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8 Common Mistakes When Filing for Bankruptcy

Thu, 04 May 2023 16:02:37 GMT

Filing for bankruptcy can help you get rid of most of your debts. However, your debt problems might continue even after filing for bankruptcy. Here are common bankruptcy mistakes to avoid.

Choosing the Wrong Chapter

You can file for bankruptcy under Chapter 7 or under Chapter 13. Each type of Chapter provides different types of debt relief, some of which might not solve your debt problem. The most common mistake is to choose Chapter 13 when you should have selected Chapter 7.

Chapter 13 will cost more and last longer because you must pay all your debts eventually. However, if you want to protect your assets, you shouldn't choose Chapter 7 either.

Not Meeting Income Requirements

Your income must be below a specific threshold to qualify for Chapter 7 bankruptcy. If you file for bankruptcy with a high income, your application won't go through. Instead, work with a qualified bankruptcy attorney to determine if your income is above the threshold.

Repaying Family Members

Before you file for bankruptcy, you may pay some creditors and ignore others. For instance, some debtors pay their family members while avoiding other ordinary creditors. Bankruptcy regulations don't allow debtors to treat family member creditors better than other ordinary creditors. A bankruptcy trustee will simply go to court and reclaim any amount that you repaid to a family member.

Liquidating Retirement Accounts

The laws in most states shield retirement accounts from creditors. If you are filing for bankruptcy, your creditors can't touch your retirement account. That means that you can clear your debt and still maintain the funds in your retirement accounts. Unfortunately, some debtors use the funds in their current accounts to try and clear their credit card debt. This makes those funds no longer exempt, so check your state’s laws.

Using Large Amounts of Credit Before Filing Bankruptcy

You might want to make significant purchases just before you file for bankruptcy. Once you file for bankruptcy, the creditor can object and point out the recent purchases. The solution is to avoid bundling up new purchases if you plan to file for bankruptcy in the near future.

Transferring Assets From Your Name Before Filing for Bankruptcy

Some debtors think that they can transfer assets, such as a house, into somebody else's name before filing for bankruptcy. If you have to transfer a valuable asset, you must get paid the right price for that asset's market value. Otherwise, a bankruptcy court will consider the transfer to be fraudulent and overturn it. You can ask the bankruptcy court to exempt the asset from your creditors.

Mortgaging Your Home to Pay Off Debt

You might try to offset your debt by taking another loan. This is especially common if you suspect that your creditors might auction your home. An attorney can advise whether you will keep your home after filing for bankruptcy. That way, you don't have to take a mortgage.

Filing Too Close to a Major Life Event

If you get married, you can merge your finances with your spouse's. But such a move can have catastrophic consequences when you file for bankruptcy. If you file for bankruptcy as a single person, the court will only scrutinize your finances. However, if you are married, the court will also analyze your spouse's assets and income.

Since you recently got married, your finances will have drastically changed. The court might deny your application for Chapter 7 bankruptcy and direct you to apply for Chapter 13 bankruptcy. Another common mistake is filing for bankruptcy when you expect to get a large sum of money, such as a divorce settlement, insurance payout, or inheritance. A sudden increase in your income close to a bankruptcy filing can affect the success of your bankruptcy application.

Before you begin the bankruptcy filing process, reach out to Custer Custer & Clark LLC. We are a bankruptcy firm that supports clients through trying times. Our experts can help you organize and discharge debts primarily by filing for bankruptcy under Chapter 7 or 13. Contact us to get started.

Can You Purchase a Car During a Chapter 13 Bankruptcy?

Fri, 31 Mar 2023 13:31:00 GMT

Even the most financially disciplined and prudent individuals can find themselves in debt. And sometimes, the best way out of unmanageable debts is to file for bankruptcy.

For example, filing for Chapter 13 allows you to restructure your debts to pay off the debt in installments per the court's order.

However, you may find yourself in a situation where you wish to purchase a car to help you get to and from work or navigate your daily errands. But the big question is, can you buy a car during a Chapter 13 bankruptcy? Learn everything to know about this matter.

Can You Buy a Car During Bankruptcy?

The answer is yes; purchasing or refinancing a car during bankruptcy is possible. But the viability depends on your financial situation and the reason for needing the car.

For example, the reason for buying the car must be acceptable per the creditor's requirement. If the creditor believes that buying a car is in your best interest, you may qualify for purchasing or refinancing a car during bankruptcy.

For instance, suppose your old car has given up, and you need a new one to show up for work. If your creditor is convinced that buying a car will help improve your financial situation, they may permit you to buy it.

Conversely, if your motive for a car purchase is purely luxury or leisure, then your creditor is highly unlikely to approve the purchase.

What Tips Will Increase Your Chances of Car Loan Approval?

Considering your financial situation, you may need to finance the car purchase with a loan. These tips will help you increase your chances of loan approval.

Get a Court Approval

You must get court approval if you wish to buy a new or used car. Why? Your monthly debt payment is based on your financial situation at the time of bankruptcy filing.

Therefore, a slight change in your budget, such as when you buy a car, may affect your ability to afford the court-ordered payments. So, the court needs to ensure you can afford the new car loan payments and the other bankruptcy debts.

Find a Willing Lender

Not all leaders will be willing to finance you in a state of bankruptcy. For example, most banks consider your credit scores to assess your loan eligibility. Since bankruptcy lowers your credit scores, you may need to look for lenders willing to finance people with bad credit scores.

Obtain a Buyer's Order

Your car dealer provides you with a buyer's order, essentially a receipt of your car purchase that includes details such as the car model, purchase price, and other related costs.

First, get a sample buyer’s order from your dealer to help you choose a car you can comfortably afford. Then, present the sample to your trustee, who will evaluate the document to determine whether the purchase is permissible.

The trustee considers if the car is a need. The trustee will also check if you can pay back the loan on top of other bankruptcy-related expenses.

If the trustee approves the purchase, they must file a motion to allow you to incur more debts. And if this motion is approved, you are good to go.

While you can purchase or refinance a car during Chapter 13, consider the overall financial situation so you don't end up in more debt. The best way to do it is to consult a bankruptcy attorney.

The attorney will help you decide whether buying a car is in your best interest. The law expert will also advise on proceeding with the case for loan approval.

You can trust us at Custer, Custer & Clark LLC Attorneys at Law to guide you through car purchases during bankruptcy. We have extensive experience in Chapter 7 and Chapter 13 bankruptcies and can offer the best legal advice. Contact us for a consultation.

What Documents Do You Need to File Chapter 7 Bankruptcy?

Mon, 26 Dec 2022 19:39:00 GMT

Filing for Chapter 7 bankruptcy can be a complicated process. It requires a great deal of paperwork and the proper documentation to ensure you comply with bankruptcy laws. You should be familiar with the documents needed to complete your case. This blog post will discuss what documents you need so that you can get started on your path to financial freedom.

Income Documents

Income documents include tax returns, pay stubs, and profit and loss statements. Tax returns should be from the past two years . If you can't access your returns, consider requesting a transcript from the IRS.

Any relevant pay stubs must be from six months prior to filing. Three months of recent pay stubs are sometimes sufficient for Chapter 7, but six months is always better.

If you are self-employed or own a business, collecting your profit and loss statement along with several months of bank statements will demonstrate proof of income.

Certificates of Completion

Certificates of completion for Chapter 7 bankruptcy prove that a debtor has successfully completed credit counseling and a debtor education course.

Credit counseling is required for all individuals filing for Chapter 7 bankruptcy. It teaches debtors about budgeting, money management, and other strategies to help them avoid financial difficulties in the future.

Debtor education courses provide information on how to use credit wisely and create a budget that works for their individual situation. The certificate of completion serves as proof that the debtor has completed these courses, which is required before they can file for bankruptcy.

Identification

Identification documents can include items like Social Security cards, a state-issued driver's license or ID card, your passport, and proof of U.S. citizenship if applicable. You can also use a consulate card, medical insurance card, resident alien card, or IRS statements.

Bills or Creditor Statements

Bills or creditor statements are essential documents when filing for Chapter 7 bankruptcy because they provide a detailed list of the debts you owe and to whom. This information is critical in verifying the amount of debt you have and the nature of your obligations, such as whether or not it is secured or unsecured.

These documents also provide evidence of any particular payment arrangements you have with your creditors, such as forbearance agreements. Additionally, bills or creditor statements may show if there have been any payments made on the debts and how much has been paid.

Mortgage Statements

Mortgage statements provide proof of the amount you owe on your mortgage, which is vital for determining whether or not you have any equity in your home that can be liquidated as part of your bankruptcy proceedings. Mortgage statements also show if there have been any missed payments, late fees, or other charges that could affect your bankruptcy filing.

Vehicle Information

One of the most essential documents is vehicle registration info, which proves that you own all the cars associated with your name. You need proof of vehicle registration, proof of value, and insurance.

If you have a car loan or lease, it's also important to provide details of that obligation. All these documents prove your ownership or financial interest in the vehicle and ensure everything is taken into account when determining your eligibility for Chapter 7 bankruptcy.

Proof of Child Support or Alimony

Your alimony and child support may have contributed to your accumulative debts. Collect any records that can verify your financial obligations in either case so you can complete your filing. Provide as much detail as possible since it goes a long way toward helping the court decide how to handle things for you down the line.

If you're considering filing Chapter 7, the best move is to consult with a professional for guidance. At Custer, Custer & Clark LLC, we'll tell you what additional documentation is required for your case. Having an expert guide you through the process can make all the difference. Contact us today for more information about filing for bankruptcy.

Common Bankruptcy Myths Debunked

Fri, 21 Oct 2022 11:10:00 GMT

Numerous situations may lead you to bankruptcy. Perhaps you lost your source of income, or you recently went through a divorce that left you with debt. Maybe you have been dealing with medical bills for a while now, and the bills have become too much to handle.

Whatever the case, some individuals shy away from talking about bankruptcy because of all the myths and misinformation surrounding it. Read on to differentiate bankruptcy myths from facts and make informed decisions.

Bankruptcy Signifies Failure

People think that filing for bankruptcy indicates personal failure because of the negative connotations associated with the word. However, this could not be further from the truth.

In actuality, many individuals who file for bankruptcy are successful people who have fallen through difficult times. Bankruptcy may be the best solution for you if you struggle to keep up with your debt payments. The step is a chance to start fresh and rebuild your finances.

You Will Never Borrow Money Again

Some assume that bankruptcy will harm their credit score so severely that they will never be able to borrow money again. While it is true that your credit score will take a hit after you file for bankruptcy, the situation is not permanent.

You can still improve your credit score if you make an effort to do so. For instance, you can get a secured credit card and make timely payments. You can also work with a credit counseling agency to help you improve your score over time.

All Your Assets Will Be Taken Away

If your main reason for not filing for bankruptcy is fear of losing everything, then you should know this is not always the case. In fact, many individuals who file for bankruptcy keep most, if not all, of their assets.

The reason is that most states have what is called a bankruptcy exemption list. This list includes items you can keep even after filing for bankruptcy. Some things that may be included in the exemption list are your home, car, retirement savings, and personal belongings such as clothes and furniture. Therefore, just because you owe money does not mean that you have to lose everything you own.

Your Debts Will Disappear When You File for Bankruptcy

Some people think that they can use bankruptcy as a way to get rid of all their debts. But, unfortunately, that is far from reality.

Bankruptcy aims to ease your debt burden, not eliminate it. There are certain types of debts that cannot be discharged through bankruptcy. These include student loans, child support, and taxes.

Under chapter 7 bankruptcy, most of your debts, such as credit card debts, will be wiped out. However, you will still be required to pay your secured debts, such as your mortgage and car loan. As such, don't rush to file for bankruptcy with the hopes that the process will wipe away all your loans.

Your Bankruptcy Status Will be Publicized

Finally, some people are reluctant to file for bankruptcy because they think everyone will know they are not doing well financially. However, that only applies to public figures and prominent individuals.

Although the bankruptcy is a public record, it is not publicized in the media. The general public will only know about your bankruptcy status if they go out of their way to find out. Therefore, you don't have to worry about your friends, family, and colleagues finding out that you have filed for bankruptcy.

Filing for bankruptcy can be a difficult decision to make. But now that you can separate fact from fiction, you will be better positioned to make smart choices. First, consult with a bankruptcy lawyer to learn more about the bankruptcy process and what it entails.

You can trust us at Custer Custer & Clark LLC to provide honest and accurate legal advice. We have years of experience handling bankruptcy cases and will work hard to ensure you get the best outcome possible. Contact us for a consultation.

Can You Take a Mortgage Post Bankruptcy?

Wed, 31 Aug 2022 14:11:00 GMT

If you want to take a house loan, your lenders look at different factors, including bankruptcy status. Bankruptcy does not negate your plans to buy a house. Nonetheless, a few challenges could make mortgage acquirement stricter. This blog explores the nitty-gritty of mortgage acquirement post-bankruptcy.

Time Taken to Qualify for a Mortgage Post-Bankruptcy

The waiting period depends on which consumer bankruptcies you filed. For instance, the chapter 7 plan remains on your credit report for a decade . Nonetheless, most lenders can offer you a loan one to four years after you file for bankruptcy. However, if you lacked control over the bankruptcy, lenders can reduce the required time.

Chapter 13 is more favorable if your repayment arrangement is solid, and you would want to buy a house sooner. The report remains on your credit report for seven years. After that, the waiting period depends on whether the court discharges or dismisses your debt. You will wait two year if the court discharges and four years if the court dismisses your bankruptcy.

Steps for Mortgage Application After Bankruptcy

The steps towards a mortgage post-bankruptcy are not so different from the normal process. Nonetheless, you must be more vigilant in notifying your lenders that you are in a position to repay the loan. Read on to discover a few steps to guide you on what to do.

Examine Your Credit Report

First, understand what the credit report entails to improve your credit score. Not all reports are perfect, so check for errors that could reduce your score. Typical errors include false identity, address mistakes, and incorrect account details.

You can attain one annual free credit report from Experian, Transunion, or Equifax. You can disagree with errors and confirm that your bankruptcy gets removed from the report in good time.

Rebuild Your Credit Score

Lenders use your credit score to determine your ability to repay. A higher score earns you more trust from lenders. Bankruptcy reduces your score, but you can rebuild the credit with forbearance and a proper plan.

You could also get a secured credit card to build your score and become in better standing with lenders. The log of activities on your secured card passes on to credit agencies to rebuild your score. Also, avoid debts you cannot service and pay your utility bills in good time.

Get an Explanatory Letter

Often, bankruptcy results from mitigating circumstances or poor financial choices. Tell your lenders if yours stemmed from uncontrollable circumstances like a disease or job loss. Lenders are often more lenient if the reasons behind the bankruptcy were uncontrollable.

A bankruptcy explanation letter is not mandatory but improves your standing with lenders. You could also state what you have done to prevent the reoccurrence of bankruptcy. Other factors demonstrating sound financial management post-bankruptcy include cash reserves and a favorable debt-to-income ratio.

Request Preapproval

Preapproval is not a mandatory step of mortgage approval, but a preapproval letter sheds light on different aspects. For instance, the lenders let you understand how much money you qualify for. You can then narrow down your search to fit your budget.

With a preapproval letter, you notify sellers that you can get the money to buy the property. A good credit score comes in handy before you apply for preapproval. So, give yourself enough time post-bankruptcy to reestablish your score before you apply for a house loan.

Patience and proper financial plans are paramount for getting a house loan post-bankruptcy. Then, you can commence your dream of homeownership. If you still have questions or want advice on what to do after a bankruptcy, contact the lawyers at Custer, Custer & Clark LLC .

Can You Improve Your Credit Score Under Chapter 13 Bankruptcy?

Tue, 21 Jun 2022 05:02:00 GMT

Sometimes, debts are inevitable. In extreme cases, you may have to file for bankruptcy, a process which intends to relieve you from creditors and give you a fresh financial start.

When you decide to file for bankruptcy, you have different chapters to choose from, such as Chapter 13 bankruptcy. With this type of bankruptcy, a court will authorize a repayment term, where you must put in your best effort to repay the loan within the repayment term. The best part about this bankruptcy chapter is that your loan repayment features 0% interest.

However, the big question is, can you improve your credit score during chapter 13 bankruptcy? You can do a lot to build and reinvent your credit score, despite being under bankruptcy. Discover some tips to help you improve your credit score.

Make Payments on Time

The court expects you to make repayment within the outlined period. The good thing is that your trustee considers your financial situation to tailor a flexible payment plan for you.

However, you must go out of your way to ensure you do not miss any payment. The effort will show your commitment to clear debts, which will automatically boost your credit score. But how do you make timely payments during bankruptcy and financial challenges?

Create a Budget

Create a budget that includes your loan payment as a priority bill. You may create a weekly or monthly budget that allows you to set aside an amount for loan payments.

Note that commitment and discipline are the keys to help you stay on track. Do not let temptations sway you to spend the money you put aside for loan clearance on other things.

As you create a budget, consider your income and the amount you owe the creditor. This step will help you create a sustainable budget.

Set a Payment Reminder

Many people agree that they often forget to repay a loan, which only hits their minds days later. The thing about chapter 13 bankruptcy is that you cannot afford to miss even a single payment if you do not want to get into further trouble.

To avoid this problem, set a loan payment reminder. Even better, you can set up automatic payments to ensure your payments are always on time, even if you forget.

Keep Credit Utilization Low

Credit utilization is the amount of credit you use compared to the available credits. Try to minimize the amount of credits you spend during chapter 13 bankruptcy to help boost your score.

Talk With Your Trustee

If you cannot make payments on time for any viable reason, reach out to your trustee. The trustee may be able to modify your payment plan to a more flexible setup. The modification will reduce cases of missed payments so you can retain a positive credit score.

Minimize the Amount You Spend on Debts Monthly

The amount of your total monthly income that you spend on debts is among the most significant credit score determinants. If you spend most of your income on debts, the credit score calculator assumes you are not well financially, which negatively affects your credit score. In the same way, if you strive to lower your debt-to-income ratio, this shows financial capability and discipline, and your credit score will undoubtedly go up.

You can rebuild your credit score during chapter 13 bankruptcy. But you must be ready to work on your financial discipline to reduce your debts. Talk to our expert bankruptcy lawyers at Custer Custer & Clark LLC Attorneys at Law today for advice on other tips to change your financial situation for the better.

Considering Bankruptcy and Moving House? Answers to Your Questions

Sun, 01 May 2022 14:52:00 GMT

Do you plan to file bankruptcy but also need to — or choose to — move at the same time? Like many decisions during the lead-up to and filing of a bankruptcy claim, undertake moving house only after careful consideration. To help you decide if, how, and when you should move, discover a few important answers to common questions about it.

Can You Move After Filing?

The short answer is that yes, you can usually move to a new home after filing your bankruptcy claim. Most people who do this need to move for unavoidable reasons, such as not being able to pay the rent, having to move for better work opportunities, or moving in with family for financial reasons. The court understands this and makes allowances.

If the move is in-state, this is usually of little concern even if you move to a different county than what may be under the jurisdiction of your bankruptcy court. In general, your case remains assigned based on where you lived when you filed. You must notify the court of your new address, of course, so you can receive notices.

Can You Move Out of State?

Moving to another state during bankruptcy is trickier. While bankruptcy laws are governed by federal law and are then generally applicable across borders, each state has the right to set some of its own rules in certain areas.

Some of the most common state rules affecting a move are residency laws. The state in which you filed may have residency requirements if you want to use its list of exemptions. If no longer a resident, you may be required to use only the federal exemptions. The second way in which residency may affect your filing is by state residency requirements about how long you must live in a state to use its court system.

Should You Move Before Filing?

In general, making a long-distance move before filing your case generally simplifies things. Not only does this prevent you from one more upheaval and burden while navigating a bankruptcy legal claim, but this also keeps you physically close to your court for hearings and other legal matters that you must do in person.

Some debtors move before filing for bankruptcy in order to choose a different jurisdiction. As mentioned, different states have different rules about how much you may exempt. For example, Georgia allows debtors to use some of their unused homestead exemption to exempt other assets. A renter might opt to file in Georgia if this rule would let them protect something a different state doesn’t cover.

What If You Need to Buy or Sell?

If you own a home but need to move, can you engage in a real estate transaction during bankruptcy? This is allowed, but you may need to take some proactive steps. If you haven't filed bankruptcy yet but will do so in a short time, make sure that the sale or purchase doesn't look like an attempt to skirt bankruptcy rules. You wouldn't want to try to hide any funds from a sale, for instance.

Already in an open bankruptcy case? You usually need the court's permission to buy or sell a piece of property. If moving for the right reasons, this is often not an insurmountable obstacle.

Where Should You Start?

Do you have other questions about moving before or during a bankruptcy claim? Start by meeting with the bankruptcy legal team at Custer Custer & Clark LLC . We'll help you find the answers you need so you can make the best possible decisions. With our help and your diligence, you'll find the right living circumstances and have a successful bankruptcy case no matter where life takes you.

How Bankruptcy Exemptions and Equity Work Can Protect Assets

Tue, 15 Mar 2022 09:24:00 GMT

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One of the biggest concerns for many people considering bankruptcy is whether or not they can keep their assets. Whether this is a home, a car, your heirloom jewelry, or the equipment you need to earn a living, protecting your most important assets is vital to recover and rebuild when the bankruptcy is over.
But how do you protect these assets? Two key elements work together to accomplish this. Here's what you need to know about exemptions and equity in bankruptcy.
What Are Bankruptcy Exemptions? Exemptions in a bankruptcy case refer to which assets — and how much value — are protected (or exempted) from seizure to pay the person's creditors. Most states provide a list of exemptions that it allows, usually including a category and a dollar limit.
For example, Georgia bankruptcy law allows you to exempt up to $5,000 of value in one or more motor vehicles. So if you own a car worth $4,500, the trustee would not use it to pay off your credit card or medical debt.
Along with state exemption lists, the federal government provides a list of its own. States may or may not allow a filer to use the federal exemptions . And these also may or may not be more beneficial. The same car owned by the Georgia resident above would only see $4,000 of its value exempted and the remaining $500 in play.
Bankruptcy exemptions vary by state. They commonly include many of the same categories, such as real property, retirement accounts, vehicles, work-related tools, jewelry, and personal property. Many states (and the federal list) also offer what's known as a wildcard exemption — a dollar amount you may generally use to exempt any property you choose.
What Is Equity? To use exemptions correctly, you must also understand how the value of assets is determined. If you own an asset like your car free and clear, your value — referred to as your equity — is its full value. However, what if you still owe money on a car loan? You would now calculate your equity by subtracting what you owe from what it's worth.
For example, consider the Georgia car owner above. What if their car is worth $9,000 on the auto market but they carry a loan with $2,000 still due. The value for exemption purposes is not $9,000 but rather $7,000 ($9,000 - $2,000). Of this, $5,000 could be exempt under federal bankruptcy guidelines. The gap that the borrower must fill is not $4,000 but only $2,000.
When you consider the actual equity in some assets, you may find that things work out better for you than they first seemed. A homeowner can exempt $25,150 of equity in their home, for instance, but this is much less than most homes are worth.
However, if your home is valued at $200,000 but you owe $175,000 on it, that property is fully exempt. Your equity is only $25,000 — just under the qualifying threshold.
In addition, things like a wildcard exemption can help as well. If your mortgage is for only $174,000, you would still have $850 subject to seizure. But you may be able to use $850 of the federal wildcard exemption to cover the rest and save the home.
Where to Learn More Like many facets of bankruptcy law, exemptions and equity calculations can be confusing. The best place to begin is to learn more about how they work in your state and how they affect your specific assets. Custer, Custer & Clark LLC Attorneys at Law can help.
We'll assess your financial situation, debts, and assets to draw up a plan that protects the things you value the most. Call today to make an appointment or get answers to your questions.

The Automatic Stay - Answers About This Bankruptcy Benefit

Sun, 09 Jan 2022 23:02:00 GMT

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When most people think about bankruptcy, they usually focus on the end goal of permanent debt discharge. And while this is the most long-lasting benefit from declaring bankruptcy, it's not the first and may not even be the most important.
One often-overlooked element of all bankruptcy filings is the automatic stay. What is this stay? How can it help you? And what should you know about it? Discover a few answers.
What Is the Automatic Stay?
The automatic stay is a legal action that prevents further collection efforts from happening. It's a federal injunction that courts can enforce. While this stay does nothing to discharge or reduce any debts you owe, it pauses nearly all actions until the borrower can sort out their situation and seek the legal protection they have a right to.
Why Is the Stay So Important?
Many people who reach the point of needing bankruptcy have already struggled with debts for some time. This often means that they might be behind on a number of payments, including their mortgage or rental lease, necessary vehicles, utilities, taxes, and personal loans.
Unfortunately, being behind on payments means that creditors may have already started the processes of seizing assets. You, therefore, may not have months or years to wait for debts to be discharged. You need help now.
What Does the Stay Prevent?
The most common benefits of the bankruptcy stay are to prevent the lender from repossessing your vehicle or foreclosing on your house. But a bankruptcy stay does much more than that. It also prevents some or all of the following actions:

Shutting off utilities
Seizing money from bank accounts to offset debts
Experiencing foreclosure or repossession of other assets
Filing new levies or liens
Stopping wage or bank account garnishments
Experiencing the pursuit of lawsuits
Getting the collection of overpaid benefits
Receiving debtor phone calls, visits, or letters

Clearly, the stay can provide you breathing room on a number of fronts.
Does the Stay Last Forever?
Although the bankruptcy stay is routine and starts as early as 24 to 48 hours after filing, it's not designed to be a permanent measure. The stay will lift, in general, when the bankruptcy case is done. At that point, creditors can resume collection on unaffected debts. And discharged debts are now covered by a permanent injunction rather than the temporary one.
What Can Affect the Automatic Stay?
To get the most benefit from the bankruptcy stay, understand what can cause it to be dropped. First, individual creditors can petition for an exemption on various grounds. If the debt will not be subject to discharge during the bankruptcy, it may be released to proceed as normal. Lenders of secured debts attached to collateral may request an exemption if no equity is in the item.
Less commonly, a creditor may request exemption from the bankruptcy court if the debt involves fraud, to let an unrelated legal case move forward, or if the borrower confirms that they will not seek to reaffirm a secured debt.
Finally, the court may drop or limit stay protection if it finds that filer to be a serial filer. A person who files multiple bankruptcy claims within a short period - often one year - may be deemed serial filers trying to take advantage of the system.
Where Can You Learn More?
Do you need the protection of an automatic stay? Want to know more about how your particular debts or assets would be affected? Worried you may not qualify for a stay? No matter what your questions are, find answers by consulting with Custer Custer & Clark LLC . We will help you get the protection you need to start fixing your financial life and creating a brighter future.

How Job Loss Affects Your Bankruptcy Case

Tue, 04 Jan 2022 14:54:00 GMT

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Bankruptcy gives many debtors the fresh start they need to gain control of their debts, lower their monthly expenses, and establish a solid financial future. For some debtors, their bankruptcy cases don't go as planned. Job loss is one adverse situation that can affect your bankruptcy. Keep reading for important information regarding job loss and your bankruptcy case.

Job Loss Impact Varies Based on Your Specific Bankruptcy
The two most common types of bankruptcy for most debtors are Chapter 7 bankruptcy and Chapter 13 bankruptcy. Which type of bankruptcy you file will influence the impact of your job loss.
Chapter 7 bankruptcy requires you to liquidate your non-exempt assets and use the proceeds to repay your debts; the bankruptcy trustee then dismisses the remainder of your qualifying debt. Only certain debtors qualify for Chapter 7 bankruptcy, as your income must be less than a specific amount. The exact income limit varies based on your household size and the state you live in.
Job loss increases your chances of qualifying for Chapter 7 bankruptcy. However, you may lose some of your assets to debt repayment.
Retirement accounts, like 401(k) plans, are typically exempted from your bankruptcy case. To ensure that your 401(k) savings aren't used to repay your debts, you must keep the funds in some type of retirement account (not a savings or checking account). You can keep your funds with the brokerage firm that handles your former employer's 401(k) plans, or you can roll the money into an IRA.
Chapter 13 bankruptcy differs from Chapter 7 bankruptcy in that you repay a portion of your debts over three to five years. It's commonly used by debtors who are behind on their mortgage or auto loans, as the debtor can use the repayment period to get caught up on past due loan payments. The trustee dismisses the remaining eligible debts once your payment plan ends.
Individuals with incomes too high for Chapter 7 bankruptcy may file for Chapter 13 bankruptcy instead; if you're filing as a married couple with your spouse, your spouse's income will also count towards the bankruptcy case.
If your job loss lowers your income, you may not qualify for Chapter 13 bankruptcy. The bankruptcy trustee can refuse to approve a repayment plan if they believe the debtor doesn't have sufficient income to make the payments.
Some debtors may benefit if they file for Chapter 7 rather than Chapter 13 bankruptcy. However, if you have assets that you want to protect or need to get caught up on your home or mortgage payments, being ineligible for Chapter 13 bankruptcy can put your possessions at risk.
Job Loss After Your Chapter 13 Payment Is Approved
Your job loss may occur months or even years after the bankruptcy trustee approves your Chapter 13 plan. If this happens, you must be proactive, as you'll likely struggle to make your monthly payments due to your income reduction. You have a few options, and your best alternative depends on the specifics of your situation.
If you believe your job loss is likely to be temporary, you can ask your attorney to file for a short-term suspension of your Chapter 13 payments. This will give you the opportunity to find a new job.
However, if you find that your income is significantly lower or you believe you'll be without income for an extended period, your lawyer may be able to file for a reduction of your Chapter 13 payment. Depending on the severity of your income loss, you can request a hardship discharge. A hardship discharge eliminates your remaining qualifying debts and functions similarly to a Chapter 7 bankruptcy.
Are you concerned about your ability to repay your debts? If so, contact Custer, Custer & Clark LLC Attorneys at Law to schedule a consultation.

Should You Do Estate Planning During Bankruptcy?

Tue, 09 Nov 2021 15:54:00 GMT

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Do you plan to file for bankruptcy? If so, you probably have many questions about what you should and shouldn't do during this time. And while some tasks clearly should be done before or after your bankruptcy case is completed, others are more complex.
One such task is estate planning. How does your bankruptcy affect your estate plan and vice versa? To help you protect yourself as fully as possible, here are answers to a few common questions on the subject.
Should You Start Estate Planning Now? If you don't have an estate plan in place, now is always the time to get started. Anything can happen to anyone at any time, and an estate plan protects both your loved ones and yourself no matter what happens with your debt. In particular, documents that detail who you would like to make decisions for you in case of incapacitation will not be affected by your bankruptcy, so these can be done at any time.
Keep in mind that you can alter your estate plan after you exit bankruptcy, so you don't need to worry if your financial situation changes. And much of the information you need for your bankruptcy case is also information that helps with estate planning. Therefore, this may be a very good time to save money and effort by handling both financial matters.
How Does Debt Affect Your Estate? The biggest question many have about estate planning with debt is how those debts affect your estate. In general, your creditors are notified when you pass away so that they may submit a claim to the probate court to have their debt settled from your estate. Legitimate debts must be paid in full before the remainder of your assets are distributed per your estate terms.
If you are declaring bankruptcy because your debts outweigh your assets, creditors will be paid in an impartial manner as much as possible and nothing may be left for heirs. Debts that were your responsibility alone will likely be discharged if the estate cannot pay them. If you have any joint debtors, they may be liable for the unpaid portion.
What Happens if You Die During Bankruptcy? If you pass away while in active bankruptcy, the process of liquidation under Chapter 7 will likely continue much as it would otherwise. The bankruptcy trustee and estate executor will work together during this process.
However, if you have filed Chapter 13, or repayment, bankruptcy, the trustee has options. They may ask to dismiss the case and allow the estate liquidation to move forward. Alternatively, they may seek a conversion to liquidation (Chapter 7) bankruptcy. Finally, they may ask the court to permit the bankruptcy payments to continue from your estate.
Does Bankruptcy Benefit Your Estate Plan? Entering bankruptcy can have some positive effects on your estate plan. First, it may allow your estate to benefit from the bankruptcy exemptions in place. If potentially exempt assets would otherwise have been liquidated to pay debts of the estate, they may be better protected by liquidation through bankruptcy. Second, if the bankruptcy case is completed before (or possibly after) you pass away, discharged debts remain discharged. Creditors won't have a right to payment through the estate. This will protect your remaining assets and heirs.
Finally, wiping out debts now makes your estate plan easier in the long run. Your executor will have less work and distribution will be timelier and simpler. If you craft an estate plan with your bankruptcy end result in mind you may not even need to alter it once you exit bankruptcy.
Want to know more about estate planning before, during, or after bankruptcy? Start by meeting with Custer Custer & Clark LLC . We will help you find the answers you need to start getting the protection you need both now and in the future. Call today to make an appointment.

Can You Keep Your Home During Bankruptcy? 5 Factors

Mon, 30 Aug 2021 20:27:00 GMT

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For homeowners, the decision to file bankruptcy often takes on another level of anxiety. Most wonder if they can keep their primary home if they have to file for bankruptcy protection. And while no one-size-fitsall answer exists for this question, a few important factors can help determine whether or not you can keep that home. Discover five of these factors.
1. What the Amount of Equity Is The equity in your home, as with all secured assets, is the difference between what the property is worth on the market and what you owe on a mortgage. The amount of equity (or net value) in each home is unique to its circumstances and the age of the mortgage.
The equity value in the home is compared to possible bankruptcy exemptions. The federal bankruptcy code and most states provide a list of the amounts of equity in various assets that you may exempt from seizure to pay debts. For homes, the most common exemptions are homestead and wildcard exemptions. If the equity falls below these thresholds, your home is safe.
2. Which Chapter You Choose Chapter 7 and Chapter 13 bankruptcy can have different results for your property. Chapter 7, or liquidation, bankruptcy generally considers only the exemption allowances and the current status of the loan.
However, Chapter 13 does allow you to reaffirm your mortgage under more conditions. This can help many borrowers keep their family home as long as they can continue to meet their financial obligations to the lender. If retaining the house is important, some debtors even choose to forgo liquidation if they can handle the mortgage under a Chapter 13 repayment plan.
3. If You're Behind on Payments Generally, the ability to keep your house in both Chapter 7 and Chapter 13 depends on whether you're behind on payments and how much. Those who are current with their mortgage will have a much easier time clearing the hurdles to use equity exemptions, especially if they file Chapter 7.
If you choose Chapter 13, you may have more wiggle room regarding missed payments and late fees. The reason is that you can usually structure a repayment plan to include past due payments, then stretch them out over the course of the entire term (either three or five years). This may make getting up to date manageable.
4. Whether the Stay Will Hold All chapters of consumer bankruptcy come with an automatic stay that prevents creditors - including your mortgage company - from foreclosing on assets until the bankruptcy is concluded. This is one of the most important elements if you're at risk of foreclosure.
However, the automatic stay can lift early if the mortgage company can show that you have no feasible way to afford to get (and stay) current and if no equity could be distributed to other creditors. In this case, no creditors would be harmed if the house returns to the lender.
5. Whether You Should Do So Finally, consider whether or not you should fight to keep your home even if you're allowed. This is a personal decision each debtor must make, and it has both a sentimental and a practical element.
If your bankruptcy issues stem from something unrelated and you can comfortably make mortgage payments if other debt is discharged, this could be a good decision. However, if you already struggle or fail to make payments, keeping these in place limits how much relief bankruptcy provides. This could even result in another loss down the road.
Where to Learn More Clearly, the protection of your primary residence is a complex task. The best place to begin is to consult with an experienced bankruptcy attorney in your state. Georgia residents can rely on the assistance of Custer Custer & Clark LLC . We will help you understand your options and choose the path most likely to succeed. Call today to get started.

The 3 Categories of Assets in a Bankruptcy Case

Tue, 29 Jun 2021 17:31:00 GMT

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During bankruptcy, understanding what's at stake and what you may be able to keep is vital for all debtors. This means that before you make any decisions about which chapter of bankruptcy to use, whether to exempt assets, or what loans to reaffirm, you should first know what actually make up your assets and how they affect your case. Use this guide to learn more about the three types of bankruptcy assets.
1. Personal Property Personal property is all around you, and it includes things both large and small. It's basically everything you own that you can touch - including furnishings, clothing, books, collections, computers, mobile devices, books, jewelry, guns, cars, and household goods.
Technically, all personal property a debtor owns when they file for bankruptcy is generally considered part of the case and could be used to pay debts. However, much of your personal property can be exempted under both state and federal rules. For instance, Georgia law allows you to exempt up to $500 in jewelry, so many people wouldn't have to lose their wedding rings even if these are part of the case.
What if your jewelry collection is valued at more than the $500 exemption? Both state and federal rules generally allow wildcard exemptions that can be used to boost the exempted value of anything you wish - from your wedding rings to your trading card collection to your car.
2. Real Property Real property is another term for real estate. For most Americans, the largest asset they own is their primary residence. But some debtors may have a rental property, a piece of inherited land, or a vacation cabin.
As with personal property, you can exempt a portion of the value of your primary home. This is generally known as the homestead exemption, and it varies by state and in federal rules. The Georgia homestead exemption is $21,500 (if the home is in your name only).
The homestead exemption may not sound like a lot in comparison to home values, but it represents only the portion of its value that is in equity. Equity is the difference between what the property is worth on the market and what you owe to others for it. So if your home could sell for $300,000 but you still owe $250,000 to the mortgage company, the equity you need to exempt is just $50.000.
Other real property is often not easily exempted, and you may need to use wildcard exemptions or other means to do so.
3. Intangible Property Finally, do you have intangible property in your case? Most Americans do, although they may not realize all of it. Intangible property are assets that cannot be touched. They commonly include retirement accounts, bank accounts, stocks and bonds, whole life insurance policies, royalties or rights, stakes in a business, and tax refunds.
Gathering information on all your intangible property can be complicated. For instance, many people overlook the cash value of their whole life insurance policy. And determining a value for some business interests often requires outside evaluation.
The good news is that, as with other types of property, intangible property can be exempted under bankruptcy rules. Each state approaches this subject differently, but most states and the federal rules exempt some or all of your retirement accounts, personal injury damage awards, and public benefits. Specific lists of intangible asset exemptions also address less common items.
To ensure you approach the protection of all your assets in the right way, the best place to begin is a consultation with a qualified bankruptcy attorney in your state. They will help you assess your personal, real, and intangible property to see how it is automatically protected through exemptions, where you have exemption options, and what you may want to let go of.
Georgia residents can trust the bankruptcy team at Custer Custer & Clark LLC . Call today to make an appointment and get the answers you need.

Bankruptcy Look-Back Periods: What You Need to Know

Wed, 05 May 2021 21:45:00 GMT

As you plan for bankruptcy, one important element to understand is the look-back period. What is a look-back period, and how does it apply to three parts of the bankruptcy process? Here are a few answers.

What Is a Look-Back Period?

A look-back period is a period of time in the past used to assess certain types of transactions. A pension company might, for instance, look back at a person's income over three or five years to determine what their average salary was or what the highest salary was. This information is then used to figure benefits upon retirement.

Look-back periods in bankruptcy filing seek to accomplish one of two things: they may identify income ranges or look for specific transactions. These look-back periods are important because they help decide such things as how much your repayment plan is, whether you qualify for a type of bankruptcy, or what transactions may be suspect.

How Does the Means Test Involve a Look-Back Period?

Anyone who wants to file Chapter 7 (liquidation) bankruptcy must first face a look-back period as part of the means test. The means test determines your income over a period of time and uses this to either qualify you or disqualify you for Chapter 7 bankruptcy. Generally, the income look-back period is 6 months backward from the last day of the month prior to your filing date.

Your income during the look-back period is added up to find your typical average monthly income. This is used to determine if you qualify for Chapter 7 or must choose Chapter 13. Then, it can be used to help come up with your repayment plan in Chapter 13.

The challenge of this look-back period is that it may not be accurate. Because it includes things like one-time bonuses and it may not reflect a recent change in income, you may need to seek extenuating circumstances during the means test.

What Transactions Are Assessed During a Look-Back Period?

All bankruptcy filers must also expect a look-back period designed to find evidence of transactions that violate the bankruptcy rules. How do these operate?

First, the look-back period for payments known as avoidable preferences can be anywhere from 90 days to a year, depending on state rules and the type of creditor. The trustee will assess payments made during this time in case any of them wrongly prioritized a creditor. If they find payments that don't meet the bankruptcy court's rules, the trustee may void the payment and request that money back.

For instance, perhaps you paid off a Christmas loan from your grandparents but haven't paid your credit card bills during the look-back period. Even though you want to prioritize paying Grandma and Grandpa, the bankruptcy court may treat their loan the same as your credit cards. Therefore, both your family and the credit card company had equal rights to the money you paid your grandparents.

The second type of transactions sought are potentially fraudulent ones. The look-back period for these is generally between two and ten years. During this time, charges or debts racked up for luxury purchases and withdrawals of cash are suspected to be fraudulent. The court may assume that you didn't intend to pay them back. This is a misuse of the bankruptcy system, and you would have to prove otherwise.

How Can You Avoid Trouble With Look-Back Periods?

Look-back periods have the potential to derail your bankruptcy plans, so you should seek professional legal assistance to prepare for them. Custer, Custer & Clark LLC Attorneys at Law has aided Georgia residents with all their bankruptcy needs for more than 80 years. Call today to discuss your look-back period concerns and get the answers and guidance you need.

Trouble With Chapter 13 Payments? About Conversion to Chapter 7

Thu, 25 Feb 2021 21:49:00 GMT

Have you chosen Chapter 13 bankruptcy with a repayment plan? While these plans work out for many debtors, a lot can change in the three to five years of the plan's lifetime. If your situation has or is about to change for the worse, what happens if you can no longer fulfil your repayment schedule? Here's what you need to know.

You Can Change to Chapter 7

The good news is that if you can't carry on with Chapter 13, you do have bankruptcy recourse. You may apply to have your case converted to Chapter 7, which is liquidation and discharge. The same case will continue, but you'll receive a new trustee and have to amend a number of documents filed for your case. These amended documents usually include Schedule I and Schedule J as well as the Statement of Intent.

As with any Chapter 7 bankruptcy, the trustee would then liquidate nonexempt property and use it to pay off remaining creditors to the extent possible. Generally, this only includes property you owned when the conversion was done.

You May Need to Qualify Again

To convert your case, you may or may not be required to qualify for Chapter 7. Qualification usually means that you would submit to the means test. The means test has two parts, first comparing your income over the past six months with a standard threshold and then subtracting a list of allowed expenses and checking again.

If you lost a job or income within that six month period, the court can look at extenuating circumstances in the means test. If you still don't qualify for Chapter 7 even in your new circumstances, you can often request permission to convert your case anyway.

You Can't Act in Bad Faith

The court will carefully assess the reason you are converting your case. You must not appear to be misusing the bankruptcy system with this move. Transparency and honesty about your changing circumstances, assets, and debts is essential.

If the court believes you have deliberately withheld information, provided false information, transferred assets to facilitate the conversion, or otherwise acted dishonestly, it can deny the petition or revalue your bankruptcy estate to include both assets owned when you first filed for Chapter 13 and assets you gained later.

You May or May Not Save Assets

What happens to your major assets that you kept by opting for Chapter 13? The answers depend on the situation. As with any Chapter 7 bankruptcy, you can exempt certain assets from liquidation in accord with state or federal rules.

You may also be able to reaffirm loans for things like your primary home and vehicles. Reaffirming loans does require that you meet certain rules, such as that you are current with payments. With your new circumstances, though, you may need to carefully reconsider reaffirming loans that have since become burdensome. The choices you made when first applying for bankruptcy may not still be the right ones.

You Should Consult With an Attorney

If you think that you may need to convert your repayment case to a liquidation, the time to start making a plan is before things get dire. For instance, if you want to reaffirm any loans, missing payments could make that impossible. Acting early can protect you.

Meet with an experienced bankruptcy attorney in your state to find out what the rules are and what options may work for you. Georgia residents can count on the legal team at Custer, Custer & Clark LLC to help them navigate this process. Call today to make an appointment and find out how to ensure the best outcome no matter what's changed in your life.

6 Signs Your Business Should Consider Bankruptcy

Mon, 21 Dec 2020 22:00:00 GMT

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The decision to file bankruptcy is rarely an easy or a fast one. And for businesses that may have more at stake, it can be a harder choice. How can you know that it's time to seek bankruptcy protection for your business? You may need to look for some of the common indicators that you can't fix the company's problems on your own. Here are a few things to look for and why they're important.
1. Cash Flow Decreasing
Every business has cash flow problems on occasion. A customer may pay late or a contract might fall through. But if your cash flow - even if it's still positive - has been consistently getting worse, there is a more fundamental problem. If you can fix this foundational issue through restructuring debts and business operations in Chapter 11, the business has a fighting chance.
2. Very High Leveraging
Borrowing for various reasons isn't an inherent problem for any company. In fact, it can be a healthy part of business. But if your company has continued to borrow for the wrong reasons - like funding day-to-day expenses - and is now over-leveraged, it's losing money on a regular basis. Chapter 11 offers a chance to get out from under a lot of debt and focus on finding the reasons why you can't cover expenses.
3. Missing Payroll
Failure to make payroll - or even the possibility that it might happen - should be a big red flag for any company. Why? Payroll is not like most other obligations. There are serious consequences to missing this payment. Employee morale goes down, your reputation is permanently damaged, and you may get a visit from your state labor board.
Any employer at risk of taking this step has already exhausted other options. And when you've exhausted the normal options to maintain positive cash flow, it's time to look into the safety net provided by business bankruptcy.
4. Needing More Capital
The choice between borrowing money and injecting new capital is an important one. When you borrow money, it's usually for a temporary problem or challenge. You might need to finance a new piece of equipment, for instance.
But when the company needs additional contributions of capital funds from owners, officers, or investors, it represents a more permanent challenge. If the problems that led to this necessity aren't addressed, those funds will be less effective than they should be. And you may wind up back where you started but with fewer options.
5. Key Employee Turnover
How do key employees feel about your company's decisions and actions? The employees who are aware of management decisions but also work to implement those decisions often have an important perspective on how things are going.
If you've lost important employees on a regular basis, analyze why that might be. Are employees frustrated with the company? Are they jumping ship? Are they quitting without a new place to work? Do they feel blamed when things go wrong for the business? If so, maybe your employees are telling you that the company needs a radical shift in how it operates - something you can accomplish in restructuring.
6. Increasing Interest Costs
Analyze the amount of money your business has paid over time in the form of interest, late fees, origination fees, and penalties. These expenses are side effects of missing and late payments, borrowing more money, and disorganization. So the more you're paying to compensate for ongoing financial woes, the more you should consider finding a more permanent solution.
Is your business suffering from any of these indicators? More than one? If so, start taking control by learning how Chapter 11 or even Chapter 7 can save it or protect you and your employees. Georgia businesses have relied on the legal pros at Custer, Custer & Clark LLC since 1938. Call today to make an appointment.

Partnerships and Bankruptcy — How Everyone Is Affected

Wed, 28 Oct 2020 10:21:00 GMT

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Being in a business partnership offers a unique opportunity to pool your resources with other like-minded entrepreneurs to earn profit for all. But life - both personal and business life - doesn't always work out the way a person wants. Unfortunately, this can sometimes lead to the need to seek bankruptcy protection from creditors.

What happens to your partnership, or to you as a partner, when this happens? Here's what every partner needs to know to protect themselves.

What Happens When a Partner Declares Bankruptcy

Personal bankruptcy affects businesses in different ways depending on which type of legal entity it is. Sole proprietorships, some LLCs, and partnerships are all the sort of business that is irrevocably intertwined with the individuals who own it. Therefore, it's very hard to separate a personal bankruptcy from the business. Generally, this is because partners are personally liable for business obligations.

If a partner must declare bankruptcy, the partnership's path depends on several factors. If a general partner declares Chapter 7 bankruptcy, which is the liquidation of assets, it often causes the partnership to be dissolved as well. A limited partner's bankruptcy may not have the same effect since their liability is defined by their stake in the business.

Reorganization - Chapter 11 or Chapter 13 - may give the partnership more options, though. If the partnership is able to file Chapter 11 after a partner's personal bankruptcy, the business may be able to expel the affected partner by buying out their interest. While this may cause a financial burden for the business or surviving partners, it prevents the partnership from having to dissolve.

What Happens When a Partnership Declares Bankruptcy

Since partnerships are inextricably linked to their owners, how are these owners affected if the business must declare bankruptcy? Chapter 7 bankruptcy - asset liquidation - essentially dissolves the partnership and sells its assets to satisfy debts. Each party would walk away with either some of the remaining assets or nothing.

However, the real difficulty for partners occurs when the business assets don't cover all its debts. Because general partners hold personal responsibility for business debts, creditors may simply come after their personal assets instead.

These personal guarantees of debt cause a ripple effect within a partnership. Once the partnership's business bankruptcy is in play, all general partners may need to consider filing for bankruptcy on a personal level. And if they choose to take different paths regarding this legal protection, some may end up with more debt liability than they want - or expect. This can cause financial and personal impacts.

Chapter 11, or reorganization bankruptcy, is generally open to partnerships just as it is to other businesses. But the personal guarantees by partners makes this route trickier and therefore less popular. Creditors have more leverage because they can opt to pursue personal assets instead of accepting lower or longer payments by the partnership.

Where You Should Start

If you suspect that your partnership or any of its individual owners may need to seek bankruptcy protection, you should seek qualified legal advice as soon as possible. You need to protect your own interests and finances, so an outside attorney without a stake in the business or other partners' interests is ideal.

Together, you and your lawyer can decide whether you will be affected by a partner's or business bankruptcy, whether you need to claim your own bankruptcy, and how the partnership may fare from the effects.

Custer, Custer & Clark LLC Attorneys at Law can help. We have aided Georgian businesses and individuals in navigating the debt relief waters since 1938. Call today to make an appointment with our experienced team.

Newlyweds? 5 Ways Bankruptcy Could Make Your Marriage Better

Fri, 28 Aug 2020 19:09:00 GMT

A new marriage is a new adventure. And while most of this time will be magical and exciting, it is also a time when a new couple can face unexpected challenges. One of the most dangerous for many Americans is the challenge of dealing with sensitive money issues like debt and spending.

If you or your spouse is entering a new marriage with a heavy debt burden or a troubled financial past, have you considered declaring bankruptcy now? It may not seem the most palatable thing to plan right before your wedding, but it could be a positive thing for a new family. Here are a few reasons why.

1. Old Debt Won't Derail Plans

A new couple makes a lot of plans, both jointly and as individuals. But when the marriage is burdened by the debt of one or both members, some - or many - of those plans may not be achievable. Crushing debt brought into the relationship might prevent you from buying a home, starting a family, moving to a desirable location, or traveling with each other. By ridding yourself of debt, your new adventure can really begin.

2. One Partner's Debt Won't Be an Issue

If only one spouse is carrying a big debt burden, it could be a source of emotional conflict for either side. The person with a lot of debt or past money struggles may be embarrassed or feel overwhelmed trying to prevent it from being a problem for the other. Or the non-debt laden partner may find themselves unintentionally resentful or angry. Harassment and collections efforts could make things even worse.

Whatever the emotional toll, the best way to prevent an unequal debt load from causing problems within the marriage is to make it a non-issue.

3. You Get a Clean Slate

No matter who has had financial problems in the past (or what kind), marriage is a time for a fresh start. You have a variety of options when dealing with debt, but few of them wipe the slate away cleaner and faster than the right bankruptcy.

Chapter 7 bankruptcy is a straight discharge of eligible debts - meaning that once bankruptcy is completed, they will be gone. And even if you choose Chapter 13 (debt repayment), the repayment period is relatively short compared to many other options.

4. Both Partners Learn Financial Skills

When you tackle a big financial problem like this, both partners will learn valuable skills and lessons from the experience. No matter whether one spouse has debt issues or it's a shared problem, the financial education will serve both.

Financially inexperienced spouses may learn better ways to budget and prioritize expenses and debts. If one spouse hasn't personally had the type of financial setback the other has, they will have a new perspective that will serve to help them in the future. Both partners can even work with the credit counseling service to develop good money management habits.

5. You Avoid Unwise Choices

If you worry about bringing debt into your marriage or fear it will cause relationship problems, you may feel compelled to take action that isn't in your best interests. For instance, a spouse might try to walk away from the debt to avoid dealing with it. Or you might be lured in by the claims of debt consolidators or debt negotiators and end up worse off than before. You might even raid retirement accounts much earlier than you anticipated.

Bankruptcy, on the other hand, is a legal process that will improve the situation of most debtors. By choosing it, you take the sometimes difficult but safer course to a real solution.

Is your new relationship weighed down by the financial struggles one or both spouses bring into it? If so, start taking control by learning more about bankruptcy options individually and in tandem. At Custer Custer & Clark LLC , we can help. Make an appointment together today.

Understanding Wage Garnishment and Bankruptcy

Fri, 26 Jun 2020 19:52:00 GMT

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Creditors have many methods available to help them collect on debts. One of the methods is wage garnishment. A wage garnishment compels your employer to withhold a portion of your pay that goes toward the reduction of your debt. Wage garnishment can naturally put a bind on a person already struggling financially. Find out how wage garnishment works, especially related to bankruptcy.
Wage Garnishment Lawsuit Georgia follows federal law regarding wage garnishment. According to federal law, creditors cannot enact wage garnishment the moment you miss your first payment. Rather, they must get a money judgment from the courts. To obtain a money judgment, the creditors must file a collection lawsuit in court. They must argue their case and win it. When they've done so, they get awarded a money judgment, which is a statement legally testifying that you owe that creditor money. They can then contact your employer and enact the wage garnishment.
Wage Garnishments Amounts Federal law also dictates how much the courts can order in wage garnishment. The goal isn't to take all of your money but rather settle your debts while affording you enough money for living expenses. The money judgment creditor can file for 25 percent of your disposable earnings. However, they can also use another formula with your disposable earnings minus 30 times the current federal minimum wage, as figured in a weekly sum. If your disposable earnings fall within a predetermined category, they can garnish an amount within that range. The employer is only required to garnish the lesser amount between the two figures.
Wage Garnishment and Your Job Debtors often worry that a wage garnishment will jeopardize their job, which will obviously put even harder financial difficulties on them. However, Georgia law doesn't allow an employer to fire you because of one wage garnishment. The challenge comes if you face two or more garnishments. In that case, the employer can terminate your employment.
Wage Garnishment Challenge You're not helpless in the wage garnishment scenario. If creditors start filing lawsuits against you with the aim of earning a money judgment, you can hire legal help. The creditors must inform you of their money judgment before they seek garnishment. Therefore, you'll have time to challenge the judgment.
Attorneys can help you with that challenge. They might be able to negotiate with your creditors to enter into a payment agreement on your behalf. You'll be beholden to that agreement, but it often represents less payment than the wage garnishment. What's more, it keeps your employer out of your finances.
Wage Garnishment and Bankruptcy When you file for bankruptcy, the courts award you an automatic stay. The stay is an injunction that legally prevents creditors from attempting to collect on your debt. They can no longer call you or send you mail. They also can no longer file lawsuits against you to obtain the money judgment. And if they've already received the money judgment, they can't use it to garnish your wages. If you've already gotten to the wage garnishment stage, you can still file for bankruptcy. At that point, your employer can no longer withhold wages to pay your creditors. The creditors might file to have the garnishment continue, but the courts only award that in special circumstances. In some cases, you may even be eligible to receive some wages back from the garnishment.
Wage Garnishment Exemptions The courts consider certain debt above the rules. Not only are these debts not available for the automatic stay, the debtors don't even have to file for a money judgment. These debts include child support, defaulted student loans, and unpaid taxes. With child support, between 50 percent and 60 percent of your disposable earnings are eligible for garnishment. For student loans, the collection entity is entitled to an amount up to 15 percent of your disposable income. With unpaid taxes, the federal and state government can deduct your back taxes from your wages. If you're facing wage garnishment issues and want to explore your challenge and bankruptcy options, contact Custer, Custer & Clark, LLC, Attorneys at Law .

What to Know About Chapter 13 Repayment

Fri, 24 Apr 2020 21:02:00 GMT

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Many American struggle with debt, and as they try to get out of it, more and more bills only pull them under. Luckily, bankruptcy is a legal and realistic way to remove or restructure much of your debt. If you are ready to start improving your financial situation, keep reading to learn more about the Chapter 13 repayment period.
How Long Does the Repayment Period Last?
The repayment plan for Chapter 13 bankruptcy can last three to five years . In most cases, you can only propose a three-year repayment plan if your income is below the state median. Naturally, however, the shorter the repayment plan, the higher the monthly payment, and people with a lower income may not have enough to pay this high payment.
For this reason, many people still choose to take the full five years for their repayment plan. If you have the extra money, you may be able to get a repayment plan shorter than three years. You will only qualify for this, however, if you can and will repay the full amount you owe on unsecured debts.
How Much Do You Have to Repay?
Depending on your situation, the amount of money you repay can significantly vary. While some people choose to repay the full debt, others end up paying zero percent of unsecured debts. The leading factor that determines how much you pay is the "best interest of the creditors." In other words, it means the creditors won't get less because you filed for Chapter 13 instead of Chapter 7.
In Chapter 7, unsecured creditors get some money back after your nonexempt property is sold (excluding property you need to work and live). In Chapter 13, you keep your nonexempt property, so the only way lenders get any money is via your repayment plan. Of course, the courts will consider your disposable income so you don't pay more than you can afford.
How Does Repayment Affect Your Credit Score?
Both Chapter 13 and Chapter 7 bankruptcy negatively impact your credit score about the same. However, after bankruptcy, you will be free to start taking out loans again. In fact, getting credit cards and loans after bankruptcy is one of the best ways to rebuild your credit. As long as you keep the balances low and pay bills on time, your score should quickly rise.
Even with a low credit score, however, lenders may be more willing to lend to people with a Chapter 13 bankruptcy vs a Chapter 7. The lender may feel more comfortable with someone who tried to make a good faith effort to repay some of the debt.
Can You Save Money During Repayment?
If you have extra money, you should always try saving money, even during the Chapter 13 repayment plan. It can help if you fall behind a few months, or it can serve as financial support after you get out of bankruptcy. Plus, having extra disposable income will help get loans after your bankruptcy to boost your credit score. If you get a new job or promotion, and your income changes, your plan may change too. This is because the plan depends on how much disposable income you have. If you suddenly have more disposable income, your repayment may increase. On the other hand, if you have to take a job with a lower salary, you may be able to reduce your repayments. Typically, a change in salary doesn't affect 100 percent repayment plans.
Bankruptcy is a major decision, but it can be what you need to finally get your finances under control. With Chapter 13, you may have to repay some or all of the debt, unless you qualify for a zero repayment plan. If you would like to know more about bankruptcy and repayment, contact us at Custer, Custer and Clark LLC Attorneys at Law.

What Is Chapter 20 Bankruptcy, and How Can It Help You?

Fri, 28 Feb 2020 09:08:00 GMT

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When a person needs to file bankruptcy, they generally choose either Chapter 7 or Chapter 13 claims. But there are situations when it may be advantageous to plan on filing both types. While Chapter 20 is not an official bankruptcy chapter, it's actually a combination of Chapters 7 and 13. How can you do file for Chapter 20 bankruptcy? And why might it help your finances even more? Here is a short guide to Chapter 20 bankruptcy.

What Does Chapter 20 Mean?

The name, Chapter 20, doesn't refer to an actual bankruptcy code. It's a combination of the numbers 13 (Chapter 13) and 7 (Chapter 7). This is the strategy of filing for Chapter 7 bankruptcy to have some of your debts fully discharged. Then, you would file Chapter 13 to secure a payment plan for what's left.

Why Would You Need Both Chapters?

There are basically two situations when a debtor might need the service of both bankruptcy chapters in order. Both reasons involve the size and nature of the debt load.

The first scenario is when a person's debt exceeds the limit for Chapter 13 bankruptcy. In Chapter 13, your debt cannot be more than $1,257,850 in unsecured debt or $419,275 in secured debt (as of 2019). If your debt is over this amount, you may be able to reduce the total through a Chapter 7 discharge first. Then, you would proceed back to Chapter 13.

The second scenario is when a significant portion of your debt will not be discharged through Chapter 7. Non-dischargeable debt (such as certain tax debts or student loans), as well as secured debts that you reaffirm (usually car loans and mortgages), may still not be affordable. One solution, then, is to seek a repayment plan for remaining debts to make them manageable.

What Are the Other Advantages?

In addition to these two common reasons to utilize two claims, a second filing has a few other benefits. If you just need some time in order to get current with a non-discharged debt, for instance, filing for Chapter 13 provides an automatic stay that could provide the time you need.

Also, if you need to stretch out any debts longer than their allotted term (such as IRS debts), a five-year payment plan reduces monthly amounts due. And finally, you may be able to reduce or eliminate some secured debts through a process known as 'lien stripping'.

What About the Time Limits?

The bankruptcy system does have some built-in safeguards to prevent abuse, including a minimum time limit between receiving two discharges. If you file Chapter 7, you must wait four years to receive a discharge through Chapter 13. But this doesn't prevent you from filing and getting on a repayment plan - thus receiving the above benefits - without an actual discharge.

If you do seek a discharge after your payment plan period ends, you may need to wait until the time limit has expired. But because the clock begins on your filing date, it is likely to be less than four years.

Is Chapter 20 Guaranteed?

Using this strategy to fix your debt situation is controversial. While it does adhere to the letter of the law, some judges feel it does not represent an attempt to operate on good faith. In order to be granted, your bankruptcy petition - including debt lists and payment plans - must be proposed with the intent of being honest and having the right motives. Proposals to 'lien strip', in particular, may often be denied.

At Custer, Custer & Clark LLC Attorneys at Law , we understand the value of Chapter 20 filings as well as other strategies. We can help you find the best route for your circumstances. If concerns about either chapter of the bankruptcy code are preventing you from seeking the relief you need, call today to learn more about a Chapter 20 plan.

3 Options to Get Your Car Back After It's Repossessed

Thu, 02 Jan 2020 19:35:00 GMT

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Has your car been repossessed? This is undoubtedly a stressful time for you, but you may still be able to get your vehicle returned to you if you act quickly. How? Here are three options.

1. Redeem the Vehicle

The fastest way to get your vehicle back is, unfortunately, the option that few people can afford to do. This is called redeeming the car. To redeem the repossessed item, you would need to immediately pay the full amount due on the loan. Of course, redemption also requires that you act quickly to get the vehicle back before it is sold by the financing company.

Such an option is something that some borrowers can manage to do. You may be able to borrow the money from a relative, for instance, or sell a different asset. The downside for most borrowers, though, is that they must replace the first loan with a new amount of debt to be repaid (possible at a higher cost). This may save your vehicle for now, but it may not benefit - or even worsen - your overall financial picture.

2. Reinstate the Loan

A more doable alternative is to reinstate the loan by bringing it back up to date. Talk to the lender and find out how much it would take to bring the loan current and retrieve the car. You will likely need to pay all the past due payments as well as other fees and interest.

Is reinstatement a good option for you? That depends on your circumstances. Most borrowers who are far enough behind to suffer from repossession do not have the funds available to write a large check today. You should also seriously think about whether you will end up in the same situation shortly down the road. If your financial status has not changed, simply paying off old payments may not benefit you for long.

3. Declare Bankruptcy

If you are already in over your head so much that you cannot make those monthly payments, you should consider declaring bankruptcy. Several reasons exist for why this is may be a better long-term solution than other ideas.

First, filing for bankruptcy generally provides an automatic stay. A stay is a legal order that prevents any creditors from taking further actions to collect on your debt. In the case of a repossessed vehicle, the creditor likely will not be able to sell the car at auction until they get permission from the court. But you must act before the car can be sold or you risk losing it anyway.

Secondly, bankruptcy changes your financial situation for the better. Other debt, collections efforts, and accruing interest can be wiped out so that you have more money left each month to pay the debts you do want to keep - such as your vehicle. You stop paying for old debt and can start planning for a more stable future. For someone with unmanageable debt, this is more advantageous than just reinstating the car loan.

What Is Right for You?

Only you can make the best decision for your unique circumstances. But all three options - and others that may become available - generally have one thing in common: you must act quickly. The best way to move forward is to consult with an experienced attorney who deals with repossessions.

At Custer Custer & Clark LLC , our legal team has navigated many repossession cases before. We can help you learn about your right and your options so you can make a good decision that will result in a more positive outcome. Call today to learn more. We look forward to speaking with you.

Your Inheritance and Bankruptcy: What You Need to Know

Fri, 18 Oct 2019 21:17:00 GMT

If you are overwhelmed by debt, bankruptcy may be a viable option to help you regain your financial independence. When you file for Chapter 7 or Chapter 13 bankruptcy, you can potentially leave most of your debt behind and start over fresh. Unfortunately, bankruptcy is a complex process and does not come without its consequences. One question you may have is what to do with your inheritance. If you expect an inheritance or have received one, and you plan to file for bankruptcy, you need to know how your inheritance is impacted once you file. Here are some things you should know.
Your Inheritance and the 180-Day Rule After you file for bankruptcy, the following 180 days are important. During this time, any income you receive becomes part of your bankruptcy filing. This includes your inheritance, whether the inheritance consists of money, property, pensions, and the like. Many factors will determine what happens to your inheritance at this point.
Your Inheritance After 180 Days If you receive your inheritance after the 180-day period after you file for bankruptcy, your inheritance is not part of your bankruptcy estate. If you file for Chapter 7 bankruptcy, you can keep your inheritance instead of debt repayment. If you file for Chapter 13 bankruptcy, your inheritance may be used to calculate your repayment plan under a debt restructuring. Only an exempt inheritance is not a form of income to help pay your debt.
Your Inheritance and Your Bankruptcy Trustee When you file for bankruptcy and you receive your inheritance within the 180-day period, you have to tell your bankruptcy trustee, no matter if you fear the loss of your inheritance to your debt repayment. Be sure to speak to your bankruptcy attorney as to when and how to notify your bankruptcy trustee. When you receive an inheritance within the 180-day timeframe, you have to amend some of your bankruptcy documents. The documents will depend on the type of asset you received as part of your inheritance.
Your Inheritance as Part of Your Bankruptcy Estate Whether or not you can retain your inheritance will depend on if some or all of the inheritance is exempt. Exemptions are amounts and types of property you may retain in a bankruptcy. In Georgia, for instance, you can retain $21,500 in personal property or real estate. This includes any domicile you and your dependents use as your primary residence. You can retain up to $43,000 of the value if you are married and only one spouse owns the property. You can use up to $10,000 of any unused homestead exemption to protect your other property. You cannot use any federal exemptions in a Georgia bankruptcy. You should speak with your attorney to determine what, if any, exemptions for which you qualify. If you do not qualify for any exemptions, your inheritance will go toward the liquidation of your assets to help pay your debtors in your Chapter 7 bankruptcy. The inheritance is used to help calculate your payment plan if you file a Chapter 13 bankruptcy.
Your Spouse's Inheritance If your spouse receives an inheritance, what happens to it depends on how you file for bankruptcy, either individually or together. If you file for bankruptcy individually, your spouse's inheritance is not an automatic part of your bankruptcy. The only time his or her inheritance comes into play is if you begin to include parts of the inheritance within your assets as a married couple. You can protect the inheritance is safe as long as the assets are separate from your marital assets. If you file for bankruptcy together, the inheritance is part of your bankruptcy filing. You then have to go through the exemption process to determine what happens to your spouse's inheritance. If you have any questions about your bankruptcy, please contact us at Custer, Custer & Clark LLC Attorneys at Law .

Bankruptcy and Credit Card Debt

Mon, 22 Jul 2019 21:35:00 GMT

Do you feel overwhelmed by credit card debt? It's a situation that many people find themselves in. The average credit card debt in the United States is $6,741 per household and there are many people with substantially more credit card debt than that. But when should you decide that enough is enough and that you should declare bankruptcy? Read on to find out what you need to know about credit card debt and declaring bankruptcy.

There Are Options for Those With Credit Card Debt

Credit card debt can be negotiated, settled, and managed. There are avenues in place to help you, though it does mean that you will likely need to shut down your credit card accounts and go without credit cards as your credit recovers.

Many creditors are willing to settle a debt for a percentage of the amount owed, or even lower your interest rate which can help you pay off the remaining balance.

You Won't Qualify If You Can Repay the Debt

If it's possible for you to repay the debt, then you likely won't qualify. But possible is a relative term in relation to your income. If paying off your debts puts you near or at the poverty line, then it isn't really possible for you to repay the debt. This is considered to be significant financial hardship, which is what bankruptcy proceedings are intended to avoid.

To know whether you qualify for debt, you'll need to meet with a bankruptcy attorney. They will go over your finances, income, and expenses, to determine whether you are financially able to repay the debts that you have.

This is an important step because there are many factors to consider. For instance, if you could pay off your debts if you downsized significantly, you may still not qualify.

If You're Already Being Sued, Bankruptcy May Be the Best Option

If your creditors are already attempting to reclaim their money from you in court, bankruptcy is often the best option. Bankruptcy temporarily halts any legal action against you regarding your debts, making it possible for you to get some breathing room and consider your options. If you're already going to collections, your credit score is already likely to be bad. A judgment against you is going to hit your credit report, just as a bankruptcy would.

On the other hand, if you're current on all your credit card payments, and simply feel overwhelmed, the situation may still be manageable. It depends on how well you're paying your debts and whether you can continue to do so without suffering from extreme financial duress.

You Can Declare Chapter 13 Bankruptcy Instead of Chapter 7

When most people think about bankruptcy, they think of Chapter 7 - a complete dissolution of their debts, in addition to a dissolving of their additional assets. But Chapter 13 bankruptcy can be useful for credit card debt. During Chapter 13 bankruptcy, your debts are restructured under different terms, with the goal of having those debts paid off in a specific amount of time.

During Chapter 13 bankruptcy, your credit card terms will be renegotiated to be easier to pay off, much like a payment plan or a settlement. Your creditors will then be guaranteed regular payments on a scheduled basis.

Since there are many gray areas and there's no clear line between too much debt and a manageable amount of debt, it's often best to speak with a professional. A bankruptcy attorney will help you decide whether your credit card debt is enough that you should file for bankruptcy. For more information, contact Custer, Custer and Clark LLC , Attorneys at Law.

Bankruptcy and Your Career: What You Need to Know

Fri, 24 May 2019 00:00:00 GMT

Fear is a common emotion when people consider the option of bankruptcy. How an employer may react is a frequent concern. People in a financial bind would understandably feel concern that their source of income could be put at risk - or that the decision to file could disrupt their future employment goals. The risk may not be as high as people expect.

Discovery of Bankruptcy

Employers do not receive a notification of bankruptcy when an employee files or receives a discharge. Bankruptcy information is made public, but most people will probably never view the information. Filers miss very little work because they only meet with a bankruptcy attorney in-person a couple of times and court hearings are a one-time event.

An occasion when an employer could find out is if Chapter 13 bankruptcy is filed. Filers that choose Chapter 13 bankruptcy protection may need to have their paycheck garnished as part of their repayment plan. Employees can choose to make the information available to their employer beforehand to avoid a surprise notification.

Honesty about the situation can help to avoid conflict if the employer hears about the filing. Anyone can experience financial problems and most employers do not equate credit scores with ability. Tell the truth, and explain briefly how the problem developed.

Reaction of Employers

Employers cannot legally fire someone because of a bankruptcy. However, if other behavioral or performance problems exist with the employee, or if the company were ready to downsize, the notification may encourage them to let the individual go. If an employee loses their employment immediately after a bankruptcy, they may have a case for discrimination.

Section 525 in the U.S. Bankruptcy Code prevents employment discrimination due to bankruptcy. Professional licenses are also not at risk because the law prohibits the government from pulling licenses after bankruptcy or from refusing to renew or award a license to a qualified candidate.

Response From Applications

A skilled, trusted employee that has shown their value to an employer over time may feel confident their position is secure, however, a job hunt can make people feel much less comfortable about their chances. You should remember that the only way the employer will know of the bankruptcy is if they decide to pull the credit report and actually review it.

Not every employer automatically downloads a credit report. Even the employers that ask candidates for their permission to review their report do not always bother to do so. Sixty percent of employers pull credit reports, however, they do not necessarily do it for every position. Only 13 percent of those that get the information will check all the reports they receive.

Credit reports typically only become an employment factor for positions that involve money handling or a security clearance. Even then, the checks are to make certain there is no evidence of someone living beyond their means or careless behavior. Bankruptcy does not necessarily happen due to these behaviors.

Bankruptcy can often make employers less uncomfortable than they are with a candidate that has a large amount of debt. People that owe more money than they can repay are at risk of garnishment, lawsuits, and other distractions. An employer may feel a high debt load could encourage the candidate to make unethical decisions like embezzlement.

The decision to file bankruptcy can cause people to feel vulnerable and concerned about their future. Questions about what to expect are common as people go through the process. At Custer, Custer & Clark LLC Attorneys at Law , we want our clients to ask questions so they feel comfortable about the choice they make. Schedule a consultation today.

Should You File for Bankruptcy Before, During, or After Divorce?

Thu, 21 Mar 2019 01:23:00 GMT

Bankruptcy and divorce have strong ties. Financial struggle can lead to divorce and divorce can create financial struggle. Because of this, people often consider filing for bankruptcy along with filing for a divorce. However, for both these proceedings, timing is critical. Should you file for bankruptcy before, during, or after a divorce?

When to Consider Filing for Bankruptcy Before a Divorce

Filing before a divorce can make a lot of sense in many scenarios. A pre-divorce bankruptcy cleans up the debt and financial situation, which actually make the divorce process go more smoothly. A joint petition and approval for Chapter 7 bankruptcy can help eliminate debt in both names quickly. If you cannot qualify for Chapter 7 jointly, consider working together to file separately. This can give each of you lower incomes, which will help you qualify for Chapter 7. Unfortunately, a relationship waiting to start a divorce proceeding doesn't always come with parties on good terms. You can each file for bankruptcy separately and independently of each other, but that will cost extra time, create complications, and generate more confusing paperwork. Chapter 13 is also a possibility, but the process can last for years, whereas Chapter 7 often only takes months. In addition, the Chapter 13 repayment plan will require both parties to participate. The process can tie up assets and make it difficult to divide those assets as well. Filing for bankruptcy before a divorce works best for parties who can work together and are okay with waiting before filing for divorce. If there are problems or a lack of communication between you and your spouse, you may have to file on your own or wait until after the divorce to file.

When to Consider Filing for Bankruptcy During a Divorce

In almost all cases, you shouldn't attempt to file for bankruptcy and divorce simultaneously. A bankruptcy puts an automatic stay in place, which freezes assets and keeps creditors from trying to collect. The divorce proceedings will involve an attempt to divvy up the marital assets. The court will have trouble splitting assets while a different and ongoing legal process freezes those assets. This scenario can drag out both processes. Some extreme cases can call for filing for both bankruptcy and divorce in the same time period. Those niche situations are best identified by and discussed with a bankruptcy attorney.

When to Consider Filing for Bankruptcy After a Divorce

If filing for bankruptcy before the divorce is too difficult, then waiting until after the divorce may be the best option. For example, if both parties can't file Chapter 7 jointly, then both of you can wait until after the divorce to try again separately. If you find you will have to file for Chapter 13, even if you file separately, then waiting to start the process until after the divorce can make the most sense. In fact, the nature of Chapter 13 Bankruptcy means that it may benefit you more after you're divorced. The Chapter 13 repayment process will enforce structure on your financial obligations. The process can help you gain a better grasp of your new financial situation post-divorce. Filing for bankruptcy after a divorce does come with some challenges. This is especially true if your exspouse plans to file for bankruptcy as well. Some confusion over who owns what debts can arise, and you may need bankruptcy protection for yourself. No matter what, combining a divorce and bankruptcy isn't something you should attempt without consulting legal help. Bankruptcy, even at the best of times, can become a complicated process. If you're considering bankruptcy, whether before, during, or after a divorce, contact Custer, Custer & Clark LLC Attorneys at Law to discuss your options.

Questions to Ask Before Filing Chapter 7 Bankruptcy

Wed, 23 Jan 2019 02:20:00 GMT

If you are considering filing for bankruptcy, there are things you need to be aware of before you do. If you have poor spending habits, filing bankruptcy can help you get rid of qualifying debts you currently have, but if you continue with those poor habits, you may be in trouble again. Before you file for bankruptcy, you should be informed about the process, about your debts, and what happens after you file.

What Kind of Spending Habits Do You Have?

Does your debt consist of mostly credit card debt that you can afford to pay, but your spending habits are just too poor? Write down all of you debts as well as your income. Include things such as groceries, gas, and other monthly utilities you pay for. If there is no wiggle room at all, or no way to pay for your bills without being negative each month, this is a problem. If, however, you have enough monthly income to cover your debts but you spend too much money going out or on frivolous spending, you may benefit more from learning how to control your spending.

What Debts Are Included?

Not everything can be included in a Chapter 7 bankruptcy. If you have student loans that are outstanding, these cannot be included in your bankruptcy; these loans are debts that will not be forgiven and you will still be required to repay. Other debts, such as recent spending on a credit card, may also not be included in your bankruptcy. This decision is going to be up to the bankruptcy trustee. The trustee may ask about these expenditures and may either tell you that they need to be repaid or returned in order to repay the debt. Most other debts can be included in your bankruptcy including medical bills, auto loans, and even mortgages. If an auto loan or mortgage is included, your home or automobile may be foreclosed on or repossessed.

What Happens After Your File?

After you file for bankruptcy your creditors will receive a notice of your bankruptcy. At this point, your creditors should not send you bills or call your home. Inform them that you have filed for bankruptcy if you continue to get bills or phone calls. If the calls continue, give the creditors your attorney's phone number. To complete the bankruptcy, it will either be discharged (which means completed), or it will be dismissed (which means there was a problem and it could not be filed). After your discharge, the debts that were included in the bankruptcy will be forgiven. These debts will still be on your credit report (and marked as bankruptcy), and will remain there for up to 10 years.

How Do You Rebuild Your Credit?

Your credit will not be ideal after you file for bankruptcy, but that doesn't mean you will not ever qualify for a loan again. You can rebuild your credit, but the process will take you some time. To help you rebuild your credit, be sure to pay all debts including monthly utilities on time. Open a credit card with a low balance and spend a very small amount every month. Pay this small amount off immediately. This behavior will help you rebuild your credit, as it will show you can have a credit card, keep the balance paid off, and pay it on time. Before you file for bankruptcy, be sure to be well-informed about the process, what happens during and after you file, and what can be included in the bankruptcy. Make an appointment today with Custer, Custer &Clark LLC Attorneys at Law for a bankruptcy consultation.

DO'S AND DON'TS OF CAR REPOSSESSION

Thu, 22 Nov 2018 00:00:00 GMT

Repossession is a scary concept. One day, you are on your way to owning a car outright. The next, a financing company is breaking down your door or blowing up your phone demanding money. If you do not pay the company, you risk losing your car. Financing companies have the right to tow your car away if you do not pay the bill.
You face repossession if you fall behind in payments or otherwise violate the contract you signed with the creditor. The car is seized as collateral and sold, usually at auction, to cover the amount you owe.
Are you facing repossession of your vehicle? Are you afraid you might lose your car and the money you have paid on it? Read on to learn more about the do's and don'ts when you face repossession of your vehicle.
Do Not Hide
Unfortunately, hiding from your debts will not help you. Hiding the car could result in criminal charges.
Some people try to hide their vehicle in the garage or a storage shed in the hopes the lender will not be able to retrieve it. A judicial process will ultimately allow the lender to retrieve the property regardless of where you store it.
Do Consider Bankruptcy
When you initiate bankruptcy proceedings, creditors are not legally allowed to repossess your car, at least right away. If creditors have already repossessed your car, you may be able to get it back if you file before the car is sold.
Bankruptcy allows you to lower your payments and reduce the interest rate you have left on your balance. While your credit will take a hit, consider at least speaking with a bankruptcy attorney so you can understand the benefits of filing.
Do Not Fight With Fists
The creditor has the right to come on to your property to tow the car away, so trying to use force is not going to prevent repossession. In fact, force might even make the creditor less likely to work with you. If you try to fight the individuals who come to repossess your car, you will surely find yourself facing criminal charges. If the cops are called, it could complicate the process further while still leaving you without a car to drive.
Do Ask for Personal Belongings
While the lender may not automatically reach out to you to return any personal belongings you have left in the car, you have the right to ask for them back. You may be asked to pick up the items or the lender may send them to you.
Do Hire an Attorney
Even if the creditor takes your car back, the creditor may sue you in the future. Lawsuits are especially common if the creditor does not receive enough money to cover the amount you had left to pay on the car. You need an attorney to help you understand your legal options and so you can make better decisions for the future.
An attorney can also represent you in challenging the rights of the creditor to retrieve the car. Perhaps your payments are on-time and there is a mistake. The lawyer can also renegotiate your loan or take action against a lender who did not provide you with proper notification of the issue.
You do not have to deal with an unsure financial future. Attorneys are available to help you manage your finances and ensure you are going about the process of managing your money legally. Call Custer, Custer & Clark LLC today to set up a consultation with a compassionate attorney who can help with your unique car repossession situation.

WILL PEOPLE KNOW IF I DECLARE BANKRUPTCY?

Fri, 28 Sep 2018 00:00:00 GMT

Declaring bankruptcy isn't easy, but it can be the smartest financial decision for many people. Nevertheless, you may worry that others may find out about your bankruptcy. Even though bankruptcy does show up on your credit report, you can declare bankruptcy very quietly. Here's what you need to know about who will (and who won't) know about your bankruptcy proceedings.
Your Creditors Will Be Notified of Your Bankruptcy First
A bankruptcy proceeding halts any credit collection actions against you. Consequently, your creditors are going to need to be alerted first. Once they're alerted, they have to stop contacting you until the bankruptcy has been completed and your debts have been resolved, one way or another.
This does mean that your creditors are going to be immediately apprised of your bankruptcy, but these are the only entities who are going to be directly notified of your bankruptcy, apart from your bankruptcy trustee.
Your Bankruptcy Trustee Will Work With You
A bankruptcy trustee will be assigned to you during your bankruptcy. They will both help walk you through the process and make sure that your creditors are being paid. This trustee will not know you outside of the bankruptcy; they are a professional. Their sole focus is helping people who are going through the same process as you.
Your Employer May Find Out About Your Bankruptcy
Your employer may find out about your bankruptcy, but only in two situations. For example, some employers run a credit report and background check when hiring. These employers are usually working with confidential or sensitive information, or may even need you to procure top secret clearance.
In this case, the employer won't always judge you based on a bankruptcy - they just need to know your financial situation. In the case of top secret clearance, they want to make sure you're being open and honest.
The other situation is wage garnishment. If you're creating a payment plan for creditors through Chapter 13 bankruptcy, you may need to get your wages garnished through your employer. That means that the human resources department of your company is going to know about your bankruptcy. However, this will not happen if you're wiping out your debts through a Chapter 7 bankruptcy.
Your Bank or Landlord May Find Out
If you try to get new credit or you try to move into a new home, your bankruptcy will be revealed on your credit report. In terms of new credit, you may be surprised to find that many lenders are willing to lend to those who have had a bankruptcy in the past, provided that a few years have passed.
Likewise, though landlords may consider a bankruptcy a negative factor, they are going to be looking at your overall credit history and financial picture. You can still find a place to rent after a bankruptcy; in fact, there are even home mortgages open to those who have declared bankruptcy.
Your Family and Friends Won't Know
Perhaps most importantly, your family and friends aren't going to know about your declaration of bankruptcy unless you tell them. Bankruptcy is not going to be public knowledge except for those who are expressly running your credit report, and you need to consent for that.
Regardless of who will find out about your bankruptcy, bankruptcy is ultimately one of the first and best steps for many people who want to control their financial future. Declaring bankruptcy now is a step towards meeting your financial goals in the years to come. If you want to learn more about declaring bankruptcy and the intricacies of the process, contact Custer, Custer, & Clark LLC, Attorneys at Law .

WHAT YOU SHOULD KNOW BEFORE YOU REAFFIRM YOUR DEBTS IN CHAPTER 7

Sat, 07 Jul 2018 00:00:00 GMT

Making the decision to file for Chapter 7 bankruptcy could change your life in many ways - mainly, by helping you become debt free. When you file and have a car loan or house loan, you can choose an option that allows you to reaffirm your debt. Before you rush into this, you should understand what reaffirmation of debt is and how it affects you.

What Is Reaffirmation of Debt?

Reaffirmation of debt is a process you can use in Chapter 7 if you want to keep a secured asset that you own. A secured asset is something you own that you have a loan on. Secured debts include car loans and mortgages. For example, if you own a car and do not want to lose it when you declare bankruptcy, then you would have to reaffirm this debt.

Reaffirming the debt keeps the asset tied to the loan, which is beneficial because you will also keep the terms that you currently have in place. This includes the payment amount, interest rate, and the number of payments left on the loan.

Can You Reaffirm Any Secured Debt?

Reaffirming secured debt is a process that the bankruptcy trustee must approve. Additionally, you must also get approval from the lender. Sometimes reaffirming a debt is a relatively easy process to do, but other times the trustee or the lender will not agree to your reaffirmation.

The trustee will base their decision on several things. First, the trustee will determine if he or she thinks you can afford to keep the asset. Trustees decide this by reviewing a person's income and debts.

Secondly, the trustee will look at the amount of equity you have in the asset. Because assets with a lot of equity can be sold to help repay your debts, you may not be able to keep assets with too much equity.

Lenders also have a right to approve or deny reaffirmation requests, and they base their decisions on the same factors as trustees. Lenders typically will approve these requests for people who are current on their loans, whereas they may reject the reaffirmations if people are behind on their payments.

How Do You Reaffirm a Debt?

If you have a car, house, or both that you would like to reaffirm, then talk to your bankruptcy lawyer. Your lawyer will prepare the necessary documents to send to the lenders. Once the lenders receive the documents, they must respond to the letters by stating whether or not they will reaffirm the debts. In either case, your lawyer will let you know the lender's decision.

Should You Reaffirm a Debt?

Before you decide to reaffirm a debt, make sure you know what will happen if you reaffirm the debt and then cannot pay for it. When you are certain you can afford the payments, reaffirming a debt is a good choice.

If you start experiencing financial problems to the point where you cannot make the payments on the reaffirmed asset, then your lender has the right to foreclose or repossess your asset. In this case, the lender can require that you pay all the past-due balances plus any deficiency the lender might experience from selling this asset to pay off the balance you owe on it.

If you currently have too many debts to pay and cannot afford to make the minimum payments, then you should consider bankruptcy. Give our team at Custer, Custer & Clark LLC Attorneys at Law a call to learn more about bankruptcy and what the best options are for you. When you call, schedule a free consultation with one of our lawyers. We will review your case and help you however we can.

FILING FOR BANKRUPTCY WITHOUT YOUR SPOUSE

Wed, 30 May 2018 00:00:00 GMT

Using bankruptcy to become debt-free is a good option for many people; however, what if you are married and want to file for bankruptcy without your spouse? If you would like to file for bankruptcy individually while married, here are several important things you should know before you file.

PEOPLE CAN FILE INDIVIDUALLY IF MARRIED

The first thing you should know is that you can legally file for bankruptcy by yourself if you are married. The law does not require both spouses to file together; however, you should never file individually without understanding the full impact bankruptcy has on your debt and your spouse's debt.

Additionally, you are free to file for Chapter 7 or Chapter 13 individually if you are married. The law does not state that you may only use one of these options, but you should understand which option is best for your situation before you file.

Typically, a lawyer will review a person's debts, income, and situation before recommending a particular branch. The lawyer will also run tests and calculations to determine which branch a person qualifies for.
From there, you can determine what branch you qualify for and what branch would be the best option for you. You can also talk to the lawyer about the pros and cons of filing alone versus filing jointly with your spouse.

REASONS MARRIED PEOPLE FILE INDIVIDUALLY

Secondly, you should understand that there are several good reasons married people prefer filing individually for bankruptcy. The first reason is to find debt relief from bills that only one spouse owes money on. If all the debts you have in your marriage are in your name only, filing for bankruptcy might eliminate all those debts, leaving you and your spouse debt-free.

People who file individually while married also sometimes do this when their spouse wants to protect his or her credit. If you file alone and receive a discharge of your debts, your filing will not affect your spouse's credit. If your spouse's credit stays the same, he or she may still qualify for great rates on loans and credit cards.

GEORGIA LAWS WORK FOR YOU WITH INDIVIDUALLY BANKRUPTCY

Another good thing you should know about filing for bankruptcy in Georgia is that the laws work well for married people filing individually for bankruptcy. Georgia is not a community property state. What this means is that if you have debt in just your name, you can eliminate it through bankruptcy without affecting your spouse.

If you lived in a state with community property laws, filing for bankruptcy on your own debt could help you eliminate the debt that you owe; however, your spouse would still be responsible for the debt, simply because you are married. In these states, both spouses are equally responsible for all debts in a marriage, even if the debt is only in one spouse's name.

One last important thing you should know before pursuing individually bankruptcy is that the court will add up your income and your spouse's income when performing the means test. The means test helps determine if you qualify for Chapter 7. Even though you want to file alone, bankruptcy laws require adding in the income of both spouses, not just the spouse filing.

If you have a lot of debt that you cannot repay, you should evaluate bankruptcy to find out if it could help you regain control of your finances. To find out more about bankruptcy and your personal situation, schedule a free consultation with an attorney at Custer, Custer & Clark LLC Attorneys at Law. We look forward to serving you.