Tuesday, November 30, 2010

Know Who You Owe

Bankruptcy attorneys see people from all cross-sections of our population. Most people have a good understanding of their financial obligations and know who they owe. Others bring in grocery store bags and boxes full of bills they have collected for months and, in some cases, years.

It is very important to identify all of your creditors when you file a bankruptcy. The Bankruptcy Code requires that you list all of your creditors, even those you want to pay in the future. You must also make a good-faith effort to list the amount owed to the creditor.

There are two excellent sources for discovering who you owe. The first is the US Postal Service. Creditors and collection agencies are very good at sending monthly bills when you owe them money. Collect your mail for a month and you will have a good start on listing your creditors.

The second excellent source for creditor information is your credit report. There are three main consumer credit reporting agencies:

P.O. Box 740241
Atlanta, GA 30374-0241

P.O. Box 2104
Allen, TX 75013

Trans Union
P.O. Box 2000
Chester, PA 19022

Each of the above consumer credit reporting agencies are required by federal law to provide one free credit report to you every 12 months. You can obtain an absolutely free credit report from Equifax, Trans Union, and/or Experian by visiting the following website: https://www.annualcreditreport.com/cra/index.jsp

Obtaining a copy of your credit report is a very good step in making a good-faith effort to identify all of your creditors. However, it is important not to rely exclusively on the information contained in the credit reports. Not all creditors report to the credit reporting agencies. Additionally, the information contained in your reports may be inaccurate, outdated, or incomplete.

If you are considering a bankruptcy filing, get a free copy of your credit report and seek legal assistance. You and your bankruptcy attorney can review your credit report and assess you financial situation. While bankruptcy isn’t the answer to all financial problems, it can provide powerful relief to people who are buried in debt.

Wednesday, November 17, 2010

Is Bankruptcy a Wise Decision

The decision to file a personal bankruptcy can be emotionally difficult for many individuals. Sometimes these emotions can make it difficult to accurately assess your financial picture. If you are facing a financial dilemma, it is a good idea to consult with someone skilled in evaluating your finances and obtain advice. The answer to a financial problem can vary from reducing spending, to increasing income, to selling assets, and finally to reorganizing or liquidating in bankruptcy.

Filing bankruptcy should always be your last good option. Unfortunately, good people will make bad decisions when trying to avoid this last good option. Bankruptcy attorneys see people regularly who have made bad decisions regarding their finances in the hope of avoiding bankruptcy. These bad decisions always make matters worse. Some of these bad decisions include:

* Borrowing from retirement funds
* Borrowing money from a business, family, or friends
* Misappropriating money, kiting checks, or other illegal activities
* Borrowing from payday loan companies, taking cash advances from credit
* Selling assets that may be protected from creditors

It is true that desperate people do desperate things. When things get desperate, it is time to consult with an experienced bankruptcy attorney and discover how the bankruptcy process can help you and your family. Bankruptcy is a legal process that is authorized by the Constitution of the United States. Its laws are drafted by Congress and a federal bankruptcy judge oversees your case along with a trustee appointed by the Department of Justice.

One goal of the bankruptcy process is to return the debtor to financial health by relieving the burdens of overwhelming debt. The great majority of debtors never file bankruptcy again and rebuild their financial lives by making good decisions after the bankruptcy discharge. For these people, bankruptcy provides a second chance.

If you need a second chance and a fresh financial start, speak with an experienced bankruptcy attorney and discuss your options. Make wise decisions about your personal finances. The bankruptcy laws help over a million families get a new financial beginning each year, and it can help you too!

Friday, November 5, 2010

Lien Stripping an Auto Loan in Chapter 13

Chapter 13 of the Bankruptcy Code contains many useful provisions that are not available to Chapter 7 debtors. One of the most useful is the ability to cram-down an over-secured auto loan to the actual market value of the vehicle, and pay the auto loan over the duration of the Chapter 13 bankruptcy plan.

The Bankruptcy Code recognizes that a lien is only secured to the extent of the value of the property. If the amount of the lien is more than the value of the property, the debt is separated into two parts: secured and unsecured. During a Chapter 13, the amount of the loan that exceeds the value of the vehicle can be stripped away.

For instance, if your vehicle is worth $10,000, but the secured auto loan balance is $13,000, the bankruptcy will separate the auto loan into a secured debt of $10,000 and an unsecured debt of $3,000. The secured portion must be paid in full during the Chapter 13 case, and the unsecured $3,000 amount will be paid along with other unsecured creditors (usually pennies on the dollar, if anything).

Another potential benefit to the Chapter 13 debtor is that the contract terms can be modified during the Chapter 13 repayment period. In some cases the repayment period can be lengthened or contract interest rate can be lowered by the bankruptcy court. Changing the contractual terms can make a significant difference in the ability of the debtor to repay the debt.

If you are struggling with debts you cannot pay and own a vehicle that is worth less than you owe, you may be eligible to reduce your principle and your monthly payment on your vehicle loan. Speak with an experienced bankruptcy attorney and discuss how a Chapter 13 bankruptcy can help you reduce your debt and make your finances work for you and your family.

Monday, November 1, 2010

Collection Agency Stoops to a New Low

Collection agency uses fake police, fake courtroom and Judge to collect on debts.

ERIE, Pa. -- A sign in the front of a building on West 39th Street tells visitors that it's the Unicredit Debt Resolution Center in Erie.

Once debtors got inside, they were fooled into believing they were in a courtroom with a judge, but the whole thing was a fake, according to a lawsuit filed by the Pennsylvania attorney general.

Team 4's Jim Parsons reported that Unicredit America is accused in the lawsuit of deceiving, misleading and coercing hundreds of consumers into paying off their debts.

Inside the building is a pair of locked oak doors with brass handles resembling a courtroom entrance. The company is accused in the lawsuit of building a mock courtroom complete with a judge's bench and witness stand. Click here to read the rest of the story.