Bankruptcy & Debt Relief
It’s one thing to carry a certain amount of debt—as long as you’re gradually paying it off and can see light at the end of the tunnel. The problem begins when you’re not able to pay enough each month, the interest compounds, and the amount you owe just keeps getting bigger. This is a situation that is only going to get worse as your debt increases over time, making it virtually impossible that you’ll ever be able to completely pay it off.
If you find yourself in such a situation, you really need to consider filing for bankruptcy. Many people are reluctant to consider bankruptcy, partly due to many misconceptions that are out there. To find out more about these misconceptions, check out our bankruptcy myths page. Read the rest »
Zombie movies and TV shows are all the rage, but we know they don’t really exist. Actually, there is one kind of zombie out there, lurking in the shadows and waiting to pounce—“zombie debt.” What is zombie debt? Zombie debt, also called “phantom debt,” is debt that is not legitimate because it is old, defaulted, discharged in a bankruptcy, or never actually owed.
Many people don’t realize it, but there is a statute of limitations on the collection of debt. In California that statute of limitations is four years. This means that a creditor has four years to try and collect a debt. After that, the debt is invalid. Read the rest »
No one intends to get into financial trouble, but for many Americans, that becomes the reality. Unless you’re incredibly wealthy, staying financially stable is like walking a tightrope. You’re constantly earning, spending, and saving, while trying to maintain a balance. Unfortunately, it’s all too easy to get off-kilter and start falling into a downward spiral of debt. Fortunately, there is a safety net. If you are in dire financial straits and are considering filing for bankruptcy, here’s six questions to help you decide: Read the rest »
The number of yearly bankruptcy filings in the United States has increased steadily over the last century, peaking at two million in 2005. It’s easy to draw a correlation between the rate of bankruptcy and the overall economic health of the country, but what are common individual reasons why people choose to file? Following are the top 10 reasons people file for bankruptcy: Read the rest »
One of the reasons many people are reluctant to file for bankruptcy is the fear that it will ruin their reputations and make it difficult to get a job or rent an apartment in the future. While most of people’s fears about bankruptcy are unfounded, there is some reason for concern when it comes to post-bankruptcy discrimination. Read the rest »
Bankruptcy is a serious undertaking, quite possibly the most serious financial event of one’s life. This is why it is crucial to avoid some of the more common mistakes when you take this important step toward a clean slate. Common bankruptcy mistakes include the following: Read the rest »
What a lot of people don’t realize is that you don’t have to give up everything you own when you file for bankruptcy.
There’s an unfortunate misconception that bankruptcy is a punishment of some sort, when in reality, it is not. Bankruptcy was designed to help people get out from under smothering debt and back on their feet as functioning members of society. People can’t do that without a roof over their heads and a reliable way to get to their jobs.
This is why “exemptions” are written into bankruptcy law. Exemptions are types of property that can’t be seized by lenders or creditors while a person is undergoing bankruptcy. For instance, if you were under financial strain and had missed a few car payments, you would be worried about having your car repossessed. Once you filed for bankruptcy, an “automatic stay” was issued. An automatic stay is an immediate injunction that prevents creditors from trying to collect on debts you owe them. This includes repossessing your car. Read the rest »
If you’ve come upon financial hard times, you’ve probably had trouble paying your rent. If you don’t pay your rent, your landlord has the right to evict you. But when you file for bankruptcy, what’s called an “automatic stay” is issued.
An automatic stay is basically a cease and desist order to all the creditors who are breathing down your neck. Under Section 362 of the Bankruptcy Code, an automatic stay stops “any act to obtain possession of property of the bankruptcy estate . . . or to exercise control over property of the bankruptcy estate.” So, technically, your landlord is a creditor and is not allowed to proceed with the eviction. But it’s not that simple. Read the rest »
Not all debt is created equal, according to a recent post on Yahoo Finance. The article explains that your biggest debts aren’t necessarily the ones you want to pay off first. As an example, the author cites a story from a certified financial planner (CFP). A young woman came in to her office, distraught over her debt. She owed $250,000 in student loans and $25,000 in credit card debt. The woman was focused on paying off her student loans first. The CFP explained that she should concentrate on paying off the credit card debt first, because it had higher interest rates. It make sense if you think about it, federal student loans have interest rates of four to six percent while most credit cards charge around 16 percent. Since higher interest debt grows at a faster rate, you’ll want to pay that off first. But there are other factors involved when managing one’s money. For instance, it may not be wise to pay off all your debt before investing in your retirement. You need to take advantage of the tax breaks you get for retirement savings and the matching funds you get with 401(k) plans. This type of knowledge is why you should regularly consult a financial expert. Unfortunately, many Americans don’t take a hard look at their finances until it’s too late. If you find yourself in debt trouble, you may be in need of an experienced debt reduction attorney. The legal team at the San Fernando Valley offices of Nader, Naraghi & Woodcock, APLC has been helping people get out of debt for 20 years. Call them at (800) 568-0707 for a free consultation.
Chapter 7 Bankruptcy will completely relieve a person of all their unsecured debts, with the exception of tax burdens and student loans. But to be able to file for Chapter 7 Bankruptcy, you will first need to pass the “means test.” The means test is designed to determine if you have the means to pay off your debt over a reasonable amount of time. The test takes into account your income, expenses, and the size of your family to determine if you have enough disposable income to pay back a substantial amount of what you owe. The first question on the test is whether you make more or less than the median income in your area. This is important because the median income is going to be quite a bit higher in Beverly Hills than it would be in Sylmar. If you do make less than the median income for your area, you don’t have to take the rest of the test. But if you make more than the median income, you aren’t necessarily relegated to filing for the less forgiving Chapter 13 Bankruptcy.