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Bankruptcy Help For Everyday People

Durham Bankruptcy Law Blog

How can I file a bankruptcy for no money down?

Under the current Ch 13 laws it is possible for some clients to file a Ch 13 bankruptcy without paying any upfront fees or costs. A Ch 13 bankruptcy is a type of plan that can set up reasonable payments for a 3-5 year period to help individuals and couples catch up on car loans, back house payments and help with unsecured credit card debt. In a typical Ch 13 case a client may be behind in car payments and have unsecured loans and credit cards as well. In this situation we can set up a payment plan to pay for the car loan over a five-year period and in most cases alleviate the unsecured debt without having to pay any money to those unsecured creditors. In some cases, you may be able to even greatly reduce the amount you pay back on your car loan. If you do not have the up-front filing fees of $310.00 to start the Ch 13 bankruptcy it is possible in certain situations to file a Ch 13 case for no money down. This allows you to set up a payment plan to pay the filing fee in three installments while at the same time obtaining the protection you need from the bankruptcy laws. In order to qualify for the no money down filing you have to meet certain criteria in our office.

Employers will hire people who have filed for bankruptcy

Individuals who file for bankruptcy are likely to have a difficult time getting unsecured credit cards or loans. However, one study found that filing for bankruptcy is unlikely to have an impact on whether a person is able to find a job. Furthermore, filing for bankruptcy is unlikely to have an impact on how long a person stays in a particular position.

This was the key takeaway from a study involving researchers from the University of Chicago, Harvard and Yale. A representative from the Social Security Administration was also involved in the study. Researchers used data from the SSA as well as the Equifax Consumer Credit Panel to come to this conclusion. The study looked at the difference between those who had a Chapter 13 bankruptcy fall of their credit report and those who had a Chapter 7 bankruptcy on their credit reports.

In what situation is Chapter 7 the best bankruptcy choice?

If you are sick and tired of being in overwhelming debt, you may have concluded that you need to make a drastic change. Financial troubles do not usually go away unless significant changes are made. If you do not feel that you can increase your income or reduce your outgoing expenses significantly enough to tackle your debts, considering filing for bankruptcy could be a wise move.

When first looking into your bankruptcy options, you will discover that there are several different types of bankruptcy. For individual debtors, the most common choice is Chapter 7 bankruptcy or Chapter 13 bankruptcy. The best choice for you will depend on your individual circumstances. The following is an overview of when filing for Chapter 7 will likely be the best choice.

Creditors obligated to pause collection attempt during bankruptcy

One reason why people in North Carolina may file for personal bankruptcy is to put an end to creditor calls and collection attempts, including lawsuits and repossessions. People struggling with insurmountable debt may face intensive attempts to collect, and filing for bankruptcy may provide them with options to find relief. When people file a bankruptcy petition, an automatic stay goes into effect. Creditors that want to move forward with ending a lease or other actions need to approach the bankruptcy court first, and they can be penalized for failing to comply with the automatic stay.

However, one issue that has remained in dispute is whether creditors in a bankruptcy case also need to act affirmatively to put an end to collection processes that are already in place. Some courts have decided that creditors do not have this obligation, but others have held that they do, leaving some uncertainty in place. In one case, a woman had a debt for unpaid legal bills to her former divorce attorney, who had previously obtained a judgment against her and sought wage garnishment against her for the amount in question. The debt was included as part of the bankruptcy petition in addition to the $1,000 in wages that had already been garnished.

Qualifying for Chapter 7 bankruptcy

Many North Carolina consumers are struggling with their financial obligations, and there are several reasons why this might be so. People can be burdened with extensive credit card debt or medical bills, and the situation can be exacerbated by an unexpected job loss. When other methods of debt relief have failed or are unavailable, some people might consider filing for bankruptcy under Chapter 7. However, not everyone is eligible to do so.

Under Chapter 7, a person's non-exempt assets are liquidated by a court-appointed trustee, with the proceeds being used to repay creditors. In most cases, any remaining balances on certain types of unsecured debt are discharged, and the process usually takes only a few months. To qualify, however, filers generally must first pass the means test, which compares their income to the median income in the state in which they reside.

Why Chapter 7 is often a better choice than debt consolidation

It's common to notice advertisements for products or services when you need them and to tune them out the rest of the time. If you've been struggling with your finances, you may have noticed that there seems to be a lot of debt consolidation and debt relief programs that advertise both on the television and the radio.

You might even find yourself thinking that such programs could help you better manage your finances. However, you should keep in mind that it costs a lot of money to purchase that advertisement space. Those companies turn a tidy profit off of a service that they like to pretend they do for nothing.

Don't let the fear of bankruptcy hold you back: You'll recover

It's true that your life after bankruptcy may be different than it was beforehand. Bankruptcy generally reduces your credit score and can make it harder to get credit in the future, at least for a short time.

The fear of what might happen after bankruptcy isn't a good reason to avoid using it when you need it, though. Bankruptcy can free up your finances and make it easier for you to go without the need for credit cards. With better stability, you may not even miss the credit lines you once had.

Young adults not shying away from credit cards

According to TransUnion, roughly half of Americans between the ages of 18 and 24 have a credit score of at least 661. Therefore, lenders in South Carolina and throughout the country have made it a priority to connect with younger borrowers. Previous data has shown that a 24-year-old has an average of $2,000 in credit card debt. Furthermore, 41% of individuals between the ages of 18 and 24 have at least one credit card.

There had been some concern that younger Americans would be less eager to borrow money as they grew up during the Great Recession. While a willingness to borrow money could be good news for banks and other lenders, it can be detrimental to a young person's ability to grow his or her net worth. Millennials currently have 2.9% of the nation's wealth, and their financial standing was influenced by a willingness to take on student loan debt.

Candidates discuss medical debt during presidential debate

North Carolina residents who watched the Jan. 14 Democratic presidential debate may have heard Senator Bernie Sanders say that about 500,000 Americans file for bankruptcy each year because of medical debt. Sanders based his claim on the results of a recent survey of 910 personal bankruptcy cases conducted by the Consumer Bankruptcy Project. The advocacy group concluded that more than 65% of the people who file a Chapter 7 or Chapter 13 bankruptcy each year do so because they have medical bills they cannot pay or found themselves in an unmanageable financial situation after an illness or injury.

The CBP study suggests that the Affordable Care Act has done little to address the issue of medical debt in the United States as all of the bankruptcies studied were filed after the landmark law's passage. A previous study conducted by the group before the ACA was signed into law by President Obama linked roughly the same percentage of bankruptcies to medical debt. Senator Elizabeth Warren, who is one of the candidates running against Sanders for the Democratic presidential nomination, contributed to that study.

Protect your family with an estate plan

All adults should have a basic estate plan in place to provide instructions for their loved ones after they pass away. Unfortunately, many people don't take the time to get one in place either because they think they have plenty of time to create it or because they don't want to think about it. This can put their loved ones in a bad position when the person passes away.

If you don't have an estate plan in place right now, you should carefully consider how doing a little work can help loved ones in the future. This isn't necessarily a challenging process but it can take a little time.

Start Planning For The Future Today

Want to get out of debt? Create a will? We can help.

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