“Filing for bankruptcy is a little more complicated than many people think,” says Bert Briones, an Irvine bankruptcy attorney . In general, filing for bankruptcy is done when a person or business has debts that exceed their assets. Personal bankruptcy is a bit different than corporate bankruptcy. People are able to file for either chapter 7 or chapter 13 bankruptcy, both of which offer different protections, and impact the filer’s credit history in different ways.

Chapter 7 bankruptcy is the type of bankruptcy most people end up filing for. With chapter 7, many of a person’s assets are liquidated in order to repay their financial obligations. This will eliminate some types of debt, but things like mortgages and car payments will remain. It’s good for getting rid of things like credit card debt, or other bills that don’t require an initial deposit of collateral (referred to as unsecured debt).

In many states, filing for chapter 7 bankruptcy can only be done by individuals that pass a “means test,” which compares their income to a statewide average to determine whether they have enough debt to warrant filing for chapter 7 bankruptcy. This type of bankruptcy remains on a person’s credit history for ten years, and there is a six to eight year waiting period before they will be able to file for bankruptcy again.

Chapter 13 bankruptcy differs from chapter 7 in that it does not eliminate debt. Instead, debts are consolidated, and a repayment agreement is reached between the debtor and their creditors. This repayment agreement usually spans three to five years, and impacts the debtor’s credit history as long as the repayment agreement is in effect. Chapter 13 bankruptcy is good for individuals with a high income, and it does not require debtors to liquidate their assets.

Filing for bankruptcy is more complicated than it sounds, and the decision of how to go about doing so isn’t an easy one. A good bankruptcy lawyer can help advise you on whether or not bankruptcy is a legitimate option for your financial situation, and assist you in determining whether chapter 7 or chapter 13 is more appropriate.

If you have questions regarding Chapter 7, Chapter 11, or Chapter 13 bankruptcy, lien stripping, wage garnishment, cram down, foreclosure, asset protection, or related issues, please call Red Hill Law Group PC, to schedule a no-charge face-to-face or phone consultation with an experienced Orange County bankruptcy lawyer.

We can be reached at 877-343-3289, or please use our contact form and you will be contacted within the next business day.

Download our Free E-Book, “Seven Bankruptcy Mistakes That Will Keep You Chained to Your Debt” here:

http://bankruptcyattorneyirvinesite.com

View our educational video series:

http://www.redhilllawgroup.com/orangecountybankruptcyattorney/

“Bankruptcy is useful when someone’s financial obligations exceed their assets. Filing for bankruptcy has some negative connotations for a lot of people, but it’s really just a legitimate way for a person with a poor credit history to get a new chance to improve it,”says Bert Briones, an Irvine bankruptcy attorney . “Bankruptcy allows these people to eliminate or repay their debts, by restructuring their debts and allowing them to go on honoring their financial obligations under the protection of bankruptcy law.”

Though declaring bankruptcy is extremely useful for people who have wound up in over their heads when it comes to overdue bills and loan balances, it isn’t always suitable for every situation, and the decision of whether or not to declare bankruptcy isn’t an easy one. In general, it’s a good idea for a person to file for bankruptcy when they have assets that creditors can attempt to seize. This includes things like real estate, a car that’s worth over a certain value, or a job where employees’ wages can be garnished.

It is not usually necessary for someone to file for bankruptcy when they don’t meet these criteria, since the worst most creditors will be able to do is keep calling and sending letters. People very rarely end up in jail just for owing money, and creditors can’t attempt to seize your household goods, furniture, or other owned items that don’t count as assets.

Filing for bankruptcy prevents creditors from continuing to harass you, and restructures your debts so you can pay them off. Certain kinds of debts may be eliminated entirely. This will negatively impact your credit score, usually for five or ten years before the bankruptcy filing is removed from your credit history. Fortunately, most people who need to file for bankruptcy have credit scores that can’t really get much worse, and being able to reduce or eliminate their debts can actually end up making their credit better than it was before the declaration of bankruptcy.

Though bankruptcy has a long-term, negative overall impact on your credit score, it can still be a good decision for you if you have things creditors can take from you. Bankruptcy will keep them from hounding you, and give you some legal protection while you repay your remaining debts.  By declaring bankruptcy, you’ll enable yourself to get a fresh start financially, and go on to build a stronger credit history for yourself.

If you have questions regarding Chapter 7, Chapter 11, or Chapter 13 bankruptcy, lien stripping, wage garnishment, cram down, foreclosure, asset protection, or related issues, please call Red Hill Law Group PC, to schedule a no-charge face-to-face or phone consultation with an experienced Orange County bankruptcy lawyer.

We can be reached at 877-343-3289, or please use our contact form and you will be contacted within the next business day.

Download our Free E-Book, “Seven Bankruptcy Mistakes That Will Keep You Chained to Your Debt” here:

http://bankruptcyattorneyirvinesite.com

View our educational video series:

http://www.redhilllawgroup.com/orangecountybankruptcyattorney/

“A credit score is a shorthand reflection of the information on your credit report, sort of a “grade” you earn for doing things that impact your credit history. Paying bills on time, and doing other things that build your credit will give you a good credit score, while late payments and unpaid balances will give you a poor one,” says Bert Briones, an Irvine bankruptcy attorney .

In most situations, a credit score of less than 400 is considered poor, but some institutions will even consider a score of 500-600 less than desirable.

With a poor credit score, you are less likely to be approved for things like lines of credit and loans. You may even have trouble getting things like phone lines, cable, or other utilities. Some businesses may require customers with poor credit scores to pay a large initial deposit before giving them service. Others may refuse service entirely. You will have a very hard time purchasing a home, car, or anything else that requires a loan.

People who owe more money than they have in assets may wish to declare bankruptcy. This raises questions about how bankruptcy will impact their credit scores. Fortunately, in most cases, the news isn’t bad for them-by the time someone declares bankruptcy, there’s usually nowhere their credit score can go but up. In addition to that, the most widely used credit score, the FICO score, is calculated based on how someone matches up to other people in their demographic.

One of these demographics is reserved for bankruptcy filers, so people who have declared bankruptcy won’t be compared to people with good credit histories, only those who have also declared bankruptcy. As a result, filing bankruptcy may actually end up being a viable way to help improve your credit score, though it will still be virtually impossible to get a perfect score as long as bankruptcy is still present on your credit report.

After filing bankruptcy, there are other ways to help improve your credit score even more. The biggest one is to avoid the mistakes that caused you to declare bankruptcy in the first place. Obtain a credit card designed for people with poor credit, maintain a balance on it, and make more than the minimum payment each month. Pay all of your utility bills and mortgage payments on time. Over time, you’ll be able to rebuild your credit, and achieve a decent credit score.

If you have questions regarding Chapter 7, Chapter 11, or Chapter 13 bankruptcy, lien stripping, wage garnishment, cram down, foreclosure, asset protection, or related issues, please call Red Hill Law Group PC, to schedule a no-charge face-to-face or phone consultation with an experienced Orange County bankruptcy lawyer.

We can be reached at 877-343-3289, or please use our contact form and you will be contacted within the next business day.

Download our Free E-Book, “Seven Bankruptcy Mistakes That Will Keep You Chained to Your Debt” here:

http://bankruptcyattorneyirvinesite.com

View our educational video series:

http://www.redhilllawgroup.com/orangecountybankruptcyattorney/

“One of the biggest benefits to filing for bankruptcy is the fact that the debtor gains certain protections under bankruptcy law. This can help protect a person’s car, house, paycheck, and even their sanity,” says Bert Briones, an Irvine bankruptcy attorney.

Filing for bankruptcy protects a person’s assets by keeping creditors from being able to seize them. Chapter 13 bankruptcy does this by restructuring debt and creating a three-to-five-year-long repayment agreement that both debtor and creditors must adhere to.

Chapter 7 bankruptcy does this by eliminating debt by selling off some assets in order to pay it off. Though chapter 7 causes debtors to lose some of their assets, it protects their other ones, like their homes.

In certain situations, some creditors can garnish a person’s wages in order to repay their debt. Though this usually doesn’t impact things like welfare or social security payments, some debtors may need to take extra steps to protect these forms of income, as well. Filing for bankruptcy can stop wage garnishment in its tracks, allowing debtors to keep their entire paychecks instead of losing them to creditors.

Once a person files for bankruptcy, creditors are subject to a restraining order that prevents them from continually harassing that person. Though there are laws that determine what creditors are and are not allowed to do or say when contacting debtors, a lot of them don’t abide by these laws very well, and many debtors are still subject to undue harassment from unscrupulous collection agencies.

Filing for bankruptcy makes it contempt of a federal restraining order for creditors to continue to contact the filer. This makes it a very attractive option for people whose daily lives are being negatively impacted by the amount of phone calls and letters they receive from their creditors.

When it comes down to it, bankruptcy helps both debtors and creditors. It helps creditors by getting them their money, and helps debtors by protecting them from harassment, wage garnishment, and having their assets seized. Though the decision to file for bankruptcy is a serious one that has long term impact on a debtor’s credit history, it is ultimately beneficial for the people who have a lot to lose.

If you have questions regarding Chapter 7, Chapter 11, or Chapter 13 bankruptcy, lien stripping, wage garnishment, cram down, foreclosure, asset protection, or related issues, please call Red Hill Law Group PC, to schedule a no-charge face-to-face or phone consultation with an experienced Orange County bankruptcy lawyer.

We can be reached at 877-343-3289, or please use our contact form and you will be contacted within the next business day.

Download our Free E-Book, “Seven Bankruptcy Mistakes That Will Keep You Chained to Your Debt” here:

http://bankruptcyattorneyirvinesite.com

View our educational video series:

http://www.redhilllawgroup.com/orangecountybankruptcyattorney/

“A credit score is a shorthand reflection of the information on your credit report, sort of a “grade” you earn for doing things that impact your credit history,” says Bert Briones, an Irvine bankruptcy attorney.

Paying bills on time, and doing other things that build your credit will give you a good credit score, while late payments and unpaid balances will give you a poor one. In most situations, a credit score of less than 400 is considered poor, but some institutions will even consider a score of 500-600 less than desirable.

With a poor credit score, you are less likely to be approved for things like lines of credit and loans. You may even have trouble getting things like phone lines, cable, or other utilities. Some businesses may require customers with poor credit scores to pay a large initial deposit before giving them service. Others may refuse service entirely. You will have a very hard time purchasing a home, car, or anything else that requires a loan.

People who owe more money than they have in assets may wish to declare bankruptcy. This raises questions about how bankruptcy will impact their credit scores. Fortunately, in most cases, the news isn’t bad for them- by the time someone declares bankruptcy, there’s usually nowhere their credit score can go but up.

In addition to that, the most widely used credit score, the FICO score, is calculated based on how someone matches up to other people in their demographic. One of these demographics is reserved for bankruptcy filers, so people who have declared bankruptcy won’t be compared to people with good credit histories, only those who have also declared bankruptcy.

As a result, filing bankruptcy may actually end up being a viable way to help improve your credit score, though it will still be virtually impossible to get a perfect score as long as bankruptcy is still present on your credit report.

After filing bankruptcy, there are other ways to help improve your credit score even more. The biggest one is to avoid the mistakes that caused you to declare bankruptcy in the first place. Obtain a credit card designed for people with poor credit, maintain a balance on it, and make more than the minimum payment each month. Pay all of your utility bills and mortgage payments on time. Over time, you’ll be able to rebuild your credit, and achieve a decent credit score.

If you have questions regarding Chapter 7, Chapter 11, or Chapter 13 bankruptcy, lien stripping, wage garnishment, cram down, foreclosure, asset protection, or related issues, please call Red Hill Law Group PC, to schedule a no-charge face-to-face or phone consultation with an experienced Orange County bankruptcy lawyer.

We can be reached at 877-343-3289, or please use our contact form and you will be contacted within the next business day.

Download our Free E-Book, “Seven Bankruptcy Mistakes That Will Keep You Chained to Your Debt” here:

http://bankruptcyattorneyirvinesite.com

View our educational video series:

http://www.redhilllawgroup.com/orangecountybankruptcyattorney/

“Foreclosures seem to be an epidemic spreading across our country,” says Bert Briones,  of Red Hill Law Group PC, an Irvine, CA bankruptcy law firm, “and there are five important tips for keeping your home out of foreclosure.”

Don’t Ignore Your Mortgage Problem

If you are struggling to pay your mortgage, or have already missed payments, you should immediately contact your lender and work with them to resolve the problem.  The sooner you contact the lender, the more options that will be available to you. 

Be Prepared 

Before you talk to your lender, review your mortgage loan documents, your budget, and your income.  Knowing exactly where you stand financially is vital to negotiating an amount you can afford.  It may be wise to have an attorney assist you in your negotiations.

Know Your Options 

You should educate yourself, or have your attorney educate you, on what your options might be.  Figure out whether you need a short-term solution or a more permanent option.  It is possible the best option may be to sell your home. 

Make a Plan and Stick to it 

If you negotiate a new mortgage payment, be sure to pay it.  This may require you to eliminate optional expenses (like eating out or cable TV), but prioritizing your bills is essential.  You want to protect your credit score by making timely payments.

Beware of Foreclosure Rescue Scams 

Scam artists are popping up everywhere to provide “foreclosure counseling” services.  Before you work with anyone, do your research to confirm that they are legitimate.

If you have questions regarding Chapter 7, Chapter 11, or Chapter 13 bankruptcy, lien stripping, wage garnishment, cram down, foreclosure, asset protection, or related issues, please call Red Hill Law Group PC, to schedule a no-charge face-to-face or phone consultation with an experienced personal finance/bankruptcy attorney.

We can be reached at 877-343-3289, or please use our contact form and you will be contacted within the next business day.

Download our Free E-Book, “Seven Bankruptcy Mistakes That Will Keep You Chained to Your Debt” here:

http://bankruptcyattorneyirvinesite.com

The Bankruptcy Code was amended in 2005.  The amendment included the ‘Means Test’ for filing a Chapter 7 case.  The Means Test is a mathematical formula which determines whether a debtor’s bankruptcy petition should be assigned a “presumption of abuse” or not by the court. 

If a petition falls within the “presumption of abuse” range, the debtor has the burden to prove that the filing is not fraudulent.  If this burden is not met, the court may dismiss the Chapter 7 case.

The Means Test is applied to consumers whose majority of debt is consumer or personal debt (not business debt).  If a debtor’s income is below the state’s median income, the Means Test is not applied and there is no presumption of abuse.  Additionally, if the debtor is a disabled veteran and the debt was incurred primarily while on active duty (or related activities), the Means Test is not applied.

If the debtor is not a qualifying disabled veteran and his income exceeds the state’s median income for a household of their size, the means test is applied to determine if there is a presumption of abuse.  The Bankruptcy Code identifies numerous expenses to be deducted from the debtor’s income.  After those expenses are deducted, the amount is multiplied by 60.  If the result is under $10,000 or over $6000 and also amounting to 25% or more of your “non-priority, unsecured debt,” the court will presume that your filing is fraudulent.

As if the formula is not confusing enough, there are other factors to consider in the Means Test.  For instance, some expenses you are allowed to deduct from your income (education expenses, contributions to charity, etc.).  You must also determine whether debt is “priority/non-priority” and “secured/unsecured.”

Finally, if the court determines there is a presumption of abuse, that presumption can be rebutted by “special circumstances.”  Proving special circumstances typically requires the expertise of a bankruptcy attorney arguing there are reasonable reasons why the debtor’s income falls within a certain range and those reasons are not fraudulent.

If you have questions regarding Chapter 7, Chapter 11, or Chapter 13 bankruptcy, lien stripping, wage garnishment, cram down, foreclosure, asset protection, or related issues, please call Red Hill Law Group PC, to schedule a no-charge face-to-face or phone consultation with an experienced personal finance/bankruptcy attorney.

We can be reached at 877-343-3289, or please use our contact form and you will be contacted within the next business day.

Download our Free E-Book, “Seven Bankruptcy Mistakes That Will Keep You Chained to Your Debt” here:

http://bankruptcyattorneyirvinesite.com

“You often hear about filing a bankruptcy case and discharging debt, but what does this really mean?”, says Bert Briones, Principal Attorney at Red Hill Law Group PC, an Irvine, CA Bankruptcy law firm.

The term “discharging debt” means that the debtor’s personal liability for the discharged debts is removed.  A discharged debt is essentially eliminated.  A debtor receives his debt discharge order from the judge at the conclusion of the case. 

Once a debtor has been discharged, creditors may not take any collection action against the debtor for the discharged debts.

Dischargeable Debts

It is important to understand that not all debts are dischargeable.  Most unsecured debts (those not secured by collateral) are dischargeable.  However, the Bankruptcy Code excludes specific debts from discharge, depending on the chapter under which the debtor filed.

What Debts Are Typically Not Dischargeable?

Chapter 7 is one of the most common types of bankruptcy filed by consumers.  Under the Bankruptcy Code, there are nineteen different types of debts excluded from discharge.  Below is a list of some of the more common non-dischargeable debts under Chapter 7:

-  child support

-  alimony (spousal support)

-  most student loans

-  some tax debt

-  government fines

-  fines for injury caused by drunk driving

-  debts resulting from intentional property damage

-  debts the debtor did not include on the bankruptcy petition

The other type of bankruptcy commonly filed by consumers is a Chapter 13.  A Chapter 13 is less restrictive concerning the types of debts that may be discharged. Debts that may be discharged under Chapter 13 but not Chapter 7 include:

-  property-settlement debt from divorce or separation proceedings

-  debts resulting from intentional property damage

-  debts incurred to pay otherwise non-dischargeable tax obligations

If you have questions regarding Chapter 7, Chapter 11, or Chapter 13 bankruptcy, lien stripping, wage garnishment, cram down, foreclosure, asset protection, or related issues, please call Red Hill Law Group PC, to schedule a no-charge face-to-face or phone consultation with an experienced personal finance/bankruptcy attorney.

We can be reached at 877-343-3289, or please use our contact form and you will be contacted within the next business day.

Download our Free E-Book, “Seven Bankruptcy Mistakes That Will Keep You Chained to Your Debt” here:

http://bankruptcyattorneyirvinesite.com

“Many people are not aware of the many causes of debt that need to be avoided in the future,” says Bert Briones, a bankruptcy attorney with Red Hill Law Group PC, an Irvine, CA bankruptcy law firm.

Here are some major causes of debt that people are facing:

Poor Money Management

A monthly spending plan is very important. Without one you have no idea where your money is going. You may be spending hundreds of dollars unnecessarily each month and end up having to charge purchases on which you should have spent that money.

You will be surprised at how powerful you will feel when you are making thoughtful decisions about where and when to spend your money.

Underemployment

Are you underemployed and you have the mindset that it is only temporary?  Do not give yourself a false sense of relief.  Take your income and align your expenses with it.  Later, you can think about spending a bit more after some stability and longevity with your income.

Medical Expenses

High deductibles, coinsurance, coverage gaps, etc., can cause a major hit to your savings.  If your doctor accepts credit cards, it is not for your convenience.  They want to get paid immediately.  This becomes less risky for your medical provider, but can also create a huge problem with your financial situation.

Family Communication

Keep communication open between you and your spouse or significant other, as well as your children.  Ensure that your financial situation and spending goals are agreed upon.  Both of you need to be aware of all open credit accounts and keep each other informed about spending.  Some folks find out about accounts that they never knew existed.  Don’t let this happen to you.

If you have questions regarding Chapter 7, Chapter 11, or Chapter 13 bankruptcy, lien stripping, wage garnishment, cram down, foreclosure, asset protection, or related issues, please call Red Hill Law Group PC, to schedule a no-charge face-to-face or phone consultation with an experienced personal finance/bankruptcy attorney.

We can be reached at 877-343-3289, or please use our contact form and you will be contacted within the next business day.

Download our Free E-Book, “Seven Bankruptcy Mistakes That Will Keep You Chained to Your Debt” here:

http://bankruptcyattorneyirvinesite.com