Erich M. Niederlehner, has just completed a free ebook on Bankruptcy and encourages anyone considering filing for bankruptcy or just wants to know more about Bankruptcy to download and read the free ebook.  Erich M. Niederlehner, currently has offices in Pensacola, Fort Walton Beach and Panama City and has been practicing Bnkruptcy law for 14 years in the Gulf Coast Panhandle.  Go to www.ShouldIFileForBankruptcy.com and download the free "Book on Bankruptcy" by Erich M. Niederlehner today or click on the image above.

Look at Filing a Chapter 7 Before Thinking about Paying Back Debt

This is an interesting article that was in the Huffington Post, about when you should file for Chapter 7 and how trying to pay back your debt can cost you a lot more than the amount you owe in debt.


http://www.huffingtonpost.com/steve-rhode/why-a-chapter-7-bankruptc_b_7232654.html

Can I Keep My Vehicle During Chapter 7 Bankruptcy?

Can I Keep My Vehicle During Chapter 7 Bankruptcy?

One of the most serious questions a client may ask is, “If I file Chapter 7 bankruptcy, can I keep my vehicle?” Like many simple, straight-forward legal questions, there are no simple, straight-forward legal answers. However, while each case is different, the vast majority of bankruptcy debtors keep their vehicles during Chapter 7.

Keeping a vehicle during Chapter 7 bankruptcy starts with a simple accounting: is the fair market value of the vehicle more than the amount owed on the loan? In other words, does the debtor have equity in the vehicle? If there is no equity in the vehicle, the Chapter 7 trustee cannot take and sell it since there is no benefit to the unsecured creditors.

On the other hand, if there is vehicle equity, that equity must be protected otherwise the trustee can take and sell the vehicle to reach the unprotected equity. The vehicle’s equity may be protected by one or more legal exemptions. The total amount of exemptions available to a debtor is determined by state and/or federal law and varies from state to state, and case to case. In some cases the ownership of the vehicle may protect the vehicle’s equity, such as in cases of joint ownership with a non-filing party.

If the vehicle has unprotected, non-exempt equity, the debtor has a few options. First, instead of taking and selling the vehicle, the trustee may accept a cash payment. Generally this cash payment is less than the amount of available equity, because there are actual costs involved in selling the vehicle. Second, the debtor may consider a Chapter 13 bankruptcy. A payment equal to the amount of non-exempt equity must be paid to the debtor’s unsecured creditors during the Chapter 13 plan, but this payment is stretched over 36-60 months. Third, the debtor may choose to allow the trustee to sell the vehicle. Any claimed exemption will be paid to the debtor from the proceeds of the sale. Finally, the debtor may choose to trade or sell the vehicle prior to bankruptcy and use any proceeds for necessary household expenses.

The truth is that it is rather unusual for a debtor to have a vehicle equity issue during Chapter 7 bankruptcy. If you have a vehicle with a great deal of equity, your bankruptcy attorney can discuss your options for keeping your vehicle and protecting your equity.

Flood Waters after Massive Rains in the Florida Panhandle

This video was taken on Highway 98 in Gulf Breeze/Midway Florida the day after massive amount of rain fell within a 24 hour period. 

Obscene lack of professionalism! Brevard County Florida Judge Beats Down Assistant Public Defender for Objecting to Waive Right to Speedy Trial

What an obscene lack of professionalism!  Both the Judge and Assistant Public Defender should be suspended if not disbarred, and the Judge should be removed from the bench.  How could any plea by any of the defendants in this courtroom be considered voluntary after this incident?  How could any defendant perceive this Judge to be fair and impartial?

Why were the defendants clapping for the judge when he returned?  The judge was trying to intimidate the defendant into waiving his rights to make the Judge's life easier, and just beat down an attorney who was standing up for one of them and who was literally fighting for their rights.
http://youtu.be/BCe8D3TSFGk

Can I keep a credit card out of my Bankruptcy - Panama City, Pensacola, ...

First Chapter 13 Trustee Payment - Pensacola, Fort Walton Beach, Panama ...

Who will know if I File for Bankruptcy Pensacola, Fort Walton, Panama C...

Three Bad Bankruptcy Mistakes Before Filing Bankruptcy

Three Bad Bankruptcy Mistakes Before Filing Bankruptcy

The bankruptcy laws are confusing and complicated. Fortunately Congress and the US Supreme Court have given us a guidepost by stating that the bankruptcy laws exist to help debtors who are poor and honest. The bankruptcy trustee will investigate your case to determine whether you are both poor and honest. Excess money or equity in property can be taken to pay creditors, and efforts to hide money or assets will be punished. With this in mind, here are three bad mistakes you can make before filing bankruptcy:  

Mistake #1: Cashing Retirement Funds

Most retirement funds are fully protected from creditors and the bankruptcy court. That means if you file bankruptcy, you keep your retirement money. Congress wants you to have money for your retirement.

Along with the obvious problems associated with losing your future retirement money, cashing out retirement funds is also huge mistake because (1) your attorney may no longer be able to protect available retirement money converted into cash; and (2) in some cases the money you pay on a loan may be recoverable by the bankruptcy trustee. Money paid to creditors before bankruptcy does not improve your financial situation or help you recover from bankruptcy. Always discuss cashing out 401(k) or IRA retirement funds with your attorney prior to your filing bankruptcy.

Mistake #2: Transferring Property for Less Than Full Value

Anytime an individual transfers property for less than full value, the transfer seems “suspicious.” This is especially true when the transfer occurs just before a bankruptcy filing. The bankruptcy trustee scrutinizes all property transfers before bankruptcy, and if a property transfer was not a fair and honest exchange, the trustee may avoid the transfer and get the property back.

One common bankruptcy mistake is transferring property to a friend or family member in an effort to hide it from the bankruptcy court. This is a very bad mistake that can result in: (1) losing the property anyway; (2) denial of your bankruptcy discharge; and/or (3) criminal prosecution for bankruptcy fraud. If you need to sell or transfer property before your bankruptcy, contact an experienced attorney and discuss your options!

Mistake #4: Paying Off Loans

When a debtor pays off a loan before bankruptcy, the trustee becomes very interested in your case. First, if you paid a large sum of money to one creditor just before filing, the trustee may ask the creditor to return the money.  Second, paying off an unsecured creditor that is otherwise dischargeable (like a credit card or payday loan) is like throwing your money away. You need that money to help rebuild your finances. 

Finally, paying off secured property could create too much non-exemptible equity. The bankruptcy laws allow you to keep property up to a certain amount. The protected amount is determined by taking the fair market value of the property minus any secured loans. When you pay off the loans, you increase your equity in the property which may exceed the amount you are allowed to keep. When that happens the bankruptcy trustee may ask you for the property or the cash difference between the equity and the exemption amount. Bottom line: don’t pay off loans before bankruptcy!

If you are struggling financially, avoid these common bankruptcy mistakes by discussing your situation with an experienced bankruptcy attorney. Your attorney can guide you through the bankruptcy process and help you emerge on the other side with a brighter financial

Winning the Lottery May Not Help

Winning the Lottery May Not Help

Who hasn’t fantasized about winning the lottery when you are cash strapped? It seems that winning the lottery would solve all of your financial problems.

Not so fast.

A March 2010 study by economists at the University of Kentucky, University of Pittsburgh, and Vanderbilt University suggests that winning the lottery does not reduce the likelihood of a future bankruptcy. The study examined data from 35,000 winners of Florida's Fantasy 5 lottery from 1993 to 2002, and compared this information with state bankruptcy records. The economists found that more than 1,900 lottery winners filed for bankruptcy relief within five years after winning, a rate double that of the general population during the study period.  "The results show that giving $50,000 to $150,000 to people only postpones bankruptcy," the authors concluded.

Not every lottery winner will act like Callie Rogers, winner of a $3 million UK lottery in 2003. Callie spent every dime of her winnings on shopping, cocaine, friends and breast augmentation, and two years ago she was working as a maid. But then, Callie was probably not a skilled money manager, like the three co-workers who won a $254 million Powerball lottery in Connecticut. If you are lucky enough to win a large lottery, these professionals offer a blueprint on how to protect your money from yourself.

Financial management may seem like common sense, but Americans have many pressures to spend now and worry about the consequences in the future. It takes a reasoned approach and discipline to make a budget and stick to it. To help educate individuals and combat financial illiteracy, Congress amended the bankruptcy laws to require debtors to complete a course in financial management before the completion of the bankruptcy case. The hope is that by providing a bit of education, the debtor will take a more active interest in managing his or her finances and avoid future costly mistakes.

If you are battling insurmountable debt, don’t wish for a magical cure. Take charge of your finances and educate yourself about your options. Speaking with an experienced bankruptcy attorney is a solid first step in taking control and building a better future.

Are Your Family Finances Sustainable?

Are Your Family Finances Sustainable?

Corporate Knights, a Canada-based sustainability-focused media firm, publishes a unique list every year that predicts the world's most sustainable large corporations. Started in 2005, the Global 100 Most Sustainable Corporations in the World is a list of publicly traded companies that, based on research and analysis, are best equipped to manage the environmental, social and governance (ESG) risks and opportunities they face. The idea is to look at the company today and predict the company's future ability to thrive.

Predicting the financial future of a company is tricky business. Of the original 100 announced in 2005, ten companies on that list are now inactive. Another good example is Eastman Kodak, which appeared on the Global 100 list in 2005, 2006, 2007, 2008, and 2009. Kodak is synonymous with photography, and has a long and proud history. Kodak practically invented the amateur photography market back in 1888. Kodak is also responsible for the first digital camera in 1975 and developed cell phone photo technology. Unfortunately, in recent years Kodak has not changed fast enough to keep up with the changing marketplace. Kodak's shares once soared to an all-time high of $95 in 1997 and was a mainstay member of the Dow Jones industrial average for 74 years. In September 2011 its stock plummeted to close at $.69 a share.

Eastman Kodak is a lesson of how quickly the financial outlook of a company can change. Individuals, like companies, sometimes make bad decisions that can lead to financial trouble. Other times, circumstances happen that simply cannot be predicted. Fortunately, what looks bleak today can be better tomorrow. That is a hope that bankruptcy offers to individuals who are struggling with overwhelming debt. Bankruptcy offers the individual the "do over" opportunity to discharge or restructure debts.

If you need help reshaping your financial future, consult with an experienced attorney and discuss how the federal bankruptcy laws can help. Your attorney can offer you options for eliminating debt and making your finances sustainable for years to come.

Help! My Bank Account Is Frozen!

Help! My Bank Account Is Frozen!

Fewer things can throw your world upside down like having your bank account frozen. A bank garnishment or seizure is usually the result of a creditor attempting to collect after a court has issued a judgment against you. The court orders the bank to freeze your account and turn over its proceeds to the judgment creditor. The order is usually timed by the creditor's attorney to take effect just before your paycheck is deposited. Seizing a bank account is generally a creditor's first action because federal and state laws limit the amount that can be garnished directly from an employee’s paycheck. These limitations do not apply to cash money in a bank account.

Once your bank account is frozen, it is important to act quickly. You are entitled to protect some money from garnishment, but you must notify the court, the creditor, and the bank that you are asserting your legal exemption rights. Additionally, if you receive Federal benefits that are directly deposited into your bank account, the federal law will protect an amount equal to two months of these benefits. These benefits include Social Security benefits, Supplemental Security Income benefits, Veteran’s benefits, Railroad Retirement benefits, and benefits from the Office of Personnel Management. Federal benefits are exempt from garnishment, and the law places the burden on the bank to determine if the funds are protected.

Finally, a bankruptcy filing will immediately stop a garnishment and unfreeze your bank account. A debtor can often force the garnishing creditor to return money seized just prior to a bankruptcy filing. The general rule is that involuntary payments that amount to over $600 seized by a creditor in the 90 days before filing can be recovered.

If you have had your bank account seized, it is important to speak with an experienced bankruptcy attorney immediately and discuss your short term and long term options. Quick action is necessary to unfreeze your account, but it is also important to discuss your long term plan to avoid garnishments in the future. Your attorney can help you decide on a sensible plan to eliminate your debt and progress to a better financial future.

Ensure Your Fresh Start Is Not A False Start

Ensure Your Fresh Start Is Not A False Start

Even in today’s specialized legal world, there are still some “general practice” attorneys who work in many different areas of the law. A general practice attorney may represent clients in family law like divorces with little or no property, minor criminal issues, small land disputes, small probate estates, low dollar personal injury cases, and the like. While a general practice attorney can successfully represent clients in many legal matters, some areas of the law require a more specialized knowledge.

From the outside, a bankruptcy case seems like a simple process. You attend a couple education classes, there are standardized forms that are filled out, you pay a filing fee, and finally go to a meeting with the bankruptcy trustee. Simple, right? In some cases it is that easy, but don’t let bankruptcy’s streamlined process fool you.

Bankruptcy is a mixture of state and federal statutes, case law, procedural rules, and court and creditor customs. General practice attorneys are just not as familiar with these various rules and practices. An experienced bankruptcy attorney is also able to identify problem areas, like preferential payments to creditors or equity issues, which could have serious consequences to your bankruptcy case. Even the timing when a bankruptcy is filed can have consequences to your case. For instance, bankruptcy debtors lose their tax refund checks each year because they filed either too early or too late.

Hiring an experienced bankruptcy attorney ensures that your case will be filed correctly; that any potential trouble areas in your case will be identified and discussed before your case is filed; that you will be informed of how your case is progressing; and that you will be represented in all communications with creditors and the bankruptcy trustee. Hiring an experienced bankruptcy attorney gives you peace of mind knowing that your case is being handled correctly and competently.

Hiring experienced counsel to represent you has one more benefit – reputation. The local bankruptcy trustee and judge are familiar with your bankruptcy attorney. They have confidence that your petition and schedules are drafted correctly and that the attorney is representing the client ethically and competently. That confidence is not present with the general practice attorney. The trustee and judge are skeptical that the paperwork is correct and wonder what has been “overlooked.” Consequently, the case is scrutinized more than average.

If you are looking for an attorney to represent you in your bankruptcy case, hire someone who has devoted his or her practice to bankruptcy law. Your property and future financial success is too important to risk. Hire an experienced bankruptcy attorney and ensure that your fresh start is not a false start.

Filing Bankruptcy After Job Loss

Filing Bankruptcy After Job Loss

Many American families rely on two incomes to pay the monthly bills and set a little aside as savings. When one income is unexpectedly reduced or eliminated, the family is thrust immediately into a crisis mode. Often there is not enough money to pay all of the family bills, so touch choices must be made.

The first thing to do is to be realistic and not overreact. It is important to use savings wisely during this time and to safeguard retirement. Spending these funds to maintain your lifestyle is not good financial management, and will have long-term consequences. In most cases a substantial amount of cash and all of your retirement funds can be protected if you need to file bankruptcy. Likewise, most assets are protected during bankruptcy, so it is not necessary to sell assets to pay creditors.

Second, prioritize your spending. This may mean eliminating or reducing certain “luxuries” like premium tv channels or inflated cell phone plans. Creditors must be prioritized also. For instance, it may be more important to pay the car payment instead of a medical bill. If you file a Chapter 13 bankruptcy, your secured creditors receive a higher priority than unsecured creditors. That means your home mortgage and car payment are paid before credit cards and medical bills. You keep the house and car while unsecured creditors receive little or nothing.

Third, understand the consequences of late payment and default. There may not be enough money to pay all of your creditors, so what happens if you don’t pay a bill? In some cases filing bankruptcy will actually help your credit over the long haul. Bankruptcy stops all creditor action, including negative reporting to the credit bureau. By filing bankruptcy you can avoid additional negative reports like late payments, default, charge-offs, repossession or foreclosure.

Whether to file bankruptcy after a job loss depends on a number of circumstances. The best advice is to consult an experienced bankruptcy attorney and discuss your financial options. Bankruptcy can help you reorganize your finances when there is not enough money to pay all creditors. Your attorney can help you prioritize your spending and protect your assets.

Report Indicates That Foreclosures May Soon Increase

Report Indicates That Foreclosures May Soon Increase

September foreclosure filings fell 38% from one year ago, according to information released by RealtyTrac.com. This may seem like good news, but there is reason to believe that the foreclosure rate may soon increase.

First, the foreclosure process came under attack during the past year prompting many banks to slow or temporarily stop foreclosure proceedings. Banks and mortgage servicers have taken corrective actions over the past twelve months, and there is no evidence that previous sloppy practices are continuing. On the contrary, there is evidence that banks are being more cautious in dealing with foreclosures. The time the average foreclosure takes has increased to 336 days, up 18 days from the previous quarter.

Second, while the number of foreclosures is down for the year, the number of September foreclosure filings increased 6% from August. “This marginal increase in overall foreclosure activity was fueled by a 14% jump in new default notices, indicating that lenders are cautiously throwing more wood into the foreclosure fireplace after spending months spent trying to clear the chimney of sloppily filed foreclosures,” says RealtyTrac Chief Executive James Saccacio.

 “While foreclosure activity in September and the third quarter continued to register well below levels from a year ago, there is evidence that this temporary downward trend is about to change direction, with foreclosure activity slowly beginning to ramp back up," Saccacio said in a statement.

If you find yourself unable to pay your mortgage and facing foreclosure, get professional help. An experienced bankruptcy attorney can provide you with options to catch up payments over three to five years, modify your existing mortgage, strip away an entirely unsecured junior lien, or even walk away from your house and the debt on your own terms. 

Once a bankruptcy case is filed, the federal law stops all collection action – even foreclosure! Bankruptcy gives you a “breathing spell” to organize your finances and propose a plan to restructure your debt. In many cases debtors are able to save their homes while discharging thousands of dollars in unsecured debts, including credit cards, personal loans, and medical bills.

Don’t be another statistic! Get the information you need to make a sound financial decision regarding your home. Call an experienced attorney today and learn how the federal bankruptcy laws can help you!

Homeowners Foreclose On Bank of America

Homeowners Foreclose On Bank of America

Call it poetic justice, or even karma. . .

During the past few years Bank of America has been at the subject of harsh criticism for business practices that range from the mean-spirited (such as doubling credit card interest rates without notice, up to 28% for cardholders in good standing), to irresponsible (such as foreclosing on the wrong homes), to even fraudulent (such as the recent robo-signing scandal involving mortgage documents).  Bank of America is the nation’s largest servicer of mortgage loans, and the second largest mortgage loan originator. You’d think good record keeping would be important to such a large company, but apparently mistakes abound at Bank of America.

Take for example the case involving Florida couple Warren and Maureen Nyerges. In 2009 the couple moved from chilly Cleveland, Ohio, to warm Naples, Florida. They purchased a foreclosed home from Bank of America and paid $165,000 cash. However, in February 16, 2010, Bank of America filed a Complaint to Foreclose on Mortgage against them, claiming the Nyerges owed almost $141,000 in unpaid mortgage debt.

Warren Nyerges, 46, a former sheriff’s deputy in Ohio, spent months trying to dismiss the suit and clear up Bank of America’s error. In April of 2010, the lawsuit was dropped, and in December the Nyerges were awarded $2,534 in attorney fees. The bank did not respond to the repeated requests to pay the court judgment. Warren called the bank, sent certified letters, called the bank’s attorney, but nothing worked. Then, in January, he hired an attorney to pursue the case. The attorney sent letters and made phone call, and still Bank of America failed to respond or pay the judgment.

On June 3, the attorney for the Nyerges, accompanied by Collier County deputy sheriffs and a moving company, arrived at a local branch of Bank of America and presented the bank manager with a writ of execution to seize assets: either pay up or the movers will start taking things. An hour later checks were cut to satisfy the court judgment.

This may seem to be an extreme example of one case that has fallen through the cracks, but the truth is that banks make errors regularly. In Utah and Nevada courts issued foreclosure injunctions against Bank of America for improper practices. Other banks have also had their share of problem in producing mortgage documents and verifying that the bank is the rightful holder of the mortgage.

If you are facing foreclosure, don’t get steamrolled by the bank! You have legal options to negotiate a lower payment or possibly strip away a junior mortgage. Call today and discover how the federal and state laws can help you save your home and protect your rights.

Beware Of Debt Settlement Company Promises

Beware Of Debt Settlement Company Promises

In theory debt settlement is simple: the debtor negotiates with the creditor to reduce a debt to an amount that is regarded as payment in full. It sounds honest enough: the debtor cannot afford to repay a debt, so the creditor agrees to accept a reduction. The creditor is paid something and the debtor avoids bankruptcy.

In practice debt settlement is a nasty game of chicken. The debt settlement company advises the debtor to stop making monthly payments to the creditor. In response, the creditor pressures the debtor to pay through harassing telephone calls, damage to the debtor’s credit report, mounting interest and fees, and perhaps legal action. The resolution comes when one side blinks: either the creditor is convinced that it better take a settlement or risk discharge in bankruptcy; or the debtor realizes that his or her credit is ruined and actually files bankruptcy.

Debt settlement is big business, but many debt settlement companies have caused big trouble for their clients. Take for example Debt Relief USA. This company, like many debt settlement companies, advised its customers to stop paying its creditors and instead deposit money into a Debt Relief USA settlement account. This money, held by Debt Relief USA, was to be used as settle funds for the individual’s debts. Customers were assessed fees for services including burdensome “administration fees” and monthly “maintenance fees” that further damaged its customers’ financial situations. When a debt was settled, the Debt Relief USA charged a 13 percent “negotiation fee.”

In 2009 Debt Relief USA filed a Chapter 11 bankruptcy and claimed that it owed its clients $5 million from these settlement accounts.  In December 2010, the bankruptcy court approved a $3.7 million disbursement to Debt Relief USA’s clients. The case was also converted to Chapter 7 and Debt Relief USA is no longer conducting business.

Bankruptcy attorneys regularly see the damage caused by debt settlement companies. In some cases money is not returned to debt settlement customers, or the company itself files bankruptcy, or the individual’s credit is destroyed. Before agreeing to any debt relief program, discuss your financial situation an experienced bankruptcy attorney. There are powerful federal laws that can protect you from overwhelming debt, and a bankruptcy attorney can review your legal options without risking your cash.

Bankruptcy Fraud Can Mean Big Trouble

Bankruptcy Fraud Can Mean Big Trouble

The federal bankruptcy process is streamlined to provide timely financial relief to deserving individuals. A Chapter 7 “erase-your-debts-and-start-fresh” bankruptcy generally takes a mere 4-5 months, start to finish. The debtor discharges burdensome unsecured debt, and may get additional relief by restructuring secured debts.

A trustee is assigned to each bankruptcy case. The trustee has hundreds of cases each month to review, and a bankruptcy judge will preside over thousands of bankruptcy court cases. Consequently, the Chapter 7 process relies heavily upon the honesty and candor of the debtor who is required to accurately account for all income, expenses, assets and debts. The vast majority of debtors are honest, but the Department of Justice (DOJ) estimates that one out of ten cases have some element of fraud attached to it. When fraud is suspected, bankruptcy trustees aggressively investigate and use the resources of the DOJ, the FBI, and the IRS.

Bankruptcy fraud carries a maximum penalty of 5 years in prison and a $250,000 fine. Those convicted on federal bankruptcy fraud charges spend an average of 31 months in prison. Still, some people never learn. . .

The Portland Division of the FBI recently issued a press release concerning a bankruptcy debtor’s guilty plea to fraud charges. Viengkham Virasak, 44, of Corvallis, Oregon, incurred debt in his family members’ names and then filed bankruptcy cases in their names. Virasak actually discharged $87,500 in debt, and then filed other bankruptcy cases when he was discovered.

In May, former baseball player Lenny Dykstra was indicted on bankruptcy fraud charges. The indictment alleges that Dykstra took and sold items from his $18 million mansion after filing for bankruptcy protection. Once an individual files Chapter 7 bankruptcy the assets of the individual become part of a “bankruptcy estate” which is the responsibility of the trustee. The trustee claims that “Dykstra stole and destroyed more than $400,000 worth of property in the estate.”

Bankruptcy fraud is serious business. Dishonest acts during bankruptcy could cause the court to deny your discharge, or you may face criminal charges. Whatever your financial situation, it is best to discuss your options with an experienced bankruptcy. The bankruptcy laws are written to help the honest, but unfortunate debtor. Your attorney can work to achieve the best legal result possible and keep you out of trouble.

I Have My Bankruptcy Discharge. Now What?

I Have My Bankruptcy Discharge. Now What?

You should obtain a copy of your credit report immediately after receiving your bankruptcy discharge. Federal law entitles you to one free credit report from the “big three” credit reporting agencies, Experian, Equifax, and TransUnion, every twelve months. The easiest way to obtain your free credit report from each of these agencies is by visiting AnnualCreditReport.com.

After receiving your free credit reports, check each report for errors. First, any debt discharged by your bankruptcy should be listed as “Discharged in Bankruptcy” with a “Zero Balance.” Second, there should not be any negative activity reported after the date that you filed your bankruptcy case. This includes any new collection agency report after your filing date. Third, any debt that was reaffirmed should not be listed as “Discharged in Bankruptcy,” and should list your on-time payments. Finally, in some cases inaccurate information will be reported. For instance, a car voluntarily surrendered back to a creditor during a bankruptcy is not a “repossessed vehicle” and should not be reported as such.

Correcting any errors on your credit report is simple and easy. Each reporting agency has procedures from contesting erroneous information, either by mail or on-line. Once the credit agency has updated its records, it must issue you a free corrected report. Review this new report for errors; do not assume that the report has been correctly amended. You may need to correspond with the agency several times and supply documentation regarding your bankruptcy case. It is your responsibility to ensure that your credit report is accurate. Neither the bankruptcy court, nor your attorney, nor your creditors are responsible for sending the credit reporting agencies information regarding your bankruptcy case.

Updating and correcting your credit reports is the first step on the road to rebuilding your credit after bankruptcy. Fortunately, this step is free and takes very little effort. Be sure to correct your credit reports and then closely monitor your credit regularly for the first two years after your bankruptcy discharge. With timely payments and by carefully protecting your credit file, your credit score will increase quickly.

Can I Keep My Vehicle During Chapter 7 Bankruptcy?

Can I Keep My Vehicle During Chapter 7 Bankruptcy?

One of the most serious questions a client may ask is, “If I file Chapter 7 bankruptcy, can I keep my vehicle?” Like many simple, straight-forward legal questions, there are no simple, straight-forward legal answers. However, while each case is different, the vast majority of bankruptcy debtors keep their vehicles during Chapter 7.

Keeping a vehicle during Chapter 7 bankruptcy starts with a simple accounting: is the fair market value of the vehicle more than the amount owed on the loan? In other words, does the debtor have equity in the vehicle? If there is no equity in the vehicle, the Chapter 7 trustee cannot take and sell it since there is no benefit to the unsecured creditors.

On the other hand, if there is vehicle equity, that equity must be protected otherwise the trustee can take and sell the vehicle to reach the unprotected equity. The vehicle’s equity may be protected by one or more legal exemptions. The total amount of exemptions available to a debtor is determined by state and/or federal law and varies from state to state, and case to case. In some cases the ownership of the vehicle may protect the vehicle’s equity, such as in cases of joint ownership with a non-filing party.

If the vehicle has unprotected, non-exempt equity, the debtor has a few options. First, instead of taking and selling the vehicle, the trustee may accept a cash payment. Generally this cash payment is less than the amount of available equity, because there are actual costs involved in selling the vehicle. Second, the debtor may consider a Chapter 13 bankruptcy. A payment equal to the amount of non-exempt equity must be paid to the debtor’s unsecured creditors during the Chapter 13 plan, but this payment is stretched over 36-60 months. Third, the debtor may choose to allow the trustee to sell the vehicle. Any claimed exemption will be paid to the debtor from the proceeds of the sale. Finally, the debtor may choose to trade or sell the vehicle prior to bankruptcy and use any proceeds for necessary household expenses.

The truth is that it is rather unusual for a debtor to have a vehicle equity issue during Chapter 7 bankruptcy. If you have a vehicle with a great deal of equity, your bankruptcy attorney can discuss your options for keeping your vehicle and protecting your equity.