Often folks struggle with the ethical issues involved with bankruptcy. Some people believe that it is unethical not pay off their debts, but on the other hand, realize that filing for bankruptcy is the only way they can gain peace of mind. If you have questions like these, get answers to them by speaking to the Buffalo NY Bankruptcy Attorney Stephen K. Underwood. The truth is that many people face a financial crisis at some point in their lives, and the financial crises usually has nothing to do with personal spending habits or financial irresponsibility. The most common reason for filing personal bankruptcy in the United States is medical debt. More people are pushed into bankruptcy every year because they’re unable to afford to pay medical bills. Even if you don't have medical bills, it is generally not irresponsible spending, but loss of income for a period of time causing you to get behind in your bills.
Few terms have more stigma attached than Bankruptcy. This is why people hesitate to file for Bankruptcy, even when it is in their best interest. The following are the most common misconceptions about bankruptcy. To understand how bankruptcy can help you to get rid of debt, and resolve your financial problems, speak to Buffalo NY Bankruptcy Attorney Stephen K. Underwood.
The truth is that some people's credit will be damaged for a while, and some peoples credit may improve after filing Bankruptcy. If you already have a huge debt to income ratio, with a lot of late payments, repossessions, foreclosures and judgments, Bankruptcy will probably improve your credit score and make you a better credit risk. However, if you had a high credit score prior to filing for bankruptcy, your credit will suffer, but it can be rebuilt over time. The Bankruptcy may stay on some credit reports for 7-10 years, but that also puts potential lenders on notice that you can't file for Chapter 7 Bankruptcy again for 8 years, so they my feel it is safe to lend you money. Learn more by consulting with a WNY Bankruptcy Attorney.
Although Bankruptcy is part of the Public Record rarely does anyone find out about it but you, your creditors, your codebtors, and your lawyer. Bankruptcy filings are published in some newspapers but are generally overlooked. When was the last time you saw one.
Many people think they will lose their home if they file for bankruptcy. That does not happen generally unless you have too much equity in your home that exceeds your Homestead Exemption, but even then, with proper planning this problem can be overcome. Generally you will continue to retain your home, automobile and retirement accounts. It is your attorney's job to protect your assets, with proper planning, so you don't wind up in the poor house.
Improving your credit score and establishing good credit after Bankruptcy can be done. It presents the old chicken and egg issue because in order to build credit, you have to get credit. Some lenders may not be willing to give you credit after you have filed for bankruptcy, others will. You can begin establishing credit by opening a line of credit by getting a car loan. Car loans are less risky for lenders because they are secured. You can also get a secured credit card from a bank. A secured credit card is when you deposit a certain amount of money in an account and the bank will give you a line of credit for the amount that is on deposit. Be sure that the places you get credit will be reporting your payments to credit reporting agencies or a good payment history will not boost your credit score. To learn more about reestablishing your credit after bankruptcy contact Buffalo NY Bankruptcy Attorney Stephen K. Underwood.
If you are unable to pay your debts as they come due, you probably will qualify for a Chapter 7 Bankruptcy unless you filed one in the last 8 years. Whether it is in your best interest to file for Bankruptcy is another matter. You qualify for Chapter 7 bankruptcy if you pass the Means Test, and the Disposable Income Test. Passing the Means Test (or income test), requires you to be able to show that your annual household income is lower than the annual median household income for the State of New York (not including Social Security Income). The Disposable Income Test requires that your budget indicates that after taking your monthly income less your monthly expenses (excluding unsecured debt) that you have minimal money left over to pay unsecured debt like credit card debt and personal loans. If you fail either of these tests you may be able to file a Chapter 13 Bankruptcy. To learn more about whether you qualify for Bankruptcy speak to Buffalo NY Bankruptcy Attorney Stephen K. Underwood.
This answer to whether you can file chapter 7 bankruptcy again after having already filed is Yes. You cannot, however, file a Chapter 7 bankruptcy any sooner than 8 years (and receive a discharge) after the filing date of your prior chapter 7 bankruptcy.
Assuming the debt is not for court ordered restitution or a fine, you can't go to jail for not paying debts. Sometimes third party debt collectors will falsely tell you that you are going to jail if you don't pay them but this is improper and against the law. You can, however, be prosecuted by the district attorney for fraud if you lie on credit applications for a mortgage or other loans, so be truthful when you barrow money.
Sometimes it makes it easier to settle your divorce case when there is a lot of marital debt because it removes the issue of who will be responsible for paying those debts after the divorce is final. Keep in mind that if you agree to pay for a joint debt in a divorce agreement, you can't discharge it in bankruptcy later.
There are people who file bankruptcies without an attorney, but it is not recommend because it is important to have a firm grasp on bankruptcy law and know what you are doing because the Trustee can take your assets if the bankruptcy is not prepared correctly. Assets at risk may include your home, vehicles, household goods, and some retirement accounts. Do yourself a favor and hire a lawyer because many times a lawyer can find the money you need in your budget to pay for it.