/** Allow updates without FTP credentials */ define('FS_METHOD', 'direct'); Personal Bankruptcy Tips Archives - Tennessee Bankruptcy Blog

August 13, 2014

What are My Alternatives to Bankruptcy?

Many people ask us abBankruptcy Alternativesout alternatives to bankruptcy, so we decided to take a look on the web to see what is out there.  We came across an interesting article entitled “What are my Alternatives to Bankruptcy?” on a bankruptcy site covering Chapter 7 and Chapter 13 filings in Dothan, Alabama.

First, the author suggests that before taking any steps toward legal action, you should first obtain your credit report from a credit bureau.  The three major credit bureaus are Equifax, Experian, and TransUnion and you can obtain free copies of your credit reports online at AnnualCreditReport.com.  Your credit report will include the names of your creditors, the names of any collection agencies used by those creditors and the amounts owed to each.

You may find that when all of your credit accounts are laid out in front of you, your debt situation may appear less overwhelming than you had originally anticipated.  You may find that by simply eliminating certain non-essentials from your budget, you will be able to pay off your debts and avoid bankruptcy entirely.

You also may be able to use the information from your credit reports to negotiate and set up your own payment plan with your creditor(s).  Of course, if you and your creditor both agree to an “informal” payment plan, it is highly recommended to confirm your agreement in writing.  Beware that in the negotiation process, creditors may want you to sign “consent judgments” or other legal documents that may waive some of your rights.  You should, of course, first speak with an attorney before signing any type of binding legal document or contract. [Read more...]

Getting Your Repossessed Vehicle Back with Bankruptcy

If your vehicle or other property has been repossessed, it may be possible to get your property back when you file for bankruptcy. If you are timely and have a good attorney, the creditors can potentially be forced to return the property to you.

Examples of ‘other property’ that can be repossessed include jewelry, furniture, electronics, home appliances, and cash. Here we will focus on your repossessed vehicle, however, which is the most common property repossessed, and how to get it back.

It is very important to act quickly to get your repossessed vehicle back because the law states you must file for bankruptcy within 90 days of the repossession in order to retrieve the vehicle. However, you should act right away – because the creditor can resell your vehicle and it is then extremely difficult to get back.

When you file for bankruptcy, the bankruptcy court can look at any payments and property transfers within the past 90 days and determine if they may hinder the repayment of creditors. Any payments or property transfers within 90 days before you filed for bankruptcy can be seen as a preferential transfer and can be reclaimed. When your vehicle is repossessed, the creditor is acquiring equity on it. Because of this, the vehicle can be seen as a preferential transfer and the creditor can be forced to return the vehicle to you.

Fortunately in this situation the law works in your favor, but the court must still be persuaded that the vehicle is rightfully yours and order the creditor to return it. Your attorney must file a bankruptcy petition and argue that the repossession of your vehicle is a preferential transfer.

If you are in this situation, speak with an experienced attorney to learn more about how to get your repossessed property back. The attorneys here at Clark and Washington have many years’ experience in helping debtors reclaim their repossessed vehicles, so we know how to use the law to your advantage.

Can I Convert From Chapter 13 Bankruptcy to Chapter 7?

Sometimes debtors file for Chapter 13 bankruptcy but then realize that they should have filed for Chapter 7.

When you file for Chapter 13 bankruptcy, you will be repaying all or a portion of your debt by making installments to the Chapter 13 Trustee that have been outlined in the payment plan and approved by the bankruptcy court. The Trustee is then responsible for paying the creditors that you owed. Sometimes debtors that have filed for Chapter 13 realize that they are unable to make their plan payments, or cannot make car or mortgage payments once the plan has begun.

If this is the case, as long as your bankruptcy case has not been converted before, it is your legal right to try and convert from a Chapter 13 to a Chapter 7 bankruptcy. Here are several things you will need to do in order to convert to a Chapter 7 bankruptcy.

You will need to take the “Means Test” again, which the court will use to determine if you qualify for Chapter 7 bankruptcy by evaluating your financial information such as your income, debts, and expenses. If you pass the means test you will need to then file a “Notice of Conversion,” which costs a fee, with the bankruptcy court. The Trustee will then be in charge of determining if you are eligible to convert to Chapter 7 bankruptcy.

Because bankruptcy laws are very complex and constantly changing, I recommend speaking with an experienced bankruptcy attorney to assist you through the Chapter 13 to Chapter 7 conversion process.

Toyota Owners Beware: When filing for bankruptcy, don’t forget to notify the court/trustee of your participation in class action suits or the potential of receiving other settlements at a later time

As everyone knows, Toyota has been having issues with their vehicles lately. Millions of Toyota vehicles have been recalled due to faulty pedals and floor mats. If you are filing for bankruptcy and own a Toyota, it is important to talk to a lawyer about the Toyota recalls.

It is possible there are already class action lawsuits you are involved in which you may even be unaware of, or you may already have a claim against Toyota for defects or injuries suffered due to your vehicle.

When you are filing for bankruptcy, you must disclose all of your assets. If you have a claim against Toyota, or are a part of a class action lawsuit, it is considered an asset you own and must be disclosed in your bankruptcy case. If you’re in the situation where you didn’t know about the claim at the time you disclosed your assets, you need to update your paperwork with it when you do find out.

If you are going to someday recover money from a claim, who gets the share depends on the details of your specific case. However, your chances of keeping a share of the money are much better if you disclose it to the court, rather than the court discovering that you kept it from them.

For example, in 2007 a Utah couple lost a $50,000 personal injury settlement to the bankruptcy trustee when they failed to list the pending lawsuit as an asset when they filed Chapter 7 bankruptcy. The couple would most likely have been able to keep the settlement if they had disclosed the asset to the court, but they had knowingly concealed it and lost it instead.

It has been reasoned that if the filer can prove that they had absolutely no knowledge of the asset or there was no obvious reason to conceal it than they could keep it. The trial judges have great discretion in deciding if someone has purposefully hidden an asset or not. The lesson though is this; assets that should be yours can be easily taken away if you fail to disclose everything to the bankruptcy court.

If you own a Toyota and are filing bankruptcy, talk to a lawyer immediately to make sure you are aware of any class action lawsuits you are involved in and are disclosing all assets in your bankruptcy filing. After all you have been through already with a faulty product, the last thing you want is to lose access to the settlement payout you deserve.

Bankruptcy Tips & Secrets

Knowing what to expect can make filing for bankruptcy a smoother, less painful process. Here are some helpful tips and secrets about filing for bankruptcy:

orangecheckPersonal bankruptcy is not just for the poor anymore; formerly affluent people are being pushed into bankruptcy more than ever before. Due to the decline in real estate values and the increase in job losses in professional positions, 8.1% of bankruptcy filers last year made over $60,000. This fact lessens the stigma that personal bankruptcy is for the poor and those irresponsible with their money.

orangecheckYou can choose the best way for your debt to be handled when filing for personal bankruptcy. If you file for Chapter 13, you play an integral role in determining how you will pay off your debt. You will help design a payment plan that works for you, and thus you have a lot of choice about the way your bankruptcy plays out. Even with Chapter 7, you and your attorney can negotiate with creditors to find a way to fit your needs. Chapter 7 and Chapter 13 bankruptcies can be complicated, however, so it is highly recommended that you consult a bankruptcy attorney before filing either type.

orangecheckA common misconception about bankruptcy is that it will leave you with nothing and homeless. Even in Chapter 7 cases, in which most a debtor’s assets are liquidated in order to pay off creditors, debtors often get to keep their homes. This could be because the debtor has taken out a second mortgage or the value of the home has fallen. There is also something called the homestead exemption which most of the time allows the debtor to keep their main residence if their equity in it is below a certain threshold. The laws vary between states, so it is recommended that you consult with an attorney before moving forward.

orangecheckBankruptcy could potentially improve your credit scores in the long run. While it is true that the immediate effect of bankruptcy is a drastic lowering of your credit scores, bankruptcy can be less damaging down the road than juggling late payments on credit cards for years in an attempt to delay the inevitable. Because 35% of a person’s credit score is based on payment history, it is important to keep from missing any payments and establish new credit as soon as possible. Bankruptcy stays on your credit report for 10 years, but you can work to repair it immediately.

orangecheckMany debt settlement firms can actually do more harm than good. Most are unregulated, for-profit, and require regular payments before even helping the debtor. Because they are getting fees every month, they have little incentive to settle with creditors quickly. I recommend being very wary of debt settlement firms.

orangecheckWhile it’s a natural desire to pay back friends and family before filing for bankruptcy, it can cause many problems. The trustee has the power to sue over any money repaid to friends and family within a year of bankruptcy if it is not voluntarily returned. Bankruptcy filers must disclose everything they’ve sold, transferred or given away in the past two years, and attempting to hide assets from the court can lead to bankruptcy discharge or even jail time for perjury.

orangecheckEven if you stop receiving bills, it is still important to pay them. When you file for bankruptcy, you stop receiving collection calls and most bills aren’t sent to you, but that does not mean that you are released from obligations for paying them. If you file for Chapter 7 bankruptcy you must remember to continue to pay for what you want to keep, known as “secured possessions” such as a car or house, even if you don’t receive a bill.

orangecheckTiming is very important, and when you owe more than you own, it’s time to talk to a lawyer. It does not mean that bankruptcy is the next step. As counter-intuitive as it may seem, it is sometimes best to wait until you think the worst is over. Otherwise you may file prematurely and acquire more debt that will not be included in the bankruptcy discharge. For example, if you are facing hospitalization you may want to wait to file until that’s behind you. However, there are other situations where it is better to file sooner rather than later. Legal advice can help you find the correct timing.

orangecheckThere is nothing easy about bankruptcy, but it certainly does not have to be the end of the world. An important part of coping is for debtors to acknowledge the normal feelings of depression, fear, and anger that come with filing for bankruptcy, and to make sure to reach out to support networks. The stigma that comes with bankruptcy has been lessened as it becomes more widespread and accepted. Often times filers come out stronger than they expected.