Getting Student Loans Discharged During Bankruptcy

Dave — Thu, 21 Oct 2010 13:32:40 +0000

Student loans are not treated the same way as other types of debt. While mortgage loans, credit cards, and other types of debt are quickly discharged during Chapter 7 Bankruptcy, student loans continue to be the debtor’s obligation after bankruptcy. While there are some circumstances under which student loan debt can be discharged, these conditions do not apply to many debtors under an ordinary bankruptcy scenario. In order to qualify for a student loan discharge, you must be able to show documented proof that:

1. You will be unable to pay your basic expenses if you maintain student loan payments,

2. The above condition is unlikely to change during the life of the loan, and

3. You have been maintaining consistent payments on your student loan for the five years preceding the bankruptcy period.

Your best bet is to explore other options, such as a payment deferral or forbearance. These options do not discharge your obligation to pay the debt, but they do allow you to put payments on hold for a period of time.

Super-Sizing: Sure-Fire Path to Bankruptcy

Dave — Tue, 12 Oct 2010 13:26:16 +0000

You might have heard the term “McMansion” over the last couple of years. Since the recession of 2008, the economic impact of moving into unaffordable houses has become more apparent than ever before. There are some valuable lessons to be learned from the most recent iteration of economic history that has repeated itself many times. The bottom line: excessive spending on luxuries leads to economic collapse. This lies at the heart of the boom-and-bust cycle. Bankruptcy law firms build their business models on it.

The infamous tulip bulb craze in Amsterdam is a great example of what drives this cycle of irrational behavior. At one point in time, one could buy a house for the price of a tulip bulb in seventeenth-century Amsterdam. It’s easy to look back at this and laugh; however, we are still doing the exact same thing today. Oversized houses are a great example of this. Raising our expectations and keeping up with the Joneses has reached absurd proportions.

The next time you are thinking about making a major lifestyle upgrade, ask yourself: could I still afford this if my job disappeared tomorrow? Remember, there are no guarantees except death and taxes…

Keeping Your Car After Filing Bankruptcy

Dave — Tue, 05 Oct 2010 19:07:24 +0000

Filing bankruptcy does not automatically cause you to lose your car. Certain assets must be surrendered to creditors, but it’s important to know the rules and how they apply to you. If you own a car but cannot make the payments on the loan, you have several different options that allow you to maintain possession and ownership of the vehicle.

If you want to keep your car and plan to continue making payments after discharging your debt, you will need to reaffirm the debt with the current lender, or “redeem” the debt with a different lender. Reaffirming the debt with the current lender amounts to making a promise to continue paying on the loan.

Redemption (also called 722 Redemption after the Bankruptcy Code) allows you to reduce the amount of your loan to the current sale value of the vehicle. In other words, if you owe more than a car is worth, you will only have to pay the amount it is currently worth. You cannot do this, though, unless you have owned the car for at least 910 days.

Chapter 7 Bankruptcy: What It Is & When To File

Dave — Mon, 20 Sep 2010 02:20:11 +0000

Chapter 7 bankruptcy is sometimes called a “straight bankruptcy“. During the proceedings, the debtor turns over all non-exempt property to the bankruptcy trustee. This person then converts the illiquid assets to cash, and uses the cash to pay creditors to offset debts incurred.

The debtor receives a “discharge.” A discharge amounts to wiping the debt clean and relieving the debtor of any further obligation to repay the debt. In many cases, people who file for Chapter 7 Bankruptcy have few or no assets to lose.

You can file Chapter 7 if you are in any of the situations listed below:

Your income is insufficient to pay off your debt.
Your loans have no guarantors or co-signers, or the co-signers have defaulted.
Some or all of your past-due accounts are in collection.
Creditors are threatening to file suit against you or garnish your wages.

Most bankruptcy attorneys will give you a free initial consultation to determine if you should file Chapter 7 Bankruptcy or if a different option makes more sense.

Financial Papers

Dave — Sat, 11 Sep 2010 03:37:12 +0000

Financial papers are a good thing that people should keep up with because you never know what might happen to them. It is a good idea to keep critical financial papers in a safe somewhere that’s unnoticeable. There are plenty of critical papers that you will need the rest of your life. They are papers like social security cards, health insurance cards, car insurance, credit card papers, deeds, titles, wills, marriage certificates, birth certificates and passports. If any of these papers get lost or stolen it can amount to a lot of money or identity theft. Some people keep a lot of these documents in their purses or wallets but if they get stolen there are limited things that you can do about it. If you get a safety deposit box or safe you should go through all the financial papers at least once a year to make sure that they are up to date.

Chapter 13 Bankruptcy Rules

Dave — Tue, 07 Sep 2010 03:53:41 +0000

Chapter thirteen bankruptcies are for people who have businesses but do not want to throw it away. The bankruptcy court changes the business debt into a repayment plan. The court will only do that if the business is in good enough financial state to be able to pay back on a payment plan. The court will decide on the amount that will be paid and when it is due. The repayment plan is usually on a three to five year scale. It will remain on your credit report for seven years. Bankruptcy laws require that you take credit counseling six months before you file for the bankruptcy. Chapter thirteen also requires you to take a personal financial management course. In order to file for chapter thirteen your unsecured and secured debts must be under the required limit. The court also requires that you give a list of all your properties.

Losing all your Money

Dave — Tue, 07 Sep 2010 03:38:14 +0000

Bankruptcy is one of the major issues people face today. Bankruptcy is a legal state of complete lack of some abstract property. It is something that should not be treated lightly. There are two common types of bankruptcy which are chapter seven and chapter thirteen. Chapter seven is when a trustee collects your assets, sells them, and then uses the cash to pay the creditors that you owe. Chapter thirteen is when you pay off your debt within a three to five year period. When you file for bankruptcy it stays on your record for seven years or longer. There are agencies to help you get out of debt without having to file for bankruptcy. It prevents you from getting a loan, buying a home, a car, and credit cards. There are also bankruptcy lawyers that will meet with you to help you determine if bankruptcy is the only option.

Credit Cards

Megan — Mon, 09 Aug 2010 03:33:51 +0000

Credit cards always look good whenever you do not have the money for everything. But, before purchasing and applying for a credit card take a step back and look at the advantages and disadvantages of getting one. Some advantages of getting a credit card could be establishing good credit history, they are better than cash, you get reward points, and the payment methods are easy. The biggest disadvantage of it is the fact that if you do not watch how much you spend or keep up on that bill you will see debt collectors in a matter of seconds. Once you miss a payment on a credit card bill, they often raise interest which is one of the biggest reasons why many people in today’s society are in debt so much. If you get into debt, it could lead to excessive debt problems which may lead to filing for bankruptcy so think before you get a credit card.