Archive for January, 2012

When Bankruptcy Is Not an Option

Tuesday, January 31st, 2012

“It’s a common misconception that all debts can be erased with chapter 7 bankruptcy, but this isn’t the case,” says Bert Briones, an Irvine bankruptcy attorney .  “Some debts are “non-dischargeable debts,” and cannot be eliminated by filing for chapter 7, regardless of the circumstance.”

These debts include criminal fines (like court fees or penalties), and back taxes. You may also not attempt to discharge any debts incurred as a result of criminal activity. For example, if you were charged with negligent homicide, you cannot attempt to use chapter 7 bankruptcy to discharge any debts related to the victim’s death, even if they are not court fees or fines.

Debts incurred due to fraud or false information will not be considered dischargeable.  Fraudulent debts are those that you rang up knowingly before filing for bankruptcy. For example, if you obtained a new credit card, charged it to the limit purchasing items subject to bankruptcy exemption, and then filed for bankruptcy less than ninety days later, that debt will not be discharged.  Similarly, if you lied on a credit card application in order to obtain the card, any debt incurred on it won’t be eligible for chapter 7.

Any debts that weren’t listed on your original bankruptcy filing also will not be discharged.  When you file for bankruptcy, it is your responsibility to list all of your dischargeable debt. Any that you neglect to mention will not be considered at that time.

Alimony or child support is also not dischargeable, however divorce settlements may be if it is mutually agreed upon by your former spouse.

Lastly, you also cannot use chapter 7 to discharge debts that you racked up paying for non-dischargeable debts. If you took out a loan or cash advance in order to pay for a fine relating to a criminal charge, for example, you are not eligible to claim that loan in your bankruptcy filing.

If your debts fall under these criteria, don’t worry. Even if chapter 7 isn’t an option for you, you might still be eligible to file for chapter 13 bankruptcy, instead, since it operates a little bit differently. Contact a good bankruptcy attorney in order to go over your complete list of debts, so you can determine whether or not you are a candidate for chapter 7 or chapter 13 bankruptcy.

If you have questions regarding Chapter 7, Chapter 11, or Chapter 13 bankruptcy, lien stripping, wage garnishment, cram down, foreclosure, asset protection, or related issues, please call Red Hill Law Group PC, to schedule a no-charge face-to-face or phone consultation with an experienced Orange County bankruptcy lawyer.

We can be reached at 877-343-3289, or please use our contact form and you will be contacted within the next business day.

Download our Free E-Book, “Seven Bankruptcy Mistakes That Will Keep You Chained to Your Debt” here:

http://bankruptcyattorneyirvinesite.com

View our educational video series:

http://www.redhilllawgroup.com/orangecountybankruptcyattorney/

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Posted in Bankruptcy, Bankruptcy Alternatives, Chapter 11, Chapter 13, Chapter 7, Client Help, Credit Scores, Creditor Harassment, Debt Settlement / Debt Negotiation | No Comments »

Chapter 7 Versus Chapter 13 Bankruptcy

Tuesday, January 24th, 2012

“Filing for bankruptcy is a little more complicated than many people think,” says Bert Briones, an Irvine bankruptcy attorney . In general, filing for bankruptcy is done when a person or business has debts that exceed their assets. Personal bankruptcy is a bit different than corporate bankruptcy. People are able to file for either chapter 7 or chapter 13 bankruptcy, both of which offer different protections, and impact the filer’s credit history in different ways.

Chapter 7 bankruptcy is the type of bankruptcy most people end up filing for. With chapter 7, many of a person’s assets are liquidated in order to repay their financial obligations. This will eliminate some types of debt, but things like mortgages and car payments will remain. It’s good for getting rid of things like credit card debt, or other bills that don’t require an initial deposit of collateral (referred to as unsecured debt).

In many states, filing for chapter 7 bankruptcy can only be done by individuals that pass a “means test,” which compares their income to a statewide average to determine whether they have enough debt to warrant filing for chapter 7 bankruptcy. This type of bankruptcy remains on a person’s credit history for ten years, and there is a six to eight year waiting period before they will be able to file for bankruptcy again.

Chapter 13 bankruptcy differs from chapter 7 in that it does not eliminate debt. Instead, debts are consolidated, and a repayment agreement is reached between the debtor and their creditors. This repayment agreement usually spans three to five years, and impacts the debtor’s credit history as long as the repayment agreement is in effect. Chapter 13 bankruptcy is good for individuals with a high income, and it does not require debtors to liquidate their assets.

Filing for bankruptcy is more complicated than it sounds, and the decision of how to go about doing so isn’t an easy one. A good bankruptcy lawyer can help advise you on whether or not bankruptcy is a legitimate option for your financial situation, and assist you in determining whether chapter 7 or chapter 13 is more appropriate.

If you have questions regarding Chapter 7, Chapter 11, or Chapter 13 bankruptcy, lien stripping, wage garnishment, cram down, foreclosure, asset protection, or related issues, please call Red Hill Law Group PC, to schedule a no-charge face-to-face or phone consultation with an experienced Orange County bankruptcy lawyer.

We can be reached at 877-343-3289, or please use our contact form and you will be contacted within the next business day.

Download our Free E-Book, “Seven Bankruptcy Mistakes That Will Keep You Chained to Your Debt” here:

http://bankruptcyattorneyirvinesite.com

View our educational video series:

http://www.redhilllawgroup.com/orangecountybankruptcyattorney/

 

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Posted in Bankruptcy, Chapter 11, Chapter 13, Chapter 7, Credit Scores | No Comments »

Should I File Bankruptcy?

Wednesday, January 11th, 2012

“Bankruptcy is useful when someone’s financial obligations exceed their assets. Filing for bankruptcy has some negative connotations for a lot of people, but it’s really just a legitimate way for a person with a poor credit history to get a new chance to improve it,”says Bert Briones, an Irvine bankruptcy attorney . “Bankruptcy allows these people to eliminate or repay their debts, by restructuring their debts and allowing them to go on honoring their financial obligations under the protection of bankruptcy law.”

Though declaring bankruptcy is extremely useful for people who have wound up in over their heads when it comes to overdue bills and loan balances, it isn’t always suitable for every situation, and the decision of whether or not to declare bankruptcy isn’t an easy one. In general, it’s a good idea for a person to file for bankruptcy when they have assets that creditors  can attempt to seize. This includes things like real estate, a car that’s worth over a certain value, or a job where employees’ wages can be garnished.

It is not usually necessary for someone to file for bankruptcy when they don’t meet these criteria, since the worst most creditors will be able to do is keep calling and sending letters. People very rarely end up in jail just for owing money, and creditors can’t attempt to seize your household goods, furniture, or other owned items that don’t count as assets.

Filing for bankruptcy prevents creditors from continuing to harass you, and restructures your debts so you can pay them off. Certain kinds of debts may be eliminated entirely. This will negatively impact your credit score, usually for five or ten years before the bankruptcy filing is removed from your credit history. Fortunately, most people who need to file for bankruptcy have credit scores that can’t really get much worse, and being able to reduce or eliminate their debts can actually end up making their credit better than it was before the declaration of bankruptcy.

Though bankruptcy has a long-term, negative overall impact on your credit score, it can still be a good decision for you if you have things creditors can take from you. Bankruptcy will keep them from hounding you, and give you some legal protection while you repay your remaining debts.  By declaring bankruptcy, you’ll enable yourself to get a fresh start financially, and go on to build a stronger credit history for yourself.

If you have questions regarding Chapter 7, Chapter 11, or Chapter 13 bankruptcy, lien stripping, wage garnishment, cram down, foreclosure, asset protection, or related issues, please call Red Hill Law Group PC, to schedule a no-charge face-to-face or phone consultation with an experienced Orange County bankruptcy lawyer.

We can be reached at 877-343-3289, or please use our contact form and you will be contacted within the next business day.

Download our Free E-Book, “Seven Bankruptcy Mistakes That Will Keep You Chained to Your Debt” here:

http://bankruptcyattorneyirvinesite.com

View our educational video series:

http://www.redhilllawgroup.com/orangecountybankruptcyattorney/

 

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Posted in Bankruptcy, Chapter 11, Chapter 13, Chapter 7, Client Help, Credit Scores, Creditor Harassment | No Comments »

Poor Credit Scores and Bankruptcy

Wednesday, January 4th, 2012

“A credit score is a shorthand reflection of the information on your credit report, sort of a “grade” you earn for doing things that impact your credit history. Paying bills on time, and doing other things that build your credit will give you a good credit score, while late payments and unpaid balances will give you a poor one,” says Bert Briones, an Irvine bankruptcy attorney .

In most situations, a credit score of less than 400 is considered poor, but some institutions will even consider a score of 500-600 less than desirable.

With a poor credit score, you are less likely to be approved for things like lines of credit and loans. You may even have trouble getting things like phone lines, cable, or other utilities. Some businesses may require customers with poor credit scores to pay a large initial deposit before giving them service. Others may refuse service entirely. You will have a very hard time purchasing a home, car, or anything else that requires a loan.

People who owe more money than they have in assets may wish to declare bankruptcy. This raises questions about how bankruptcy will impact their credit scores. Fortunately, in most cases, the news isn’t bad for them-by the time someone declares bankruptcy, there’s usually nowhere their credit score can go but up. In addition to that, the most widely used credit score, the FICO score, is calculated based on how someone matches up to other people in their demographic.

One of these demographics is reserved for bankruptcy filers, so people who have declared bankruptcy won’t be compared to people with good credit histories, only those who have also declared bankruptcy. As a result, filing bankruptcy may actually end up being a viable way to help improve your credit score, though it will still be virtually impossible to get a perfect score as long as bankruptcy is still present on your credit report.

After filing bankruptcy, there are other ways to help improve your credit score even more. The biggest one is to avoid the mistakes that caused you to declare bankruptcy in the first place. Obtain a credit card designed for people with poor credit, maintain a balance on it, and make more than the minimum payment each month. Pay all of your utility bills and mortgage payments on time. Over time, you’ll be able to rebuild your credit, and achieve a decent credit score.

If you have questions regarding Chapter 7, Chapter 11, or Chapter 13 bankruptcy, lien stripping, wage garnishment, cram down, foreclosure, asset protection, or related issues, please call Red Hill Law Group PC, to schedule a no-charge face-to-face or phone consultation with an experienced Orange County bankruptcy lawyer.

We can be reached at 877-343-3289, or please use our contact form and you will be contacted within the next business day.

Download our Free E-Book, “Seven Bankruptcy Mistakes That Will Keep You Chained to Your Debt” here:

http://bankruptcyattorneyirvinesite.com

View our educational video series:

http://www.redhilllawgroup.com/orangecountybankruptcyattorney/

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Posted in Bankruptcy, Chapter 11, Chapter 13, Chapter 7, Client Help, Credit Scores, Creditor Harassment | No Comments »