Category Archives: Bankruptcy Help

Your Bankruptcy Consultation: The 3 Main Topics

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What happens at a bankruptcy consultation? The answer to this question is different depending on who the bankruptcy consultation is with, whether the consultation is in person or by phone, and what systems the bankruptcy attorney has set up for the consultation. I can give you some general insight as well as information about how I conduct my own bankruptcy consultations.

Consultation Fees

Many, but not all, bankruptcy attorneys do some sort of free consultation. The attorneys who don’t do free consultations aren’t necessarily more expensive; often, those attorneys feel that they are giving more value during the consultation phase, so they should charge a fee. Or they feel that they shouldn’t give away their time. There may be an incentive built into the consultation fee in the sense that the attorney may credit such a fee against the entire bankruptcy attorney fee if you hire them.

As of yet, I don’t charge bankruptcy consultation fees for the most part for a couple of reasons: First, I do all my bankruptcy consultations over a relatively short phone call and not in person. In-person consultations take up far more of my time and I always charge for those. This doesn’t mean that I do all my phone consultations for free. I may charge a small fee for other types of consultations, such as student-loan consultations, since I’m providing a lot of value during those sessions.

Second, I see the primary purpose of the bankruptcy phone consultation as determining whether your case is one that I am able to take. I ask enough questions to enable me to determine whether the case is one that I have the time for and whether it is of the type that I want to take. For example, if your primary reason for calling is to get help with keeping your home through a mortgage foreclosure, I’m probably not the lawyer for you, since I generally don’t like to take those cases. But I may have a good lawyer referral or two for you!

Discussing Your Situation

The facts of your particular financial situation will come up during the bankruptcy consultation. A variety of issues are relevant to your financial situation and to a potential bankruptcy case, the most basic of which are how much money you make and what kind of debts you would like to have discharged in bankruptcy.

Not by any stretch of the imagination are these the only two issues that will come into play in your bankruptcy case, but they are a good place to start. You should be psychologically prepared to answer all sorts of questions about your financial affairs that would be inappropriate in a social setting. Think about what you own that might have any resale value, how you incurred your debts, whether you are or have been involved in a business of any kind and with whom, whether your spouse has anything to say about you filing for bankruptcy, etc.

All the different factors that could possibly come into play regarding your financial situation are too numerous and varied to list here. Just remember that anything and everything impacting your overall financial situation is potentially relevant and don’t forget to bring it up with the bankruptcy attorney at some point.

Eligibility For Bankruptcy

One topic that’s relevant to every bankruptcy consultation is your eligibility for bankruptcy, which also ties into the question of which chapter you might file.

Sometimes, your financial goals might dictate which chapter you should file, such as saving a home from foreclosure, for example. But there’s also the question of which chapter you are eligible to file, if any.

During the bankruptcy consultation, the attorney might unearth information showing that you aren’t eligible for the chapter you had hoped to file, or that a different chapter of bankruptcy would be better for your situation. Or they might find that bankruptcy is a bad idea for you altogether.

If your gross (before tax) income is close to the line of eligibility, the attorney may want to run the means test for you. Running the means test is not simple or quick and you should expect to pay a fee for this process. In my practice, I roll this fee into the bankruptcy, if the client hires me to file their case.

Call to schedule a free telephone bankruptcy consultation with attorney Jennifer Weil at (201) 676-0722.

How To Keep Your Car Through Bankruptcy

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This focus of this post is how to keep your car through your bankruptcy. It’s based on my experience as a bankruptcy lawyer, from what I’ve seen happen in my clients’ cases over time. I’ve helped many people successfully keep their financed or leased cars through bankruptcy and beyond. And I’ve seen what happens when people don’t take the steps required to keep their car through bankruptcy.

If you follow the right steps, then you will have the ability to keep your financed or leased car through bankruptcy and thereafter.

Truth is, if you are making all of your car payments in full and on time, you can keep your car through the bankruptcy.

But there’s a trick to it. If your lender has been lenient, letting you make payments late by telling you it’s OK with them, they will not be OK with late payments once your bankruptcy is filed. Lenders become more strict when their customer has filed for bankruptcy. They will want their full payments on time each month, even if before they’d said that late payments were OK.

What happens if your payments are not in full and/or on time every month? Can the lender repossess? Once you are out of bankruptcy, yes – the lender can repossess your car. If you’ve been chronically late with payments, or even if you were late only one month, and you didn’t get all caught up before filing bankruptcy, you’ll face having your car repossessed.

Remember, a car loan is a type of secured debt. This means that if you don’t make your car payments in full and on time, the lender can take the car back. The same is true of a leased car. In fact, repossession may be the lender’s only remedy after you have taken the car loan through the bankruptcy.

The first lesson here is that if you haven’t been strictly making your full car payment on time every month, now’s the time to catch up completely – before your bankruptcy case gets filed. If you don’t, you might be looking at repossession after the bankruptcy is over with.

A second lesson in all this is that if you are having trouble keeping up with your car payments, now is a good time to take a long, hard look at whether this particular car loan is a good idea for you to keep dealing with. Bankruptcy will provide an opportunity to discharge your car loan. If the payments are just too much, or if the car keeps having problems, bankruptcy can allow you to get rid of the car and its loan and, once your case is finished, to pick up a different car, if you need one.

How to keep your car through bankruptcy is not such a mystery. And it isn’t difficult, either. Successfully keeping your car through your bankruptcy case takes a little planning and attention to detail before you file the bankruptcy case.

Mapping out your bankruptcy before you file is arguably the most important part of filing for bankruptcy, because it is the best way to ensure that your bankruptcy case will go smoothly. Ideally, you should never be in a rush to file a bankruptcy case, because that’s when important details get lost, like catching up on your car payments so that you don’t face losing that car after your bankruptcy case is over.

Game plan your personal strategy to keep – or to get rid of – your car through your bankruptcy. Call (201) 676-0722 to schedule a phone appointment to discuss it with attorney Jennifer Weil.

How To Afford Bankruptcy

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A lot of people think that if they can’t afford their credit card payments, then they can’t afford bankruptcy. But this isn’t necessarily true.

How To Afford Bankruptcy: Stop Paying Credit Cards

The way to afford bankruptcy often is to stop making your credit-card payments and to use that money for your bankruptcy. After all, you are throwing money out the window by paying on credit cards if you are going to file for bankruptcy anyway.

Decide If Bankruptcy Is Right For You

If you’re still in good standing on all your credit cards, it’s best to be sure that bankruptcy is the solution for you, before you stop paying on all your credit cards. The way to do that is to do your research and to talk with an experienced bankruptcy attorney who is familiar with all the different solutions for your debt problems. Most bankruptcy attorneys can evaluate your situation and tell you whether bankruptcy is a good idea for you and if it’s not, they can recommend other solutions.

Decide If Debt Settlement Is Right For You

Keep in mind that a non-bankruptcy solution such as debt settlement will also involve stopping payments on credit cards, although you have the option of stopping one or two at a time instead of all of them. And debt settlement is often more expensive than bankruptcy, depending on your individual situation.

Get The Money From A Relative

Another way to afford bankruptcy is to obtain the money from a relative who is willing to give it to you.

Can You Qualify For Free Legal Services?

There are legal services organizations out there who will refer you to an attorney that will do your bankruptcy for free, if your income meets a certain low threshold.

Explore your options. Contact attorney Jennifer Weil to schedule a free telephone consultation: (201) 676-0722. Or you can schedule your own consultation online at my Setmore page.

How To Kick Start The Bankruptcy Process

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(Note: This is an update of a post from 2010 that many people found useful in beginning the bankruptcy process.)

How do you kick start the bankruptcy process? Most people want to get their bankruptcy case done as quickly as possible. To start, your bankruptcy attorney will ask you for a list of documents and information. It would help move things along faster if you knew what to gather right away.

Here’s a list of items to gather for your bankruptcy attorney:

1. Your last 6 months’ worth of pay stubs or other proof of income;

2. The details of your last bankruptcy filing, if any, including the date, place, and chapter of filing and the case number;

3. Gather your last 3 to 6 months’ of bank statements from all accounts, including checking, savings, retirement, CDs, IRAs, investment accounts, money market accounts, etc.;

4. Get a copy of your TransUnion credit report from www.annualcreditreport.com;

5. Gather all the collection letters that you have received in the past few months;

6. Gather all the bills that you are behind in paying that do not show up on your credit report;

7. Gather basic information on these types of debt (if you still owe them, even if you’re current on payments): Student loans, back taxes, alimony, child support, criminal fines and restitution; debts resulting from fraud; and divorce or property settlement debt;

8. Gather information regarding any cash advances or balance transfers you had in the past few months;

9. Get a copy of last year’s tax return or tax transcript;

10. Gather information on all of your most valuable property;

11. If your last year’s tax filing is overdue, file that return so the amount you owe or the refund you are owed can be determined;

12. If you own real property, gather the deed and mortgage and home equity loan papers;

13. If you have a car, get the last lease or financing bill for that car, if you’re still paying on it;

14. If you have any secured debt, gather the papers relating to it;

15. Copy your picture ID and your Social Security card or other proof of your Social Security number;

Remember, disclosure is a key to a successful bankruptcy case. If you don’t disclose, you may not get all the exemptions to which you are entitled. Tell your bankruptcy lawyer everything about your financial situation, especially if you borrowed money from a relative.

If you are in New Jersey and considering bankruptcy, please call Jennifer Weil to schedule a free telephone consultation on my Setmore site or at 201-676-0722.

How To Increase Your Credit Score After Bankruptcy

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So many people who are in debt are concerned about the impact of bankruptcy on their credit reports that they hesitate to file for bankruptcy. People are afraid that their credit will never recover from bankruptcy, especially since they know that a bankruptcy will be on their credit reports for ten years.

Does Bankruptcy Ruin Your Credit?

Because of the common view that bankruptcy ruins credit, I started paying attention to the post-bankruptcy credit reports of my clients, especially those clients who had gone through a Chapter 7. I started asking them to tell me about what credit offers they received, if any, right after their bankruptcy case ended. If they took those new credit offers, I wanted to hear what the freebie credit score estimators like Credit Karma (ad) said about their credit scores.

Surprisingly, these clients mostly received offers of new credit right after their Chapter 7 bankruptcy case was over. The offers were not great – often, they were for secured credit card accounts with low limits – but the point here is that my post-discharge Chapter 7 clients were receiving unsolicited offers of credit.

Not all of these post-bankruptcy clients accepted offers of new credit. When these clients checked their credit reports months after their bankruptcy cases were over, there was virtually no change. Their credit scores of those who had not accepted new credit offers had taken a hit from the bankruptcy itself, but then those scores hadn’t changed.

Steps To Improving Your Credit

However, there was significant improvement in the credit scores of post-bankruptcy clients who had accepted and used offers of new credit. The elements of building back up your credit score are key:

  • Clear out the bad debts from your credit reports (hint: debt settlement often doesn’t help);
  • Then accept offers of new credit – don’t go overboard here, because next…
  • You’ll need to use the new credit accounts, so don’t charge any more than you can easily pay off, in full and on time, each and every month. Even if you only charge $20 a month, that’s fine;
  • As your credit improves, accept the new, better credit offers that you receive;
  • Keep paying off your credit cards in full and on time every month.

After you’ve used bankruptcy to clear out your old, bad debts, you would use the above method to build your credit score back up.

How Debt Settlement Affects Your Credit

The above process is usually much faster than debt settlement, since debt settlement involves paying large amounts to creditors over time and then waiting 7 1/2 years for those bad debts to fall off your credit reports. The timeline may not matter for people whose bad debts have already fallen off their credit reports, but unless you fall into that category, you may want to speed things up.

Looking for bankruptcy help? Make a telephone appointment with attorney Jennifer Weil at (201) 676-0722. Or you can schedule your own phone appointment here.

The 2 Biggest Bankruptcy Myths, or: How Long Does A Chapter 7 Bankruptcy Stay On Your Credit Report?

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The question of how long a Chapter 7 bankruptcy stays on your credit report is one I get all the time. The short answer is 10 years. But the real reason that people ask me this question is because they’ve heard that a bankruptcy, especially a Chapter 7 bankruptcy, destroys the credit report for as long as it appears on their credit report, or even permanently. However, this reflects a couple of fundamental misunderstandings about the impact of bankruptcy on your credit report.

Myth #1: Chapter 7 Bankruptcy Destroys Your Credit

Simply put, it isn’t true that Chapter 7 bankruptcy, or any chapter of bankruptcy, destroys your credit. Your credit score takes an initial hit of several points as a result of the Chapter 7 being filed. But in saying that a Chapter 7 “destroys your credit,” you are giving too much power to bankruptcy – even more power than your bad debts have. It’s not possible for bankruptcy to “destroy” your credit report. What does it even mean for something to destroy your credit?

Let’s examine this belief: Does it mean that, when you apply for credit after bankruptcy, the decision maker will see that you filed for bankruptcy and automatically deny you? That’s just not true, but let’s assume for a moment that it is, and work through it logically.

Let’s start with basic facts: You have unmanageable credit card debt. Either all of that credit card debt shows up on your credit report, or it doesn’t because it’s business debt or because it’s pretty old. If it shows up, your credit report already looks bad because your debt-to-income ratio is bad and/or one or more accounts shows as being in default. But whether the debt appears on your credit report or not, you are living under the threat of debt collection, which includes debt-collection lawsuits. If you get sued for a debt and get a judgment against you, you could be subject to bank levy and/or wage garnishment. That’s even worse for your income and credit; it deprives you of full control over your income and your bank account.

Let’s say that instead of keeping these unmanageable debts on your credit report, instead of subjecting yourself to debt-collection lawsuits, you qualify and file for a Chapter 7 bankruptcy and you get all those credit-card debts discharged. How does your credit report look then? Yes, the bankruptcy shows up. Yes, all your credit-card accounts show up…but NOT as owing any balances. Instead, they show up as “$0 owed, discharged in bankruptcy” or something similar.

How does the sudden lack of debt affect your credit report? Positively, to be sure. Your debt-to-income ratio, which looked pretty bad just a few months before, looks a lot better after all that debt is wiped out in bankruptcy. Any creditor, such as a mortgage company, who is interested in how much debt you’re carrying, will see that you have several $0 balances, instead of credit-card balances totaling $20,000, $30,000 or more. Owing $0 gives you more money to put toward other things, such as a new mortgage, than owing $30,000 or more on credit cards. Mortgage companies know this.

Yes, there’s a waiting period of a couple years after bankruptcy before you can qualify for a mortgage, but that waiting period is shorter than the amount of time that bad (defaulted) credit-card debt stays on your credit report. Bad debt generally stays on your credit for 7 1/2 years. Which one do you think looks “better”? Seven and a half years of owing a ton of unmanageable credit card debt, or a Chapter 7 bankruptcy notation with no credit card debt at all? If you said the former, then you really need to put yourself in the shoes of creditors and re-examine your financial belief system.

Myth #2: Chapter 7 Bankruptcy Looks Worse on Your Credit Than Chapter 13 Bankruptcy

The basis of the myth that Chapter 13 bankruptcy looks better on your credit report than Chapter 7 bankruptcy comes from the idea that it is better to repay your debts, even partially, and Chapter 13 allows you to do that.

While it’s true that any individual creditor could choose to look more favorably on Chapter 13 for this reason, it’s a myth to believe that a Chapter 13 is always better for your credit. In fact, a Chapter 7 bankruptcy can be better for your credit in that it ends more quickly. To be successful, a Chapter 13 bankruptcy must last either 3 years or 5 years, which is the length of your plan. For each month of your Chapter 13 plan, you pay 100% of your disposable monthly income into the plan.

Either chapter of bankruptcy may be used as a method of solving your debt problems. It’s helpful to keep that in mind: Bankruptcy is a solution, not a way of making your debt problems worse. Don’t let the myths override your ability to rationally think about your financial situation.

For help rationally thinking about solutions to your debt problems, call (201) 676-0722 to schedule a specific day and time to have a discussion with attorney Jennifer Weil, or email weilattorney@gmail.com.

How To Solve Your Debt Problems: Making the Decision

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Many people will tell you that one type of solution for debt problems is better than others for several reasons: They’ll say that one solution is the best for your credit report; that one solution is cheaper than others; and even that morality favors one solution over others.

Considering Your Options

But when you are considering what to do about our overwhelming debt, it’s best to consider all of your options. That’s the only way to know what works best for you. You’ll want to avoid the disappointment that happens after you decide on an option and implement it, only to discover that it wasn’t the right way to go, especially after finding out about another solution that would’ve been a lot better.

When you’re solving debt problems, you need to consider all the relevant information up front in order to decide what’s right for you. Once you’ve chosen a path to solve those debt problems, it’s difficult, if not impossible, to go back and opt for a different solution.

How to Find The Right Solution For You

Finding the right solution means examining your entire financial situation, looking at everything you own and everything you owe. Then look at how all the available solutions would apply to your situation. Don’t leave out any potential solutions, no matter how crazy they sound: Compare the likely results of debt settlement, Chapter 7 bankruptcy, Chapter 13 bankruptcy, and of doing nothing at all. What are the effects of each solution on your overall financial health? On your credit? How much could each one cost, both over the long term and over the short term?

How To Gather Information

Make sure that you’re examining and comparing the facts of how each solution actually applies to your situation, not your hopes and fears around each of them. Get advice from people who know what happens when each solution is applied to your type of financial situation. Talk to someone who actually settles debts, not just someone who used a debt-settlement company or who works to sell a company’s debt-settlement services. Find out if that debt-settlement company you’re considering is operating legally in the State of New Jersey.

Talk to one or more bankruptcy attorneys. Find out if you qualify for bankruptcy. Find out what would happen to your financial situation under each of the different chapters of bankruptcy. Ask them what might happen if you sat back and did nothing. It might sound crazy, but doing nothing is a viable solution for some people.

When To Lay Out Your Hopes And Fears

Only after you objectively consider the facts, can you decide whether your hopes and fears are grounded in fact. Do your research. Talk to professionals who have seen situations like yours and who have seen the outcomes of the various solutions. Then decide.

If you need to speak with a professional who has helped others file bankruptcy, settle debts, and guided others in doing “nothing” about their debts, call and schedule a phone consultation with attorney Jennifer Weil at (201) 676-0722 or schedule your own phone call at my Setmore page.

Struggling to Make Minimum Credit Card Payments? Explore Your Options

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Struggling to make minimum payments on your credit card debt and unable to save any money? You may want to consider bankruptcy as an option for debt relief. If your credit card debt has become overwhelming, debt settlement and bankruptcy are the two main options for financial relief.

While debt settlement may seem like an attractive option, it can often be more expensive than bankruptcy. You will have to pay back at least a portion of your debt, and there’s no protection from debt collection lawsuits.

On the other hand, filing for bankruptcy offers protection from debt collection activities such as lawsuits. With Chapter 7 bankruptcy, you may be able to have your entire credit card debt discharged for the cost of attorney fees and filing fees. If you file for Chapter 13, you’ll pay back a portion of your debt under the protection of bankruptcy from debt collection activity.

It’s important to weigh your options and consider the financial and legal implications before making a decision on debt relief. Contact a bankruptcy attorney to discuss your options and determine if bankruptcy is the right choice for you.

Do you have questions about whether you should file for bankruptcy? Schedule a phone consultation with attorney Jennifer Weil on the Setmore page.

The 4 Conditions for Discharging Tax Debt in Bankruptcy

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Income tax debt is the only type of tax debt that may be dischargeable in bankruptcy. To meet the requirements for discharge, the debt must fulfill the following 4 conditions. Understanding these conditions is key to determining if your tax debt can be discharged in a Chapter 7 bankruptcy.

  1. Three Years Since Tax Return Due Date: The taxing authority, such as the IRS, has three years from the date the tax return was due to collect the income tax debt. This time period is based on the fixed date of the tax return filing and is not affected by the taxpayer’s actions or the tax authority’s actions.
  2. Two Years Since Tax Return Filed: The second condition measures the time since the tax return was actually filed by the taxpayer. The dischargeability of the debt may depend on the state in which the taxpayer resides, as some states allow for late tax returns to still be discharged if at least two years have passed since the filing.
  3. 240 Days Since Assessment: Assessment is the tax authority‘s formal determination of the taxpayer’s tax liability. The 240-day period begins after the tax has been assessed, allowing the tax authority time to collect the debt if it was delayed during an audit or offer-in-compromise process.
  4. Fraudulent Tax Returns and Tax Evasion: If the taxpayer was intentionally dishonest on their tax return or tried to avoid paying taxes, the tax authority has no opportunity to collect the debt, and it cannot be discharged in bankruptcy.

It’s important to note that if the tax debt does not meet all four of these conditions, it may not be dischargeable in bankruptcy. Additionally, taxes from operating a business, non-income taxes, and taxes with recorded tax liens may also not be dischargeable.

By understanding these four conditions, taxpayers can make informed decisions regarding the dischargeability of their tax debt in bankruptcy.

Book a free telephone consultation with attorney Jennifer N. Weil here: https://jenniferweil07030.setmore.com/.

Discharging Income Taxes In Bankruptcy

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Introduction

Dispelling common myths surrounding income-tax debts is crucial for making informed financial decisions. While Chapter 13 bankruptcy is often associated with a prolonged repayment plan, the reality is that various options exist, and each individual’s situation is unique. Let’s explore the truth behind these myths and how a personalized approach can guide you towards the most effective solution.

Myth 1: Chapter 13 is the Only Solution for Income-Tax Debts

Contrary to popular belief, filing for Chapter 13 bankruptcy isn’t the sole solution for handling income-tax debts. The myth persists because Chapter 13 is indeed an excellent option for certain cases. However, the key lies in understanding the specifics of your situation, which requires a tailored evaluation by an experienced attorney.

Myth 2: Income Tax Debts Cannot Be Discharged in Bankruptcy

While it’s true that not all income-tax debts are dischargeable, the blanket statement that they cannot be discharged is a myth. There are conditions that, if met, allow for the discharge of income-tax debts. An attorney, equipped with your tax account transcripts, can assess each tax year individually to determine eligibility for discharge.

Navigating Chapter 7 vs. Chapter 13

Determining whether Chapter 7 or Chapter 13 is more suitable depends on various factors, including the recency of the income-tax debt. Chapter 13 may be preferable for recent debts, offering a chance to avoid penalties and interest. However, if most of your tax debts are dischargeable, Chapter 7 might be a more favorable option based on your overall financial circumstances.

Conditions for Discharging Income Tax Debt

Understanding the conditions for discharging income-tax debt in Chapter 7 is crucial. This includes meeting criteria such as the tax return due date, filing date, assessment period, and avoiding fraudulent activities. These factors, when evaluated by an attorney, contribute to a well-informed decision.

Conclusion

Debunking myths and understanding the nuanced conditions for dealing with income-tax debts requires a personalized approach. Consultation with a knowledgeable attorney, like Jennifer Weil, Esq., ensures a thorough evaluation of your specific circumstances.

Schedule a free bankruptcy consultation with Jennifer Weil, a New Jersey bankruptcy attorney, to discuss your options.