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Tuesday, June 23rd, 2009

The Case For Bankruptcy Lawyers

Rick Bloom, a financial advisor and columnist with the Detroit-area Observer & Eccentric, had some direct and stern words for a reader that recently wrote in and asked if he should represent himself when filing bankruptcy.

The reader was concerned about the bankruptcy lawyer's fees. He found some Web sites to help him with the paper work and was considering trying it himself. Naturally, if you're considering filing bankruptcy money can be tight.

But Bloom didn't mince words when offering his take:

I think it is a lousy idea for people to handle their own bankruptcy.

He offered lots of reasons, but perhaps the most compelling:

If you fail to dot all of the “I's” and cross all of the “T's,” you may find you did not get the results you desire and that could lead to problems. After all, your creditors, whether they are a charge card company or a bank, are going to have lawyers represent them. You are at a severe disadvantage if they have an attorney and you don't.

If you are concerned about the costs of filing bankruptcy, there are a few things that you can do:

  • Speak with an attorney about fees. As Bloom points out, your lawyer should be able to give you a "good faith estimate" of the costs associated with filing.
  • Speak with the local state bar association. Depending on the circumstances, this governing body for bankruptcy lawyers may be able to provide support.
  • You need to be comfortable discussing matters with your bankruptcy attorney, especially money matters. If you aren't comfortable with your lawyer, find one that suits you better.

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Posted in Find a Bankruptcy Lawyer | 1 Comment »

Thursday, April 9th, 2009

After Filing Bankruptcy: Attempting to Collect Discharged Debts Is Illegal!

When you receive your bankruptcy discharge, you are legally excused from responsibility for any debts that have been discharged.

Unfortunately, some unscrupulous creditors count on people filing bankruptcy not knowing how far their protection extends and attempt to collect on debts after the court has excused them.

Don’t Pay What You Don’t Owe

The fresh start granted to you by the court protects you from the following.

  • Mail contact from creditors: Letters indicating that payment is due are prohibited; if you receive any, show them to your attorney.
  • Phone calls from creditors: Again, you have no obligation to pay discharged debts. Contact from creditors asking you to do so is forbidden. Record the time and date of any such calls.
  • Lawsuits from creditors: Because you no longer owe money on discharged debts, creditors have no legal recourse to collect them.
  • Failure to update your credit report: Creditors that threaten to continue reporting a discharged debt as unpaid to scare you into paying it are breaking the law. Be sure to check your credit report for accuracy and note any wrong information you see.

Why Creditors Attempt Collection

Put simply, creditors stand to make money by attempting to collect on debts you don’t owe.

If you pay them, they get cash they otherwise wouldn’t have.

In some cases, the people or groups attempting to collect aren’t even your original creditors! Here’s why:

  • Say you owed one credit card company $1,000, but the debt was discharged in bankruptcy. You now owe the company $0, which is how much they can legally collect from you.
  • A third party collector may offer to buy your debt from the credit card company for, say, $10 for the privilege of “owning” the discharged debt. The credit card company may agree, since $10 is more than $0, so they technically make a profit.
  • The collector can then hound you about paying the debt, even though you no longer have any legal obligation to do so. If you end up paying, they make $990. If not, they only lose $10.
  • Because enough bankruptcy filers are unaware that they don’t have to pay these debts (or feel somehow guilty about not having paid them), many pay. This makes the illegal debt collection profitable even when some people refuse to pay.

Contact a Bankruptcy Lawyer

If any of your creditors tries to collect on this “zombie debt,” you have the right to contact a bankruptcy lawyer.

You have rights and can take action to protect them – that’s what the fresh start is all about!

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Posted in Post-Bankruptcy Debtor Education | 3 Comments »

Wednesday, April 8th, 2009

Assert Your Rights As a Consumer

Unfortunately, a recent report from the FBI suggests that cyber crimes increased as much as 33 percent last year.

This means that, as a consumer, you need to take steps to protect yourself and know what you can do if you’re victimized by online fraud.

Fair Credit Reporting Act

This law gives you the right to access your credit report for free and to challenge any incorrect information you see there.

Staying abreast of the information on your credit report is one of the best ways to make sure you aren’t victimized by identity theft and other cyber crimes. Just follow these steps:

  • Go to www.annualcreditreport.com and request a free credit report from Equifax, Experian and TransUnion once every year. (You may want to request one every four every four months, or all three at once.)
  • Check the information against your own records. If you notice any inaccuracies on your report, contact the agency immediately.
  • Be sure you file all complaints in writing and persist until the matter has been handled appropriately.

Incorrect information on your credit report can harm your overall credit rating – when you apply for loans or credit cards, you may be offered higher interest rates than you would have been otherwise or even be denied a loan entirely.

Truth in Lending Act

This law is designed to protect consumers in credit transactions.

Lenders are required to disclose specific information about loans (including interest rates, payment periods, late fees and more).

When lenders don’t comply with the terms of this law, your rights have been violated and you may want to take action.

Fair Debt Collection Practices Act

Creditors must adhere to strict rules when trying to collect money from you: they’re limited to calling between certain hours of the day, prohibited from certain types of contact altogether and forbidden to deceive you in order to collect money.

How to Know If You’ve Been Victimized

Besides these two acts, the government has outlined housing acts, credit reporting acts and others to make sure you get a fair shake in the world of credit. But how can you be sure you’re taking the right steps?

Consulting with a bankruptcy lawyer familiar with the laws in your state can be an effective way to make sure your rights as a consumer are recognized and, if they aren’t, to take appropriate legal action.

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Posted in Financial Literacy | No Comments »

Thursday, April 2nd, 2009

Credit After Filing Bankruptcy: Steps to Success

Credit traps are dangerous to everyone, but they can be especially damaging to those trying to rebuild credit after filing bankruptcy.

As you work your way to financial health, make sure you steer clear of these common post-bankruptcy pitfalls.

  1. Failing to Plan: When you receive your bankruptcy discharge, you’ll likely be debt-free; but that will only last as long as you spend less than you make. It may sound simple, but many people forget that continued financial health depends on continual, conscious planning.

Solution: Make sure you develop a budget and stick with it.

  1. Slipping into Old Habits: If you’re like most Americans, you needed bankruptcy protection because some crisis (like divorce, death, layoff, injury or a lawsuit) pushed you over the edge; but you may have also had financial habits that left you unable to weather a storm: over-reliance on credit cards, use of payday loans, having little or no savings, etc. After bankruptcy, it’s more important than ever to avoid such costly sources of credit.

Solution: Take advantage of the tips offered in the financial management course you’ll take during your bankruptcy – they’re designed to help you stay out of debt!

  1. Credit Repair Scams: Solutions that promise to wipe out bad credit, erase your credit history or achieve any other feat that seems too good to be true should be avoided. There’s no quick way to improve your credit and most offers of this type will likely cost you money and hurt your credit.

Solution: Take the slow-and-steady route to better credit: pay off your bills every month, don’t open more credit cards than you need and stick with your budget. Over the course of a couple years, you should see your credit improve.

  1. Picking the Wrong Plastic: As you rebuild your credit, you’ll want to open a credit card account. But be wary of the offers you receive in the mail. Your post-bankruptcy status may mean you’ll have to pay higher interest rates or fees than a borrower with stronger credit, but don’t settle for shoddy terms. Know which credit cards to avoid.

Solution: Consult with your bankruptcy lawyer if you’re not sure about the terms of a credit card agreement and consider visiting a site like bestcreditcards.com to see the variety of options available to you.

With some planning, discipline and perseverance, YOU CAN rebuild your credit after filing bankruptcy.

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Posted in Post-Bankruptcy Debtor Education | 1 Comment »

Monday, March 9th, 2009

Protect Your Credit Identity - Monitor Your Credit Report

The crime of identity theft occurs when someone uses another person’s identifying information (including Social Security Number, account numbers and credit card information) to make fraudulent transactions.

Unfortunately, the same technological advances that allow us to pay bills, shop and bank over the Internet also offer identity thieves opportunities to steal our data.

What Happens if My Identity is Stolen?

If you’re victimized by an identity thief, you may find your finances thrown into turmoil – and, depending on how quickly you realize the problem, you may have quite a headache in store.

Identity thieves can do many things, including:

  • make purchases with your credit cards
  • pose as you during a criminal arrest
  • use your SSN to pose as you during everyday life
  • obtain lines of credit using your information

Preventing Identity Theft

There’s no surefire way to prevent identity theft, but you can take steps to make sure you protect yourself as much as possible, including the following.

  1. Check your credit report! This is the single most important preventive measure you can take. Visit www.annualcreditreport.com for a truly free credit report from major reporting bureaus. This report will include information about action on all of your accounts. You’ll be able to see any suspicious activity – and take care of it immediately.
  2. Avoid phishing scams. Be cautious about e-mails. Many scammers pose as legitimate banks or lenders and request personal information for “verification” purposes. Never send sensitive information unless you are SURE you know where it’s going and that it’s secure.
  3. Treat your SSN like gold. Some people, like lenders and employers, actually need your Social Security Number; but most do not. If you’re uncomfortable about giving out your Social Security Number, ask how it will be used and why it’s needed. If you still feel uncomfortable, withhold that information. It is generally considered best practice to never give it out over the internet.
  4. Shred your important mail. Once you’re finished with credit card offers, bank statements, medical reports and other important mail, shred them. Shredding is an easy and effective way to prevent identity thieves from getting their hands on your information.

If you've been a victim of identity theft, a bankruptcy lawyer may be able to help you sort things out.

Learn more about how filing for bankruptcy may help you.

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Posted in Find a Bankruptcy Lawyer, Identity Theft | 1 Comment »

Wednesday, February 18th, 2009

Filing Bankruptcy? What to Look for in a Bankruptcy Lawyer

Here’s some things keep in mind when you’re shopping for a bankruptcy lawyer:

  • Shop around. Interview a few bankruptcy lawyers before making a decision. Many offer free consultations (be sure to ask), which will give you a chance to meet a few before selecting one.
  • Ask some questions. Don’t waste your introduction to them – get information that will help you make your decision by asking questions like:
    • How long has the bankruptcy lawyer been practicing?
    • What types of the cases does he/she have experience in?
    • Does he/she offer client references?
    • How much experience does he/she have with your type of bankruptcy case?
  • Don’t shy away from finances. It’s okay to ask how much your case will cost and it will demonstrate that you’ve thought through the bankruptcy process. Try to find out:
    • Whether the bankruptcy attorney charges hourly or by case
    • Whether installment payments are accepted
    • Whether you’ll receive itemized bills
    • Whether you can get an estimate
  • Find out who will work on your case. Don’t shy away from asking who will be responsible for your case. After all, you’re footing the bill and you should be kept informed about what is going on.
  • Accept referrals. If a bankruptcy lawyer refers you to someone else, don’t take offense. He or she likely has good reasons for doing so, like too large a workload to give your case proper attention or insufficient experience with a case like yours.
  • Offer to help. While your attorney may handle most of the paperwork and court-related documents, he or she may need you to collect receipts, find tax returns or complete other tasks. Letting your bankruptcy attorney know you’re engaged and ready to help will set the stage for a cooperative case.

Contact a Local Bankruptcy Attorney Today

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Posted in Find a Bankruptcy Lawyer | 1 Comment »

Friday, February 13th, 2009

Filing Bankruptcy FAQs: Get Your Bankruptcy Questions Answered

If you’re considering filing bankruptcy, you probably have many questions on your mind.

Take a look at these frequently asked questions about bankruptcy to learn the answers you may need to move forward.

  • Do I need a bankruptcy lawyer? Since the introduction of the new bankruptcy law in 2005 (BAPCPA, or the Bankruptcy Abuse Prevention and Consumer Protection Act), filing for bankruptcy has been much more difficult. Because you need to fill out vast amounts of paperwork, meet strict deadlines and file reams of paperwork with the court, you should consider working with a bankruptcy lawyer.
  • What is the automatic stay? The automatic stay is one of the most powerful protections bankruptcy offers. It works by preventing your creditors from taking any collection action against you and lasts throughout the duration of your bankruptcy case, as long as you adhere to the rules set up by the court.
  • Can bankruptcy prevent foreclosure? Foreclosure is considered a form of collection, so when you file for bankruptcy, foreclosure can be prevented by the automatic stay. Because Chapter 13 bankruptcy cases last for three to five years, you may be able to prevent the foreclosure of your home long enough to make other plans or catch up on your mortgage payments.
  • How do I know if bankruptcy is right for me? A bankruptcy lawyer can help you make this important decision, but you can help yourself by doing some research on your own. You can find lots of useful information on both Chapter 7 bankruptcy and Chapter 13 bankruptcy on Total Bankruptcy’s web site.
  • What are the bankruptcy laws in my state? Technically, bankruptcy is ruled at the federal level, so laws are the same across the country. Each state, though, has different Chapter 7 exemptions, which determine what property you can hang on to if you decide to file under Chapter 7 of the U.S. Bankruptcy Code. Check out your state bankruptcy laws.

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Posted in Setting the Record Straight about Bankruptcy | 3 Comments »

Tuesday, January 27th, 2009

10 Hot Tips to Save Cold-Hard Cash

In today’s economy, we all need to save money when we have the opportunity to do so.

While it’s not always easy, there are ways you can spend less and use your savings to pay down debts and grow your savings and retirement accounts.

Here are some pain-free money-saving tips that can really help gather the green in your wallet.

1) Make a shopping list and vow to stick to it. By sticking to your list, you can avoid impulse buys.

2) Use draft dodgers at doorways and apply weather-stripping and caulk around windows to keep heating and cooling costs under control.

3) Slow down on the Internet. Most people don't need the fastest (and priciest) Internet connections. You may be able to save a few dollars a month by bumping the speed down a notch - and you'll probably never notice a difference.

4) Visit your local library. Rather than buying paperbacks and magazines, utilize the library for your literary needs (and you can often rent movies for free from there too!)

5) Clip grocery coupons and shop on double-coupon days. These pennies off can really add up.

6) Eliminate your landline phones. Ditch this service and save $30 - $50 a month.

7) Unplug electronics when not in use. Even when you're not using your gadgets, they're still using energy that you pay for - so unplug them to save up to $256 a year.

8) Share a ride, bike or walk. (Are you noticing that some of these ideas will not only save you money, but are good for the environment as well?)

9) Negotiate rates with your cable company. The Wall Street Journal recently reported that some companies will offer to cut your bill to keep you as a customer.

10) Change your light bulbs. According to the EPA, if every household in the U.S. replaced a single traditional light bulb with a compact fluorescent one, it would result in a collective $600 million annual savings on utility bills.

Are You Living A Budget-Conscious Life But Still Having a Hard Time Making Ends Meet?

If you've tried everything to try to save money and repay your debt, filing bankruptcy may be a debt-relief option for you.

Check out our bankruptcy information portal Bankruptcy 101 and talk to a bankruptcy lawyer today about your options.

We'll connect you--for free and with no obligation--to a bankruptcy lawyer in your area.

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Posted in Bankruptcy and the Economy | No Comments »

Monday, March 26th, 2007

Courts Recognize Dangers of Filing for Bankruptcy On Your Own

MarketplaceMoney has an interesting story about the pitfalls of filing for bankruptcy without representation.  One U.S. Bankruptcy Court was so concerned about the mistakes made by pro bono debtors in bankruptcy--mistakes that can cause serious problems like the loss of the automatic stay protection or dismissals that in some cases result in the loss of homes or vehicles--that it created a position for a special clerk simply to help people who aren't represented by counsel.

Even in that court, though, the clerk can't give legal advice--and she says that she often ends up persuading pro bono bankruptcy petitioners that they need legal help after looking over their paperwork.

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Posted in Bankruptcy Courts | No Comments »

Wednesday, January 31st, 2007

Can’t I Just File My Own Bankruptcy?

The law certainly allows you to file your own bankruptcy petition, and you can even find forms with which to do so--but it can be a stressful experience and a risky proposition if you don't thoroughly understand the timing, requirements, procedures and terminology associated with a bankruptcy filing.   A local bankruptcy attorney can help you to untangle the requirements and choose the type of bankruptcy case most suitable to your circumstances.

The New York Bankruptcy & Consumer Law Blog has an enlightening post this week about some of the things the average person would never consider that can derail a bankruptcy case.

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Posted in Bankruptcy Courts | No Comments »