Divorce is painful and can leave us in financial ruins. We are often
clouded with emotion and are unable to make sound financial decisions
that will protect us.
Make sure to hire someone who is
thinking practically and not emotionally. If filing for bankruptcy is
necessary, than proper means must be taken to make sure your debts are
dischargeable. Divorce is ugly. Hurting the other party is also ugly.
Your best means of protection is protecting yourself, your assets, and relieve yourself of shared debts.
Call us today for a consultation.
Showing posts with label cosigner and bankruptcy. Show all posts
Showing posts with label cosigner and bankruptcy. Show all posts
Monday, September 1, 2014
Monday, July 7, 2014
Debt Loves Company
Debt doesn’t just consume one person at a time, in the event there is
a co-debtor, (and several of your debts include co-debtors). Also known
as co-signors, the people who sign with you on a debt are often family
members and the closest friends you have.
By signing a legal document guaranteeing that your debt would be paid, the co-debtor is now in a precarious situation as you file for bankruptcy.
If your goal is to wipe out as much of your debt as possible, as quickly as possible, Chapter 7 would be a good choice. However, under Chapter 7, co-debtors are not protected. If you receive a Chapter 7 discharge, you would no longer have any legal responsibility to repay the debt that was also signed by your co-debtor. But creditors would then be able to collect from the co-debtor.
The only way to protect a co-debtor is to file a Chapter 13 repayment plan, although that virtually guarantees a 60-month schedule to pay your disposable income, after necessary expenses, to your creditors.
By signing a legal document guaranteeing that your debt would be paid, the co-debtor is now in a precarious situation as you file for bankruptcy.
If your goal is to wipe out as much of your debt as possible, as quickly as possible, Chapter 7 would be a good choice. However, under Chapter 7, co-debtors are not protected. If you receive a Chapter 7 discharge, you would no longer have any legal responsibility to repay the debt that was also signed by your co-debtor. But creditors would then be able to collect from the co-debtor.
The only way to protect a co-debtor is to file a Chapter 13 repayment plan, although that virtually guarantees a 60-month schedule to pay your disposable income, after necessary expenses, to your creditors.
Tuesday, June 10, 2014
How To Handle Enormous Debt Load Right After Receiving Your College Degree.
More than ever, young adults are being saddled with an enormous amount of debt right after they earn their college degree. They spend the rest of their twenties giving a sizable portion back to the University who just won a bowl game and is hardly hurting for cash. Meanwhile, you're a twenty something lawyer who passed the Bar exam, works for a prestigious firm, yet you eat Ramen and take the bus and duck your landlord at the end of the month. That's no way to enter the workforce--straddled with debt.
More young adults are filing for bankruptcy than ever. There is a stigma and almost a shame that comes with it, but there needn't be. Think of bankruptcy less a retreat and more a reset. Yes, it will reflect on your credit report and yes it will complicate your financial future at least for the next seven years. "So why would I want that?" You ask...
Here's the alternative. Continue on eking it out. Giving most of your pay to your wealthy college who's degree you might not even be using! Take the bus. Go broke trying to impress clients by paying for your meals only to find your wages have been garnished and your card doesn't work.
You can expect that for much longer than seven years if you don't file for bankruptcy. You don't want to have to play that game where you act like: "it's the banks fault" in front of potential clients. You know good and well there was a fifty-fifty chance your card would work, which is why you only ordered salad and water. You cringed when the potential clients ordered swordfish and champagne. And then came the coup de grâce? Potential client #1 liked the swordfish so much he wants a second to go. For his dog! Your mental cash register just exploded. You know what's coming. Epic embarrassment. You see it on the waiter as his or her demeanor has now changed. They have your card in their hand and a single, short, stubby receipt. We all know what that is. The rejection letter of debit machines. Just like when you got into college. Thin envelope meant: "Sorry! Try again!". Thick envelope meant :"Pack your bags".
Don't get another thin envelope or short receipt. Get your affairs in order. What you handle today will greatly behoove you tomorrow. We will get creditors off your back and allow you to entertain those potential clients without fear of embarrassment.
Friday, May 2, 2014
What’s the difference between Chapter 7, 11 and 13 of the Bankruptcy Code?
...A commonly asked question. Commonly asked because many are truly unaware of the differences between the two.
Chapter 7.
Chapter 7 case begins with the debtor filing a petition with the bankruptcy court serving the area where the individual lives or where the business debtor is organized or has its principal place of business or principal assets.
Chapter 13
Chapter 13 issues a payment plan to repay some debts, with the rest of the permitted debts being discharged. Keep in mind, not all tax debts are able to be discharged in bankruptcy, but taxes that are eligible to be discharged in a Chapter 7 are also eligible for discharge in Chapter 13. When you file for bankruptcy, your tax debts must meet a certain standard in order to be discharged.
If you file for Chapter 13 bankruptcy, money owed to the IRS that does not meet the qualifications to be discharged can be repaid through a payment plan that lasts anywhere between three and five years without penalties or continuing interest. (Although in some cases interest and penalties must be paid if there is a tax lien).
One of the benefits of filing a Chapter 13 bankruptcy is if the IRS rejected your previous payment plan, this is a way to get them to accept one.
Chapter 11
Debtors should be aware that there are several alternatives to chapter 7 and 13 relief. For example, debtors who are engaged in business, including corporations, partnerships, and sole proprietorships, may prefer to remain in business and avoid liquidation. Such debtors should consider filing a petition under chapter 11 of the Bankruptcy Code. Under chapter 11, the debtor may seek an adjustment of debts, either by reducing the debt or by extending the time for repayment, or may seek a more comprehensive reorganization. Sole proprietorships may also be eligible for relief under chapter 13 of the Bankruptcy Code.
It is recommended that you speak with your attorney regarding this matter before deciding between filing Chapter 7 or Chapter 13 to get rid of or aid with the burden of tax debt.
Gregory J. Wald, Attorney at Law
1500 Northland Plaza
3800 American Boulevard West
Bloomington, MN 55431
Telephone: 952-921-5802
Toll Free: 1-866-747-1130
Fax: 952-831-1346
BankruptcyMinn.com
Gwald314@msn.com
Wednesday, February 26, 2014
There Are Strict Laws In Place That Limit What A Creditor Can And Cannot Do When Seizing Your Vehicle
What Rights Do I Have When Facing Vehicle Repossession?
Getting behind on your credit card payment can be a hassle but when you go into arrears on your car payment, your life can be drastically interrupted. Whenever you enter into a lease/credit agreement with a finance company, they have the right to recover their property, any time of day or night and still invoice you for the balance due on the loan as well as late fees and towing fees. Pretty harsh huh? However, there are strict laws in place that limit what a creditor can and cannot do when seizing your vehicle.
What Can Creditors do
According to state law, and likely the contract you signed while purchasing the vehicle, your creditor can legally seize your vehicle when you default on your loan. The seizure can legally occur immediately. The contract between you and your creditor will usually define "default", but it normally means a failure to make timely payments. One missed payment may be just enough, but typically not. This is because your creditor can agree to accept a late payment or can change the payment date, however this may change the terms of your original contract. These changes can occur by speaking with the creditor, by writing, or by the creditor simply accepting multiple late payments without objection.
When default occurs, state law may permit the creditor to repossess your vehicle at any time of the day - even in the middle of the night while you sleep. Creditors do not need to give proper notice, and may come on to your property to repossess.
What Can't They Do?
Creditors cannot "breach the peace" while confiscating your vehicle. Examples of breaching the peace violations can be using force or threats of force to repossess, seizing your vehicle over protest, or removing it from a closed garage.
If a breach of peace is committed when your vehicle is repossessed, you can be entitled to money damages or your creditor may be required to pay a penalty. Importantly, your creditor may also lose the right to enforce a deficiency judgment against you. A deficiency judgment is the difference between the remaining amount on the loan and the resell amount obtained by the creditor.
If you or someone you know has had their vehicle repossessed or is facing repossession, call us now. There are limited, but effective actions that can be taken such as bankruptcy, that allow you to keep your vehicle. Remember, time is of the essence. Once they've repossessed your vehicle you have ten days to pay the debt. In some cases the creditor may even refuse the payment and keep your vehicle. Eventually they will sell it and reduce it from the debt you owe them. Don't let it get to this.
For more information regarding your specific situation, contact Minnesota Bankruptcy Attorney Gregory J. Wald at 952-921-5802 or at BankruptcyMinn.com for a consultation.
Getting behind on your credit card payment can be a hassle but when you go into arrears on your car payment, your life can be drastically interrupted. Whenever you enter into a lease/credit agreement with a finance company, they have the right to recover their property, any time of day or night and still invoice you for the balance due on the loan as well as late fees and towing fees. Pretty harsh huh? However, there are strict laws in place that limit what a creditor can and cannot do when seizing your vehicle.
What Can Creditors do
According to state law, and likely the contract you signed while purchasing the vehicle, your creditor can legally seize your vehicle when you default on your loan. The seizure can legally occur immediately. The contract between you and your creditor will usually define "default", but it normally means a failure to make timely payments. One missed payment may be just enough, but typically not. This is because your creditor can agree to accept a late payment or can change the payment date, however this may change the terms of your original contract. These changes can occur by speaking with the creditor, by writing, or by the creditor simply accepting multiple late payments without objection.
When default occurs, state law may permit the creditor to repossess your vehicle at any time of the day - even in the middle of the night while you sleep. Creditors do not need to give proper notice, and may come on to your property to repossess.
What Can't They Do?
Creditors cannot "breach the peace" while confiscating your vehicle. Examples of breaching the peace violations can be using force or threats of force to repossess, seizing your vehicle over protest, or removing it from a closed garage.
If a breach of peace is committed when your vehicle is repossessed, you can be entitled to money damages or your creditor may be required to pay a penalty. Importantly, your creditor may also lose the right to enforce a deficiency judgment against you. A deficiency judgment is the difference between the remaining amount on the loan and the resell amount obtained by the creditor.
If you or someone you know has had their vehicle repossessed or is facing repossession, call us now. There are limited, but effective actions that can be taken such as bankruptcy, that allow you to keep your vehicle. Remember, time is of the essence. Once they've repossessed your vehicle you have ten days to pay the debt. In some cases the creditor may even refuse the payment and keep your vehicle. Eventually they will sell it and reduce it from the debt you owe them. Don't let it get to this.
For more information regarding your specific situation, contact Minnesota Bankruptcy Attorney Gregory J. Wald at 952-921-5802 or at BankruptcyMinn.com for a consultation.
Wednesday, July 10, 2013
Do I Need To Disclose The Auto Loan That I Cosigned For In My Bankruptcy?
When filing for bankruptcy, you are required to report all of your liabilities and assets. An auto loan in which you cosigned for is considered a liability. Even if you do not possess the vehicle and the primary borrower makes all of the necessary payments, you are still liable for the loan.
During your bankruptcy, you are required to report the co-debtors on any of the debt you have. In this situation, even if the you are discharged of your obligation to repay the loan, your co-borrower will still be responsible for the debt.
It's important to know that one borrower filing for bankruptcy could constitute a default on the loan. This could result in the creditor accelerating the loan and requesting full payment against the co-borrower or repossession. However, it's more likely that the lender will allow the co-borrower to remain in possession of the vehicle if timely payments are continued to be made under the current terms.
How is the primary borrower on an auto loan affected if the cosigner files for bankruptcy?
In this situation, the primary borrower is still legally obligated to pay the balance of the loan. The bankruptcy and discharge of the consignee's obligation of the loan results in the lender being able to only pursue the primary borrower if the loan goes unpaid.
Depending on your auto loan contract, you could be considered in default once the consignee's obligations are discharged. However, it's likely that the primary borrower will keep the vehicle if timely payments are continued to be made. Most lenders do not want to repossess a vehicle if the payments are kept current.
It's important to keep an eye on one's credit report if the cosigner files for bankruptcy. If the bankruptcy is listed on the primary borrower's credit report, it is considered incorrect. This can happen and it's imperative that all three credit reporting agencies are contacted to correct this issue.
Gregory J. Wald, Attorney at Law
1500 Northland Plaza
3800 American Boulevard West
Bloomington, MN 55431
Telephone: 952-921-5802
Toll Free: 1-866-747-1130
Fax: 952-831-1346
BankruptcyMinn.com
Gwald314@msn.com
It's important to know that one borrower filing for bankruptcy could constitute a default on the loan. This could result in the creditor accelerating the loan and requesting full payment against the co-borrower or repossession. However, it's more likely that the lender will allow the co-borrower to remain in possession of the vehicle if timely payments are continued to be made under the current terms.
How is the primary borrower on an auto loan affected if the cosigner files for bankruptcy?
In this situation, the primary borrower is still legally obligated to pay the balance of the loan. The bankruptcy and discharge of the consignee's obligation of the loan results in the lender being able to only pursue the primary borrower if the loan goes unpaid.
Depending on your auto loan contract, you could be considered in default once the consignee's obligations are discharged. However, it's likely that the primary borrower will keep the vehicle if timely payments are continued to be made. Most lenders do not want to repossess a vehicle if the payments are kept current.
It's important to keep an eye on one's credit report if the cosigner files for bankruptcy. If the bankruptcy is listed on the primary borrower's credit report, it is considered incorrect. This can happen and it's imperative that all three credit reporting agencies are contacted to correct this issue.
Gregory J. Wald, Attorney at Law
1500 Northland Plaza
3800 American Boulevard West
Bloomington, MN 55431
Telephone: 952-921-5802
Toll Free: 1-866-747-1130
Fax: 952-831-1346
BankruptcyMinn.com
Gwald314@msn.com
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