one-way ticket to losing your car for good. List all your assets and liabilities.

If you see yourself heading down the “B” road, quit using your credit card when you know you will eventually have to file. Otherwise, all the bad credit will come back to haunt you at the time of filing.

New Debt and Not Doing Research

It is not advised to take on new debt when you have to tap into your equity to manage finances. Wise choices include letting go of any debt financing if you see yourself headed towards bankruptcy.

Knowing the rules before entering the game is pretty much the unsaid rule we all abide by. You cannot file bankruptcy for every debt. Payments like student loans, child support, tax debt, and alimony are not covered by bankruptcy. Keep yourself well-informed and consult experts before filing.

Takeaway.

With all things said and done, the only thing left unsaid is to exercise caution. Be cautious of every step you make before you make it. Always keep experts in the loop, consult people who have filed before, do not try to hide any of your assets, and always be transparent. Go so far as consulting between experts. Opt for consistent decisions.

Good luck, and be smart!

Bankruptcy Forms and What You Need to Know About Them

Filing for bankruptcy can be an arduous process. It is complicated in its technicality and can be confusing in certain places. It would help if you had assistance, whether or not you are recording under Chapters 7 or 13.

Official US court sites give the official documentation for filing, which are printable and can be completed. You likewise may have to follow explicit prerequisites forced through the bankruptcy dealer of your general vicinity, which may include additional or different files. The dealer agent or a lawyer can clarify these prerequisites and instruct you on what is necessary. Sometimes, the court’s site will give the forms, too.

Form Submission

Bankruptcies and their proceedings are documented in federal courts only. All of the US states have at least one government legal locale. You should record in the locale of your main living place or where you’ve lived in for the 180 days preceding your document. (By and large, it is going to be a similar region). Business proprietors have a little extra alternatives to consider.

Forms of C7

Form b 101

The primary file in a C7 bankruptcy is the B 101, or the deliberate appeal. This will give you distinguishing information, notwithstanding information about previous forms, the end of your credit guidance, and other fundamental issues. If there’s an oust not in your favor, you should look into B 101A along with B 101B. On the off chance that you can’t pay the recording expense, you can request for payment of charge in portions from B 103A, else request a renunciationfor B 103B.

Form b 106

B 106 plus connected forms will give a rundown (or “timetable”) of your resources plus debts.B 106A and Bare meant for giving a timetable that deals with your holdings, B 106C is to give a timetable of your guaranteed exclusions, B 106D is to enlist and ensure correct lenders, B 106E or F are to enlist unstable banks, while B 106G is to enlist actionable deals yet-to-expire leases. Then,B 106H is to give the details belonging to partner account holders on your obligations, who should pay on the off chance that you don’t pay your obligations. B 106I deals with pay, while B 106J deals with month to month costs.

Form B 107 and Others

B 107 gives your Affairs Statement, that delineates, for example, your all-out pay in the course of the most recent two years, late installments to banks, continuous claims, ongoing property moves, plus assets of others in your temporary possession. B 108 is Intent Statementof your dealing with these with your obligations and yet-to-expire deals. B 121 social security details belonging to you. Forms B 122A-1 and B 122A-2 identify with the methods trial for the 7th Chapter qualification. They turn out your current month to month revenue and depict whether you need atest if your pay is more noteworthy than average.

Chapter 13 forms

The forms that an indebted person needs to document in 13relate as fairly comparable. B 101, B 101A and 101B plus B 106 along with others connected handle the very issues as 7. When recording for 13,the option to pay the documenting forgoing waivers is there, soB 103A plus 103B won’t assume a job. You won’t have to finish B 108 in 13. So, first finish B 121 to cater to Social Security details.

Chapter 13-Specific Forms

The filings explicit to 13 are B 122C-1 plus B 122C-2.B 122C-1 turns out your current month to month revenue and sets out the period in which you hope to finish your reimbursement.B 122C-2 turns out your dispensable revenue, which includes the assets utilized to issue installments under the arrangement. Notwithstanding the filings, present a different proposition for your reimbursement. It’s certifiably not a particular form and doesn’t follow a specific format; however, you can get some information regarding everything needed to be remembered for the arrangement.

Chapter 13 Eligibility Checklist

For those struggling with mounting debts who want to retain their assets, Chapter 13 bankruptcy can serve as a viable means for them to do. In Chapter 13, your debt repayment plans are rescheduled based on the court’s assessment of what you can afford for the duration of the bankruptcy – which is typically 3 to 5 years.

With that said, not everyone can qualify for a Chapter 13 bankruptcy. Here is a concise checklist of what is required:

1. Must have a total of $419,275 or less in unsecured debt and a total of $1,257,850 or less in secured debt.

2. The debtor seeking relief must be an individual and not a business entity (however, business-related debts for which the individual is personally liable can be included)

3. Provide proof that you are up to date on tax filings have enough income to meet monthly repayment obligations

4. In the preceding 180 days, neither had no preceding bankruptcy petition dismissed due to willful failure to appear before the court.

or Voluntarily had it dismissed after creditors sought relief from the court to repossess property upon which they hold liens.

5. Have completed a credit counseling course from an approved credit counseling agency within 180 days before the date of filing

#bankruptcy #bankruptcyattorney #bankruptcylaw #bankruptcylawyer #TX #BankrutpcyTX #Chapter13

Your Student Loan Debt CAN be Discharged Through Bankruptcy

There has been long a perpetuating myth that student loan debt in America cannot be wiped out by declaring bankruptcy. The truth is quite the opposite. A court can grant you a discharge provided you can prove it is causing you ‘undue hardship’.

Courts will use different tests to evaluate whether it might be causing you undue hardship. The commonly used is the Brunner test. Passing it requires you to prove that:

1. You and your dependents are unable to maintain the ‘minimal’ standard of living because of the debt

2. Additional circumstances exist that will make such a state of affairs to persist for a long period

3. You had made real effort to repay your student loan debt.

On the surface, this does make it seem that qualifying for a discharge might be difficult, but an empirical student from Villanova University found that judges have granted a hardship discharge to 40% of debtors who sought one.

In such a context, it may be surprising to find that 99.9% of debtors who have filed for bankruptcy don’t even attempt to discharge their student loans. With more and more individuals suffering from mounting student loan debt, it remains highly critical to raise awareness about how it could potentially be wiped out.

Link to the study: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1894445

#bankruptcy #chapter13 #chapter7 #studentloans

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A Record Low in Bankruptcy Filings

Despite the economic uncertainty brought by the pandemic this year, paradoxically, the number of bankruptcy filings in the country hit a new 14-year record low this November. According to data released by the legal giant, Epiq, new bankruptcy filings across all chapters for the month was 34,440, the lowest since January 2006.

According to Deirdre O’Conner, Epiq’s managing director of corporate restructuring, the economic uncertainty itself is to blame for the unusually low filing count.

“These historic low bankruptcy filings reflect the overall uncertainty about our economic recovery. Bankruptcy is a legal tool to restructure, but in this unknown financial environment, the benefit from seeking bankruptcy protection is unclear for individuals, families, and even large companies,” – Deirdre O’Conner.

In addition, government intervention may have also partly contributed to the fall in bankruptcy filings. The various COVID-19 related government programs and state eviction moratoriums are lessening individual incentives for filing for bankruptcy.

Individual bankruptcy filings through the year as a whole have been low. Compared to 2019 for the same period, in 2020, non-commercial filings under Chapter 7 were down 21%, from 414,625 to 325,716, and in the case of non-commercial filings under Chapter 13, the tally was down by 45%, from 252,660 to 137,764.

Source: Globe Newswire

#chapter7 #chapter13 #bankruptcy #legalnews #bankruptcynews #bankruptcyUS #COVID19 #USLaw

What to Expect if You Get Sued for Debt

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It is not necessary that you only get sued for a loan that you remember. There can be a case where you get a legal notice for a long-forgotten debt, which is still left unattended.

For such scenarios, you should know what to do if someone sues you. Hence, we have gathered everything that you can expect if you get sued for a debt.

Go through this to get a better idea about the whole procedure.

The Time

The very first thing that you should cater to is the time wherein you have to respond to the notice. You can expect 20-30 days from the day you receive the notice to send an official response.

However, we suggest that you get this done at your earliest. By doing so, you may even have a chance of striking a deal with the creditor or debt collector before things reach the court.

The Debt Itself

You can expect the repayment amount to be more than the amount you borrowed. The amount stated by the creditor could be more than the debt itself and may include interest, charges, court, or even attorney fee as the process is not free for creditors.

Hence, you should expect an amount which can be more than what you owe. This way, you will be in a position of negotiating the amount in front of the court.

The Original Creditor

Another thing that you can expect for such a case is that it may not be the original creditor who is filing the lawsuit against you. This is precisely why we stated earlier that you could get sued for a long-forgotten debt.

Debts get sold, and when that happens, the chances are that the person suing you is not the one you owe your money to. Hence, the situation can get complicated, and you should be prepared with all the documentation you own.

Statute of Limitations

Since lawsuits are filed mostly against unattended debt, you should always check the statute of limitations for such cases in your state. If your creditor sued you within the time frame, the case might continue.

However, if the statute of limitations for this specific type has passed, you will have the upper hand in court. To be sure, do consult an attorney and discuss the possibilities beforehand.

Showing Up in Court

Lastly, you must attend all the court hearings. By doing so, you can make sure that any opportunity that you have of winning the case or having the decision slightly in your favor is not missed.

However, if you do not show up in court, you can expect dire consequences. This includes the decision being taken directly in favor of your creditor, which will eventually give them more power. This power means that your salary, property, and savings are all at risk, which is certainly a situation you will not prefer. Hence, make sure that you always show up for your case.

For more information, speak with an experienced bankruptcy attorney – schedule your free 1-hour consultation today: https://seanflynnlaw.com/calendar/

What is a 2004 Examination in Bankruptcy?

 

 

In a bankruptcy case, you are required by the court to reveal all information that is deemed necessary. This includes all your debts, assets, income, expenses, etc. In addition, you will be required to attend a 341 meeting, where your creditors will ask you further questions (HYPERLINK: 341 Meeting article).

Usually, the interested parties, such as your creditors or the court trustee, may be satisfied with the information you provide. However, in case they wish to investigate matters further regarding your bankruptcy case, they will schedule a special session called a 2004 examination.

What is a 2004 Examination in Bankruptcy?

A 2004 exam is a formal session that allows the interested party to acquire any information that they may want regarding your bankruptcy case. A 2004 examination meeting can cover a broad range of issues, which can include but are not limited to:

In a 2004 examination, the interested parties could also bring in anyone that has knowledge relating to your bankruptcy. Any witness subject to the session will not always be entitled to an attorney, and their right to object to any questions asked may be restricted.

The 2004 Examination Process

Because of the potential for abuse, an interested party is not automatically given the right to conduct a 2004 exam. Rather, they have to request it from the bankruptcy court by filing a motion. The party requesting a 2004 exam must convince the court that they have a ‘just cause’ for holding the session. If the motion is approved, the court will then issue an order, informing you or another witness of the date and time of when the session will take place.

Additional information

A 2004 exam can also be requested by you, and it can be advantageous to do so in certain cases, such as challenging the basis of a creditor’s potential adversary claim. It is also important to know that once an adversary claim has been filed, then a 2004 Exam can no longer be used to get information from the parties involved in that proceeding. Instead, the process will be conducted in a separate adversary lawsuit with its own set of rules.

Hire a Bankruptcy Attorney

You don’t have to confront your creditors alone in a bankruptcy case. An experienced legal professional can guide you through the long-drawn and complicated bankruptcy process and ensure a favorable outcome. To hire an attorney from our office or for any inquiries, call 512.640.3340.

For more information, speak with an experienced bankruptcy attorney – schedule your free 1-hour consultation today: https://seanflynnlaw.com/calendar/

Student Loans and Bankruptcy

When someone considers the option of going bankrupt, they are definitely in the most difficult situation and they cannot pay off their debts. However, when it comes to student loans, we have often heard that it cannot be discharged through this process. Well, it is high time that we start understanding student loans and bankruptcy in combination so that one can analyze if it is an option that they should go with or not.

Student loans can be discharged through a bankruptcy case by proving ‘Undue Hardship’ and this is one of the reasons why people get confused because the process itself is not that clear. While you know that this is what you need to prove in court, there is no set of rules which every court and judge has to abide by. Hence, most people are unaware when the question arises that ‘how to prove undue hardship for student loans?’

As stated, there is no set of rules, but we do know that if not all, at least most of the judges do follow a specific test, i.e. the Brunner test to determine whether someone is applicable for student loans and bankruptcy or not. We will now look at the 3 major things that the borrower needs to prove to pass the Brunner test on which the decision of the judge relies.

Minimum Standard of Living

The first and foremost thing that you need to prove in a court is that if you were to repay the loan amount, you will not be able to maintain the bare minimum standard of living for yourself and those dependent on you. Now, it is not necessary that only people who fall under the poverty line would qualify for this. However, it depends on the judge who is handling your case and what they think about your current living conditions.

Additional Circumstances

There can be additional living conditions for you or people that are dependent on you that can add on to the fact that you cannot earn more and pay your student loan. This can include any mental or physical illness, poor quality of education, and the fact that you have reached the highest-earning that you can make and are still incapable of generating enough money.

Good Faith

The last point which is also very significant is that the judge should know that you have tried your best until now and that bankruptcy is the only option left. For example, you can ask for a repayment plan with less interest rate before you apply for bankruptcy to show the legitimacy of your intentions.

While the Brunner test is followed by most courts, it is not a set standard and so you need to consult a lawyer in your area beforehand to have enough knowledge about this and other things such as the need of filing the adversary proceeding, knowing which option is better for you, i.e. bankruptcy chapter 7 or 13, and to have an estimate of how much will the bankruptcy itself will cost you!

For more information, speak with an experienced bankruptcy attorney – schedule your free 1-hour consultation today: https://seanflynnlaw.com/calendar/

Get A Fresh Start

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