How to Get Credit After Filing for Bankruptcy

How to Get Credit After Filing for Bankruptcy

King and King Bankruptcy Attorneys 11/27/2012

During our bankruptcy consultations, one of the biggest worries our clients have is that they’ll never get credit again—or at least not for the 10 years during which bankruptcy shows on their credit report. Our clients are usually surprised to hear it won’t be as difficult as they fear. Bankruptcy will affect your credit score in the beginning, but you will be able to get credit again and rebuild your score. Bankruptcy actually helps your chances of getting credit if you had high credit card debt before the bankruptcy and collections or charge-offs. Bankruptcy gives you a clean slate. 

Secured credit cards:

 A credit union or a bank may give you a secured credit card. This is where you give the bank funds to “secure” the credit on the card. Some lenders might want you to deposit the full amount of the credit limit (e.g., a $500 deposit in exchange for a card with a $500 limit), whereas others might only require you to secure a certain percentage of the limit with a deposit (e.g., a $250 deposit in exchange for a card with a $500 limit).

Credit cards:

Many people get offers for credit cards right after bankruptcy. There are a number of companies that specialize in credit cards after bankruptcy because they can get higher interest rates or fees. Make sure you understand the terms of these offers and take the best one. 

Car loans:

Much like credit cards, there are auto lenders out there who will give you a car loan right after bankruptcy, usually at a higher interest rate. Another option is to get a co-signer for the loan. The lender may agree to refinance it later if you make regular on-time payments for a period of time.

After about six to twelve months of on-time payments toward new accounts, even small ones, your credit will start to improve. From there, getting more credit should get even easier. Some people who work diligently toward rebuilding credit can even buy a house within just a few years after bankruptcy. 

If you have questions about your credit after a bankruptcy, contact King and King at 404-524-6400 for a free consultation. 

Medical Debt and Chapter 7 Bankruptcy

Medical Debt and Chapter 7 Bankruptcy              

King and King bankruptcy attorneys, Saturday, 24 November 2012

Serious illness can happen to anyone at any time. In addition to medical bills, prolonged illness or injury can interfere with your ability to work. Missed work equates to less income, which additionally complicates the financial battle.

Medical problems and the debt that results from them are an extremely common cause for filing Chapter 7. 

Fortunately, there are ways to deal with medical debt. If you are overwhelmed with expenses, Chapter 7 bankruptcy is one possible road to security. Chapter 7 bankruptcy is a form of personal bankruptcy, which clears out unsecured debts. The process generally moves fairly quickly. The average case takes as little as four months from the time of filing.

Bankruptcy courts classify medical debt as unsecured debt, which means that it may be discharged within the bankruptcy process. An unsecured debt is one that is not protected by a physical item of property as collateral. If you are unable make payments on unsecured debts, creditors cannot generally recover any items. However, they may be able to sue you and garnish your wages.

Within the Chapter 7 process, all eligible debts included in the filing should be discharged -- any legal obligation to repay is extinguished.

If you are overwhelmed by serious medical debt, contact King and King today. Our bankruptcy attorneys can help you sort through your finances and construct a solid debt-reducing plan. Call us at 404-524-6400.

Common Questions about Chapter 13 Bankruptcy

Common Questions about Chapter 13 Bankruptcy

King and King Bankruptcy Attorneys 11/14/12

Managing money isn't always easy, and some people need more than one chance to get it right. If you’re living a lifestyle with a few comforts you don’t want to give up, or make more money than what income limits allow for filing Chapter 7 bankruptcy, you might be considering the possibility of Chapter 13 bankruptcy in order to give you a new start and help you get a handle on your finances.

What’s the difference between debt consolidation and Chapter 13?

At first glance, Chapter 13 bankruptcy can sound a lot like non-bankruptcy debt consolidation. The two are similar but have several key differences. With a Chapter 13 bankruptcy, creditors are court-ordered to comply with the terms of the debt settlement, while they have the option of declining under a standard debt consolidation plan. Also, with Chapter 13, the interest on certain types of debts stops accruing, so you can pay off what you owe without chasing down interest.  A Chapter 13 has an “automatic stay” which prevents creditors from attempting to collect a debt outside of the bankruptcy process.  Debt consolidation has no such protection.

Will I lose my assets or investments when I file Chapter 13?

Protecting assets and investments is one of the reasons why many people choose to file Chapter 13.  Speak with a qualified bankruptcy attorney to learn more about what assets you can protect in your bankruptcy.

Is Chapter 13 mainly for those who don’t meet Chapter 7 Guidelines?

While it is common for the Chapter 13 option to be presented to those who don’t pass the “means test” required for Chapter 7, there are many cases when even those with lower or moderate incomes may prefer Chapter 13 over Chapter 7.  Chapter 13 is a convenient reorganization of all of a debtor’s debts.  Also, many debtors can take advantage of “cram down” in Chapter 13, where interest rates and total amounts owed to certain creditors can be drastically reduced. 

Getting New Credit

When you file a Chapter 13 bankruptcy, your income levels are assessed to determine how much you can affordably pay towards your debts. For this reason, it is rare that new debt can be incurred during the 3-5 year repayment period. Any new credit you might get not only needs to be approved by the potential creditor, but also by Bankruptcy Court. Getting new credit is rare but possible during a Chapter 13 bankruptcy.

Every bankruptcy plan handled by King and King is customized for each individual case to obtain the very best results possible.  Contact us at 404-524-6400 for a free consultation today.

Which comes first — bankruptcy or divorce?

Should you file for bankruptcy before or after your divorce is finalized?

Which should you pursue first — bankruptcy or divorce?

This is an important decision and should in most cases be made BEFORE your divorce is complete. When one spouse files for consumer bankruptcy, it often sends the other spouse into bankruptcy too.

After divorce, domestic support obligations such as alimony and child support are not dischargeable during bankruptcy. Our attorneys can explain facts and legal options that will help you to make sound decisions about your future.

Your decision to pursue a consumer bankruptcy before, during or after divorce can be positively influenced by the guidance of experienced bankruptcy attorney. King and King as served bankruptcy clients in Atlanta and the surrounding areas with quality, full-service representation for Chapter 7 and Chapter 13 debt relief strategy; including the role that divorce can play in your decision.

Contact our bankruptcy offices today at 404-524-6400 for your free confidential consultation.

Can Filing Bankruptcy Dismiss Back Taxes?

Can Filing Bankruptcy Dismiss Back Taxes?

Taxes and Bankruptcy - 

Usually people associate bankruptcy with credit card, loan, or mortgage debt not knowing or realizing bankruptcy can also be used to eliminate liability for unpaid taxes.

The U. S. Bankruptcy Code permits discharge of certain back taxes, but several conditions do apply. Generally most business taxes are not dischargeable. People who qualify for tax discharge typically do so by filing either a Chapter 7 or Chapter 13 bankruptcy.  It is best to consult with an experienced professional to assess your unique situation. A qualified bankruptcy attorney can help determine whether you are eligible to obtain an IRS tax relief through bankruptcy.

Call King and King bankruptcy attorneys for a free consultation today. 404-524-6400

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Saving Your Home From Foreclosure

Saving Your Home From Foreclosure

Home foreclosure can be one of the most frightening financial challenges to face. Losing your home cannot only leave you without a place to live, but can also destroy all the hard work you’ve put into your home. Owning a home is an important investment, and putting money towards a mortgage instead of rent can mean a more secure future. However, if the payments become too much and you begin to fall behind, then the bank can threaten to foreclose on your home.

How Foreclosure Works

Foreclosure means that the bank will take possession of your house and sell it. If you are faced with the prospect of foreclosure or if you have already received a foreclosure statement from your lending company, one option you have is to file for bankruptcy. This may be something that not only saves your home, but also gives you a clean slate to create a more stable future.

Chapter 13 Bankruptcy and Foreclosure

Many people file for Chapter 13 bankruptcy specifically to stop foreclosure.

In most cases, an automatic stay is entered as soon as a Chapter 13 bankruptcy petition is filed. The automatic stay will temporarily stop foreclosure, along with all other collection action, regardless of the stage of the foreclosure proceedings.

With the automatic stay in place, the debtor and their attorney have the breathing room to work out a Chapter 13 repayment plan.

Professional Help is Available

Taking the leap and filing for bankruptcy can be scary but, in the end, it can release you from a world of stress and financial pressure. You don’t have to lose your home or succumb to foreclosure. There are options available and King and King bankruptcy attorneys can help. Contact at our AtlantaBankruptcy Office today at 404-524-6400 for a free initial consultation. 

Can I Keep My Car In Bankruptcy?

Can I Keep My Car In Bankruptcy?

Posted on October 24, 2012  King and King Bankruptcy Attorneys

With the economy in trouble like it has been for the past few years, you have probably heard or even know people that have pursued bankruptcy to ease the financial burden of an underwater mortgage (owing more on a mortgage than it is actually worth).

A similar question that is becoming more and more common is whether or not people can use bankruptcy as a release for the financial burden of an underwater auto loan. While each situation is considered unique and therefore could provide different outcomes, if you are facing an underwater car loan there are a few potential bankruptcy options that you can explore with your bankruptcy attorney.

Chapter 7 Bankruptcies

Chapter 7 bankruptcies provide several options for debt relief, including some that may allow you to keep your car. As always, your options will depend on your specific situation. Here are a few options under Chapter 7:

Surrender the vehicle

Surrendering your car is an option to reduce the burden of auto payments and insurance. However, this is not a viable option for most people since they need their transportation to get to and from work.

Redeem the loan

Through judicial approval, you may be able to reduce your car debt to the fair market value. In other words, if your loan balance is $8,000 and your car is only worth $4,000 you may be able to reduce the balance of the loan by $4,000. Depending on your situation, your payment requirements may be either monthly payments or a lump sum payment. There is often a tradeoff of higher interest charges, so it’s important to run the numbers to see if a redemption will help you.

Chapter 13 Bankruptcies

In Chapter 13 bankruptcies, your options are different. You may choose to keep the car and have it rolled into your bankruptcy, where you will pay some portion–often a fraction–of the balance as part of your payment plan. If you’ve owned your car for more than two and a half years, you may qualify to have your outstanding balance adjusted to Fair Market Value and stretch the payments out over the life of the bankruptcy. In some cases, you may be able to keep your car and pay off your debt for a very modest monthly payment.

As you can tell, there are many choices in bankruptcy when it comes to your auto loan. If you want to keep your car, it’s important to get expert advice. If you are exploring the possibility of filing for bankruptcy, schedule a free consultation to learn about your options with an Atlanta, Georgia Bankruptcy Attorney, by calling 404-524-6400. Contact us today.