McBride Law FirmAlexandria LA Bankruptcy Lawyer | Louisiana Chapter 132024-03-15T09:31:52Zhttps://www.tommcbridelaw.com/feed/atom/WordPress/wp-content/uploads/sites/1402483/2021/12/cropped-favicon-mcbride-32x32.pngOn Behalf of McBride Law Firmhttps://www.tommcbridelaw.com/?p=500562024-03-08T16:08:07Z2024-03-15T09:31:52ZApply for a secured credit card
Your chances of getting approval for a card may increase if you apply for a secured credit card. This kind of card requires a refundable security deposit, which typically becomes the credit limit. This deposit reduces the risk for lenders, making secured cards an accessible option for individuals with poor credit histories.
These cards often come with annual fees and high interest rates. Still, using this card provides you an opportunity to show you are responsible with borrowing and repaying money, helping to improve your credit.
Have someone co-sign with you
Finding a creditworthy co-signer can significantly increase the chances of getting approved for a credit card. The co-signer agrees to share responsibility for repaying the debt, which mitigates the risk to the lender. However, this option requires a friend or family member with a strong credit profile who is willing to put their credit reputation on the line.
Become an authorized user
If it is too difficult to obtain your own card, you might ask a relative or friend if you can become an authorized user on their card. The payment history of the account holder will reflect on your credit report, potentially boosting your score.
This option is not as effective in boosting credit since authorized users lack the primary responsibility for paying off debt. Still, it may help you establish some kind of credit history while you wait for better options to become obtainable.
Rebuilding credit after bankruptcy takes time and discipline. Applying for too many credit products simultaneously can result in multiple hard inquiries, which can further damage credit scores. The key is to start small and make timely payments so you can apply for your own credit card or another loan when your credit score has improved.]]>On Behalf of McBride Law Firmhttps://www.tommcbridelaw.com/?p=500522024-02-22T14:40:15Z2024-03-01T05:46:14ZChapter 7: Liquidation
Chapter 7 is what most people think of when talking about bankruptcy. This process liquidates most of a debtor’s assets to pay off creditors. Upon successfully completing the process, the courts discharge most unsecured debts, freeing the debtor from the obligation to cover them.
At the same time, this process protects certain types of property. The primary residence, personal belongings and tools of the trade may be exempt from liquidation. Chapter 7 typically takes three to six months, making it one of the quickest forms of bankruptcy relief.
To qualify for Chapter 7, a person must pass a means test. This procedure compares a debtor’s average monthly income to the state median income and sees if the person has enough disposable income to pay for debts after covering life’s necessities. If the income is low or there is not enough money to pay off debts, the individual likely qualifies for Chapter 7.
Chapter 13: Reorganization
A person who does not qualify for Chapter 7 might be able to file Chapter 13 bankruptcy. This process involves creating a court-approved repayment plan to repay all or a portion of debts over three to five years. This arrangement may allow the debtor to keep assets while repaying liabilities.
Chapter 13 can help prevent foreclosure on a home or repossession of a vehicle. Upon completion of the repayment plan, the court discharges qualifying debts, but other obligations, such as certain taxes and domestic support, may require full repayment.
Most people do not plan to go into bankruptcy and might fear the consequences. However, this provision can be an excellent way to start over when one’s financial obligations become overbearing.]]>On Behalf of McBride Law Firmhttps://www.tommcbridelaw.com/?p=500472024-01-18T05:29:57Z2024-01-26T05:29:16Z1. Losing everything
One common misbelief is that filing for Chapter 7 bankruptcy means losing all possessions. In reality, Chapter 7 is a liquidation process, but it does not leave individuals destitute. Certain assets, such as basic household items and necessities, are usually exempt. It is important to recognize that the goal is to provide a fresh start rather than leave individuals without any means to rebuild.
2. Permanent financial ruin
Another misconception is that filing for Chapter 7 is a one-way ticket to permanent financial ruin. While it does impact credit scores, the effect is not everlasting. Over time, you can rebuild credit scores. It is a challenging phase, but with responsible financial habits, individuals can recover and establish a positive credit history.
3. A quick fix
Some believe that Chapter 7 bankruptcy is a quick fix for financial woes. However, it is necessary to understand that the process takes time. From filing the petition to the discharge, several steps must happen. Rushing through the process may lead to complications or even dismissal of the case. Patience is key to ensuring a smooth and successful resolution.
4. No responsibility after discharge
A significant misunderstanding is that individuals have no financial responsibility after debt relief. While Chapter 7 forgives certain debts, not all are dischargeable. Alimony, child support and student loans, for example, generally survive the bankruptcy process. Understanding these ongoing obligations is important to managing post-bankruptcy financial responsibilities.
In 2022, 225,455 people sought financial relief through Chapter 7 bankruptcy. Before starting on that path, a clear understanding of the facts can empower individuals to make informed decisions.]]>On Behalf of McBride Law Firmhttps://www.tommcbridelaw.com/?p=500422023-12-21T15:56:39Z2023-12-28T07:18:11ZFiling fees
The first financial aspect to consider is the filing fee required to submit your bankruptcy petition to the court. Bankruptcy comes in different chapters, with Chapter 7 and Chapter 13 being the most common for individuals. The Chapter 7 filing fee for 2023 is $338, while the Chapter 13 filing fee is $313. These fees contribute to the administrative costs of handling your case. Legal fees vary depending on the difficulty of the case. Chapter 7 legal fees must be paid before the case is filed. Most Chapter 13 legal fees are included in the monthly payments.
Credit counseling costs
Before filing for bankruptcy, it is mandatory to undergo credit counseling. This counseling helps you explore alternatives to bankruptcy and understand the implications of your financial decisions. The cost of credit counseling varies, but it may range from $20 to $50. Keep in mind that this fee may be waivable if your income is below a certain threshold.
Educational course expenses
Another requirement after filing for bankruptcy is to complete a financial management course. Similar to credit counseling, the cost of this course varies, typically ranging from $20 to $50. As this education is an unavoidable part of the bankruptcy process, it is essential to budget for this expense.
The United States Courts report that there were 418,724 bankruptcy filings for the year ending June 2023. This figure not only shows that bankruptcy is a common and accepted method of debt relief but also that it is accessible to a wide variety of people with various financial backgrounds.]]>On Behalf of McBride Law Firmhttps://www.tommcbridelaw.com/?p=500362023-12-05T15:52:38Z2023-12-13T04:34:24ZGather and organize documents
You may need bank statements, tax returns, pay stubs and other financial records to illustrate your current finances. Organize all of this information in advance so you can avoid overlooking any details in your preparation.
Review your petition
Ensure that all of the information in your bankruptcy petition is accurate and consistent with your financial records. You will need to address any discrepancies in the meeting, so take time now to confirm everything.
Prepare for questions
The main purpose of this meeting is for your trustee and creditors to understand your financial situation and the reason for your bankruptcy. Creditors may ask a variety of questions about your financial affairs, including income, expenses and any assets. Practice your answers to some of the most common questions for a smoother, more confident presentation.
Be honest
Remember that honesty is important during this meeting. Keep your composure and avoid volunteering any additional or unnecessary information, but provide accurate, honest responses to the questions asked. Remember to ask for clarification of any question you do not fully understand.
More than 416,000 Americans filed for bankruptcy in 2023. The process offers valuable respite from the burden of financial challenges, though it does have several necessary steps, including the meeting of creditors. When you know how to prepare, you can minimize the intimidation you might otherwise feel when facing them.]]>On Behalf of McBride Law Firmhttps://www.tommcbridelaw.com/?p=500332023-11-08T15:09:24Z2023-11-15T08:53:54ZAutomatic stay
In 2022, 387,721 people filed for bankruptcy according to U.S. Courts, and one of the benefits you receive when you file for bankruptcy is an "automatic stay" issued by the courts. This legal order prohibits creditors from taking any further collection actions against you. Creditors have to immediately stop all efforts to collect on your debts, including phone calls, letters or lawsuits.
Asset protection
Depending on the type of bankruptcy you file, you may be able to protect certain assets from seizure by creditors. Under Chapter 7 bankruptcy, some of your assets may be exempt from liquidation. Chapter 13 bankruptcy usually allows you to keep your assets and set up a repayment plan.
Debt discharge
Bankruptcy can also provide debt relief by discharging or erasing your debts. Under Chapter 7 bankruptcy, your unsecured debts, such as credit card bills and medical expenses, may receive discharges, meaning you are no longer legally obligated to pay them. With Chapter 13 bankruptcy, you can set up a manageable payment plan, often with lower interest rates, to repay your creditors over a specified period.
Protection from lawsuits
Filing for bankruptcy can protect you from creditor lawsuits. Creditors who obtain a judgment against you and attempt to garnish your wages or seize your property have to stop these actions. The automatic stay and the debt discharge process will help you avoid or end creditor lawsuits.
While bankruptcy is a complex and serious legal process, it can be a lifeline for individuals struggling with insurmountable debt.]]>On Behalf of McBride Law Firmhttps://www.tommcbridelaw.com/?p=500292023-10-30T21:15:13Z2023-11-06T11:05:55ZUnderstand your financial situation
Rebuilding your credit after bankruptcy starts with understanding your financial situation. Build a budget that details your income and expenses so you can see where your money goes and easily determine how much you can afford.
Build an emergency fund
A financial safety net helps you avoid falling back into the same financial difficulties you experienced before your bankruptcy. Set aside a small amount from each paycheck until you have an emergency fund established.
Get a secured credit card
A secured credit card can provide you the opportunity to rebuild your credit responsibly. It uses cash as collateral, making it more accessible for those looking to improve their credit. Use it responsibly by making small purchases and paying it off each month. This shows responsible credit use.
Pay your bills on time
Your credit history largely depends upon your payment behavior. Making timely payments shows responsibility and consistency, both of which help to improve your score.
The U.S. court system recorded nearly 400,000 non-business bankruptcy filings in 2021. Before you file, make a plan to start rebuilding your credit so that you can improve your financial position. Planning ahead with responsible financial behaviors will help you recover from the credit effects of bankruptcy sooner.]]>On Behalf of McBride Law Firmhttps://www.tommcbridelaw.com/?p=500242023-10-09T14:48:20Z2023-10-16T09:55:09Z1. Depletion of retirement funds
When an individual files for bankruptcy, their assets and transactions can come under scrutiny. Some situations may require the liquidation of assets to pay off creditors. Some transfers to retirement accounts may not be protected.
2. Disruption of ongoing contributions
The financial strain associated with bankruptcy can disrupt an individual's ability to continue saving for retirement. The costs linked to bankruptcy may leave individuals unable to make regular contributions to their retirement accounts. This interruption in savings can have a lasting impact on their financial future.
3. Limited access to credit
A bankruptcy filing can damage an individual's credit score, making it challenging to secure loans or lines of credit that might have gone toward retirement planning. When obtaining loans, high interest rates can further erode retirement savings potential, complicating efforts to rebuild.
4. Emotional toll and impulsive decisions
The emotional toll of bankruptcy can lead individuals to make hasty financial decisions that do not align with long-term retirement goals. Stress and anxiety associated with financial difficulties can cloud judgment and lead to impulsive choices that may further jeopardize retirement savings.
In the past year, personal bankruptcy filings rose 9.5 percent. Although filing comes with an upfront financial impact, a fresh start also offers an opportunity to reevaluate financial habits and prioritize retirement savings.]]>On Behalf of McBride Law Firmhttps://www.tommcbridelaw.com/?p=500202023-09-07T14:44:03Z2023-09-14T08:08:21ZNot providing complete financial information
When filing for bankruptcy, honesty is important. Failing to disclose all your financial information, including assets and debts, can lead to consequences, such as the dismissal of your case. Ensure you provide accurate and comprehensive details to avoid complications.
Running up credit card debt before filing
To maximize the benefits of bankruptcy, some people rack up additional credit card debt before filing. The court may look at this as fraudulent behavior, and it can lead to your debts not getting discharged and even legal penalties. Avoid incurring new debts once you decide to file for bankruptcy.
Not understanding the different types of bankruptcy
From July 2022 to July 2023, the number of consumer bankruptcy filings in the U.S. increased by 10 percent, according to the U.S. Courts. These filings consisted of two main types: Chapter 7 and Chapter 13. Chapter 7 involves the liquidation of assets to pay off debts, while Chapter 13 sets up a repayment plan.
Failing to attend mandatory credit counseling
If you plan to file for bankruptcy, you must first complete an approved credit counseling session. Neglecting this step or missing the session will result in your case getting dismissed.
Not keeping adequate financial records
Maintain thorough financial records during bankruptcy proceedings. Failing to keep records of income, expenses and transactions can make it harder to prove your financial situation to the court.
Filing consumer bankruptcy can help you improve your finances in many different ways. After you finish the filing process, put together a realistic budget that helps you prevent recurring financial issues in the future.]]>On Behalf of McBride Law Firmhttps://www.tommcbridelaw.com/?p=500162023-08-25T14:13:23Z2023-09-01T06:57:42ZTypes of bankruptcy
The kind of bankruptcy you file can be a factor. Chapter 13 bankruptcy can have a lingering impact for seven years. However, if you have gone through Chapter 7, bankruptcy may leave a negative record on your credit report for up to ten years from the date of your filing.
Chapter 13 may impair credit for less time because you have completed a repayment plan that compensates creditors, at least in part. By contrast, Chapter 7 involves the liquidation of your assets, which lenders and credit card companies usually take as a more troubling sign of your financial situation.
Taking action to improve your credit
The passing of time can cause your credit score to increase, but there are activities you may engage in to improve your credit even further. These include the following:
Complete debt payments on time
Keep a low credit utilization ratio
Maintain low balances
Refrain from opening up new credit
Do not close old credit accounts
Credit bureaus note responsible financial actions and record them in your record. It may take about two years from the time of your bankruptcy to start to boost your credit, so some patience may be in order. Still, the possibility of a better financial situation could be within your grasp.]]>