How Can You Reduce Or Eliminate Your Unsecured Debt?

Posted by on February 15, 2017 in Uncategorized | Comments Off on How Can You Reduce Or Eliminate Your Unsecured Debt?

There are many businesses that advertise heavily with promises of reducing or completely eliminating unsecured debt. This is debt that is not backed by collateral such as a home or a vehicle. Credit cards and personal loans are examples of sources of unsecured debt.  These companies negotiate with your creditors to reduce your principal (the amount you owe) and your interest rate. However, they may also charge exorbitant fees and your credit rating is decimated. There are other ways to rid yourself of burdensome debt, especially if you are under temporary financial duress. Some methods you can do yourself, while others require the help of experts in the field. What can you do on your own to reduce or restructure your debt? Contact your creditors When you are underwater financially, nothing is worse than hiding from your creditors. Ignoring calls and written communication from your creditors leaves them unable to help you to resolve the situation. Most creditors have programs or policies in place for when their customers are having financial difficulties. This may include deferring payments, accepting partial payments, forgiving late fees, or completely financing or restructuring personal debt. Get help from consumer credit counseling services These services are funded by the creditors themselves, and they offer free counseling as well as debt consolidation services. You can discuss your financial situation in person or over the phone, providing information about your income and unsecured debt. If you have sufficient income to enter a debt consolidation program, your creditors will be contacted by the counseling service to try to get interest rates lowered and fees reduced. You will then be given a monthly payment to be paid to the counseling service and distributed among your creditors. A modest fee is charged for this service. During your repayment period, creditors agree not to contact you or demand payment. When all debts are repaid, the repayment plan is complete. What can you do if you don’t have enough money for any of these types of repayment plans? If your income has been significantly reduced, and you can barely pay anything toward your unsecured debt, you can file for Chapter 13 bankruptcy protection. This is known as a “wage earner’s plan,” because you must have sufficient income to qualify for the plan.  Chapter 13 bankruptcy allows you to keep your secured property, such as your home and vehicle, but you must make all regularly scheduled payments in a timely manner. However, you are allowed to make arrangements to repay any arrears as part of the bankruptcy agreement. Unsecured debt is repaid to creditors according to your available income after regular living expenses and secured debt payments are paid. If your income is only sufficient to pay monthly household expenses and house and vehicle payments, you may make very small or no payments to unsecured creditors. A Chapter 13 repayment plan is in effect for either three or five years, depending on your income. All of your payments are made to a trustee of the bankruptcy court, who distributes them to your creditors for a modest fee. After your scheduled repayment period, all of your remaining unsecured debt is eliminated. Of course, if you have substantial assets such as cash or personal property, it may be liquidated to satisfy some of your unsecured...

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Faqs About Bankruptcy Exemptions

Posted by on July 19, 2016 in Uncategorized | Comments Off on Faqs About Bankruptcy Exemptions

Exemptions are designed to give you some relief during a bankruptcy. With the help of an exemption, you can keep some of your assets out of your bankruptcy estate and protect them from creditors. If you are planning to file for bankruptcy, here is what you need to know about exemptions.  What Can an Exemption Protect? What an exemption can be used to protect depends on your state’s laws. Each state has categories for exemptions and you can only protect assets that fall within those categories. For instance, most states have a homestead exemption. It allows you to keep your home if its value is at or beneath a certain dollar amount. The amount varies by state.  Some states do have a wildcard exemption. You have the freedom to choose the assets you want to protect using the special exemption. The amount of the exemption is set by state law.  How Can You Get the Most from Your Exemptions? Before you file for bankruptcy, you need to find out what exemptions are allowed by your state. If your assets are not going to be protected by the exemptions, you and your attorney can explore other means for dealing with your financial situation.  In addition to learning what the state exemptions are, you need to know the rules. Since each state sets the rules regarding its exemptions, there are some unique rules that might work to your advantage and allow you to retain ownership of more of your assets.  You also need to consider whether filing for a state or federal bankruptcy would be best. Depending on the state in which you live, the federal exemption might be worth more. If that is the case, you could fare better by filing through the federal courts.  In addition to these measures, you need to explore the idea of doubling your assets. If your spouse is planning to also file for bankruptcy, you can combine your exemptions to protect your assets. For instance, if your state allows $25,000 for the homestead exemption, but your home’s value is $45,000, you and your spouse can combine your individual exemptions and save your home.  Whether or not exemption doubling is allowed depends largely on your state’s laws. If so, you need to file for bankruptcy at the same time to avoid any delays in processing your bankruptcy filings.  There are other tactics you can use to save your assets in a bankruptcy. Consult with an attorney, like O’Connor Mikita & Davidson LLC, as early as possible to learn which methods would work best for...

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Two Questions Regarding Filing For Bankruptcy

Posted by on February 8, 2016 in Uncategorized | Comments Off on Two Questions Regarding Filing For Bankruptcy

Becoming trapped under debts can be one of the most stressful experiences that a person can go through. If you have found yourself in this situation, you may be facing aggressive actions by your creditors. In addition to filing lawsuits, it may be possible to have your wages garnished as well as property confiscated. Fortunately, bankruptcy can offer a person a way out of this type of situation, but it is common for individuals to lack the knowledge or experience needed to make an informed decision about pursuing this legal option. If this applies to you, learning the following couple of questions and answers should help to make this choice easier. What Happens During Bankruptcy Proceedings? The process of filing for bankruptcy can be rather lengthy, but one of the first steps will be for the courts to thoroughly evaluate your financial history and standing. This is necessary because it must be determined how much of the debts you will be able to repay. Depending on the type of bankruptcy you file, this may or may not involve liquidation of some of your assets. Fortunately, many clients may find that they are able to negotiate friendlier repayment terms and debt forgiveness without having to lose any assets through this process. However, only your attorney will be able to help you determine which type of bankruptcy will be best for you. Will Your Credit Ever Recover From A Bankruptcy? There are many individuals that may be hesitant about filing for bankruptcy because they are concerned about whether or not they will ever be able to rebuild their credit. While it is commonly believed that a bankruptcy will destroy a person’s credit for many years, this does not have to be the case. Following a bankruptcy, it is generally possible to be qualified for a secured credit card by making a deposit with a card issuer. This type of card can allow you to build a positive payment history without the risk of taking on excessive debt because these cards have low limits. By making sure to always make these payments on time, it is possible to establish a positive repayment history, which will help rebuild your credit. Filing for bankruptcy can be the best option for individuals that have found themselves in an impossible financial situation. By understanding what is involved during in filing for bankruptcy as well as the fact that it is possible to build your credit relatively rapidly, you may find it is easier to make a choice about using this option to achieve a fresh financial start. Visit for more...

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Rising Costs Of Living Getting You Down? Why Chapter 7 Might Be Right For You

Posted by on August 27, 2015 in Uncategorized | Comments Off on Rising Costs Of Living Getting You Down? Why Chapter 7 Might Be Right For You

It seems that prices are going up on everything. The monthly news about the costs of gas, groceries, or other goods is rarely one that benefits consumers. Many people with financial stability can take these kinds of gradual hikes in stride, but if you are already operating in the red due to excessive credit card debt, a few more dollars at the grocery store can have a big impact on your family. Because you are the provider for your children, they look to you to care for them. Do they too often see anxiety in your face as you approach the checkout line? If so, you are probably tired of living hand to mouth and carrying the heavy weight of credit card debt around your neck. Chapter 7 bankruptcy might just be the choice that frees you from this kind of desperate living. What is Chapter 7? Many people hear about the two most common forms of bankruptcy, Chapter 7 and Chapter 13, but don’t know the difference between them. Chapter 13 is a restructuring of a person’s debt, on which he/she makes monthly payments for several years before having the bulk of it forgiven. It works well for those who have steady incomes but can only pay part of their overwhelming debt. Chapter 7, however, is known as “straight” bankruptcy; in other words, you are declaring that you can not pay your debts at all. This is probably your scenario if you cannot accommodate small increases in the cost of living. How can Chapter 7 help me? Chapter 7 bankruptcy wipes your financial slate clean. The moment your attorney files the case, your creditors must stop contacting you. During the next three to six months, a bankruptcy trustee will review your financial affairs, and you will appear in court to answer questions about them. At the end of the bankruptcy process, your debts are discharged and you have a brand new financial start. Will I lose my house? This may be the most common question asked by people considering bankruptcy. Theoretically, your assets can be sold to offset your debts. It is true that, in some cases, those filing Chapter 7 will have to forfeit their homes. However, if you do not have much equity in your house, it will not make financial sense to the court to seize and sell it, as the profit made on the sale would not pay down your debt significantly. Your attorney can advise you about the particulars of your circumstances. Where do I start? If you think Chapter 7 might be the solution for you, contact a bankruptcy attorney in your area and schedule a free consultation. He/she will review your total financial situation and then offer the best legal advice for you and your family. For more information, contact Licata Bankruptcy or a similar...

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