1.) Don’t lie about assets. Anything in your name needs to be listed in your schedules. What’s an asset? Everything you could sell or own according to the law. Potential lawsuits are even considered assets.

2.) Don’t leave out creditors or debts. If you leave out a debt then it’s non-dis-chargeable and they can come after you for the money. All creditors have the right to know you have filed.

3.) Don’t leave out income. If you don’t disclose all the income for your household then you may not qualify for chapter 7 or if you file chapter 13 your payment could go up. If a chapter 7 or 13 is dismissed then you will have a bankruptcy on your credit and have nothing to show for it but a lot of debt.

4.) Don’t give away assets or transfer them out of your name. When you file bankruptcy the court appoints a trustee who’s job is to collect and sell your non-exempt assets. So if you start giving stuff away before filing he will object to your discharge for bad faith. Think about it. If all you had to do were give all your stuff away before filing and then just walk away from your debt everyone would do it. It’s not fair that you get to “give away” you 1969 Corvette and screw your creditors out of the money it would have derived at auction. The look back on transfers to friends or family is 2 years. These gifts can and will be reversed. The friend or family member will be sued under a voidable transfer lawsuit by the Trustee.

5.) Don’t give money to anyone or pay back anyone. If you owe mom$5,000.00 and you just got a big tax refund and you pay her back for that loan and then file bankruptcy. You just got mom sued for preference. You can’t pick and choice who you want to pay right before filing bankruptcy. It’s not fair. Why should mom be treated any better than VISA? According to the bankruptcy code they are equal.

6.) Don’t incur debt right before filing. If you  rack up the VISA card right before filing it’s bad faith. Just think about it. Would you think it’s fair that someone could just wipe out a loan that you just gave them 45 days before they filed bankruptcy. it’s not. So don’t do it. And if you do tell your attorney.

Click Here for a few others

Don’t pay anyone to dispute your credit reports. Pull each report directly from the source and examine each entry. If you see things that are incorrect follow the companies dispute guidelines. If you would like me to pull your credit score to show you how bankruptcy will affect your credit score please call our office. We have special software that helps predict how bankruptcy will affect your individual score. Read my other blogs about credit scores.

Here are the three main credit bureaus and their online dispute pages.

Equifax

Trans Union

Experian

I recommend disputing your credit report with all three bureaus if the issue is on all three reports. Sometimes you will not see the same issues on all reports.

Common disputable issues.

1.Tthe reporting of a debt that has not been paid in over 7 years

2. The reporting of a negative history of a relitive with the same name.

3. The reporting of a single debt by two or three different companies claiming ownership of the debt.

4. Reporting a debt that has been paid. (remember they have the right report negative history for seven years from the date of the occurrence. So paying a debt off will not erase this)

5. Reporting the wrong amount of a debt owed.

6. Judgements or Bankruptcies that are for another person.

7. Credit inquiries that are not authorized.

To recover from bankruptcy is easy. The hard part is actually making the decision to file. Hundreds of people go to my web site each day and think about calling. 20-30 actually make the call and schedule an appointment. 10-15 people actually show up or take my call each day to talk about their situation. Of these only 2-3 actually file after seeing me on this first appointment and another 2-3 come back within the next 6 months to a year.  Some find other solutions but most do nothing until they are forced back into my office by a wage garnishment or they are denied for a loan or job because of their credit score.

The decision to file is a hard one because society put so much pressure on people to keep their credit score high. Financial institutes publish so much bad press about bankruptcy by leaking negative information about effects of filing to try and deter people from going this direction. When in fact bankruptcy has a positive affect on most peoplescredit score after filing. So when you read articles or hear rumors about bankruptcy ruining your credit score for the next 7-10 years it’s false. Each case should be based on your particular facts and financial situation. Let me pull your credit score using special bankruptcy software that predicts how bankruptcy will affect your score based on you credit history.

Based on past clients keeping in contact with me I have seen general rules emerging with clients ability to recover after filing bankruptcy.

1. Purchasing a vehicle after discharge is not an issue if you have income to support the purchase. It takes approximately 4 months on average to get discharge after filing chapter 7,

2. Most banks want you to be discharged for 2 years before they will give a loan for a home purchase. I have had clients in the resent past tell me they did it in 15 months.

3. Credit cards with low limits within a few months after getting discharged.

Read these articles re: Recovery After Bankruptcy and Buying A House After Bankruptcy

Credit scores range between 300 and 850. The higher the score the better. 500 or lower is considered a low credit score. 700 or above will save you money on your financed purchase by lowing your interest rate. In reality you want your score to be at least 600 with a goal to get it above 720. Finance companies will give you the lowest possible interest rates if you average credit score is above 720.  By eliminating the amount of debt you have and stopping the late payments from reporting you can increase your credit score. This can be done by paying all your debt off. But for a lot of people this is not a possibility. A fast and easy way to increase your FICA score is to file bankruptcy. Bankruptcy eliminates bad debts that are reporting negatively to your credit and forces the creditor to report $0.00 balances and no more late payments. Once you file bankruptcy you don’t owe the creditor and therefore they are forced to report $0.00 balances and no more late payments. This also fixes your debt to income ratio making you less of a risk for future creditors in turn making you eligible to finance products like vehicles or houses. Call us and we will pull your credit score using our special bankruptcy software that will also predict what your score will be after filing bankruptcy.

CreditKarma is a free service that tracts your credit score and I highly recommend and use it. If you want to dispute your credit report or need to pull it from one of the three credit bureaus click here.

Simple, you pay the Cost to file and I will stop your wage garnishment. To file a chapter 7 case you have to pay the Federal Court a $306.00 Court Filing Fee. In order for my office to accurately prepare your paperwork we must pull your credit reports, complete an asset check and tax verification. This cost around $100.00. So the deal I make with my clients is you pay $400.00 to cover the cost, I will do the work and stop your wage garnishment and then you can pay my attorneys fees after we file. If you are really in a desperate situation I may even pay your cost  for you and let you reimburse me after i stop your wage garnishment. Most other attorneys will not do this. To find out more please call my office and ask to speak with me, Keith D Collier.

Consumers should be sceptical of CREDIT REPAIR ORGANIZATIONS that make promisses  or statements that sound to good to be true. Just because it’s what you are want to hear don’t be fooled. Credit Repair Companies are regulated by the Federal Trade Commission. Some Florida based companies have even been sued by the Federal Trade Commission for misleading statements and false promises. These companies were targeting Spanish speaking consumers. Please read this article here.

Please contact my office for any question regarding cleaning up your credit and debt. Credit Repair is the key to saving money in the future by lowering your interest rates. For a free Phone Consultation click here.

When a creditor gets a Judgment against you they are essentially getting what is called a Judicial Lien against property that is in your name. This judgment allows them to garnish your bank accounts, wages or take personal property that is not protected by constitutional or state law. When you file a chapter 7 bankruptcy you are removing your liability on the debt. However thee is still a recorded judgment that will not be removed out of the state records. This judgment is essentially worthless because the creditor can not collect once you file and get a discharge in bankruptcy. But in some instance debtors may have issues later on with clearing title or transferring title on property, vehicles or other property. To avoid this some clients will need to file a motion in their chapter 7 bankruptcy to avoid the judicial lien. This will ensure the property is clear and ready to be transferred. This is generally an extra fee on top of the regular chapter 7 fees charged by most attorneys.

To see if you have a judgent in Duval please search Duval County Clerk Of Courts here.

To collect, read through this pdf.

Reaffirmation Agreements in Chapter 7 Bankruptcy Cases are documents that are generally prepared and filed by secured creditors. When done properly and timely they hold the debtor liable on the debt that was discharged in the chapter 7 bankruptcy case. All debts must be included in chapter 7 bankruptcy. But not all debts are or have to be discharged. Things like child support, alimony taxes owed to the IRS less than 3 years old, all student loans after 2005 are all automatically non-dischargeable in bankruptcy. But mortgages, car payments and other secured debts are dischargeable if they are not reaffirmed. When you reaffirm a debt your are signing back on liability and should do so with caution. The reaffirmation agreement is prepared from a standard form that the bankruptcy court has prepared. The secured creditor takes this form an puts all the information about the loan and debt into the form and generally will mail it to the debtor or debtors attorney. This form then needs to be completed with the debtors information and filed with the court within a specific time period. If not it’s invalid.

As a debtors attorney we run into a lot of problems with reaffirmation agreement not being prepared by the secured creditor. For some reason they are refusing to prepare and send out this document. We cannot force them to prepare the document nor can we prepare it for them because we don’t have the exact figure to complete the form.

The Form can be found on this page and here is the downloadable pdf.

Why File Chapter 11 for your Homestead instead of Chapter 13? 

3 simple reasons.

1) Chapter 11 allows you to spread your arrearages on your homestead property over the remaining years of the mortgage.

2) You don’t have to pay Chapter 13 Trustee Fees (10%) of everything that is paid in.

3) You are in control not a Chapter 13 Trustee.

Example of Money Saved in Chapter 11 vs Chapter 13

Simple Facts:

Mortgage payment $2,000.00 a month

Arrearages on Mortgage $55,000.00

In year 25 of a 30 year mortgage, 300 months left.

Chapter 13:

$2,000.00 x 60 months   = $120,000.00

Mortgage arrearages           = 55,000.00

Strip 2nd                                   = $0.00

Chapter 13 Attorneys fees = $6,200.00

Total                                             = 181,200.00

Trustee fee  10%  181,200   = $20,133.33

Total                                             = $201,333.33

Divide $201,333.33 by 60 months given to you to cure the arrearages in a chapter 13 and your monthly chapter 13 plan payment is $3,355.56.

Chapter 11 using same facts:

 $2,000.00 a month for the rest of your loan

Mortgage arrearages           = 55,000.00

Strip 2nd                                   = $0.00

Chapter 11 Attorneys fees = $00.00  chapter 11 fees are aprox. $9,000.00 and have to be paid before filing the case.

Total                                             = 55,000.00

No Trustee fee                          = $0.00

Total                                             = $55,000.00

Your plan payment under a chapter 11 is the regular monthly mortgage payment of $2,000.00 and $55,000.00 divided by 300 months, the remaining number of months left in your original mortgage = $183.55. This means you pay your mortgage company $2,183.33 per month.

No Trustee fees and no outrageous monthly payments. The attorney’s fees are paid prior to filing a chapter 11 because the court doesn’t really have a mechanism set up to allow an attorney to get paid during a chapter 11 case like a chapter 13. This is the only downfall of chapter 11 compare to chapter 13. Chapter 11 clients often ask “how am I going to come up with that amount of money”. The answer is stop paying your mortgage for 3-4 months and you will have the fees.

The second mortgage and other debts will get paid the same amount if anything in chapter 13 or chapter 11.

  Sample Chapter 11 Case for Homestead Property

Client has one house that is his homestead valued at $200,000.00. He is in his 5th year of a 30 year mortgage, 25 years remain or 300 months. The first mortgage is $220,000.00 and mortgage payment is $2,000.00 a month, he is 24 month behind with fees and cost totaling $55,000.00. Client has a second mortgage of $100,000.00. Client has $50,000.00 in medical bills and credit card debt.

Chapter 11 will allow him to pay his regular monthly payment of $2,000.00 a month and spread the $55,000.00 of arrearages over the next 25 years or 300 months at a rate of $185.00 approximately. The second mortgage can be stripped off the house because he owes more on the first than the value of the house. This debt then becomes unsecured with his $50,000.00 in medical and credit card debt. The $55,000.00 unsecured stripped 2nd  and the $50,000.00  in unsecured medical and credit card debt totaling 105,000.00 will get what the client can afford to pay over the next 5 years. What isn’t paid will be discharged.

The outcome is different when you have rental properties or business property. The chapter 11 actually gives you more power to actually re-write your mortgages if it’s not yourhomestead. Please see my other blogs re this.

Why File Chapter 11 for your Homestead instead of Chpater 13?