Posts Tagged ‘Credit card’

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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 »

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 »

How Bankruptcy Protects You

Saturday, December 31st, 2011

“One of the biggest benefits to filing for bankruptcy is the fact that the debtor gains certain protections under bankruptcy law. This can help protect a person’s car, house, paycheck, and even their sanity,” says Bert Briones, an Irvine bankruptcy attorney. 

Filing for bankruptcy protects a person’s assets by keeping creditors from being able to seize them. Chapter 13 bankruptcy does this by restructuring debt and creating a three-to-five-year-long repayment agreement that both debtor and creditors must adhere to.

Chapter 7 bankruptcy does this by eliminating debt by selling off some assets in order to pay it off. Though chapter 7 causes debtors to lose some of their assets, it protects their other ones, like their homes. 

In certain situations, some creditors can garnish a person’s wages in order to repay their debt. Though this usually doesn’t impact things like welfare or social security payments, some debtors may need to take extra steps to protect these forms of income, as well. Filing for bankruptcy can stop wage garnishment in its tracks, allowing debtors to keep their entire paychecks instead of losing them to creditors. 

Once a person files for bankruptcy, creditors are subject to a restraining order that prevents them from continually harassing that person. Though there are laws that determine what creditors are and are not allowed to do or say when contacting debtors, a lot of them don’t abide by these laws very well, and many debtors are still subject to undue harassment from unscrupulous collection agencies.

Filing for bankruptcy makes it contempt of a federal restraining order for creditors to continue to contact the filer. This makes it a very attractive option for people whose daily lives are being negatively impacted by the amount of phone calls and letters they receive from their creditors. 

When it comes down to it, bankruptcy helps both debtors and creditors. It helps creditors by getting them their money, and helps debtors by protecting them from harassment, wage garnishment, and having their assets seized. Though the decision to file for bankruptcy is a serious one that has long term impact on a debtor’s credit history, it is ultimately beneficial for the people who have a lot to lose.

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, Creditor Harassment | No Comments »

Poor Credit Scores and Bankruptcy

Monday, November 28th, 2011

“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,” says Bert Briones, an Irvine bankruptcy attorney.

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. 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, Bankruptcy Alternatives, Chapter 11, Chapter 13, Chapter 7 | No Comments »

Bankruptcy and the Means Test

Thursday, November 10th, 2011

The Bankruptcy Code was amended in 2005.  The amendment included the ‘Means Test’ for filing a Chapter 7 case.  The Means Test is a mathematical formula which determines whether a debtor’s bankruptcy petition should be assigned a “presumption of abuse” or not by the court. 

If a petition falls within the “presumption of abuse” range, the debtor has the burden to prove that the filing is not fraudulent.  If this burden is not met, the court may dismiss the Chapter 7 case.

The Means Test is applied to consumers whose majority of debt is consumer or personal debt (not business debt).  If a debtor’s income is below the state’s median income, the Means Test is not applied and there is no presumption of abuse.  Additionally, if the debtor is a disabled veteran and the debt was incurred primarily while on active duty (or related activities), the Means Test is not applied.

If the debtor is not a qualifying disabled veteran and his income exceeds the state’s median income for a household of their size, the means test is applied to determine if there is a presumption of abuse.  The Bankruptcy Code identifies numerous expenses to be deducted from the debtor’s income.  After those expenses are deducted, the amount is multiplied by 60.  If the result is under $10,000 or over $6000 and also amounting to 25% or more of your “non-priority, unsecured debt,” the court will presume that your filing is fraudulent.

As if the formula is not confusing enough, there are other factors to consider in the Means Test.  For instance, some expenses you are allowed to deduct from your income (education expenses, contributions to charity, etc.).  You must also determine whether debt is “priority/non-priority” and “secured/unsecured.”

Finally, if the court determines there is a presumption of abuse, that presumption can be rebutted by “special circumstances.”  Proving special circumstances typically requires the expertise of a bankruptcy attorney arguing there are reasonable reasons why the debtor’s income falls within a certain range and those reasons are not fraudulent.

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 personal finance/bankruptcy attorney.

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

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

What is a “Discharged Debt”?

Wednesday, November 2nd, 2011

“You often hear about filing a bankruptcy case and discharging debt, but what does this really mean?”, says Bert Briones, Principal Attorney at Red Hill Law Group PC, an Irvine, CA Bankruptcy law firm.

The term “discharging debt” means that the debtor’s personal liability for the discharged debts is removed.  A discharged debt is essentially eliminated.  A debtor receives his debt discharge order from the judge at the conclusion of the case. 

Once a debtor has been discharged, creditors may not take any collection action against the debtor for the discharged debts.

Dischargeable Debts

It is important to understand that not all debts are dischargeable.  Most unsecured debts (those not secured by collateral) are dischargeable.  However, the Bankruptcy Code excludes specific debts from discharge, depending on the chapter under which the debtor filed.

What Debts Are Typically Not Dischargeable?

Chapter 7 is one of the most common types of bankruptcy filed by consumers.  Under the Bankruptcy Code, there are nineteen different types of debts excluded from discharge.  Below is a list of some of the more common non-dischargeable debts under Chapter 7:

-  child support

-  alimony (spousal support)

-  most student loans

-  some tax debt

-  government fines

-  fines for injury caused by drunk driving

-  debts resulting from intentional property damage

-  debts the debtor did not include on the bankruptcy petition

The other type of bankruptcy commonly filed by consumers is a Chapter 13.  A Chapter 13 is less restrictive concerning the types of debts that may be discharged. Debts that may be discharged under Chapter 13 but not Chapter 7 include:

-  property-settlement debt from divorce or separation proceedings

-  debts resulting from intentional property damage

-  debts incurred to pay otherwise non-dischargeable tax obligations

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 personal finance/bankruptcy attorney.

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

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Posted in Bankruptcy, Chapter 11, Chapter 13, Chapter 7, Credit Scores, Debt Settlement / Debt Negotiation | No Comments »

What Are Some Major Causes of Excessive Debt?

Thursday, October 27th, 2011

“Many people are not aware of the many causes of debt that need to be avoided in the future,” says Bert Briones, a bankruptcy attorney with Red Hill Law Group PC, an Irvine, CA bankruptcy law firm.

Here are some major causes of debt that people are facing:

Poor Money Management

A monthly spending plan is very important. Without one you have no idea where your money is going. You may be spending hundreds of dollars unnecessarily each month and end up having to charge purchases on which you should have spent that money.

You will be surprised at how powerful you will feel when you are making thoughtful decisions about where and when to spend your money.

Underemployment

Are you underemployed and you have the mindset that it is only temporary?  Do not give yourself a false sense of relief.  Take your income and align your expenses with it.  Later, you can think about spending a bit more after some stability and longevity with your income.

Medical Expenses

High deductibles, coinsurance, coverage gaps, etc., can cause a major hit to your savings.  If your doctor accepts credit cards, it is not for your convenience.  They want to get paid immediately.  This becomes less risky for your medical provider, but can also create a huge problem with your financial situation.

Family Communication

Keep communication open between you and your spouse or significant other, as well as your children.  Ensure that your financial situation and spending goals are agreed upon.  Both of you need to be aware of all open credit accounts and keep each other informed about spending.  Some folks find out about accounts that they never knew existed.  Don’t let this happen to you.

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 personal finance/bankruptcy attorney.

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

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

5 Steps to a Higher Credit Score After Bankruptcy

Thursday, September 22nd, 2011

“If you do a nice job managing your credit after bankruptcy, a relatively strong FICO score is possible,” says Bert Briones, Principal Attorney at Red Hill Law Group, PC, an Irvine, CA bankruptcy law firm.

Step One – Save Money While Rebuilding Credit

Having liquidity shows lenders that you can manage money. Over time, your FICO score should strengthen and additional loans for higher amounts should become available.  Many lenders, especially online, specialize in working with borrowers with a history of bankruptcy, which may result in lower interest rates than a local bank.

Step Two – Check Your Credit Reports

Upon receipt of your bankruptcy discharge, ensure that you have everything removed from your credit report that was listed in the bankruptcy.  For a Chapter 7 bankruptcy, the accounts listed on your credit report should have no balance.  If the information has not been updated, write a letter to both the creditor and credit reporting company to clear it up. 

Step Three – Keep Your Expenses and Debt Low

Keep your debt/income ratio as low as possible, as it can be a sign of how risky you are.  The lower the ratio of debt to your income, the better credit risk you should be.

Step Four – Make Your Payments on Time

Post-bankruptcy, all of your bills must be paid on time.  Lenders will want to see a history of at least two years of payments made on time, and the longer you pay your bills on time, the more your credit score will improve.

Step Five – Use Secured Credit Cards

Slowly rebuild your credit by using a secured credit card (or even more than one).  The secured credit card will have a credit line equal to the deposit made to the issuer. 

A 30% balance on the card is a fair balance to maintain, while paying off everything over this amount through on-time monthly payments.  This will help show creditors that you can manage credit.

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 personal finance/bankruptcy attorney.

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/

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

What You Need to Know About Debt Collectors

Thursday, July 28th, 2011

“If you’re behind in paying your bills, a debt collector may be contacting you,” says Bert Briones, an Irvine, CA bankruptcy attorney with Red Hill Law Group, PC.

The Fair Debt Collection Practices Act (FDCPA) is enforced by the Federal Trade Commission to help protect consumers from collector abuse. This includes unfair and deceptive practices by a debt collector, who is someone who regularly collects debts owed to others. This may include attorneys, collection agencies, and companies that buy old debts then try to collect on them.

The FDCPA covers personal, not business debt, and includes such things as credit cards, medical, auto, and your mortgage.  A debt collector cannot call you before 8:00 in the morning or after 9:00 at night, and they are not allowed to contact you at your place of business if they are told not to do so, verbally, or in writing.

Harassment, false statements, and other various activities are also off-limits for debt collectors.  These include using threats of violence, using profanity, or falsely claiming to be who they are not, among others. 

If you suspect that a debt collector has violated a rule under the FDCPA, contact the Federal Trade Commission (www.ftc.gov), or your state’s Attorney General’s Office.

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 personal finance/bankruptcy attorney.

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/

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

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