Former homeowners/drivers may still be on the hook if there’s a difference between what they owe on their loan and what the bank sells it (the car or house) for at auction. These deficiency judgments are ticking time bombs that can explode years after the item goes away.
I find it usually catches you right before you go to buy a house, get married, or try and move on.
If you are facing foreclosure, call now.
I see people every day in the Louisville area who are filing chapter 7 and chapter 13. Unfortunately, because of bad advice, because they make bad choices, or sometimes just dumb luck, they make lots of bankruptcy mistakes.
Here are some of the biggest ones and how to avoid them…
10. Tapping the 401(k)- most funds in 401(k) accounts cannot be disturbed in a bankruptcy proceeding. However, money taken out of one can. Also, the huge penalties and taxes associated with a recent 401(k) withdrawal are not dischargeable in bankruptcy. 401(k) loans also create some problems.
9. Cold checks- Some people think writing a cold check is great way to get a fast loan. Besides being a crime, cold check criminal prosecutions are not fixed by a bankruptcy filing. Don’t write cold checks. Bankruptcy can’t fix jail.
8. Using credit right before bankruptcy- obtaining credit or making charges too soon close to the date of your bankruptcy filing creates debts that may not be dischargeable.
7. Not paying child support/alimony- A chapter 13 bankruptcy can be used to get your child support caught up. However, in the mean time you can go to jail for not paying child support. If you have to choose between paying child support or a credit card- pay for your kids.
6. Doing it yourself- presently, there are more than a dozen banned bankruptcy helpers. Is yours one? How do you know? By the way, if you are getting any advice from her, are you ready to come to court to clean up her mistakes? Does she have insurance? Did you know that if you don’t file your bankruptcy documents properly you could lose your home and possessions? Get professional help with your bankruptcy or be prepared to hire professional help to clean up your bankruptcy.
5. The right representation- Does your attorney have malpractice insurance? How long has your attorney been filing bankruptcies? Is the lawyer you meet the same lawyer that goes to court with you? Has your attorney been sanctioned by the Bar? Do you talk to the lawyer about your case or a “legal assistant”? Can the lawyer tell you how your bankruptcy will effect your divorce? There is more to bankruptcy than filing out forms. If something is too good to be true it probably is. Hire a professional, not just a lawyer.
4. The truth- failure to tell your lawyer and thus the bankruptcy court the truth is a crime. Many times, failure to give the lawyer all information creates problems later- that could have been avoided.
3. Getting a judgment- If you don’t pay debt, chances are, you’ll get sued. If you file bankruptcy before a judgment, you don’t have to go throw the time and expense of getting rid of liens. Many times, I can’t get back money that has been garnished. A lot of times, the damage is already done. Filing bankruptcy gets it fixed sooner rather than later.
2. Not filing taxes- besides being a crime, unfiled taxes create a set of problems that could have been fixed but now in bankruptcy. If you owe, you owe, no use in putting it off.
1. Not calling us- as soon as you think you might need to file bankruptcy, get advice from a professional. Like traveling across a jungle- filing bankruptcy requires a guide. Let us help.
There are situations in which it’s best not to wait to file bankruptcy. If you have no hope of repaying debt then you have little to gain by putting off filing. It’s usually better to bite the bullet sooner rather than later. Also, people often make bad calls putting off bankruptcy- like making 401(k) withdrawals, selling off household assets at a huge loss, or even worse, borrowing even more money. Sometimes, if you wait too long, wages get garnished, liens get placed, and other stuff happens that makes your bankruptcy take longer and cost more.
Getting through bankruptcy can be easy or disastrous. Get me involved early. By planning ahead, we can do everything we can to make your bankruptcy smooth sailing and get you off to a fresh start.
Call today and start on your fresh start.
Debt settlement firms pretend they can make creditors settle for “pennies on the dollar”. They claim their service is better than bankruptcy. I usually see them make things worse. These companies are not regulated by anyone. They can, and often do, collect thousands of dollars before providing any services. Sometimes, they take the money and run. A lot of times they can accomplish anything only to say to you “bummer”. Because they make more the longer it takes to settle your debt, they are in no hurry to work things out pronto.
First of all, debt settlement can be done by you just as easy as the settlement firms. If the creditor is not willing to work with you, they’re not about to work with some settlement firm. By getting involved with a settlement firm, the only message you’re sending is that you have extra money to pass out. This makes creditors even hungrier. Remember, debt settlement isn’t the law. Until you involve Courts, you can’t force a creditor to modify their legal rights.
To add insult injury, at the end of the settlement, the money you save is taxable income. So, about the time you’ve dug out all your savings to settle a bill, you get another bill from the government.
Before getting involved with debt CONsolidation, call me. Get real advice from a real lawyer. You owe yourself that much.
“John”, a builder in Louisville, just finished his most recent million dollar home. But when, his contract fell through, he found himself facing a financial fate he’d never anticipated. Overnight owing a $100,000.00 payment on a construction loan.
This is the new face of bankruptcy. The recession, the worst in 70 years, pushed more used to be rich people into bankruptcy than in previous recessions.
Bankruptcy filings were up over a third in the first half of 2009 from the same period the previous year. Experts predict the number of bankruptcies will keep rising even as the economy gets better.
Studies show that more and more middle class folks are feeling the pinch. Personally, I’ve notice three times as many of my clients earn more than $50,000.00 than a couple of years ago. Experts blame the increase on slumping real estate prices and job losses, which have cut deeply into professional positions. Right here, I see a lot of builders, Ford workers, and professional people.
Bankruptcy isn’t just for the poor. More and more working people need bankruptcy than ever before.
Call us, we can help.
Wantland Law
Serving Louisville, Bullitt County, and surrounding areas.
Rebuilding credit after bankruptcy is doable…however, you need to do a little work to make sure everything is as it should be.
A common worry I hear from client just out of bankruptcy that credit stuff on their credit reports is wrong. Sometimes things remain as collections on the report that were discharged in bankruptcy. Is this correct? Nope. End of the world? Certainly not. Fixable? Certainly.
The easy fix is to send a note to the credit bureau and the creditor that the debt was discharged by the bankruptcy and should no longer be on the report. Be sure to do in writing. Writing is a pain- I know- it’s also the only proof that you brought it to someone’s attention.
If they still refuse to fix it, the letter is your proof you asked. That proof, along with the motion I would file, would allow the bankruptcy court to sanction the creditor.
Good credit is possible after bankruptcy. With our help, we can get you back on track. Sometimes, just like your bills, you need a little help from us.
Call today. Tomorrow, start working on better credit.
Call us. We can help.
502-716-0000
Will I lose my house if I file bankruptcy?
I constantly get asked, “If I file bankruptcy, will I lose my house?”. The short answer to this question is “not likely”.
It’s my experience that a mortgage company would rather get your mortgage payments rather than have yet another house on the auction block. If you’re able to make the payment, chances are the mortgage company will complain not a bit. There are some exceptions, the mortgage company expects you to maintain insurance, pay the Jefproperty taxes, and generally take care of the house (their collateral).
Your probably thinking, “well genius, if I could afford the house, I would not be in this kind of trouble!”. Maybe- I see a lot of people who don’t make the house payment because of credit cards or wage garnishments. Those are two things bankruptcy certainly can fix.
“Well, I’m going to lose my house anyway. I don’t need to file.”. Wrong again. If the bank sells the house at the courthouse door and it brings less than the loan amount, a deficiency is created. This is the amount left over that you still owe. That will be part of the claim against you and can be used to garnish your wages or checking account. Also, because of the automatic stay, the bankruptcy can stall the time it will take the mortgage company to move you out. You will be living rent free.
It’s pretty obvious in most cases, a bankruptcy will keep you in your home- even if for just a little longer.
Call us today to discuss your options. 502-716-0000.
Wantland Law, PLLC
Bankruptcy-Divorce-Personal Injury
A lot of clients come to me after being in debt consolidation programs for a while. Typically, they have spent several thousand dollars on “credit counseling” or “debt consolidation”. After months of paying into a program they figure out that their debt has not actually gotten any lower, their credit, once bad, is now destroyed, and they are no closer to a fresh start than before.
Debt consolidation works for some folks. Some people are actually able to take a pile of high interest debt and turn it into one low monthly payment. Usually, these folks have OK credit and are able to get a better loan or have some collateral to offer a lender. Most that I see get put into a “debt settlement program”.
Most “debt settlement programs” or “debt management programs” work something like this…
A person calls an advertisement on late TV. Soon they are paying a few hundred dollars monthly to a debt settlement company. The company sends letters to the creditors asking them to begin negotiations. The credit card companies have a few choices…
They can chose to work with the settlement companies- this means that after the debtor pays into the settlement program for a few months, the debt settlement company will pay off the now charged-off balance to the credit card company. This allows the debtor to get out of the debt for less than the whole amount owed. Sounds pretty good, right?
Not so fast- first, your credit is pretty well shot at this point. Next, your have tax issues at the end of the year. Debt resolved through forgiveness is taxable. That means if you settled $1000 in credit card debt for $500, you get to pay taxes on $500. But, it could be worse.
Sometimes credit card companies decide not to work with debt consolidation companies. This is when the nightmare really begins…
First, your already bad interest rate gets worse. Credit card companies will move you to what is called the default interest rate. This means that the amount you owe each month in interest mushrooms. Next, the balance will be accelerated. This means EVERYTHING you owe is due now. You think this is not a problem because the debt settlement company will fix it, right? WRONG! UNLESS THE CREDIT CARD COMPANY AGREES TO WORK WITH YOU, THE DEBT SETTLMENT COMPANY HAS NO LEGAL RIGHT TO FORCE THE CREDIT CARD COMPNAY TO DO ANYTHING.
The result when this happens is ruined credit, potentially garnished wages, a higher interest rate, and no real solution in sight. Oh, and on top of that, the debt settlement company keeps your money.
What a bargain.
Does bankruptcy have drawbacks- certainly. No doubt bankruptcy will hurt good credit and be potentially more embarrassing than debt settlement. However, bankruptcy is the law. Credit card companies can’t ignore bankruptcy. Also, one way or another, bankruptcy will resolve debts.
Bankruptcy- it’s not a con game, it’s the law.
