Can I File Bankruptcy While I’m in the Military?
Many people serve in the military to give us great freedom here in the United States. Serving in the military is more than a full-time job. A service member could be deployed for months at a time. Just because you are deployed doesn’t mean that your bills stop, and they can be a lot to deal with even if you have a family back in the States. Financial emergencies happen to everyone, and when they happen, it can create a massive hardship. If you are in the military or a veteran, you may be wondering if bankruptcy is an option for you. The good news is, yes, it is an option, and you may even have extra protection and benefits. Active Duty As with any large decision, it’s always a good idea to do some research before making up your mind. There are a few very important things to consider if you are currently active duty. If you file for bankruptcy, it could affect your security clearance, which could affect any promotions you are in line for. You will be given a chance to explain why filing for bankruptcy is best for your financial situation, as you are taking charge of your debt. Having large financial debt (as opposed to bankruptcy) can also affect your security clearance, so it is important to think through how filing bankruptcy can affect you. On the bright side, as a service member, you are protected under the Service members’ Civil Relief Act (SCRA.) This give you additional time on top of the automatic stay and will postpone your bankruptcy and other proceedings against you. Other Military Personnel There are several different types of bankruptcy you could choose, so the means test helps to determine which chapter of bankruptcy is best for you. The Means Test looks at your income, debt, expenses, and any assets you may have. It will determine if you have enough disposable income to pay off your debts. If you happen to be a disabled veteran, you actually may be exempt from the Means Test. The debt must have been incurred while you were on active duty or part of homeland security defense. In addition, you must be at least 30% disabled, and your disability must be the cause of your discharge. If you were called to active duty, to serve in a homeland defense activity as part of the National Guard, or as a reserve unit of any branch of the Armed Forces after September 11, 2001, you may also be exempt from the Means Test. You will need to have served for at least 90 days after September 11, 2001. This exemption is good for 540 days after you left active duty. New Start Serving our country is a tremendous sacrifice. It is done with honor and pride. But it can also come at a cost financially. If you have served our country and are now struggling with debt, don’t struggle alone. I can help you figure out what your best options are and will walk with you down the path toward financial...
read moreJob Loss and Bankruptcy
If you feel like you’re able to keep up with your bills, but honestly live paycheck to paycheck, you aren’t alone. Many people find it difficult or impossible to make any progress toward growing an emergency fund, so when something unexpected comes up, be it a job loss or hospital bill, they’re forced to use credit cards. After enough of these challenging circumstances, it’s easy to find yourself in over your head. While bankruptcy may be your best bet, there are things you can do to get things under control while preserving your credit. Decisive Action If you’ve lost your job, there are several things you’ll need to do. First, prepare for some “damage control” by looking at your budget and expenses. Are there any luxuries that you need to cut out? Do you eat out a lot or have memberships/subscriptions that can be ended? Try to cut your spending to only the things you truly need (at least for this time period.) You may be able to negotiate with your cell phone or internet providers to reduce your monthly bills. If you have loans or credit cards, contact your creditors to see if you can work out a payment plan to reduce or defer your payments. It’s always best to at least contact the company before you miss a payment, so that you can show you’ve been proactive. As you look at your budget, you’ll also need to think about benefits you may be losing, such as health insurance. Your employer may offer you COBRA, which extends your current coverage, but this can be pretty pricey. Take the opportunity to look at other options for private insurance; if your income is low enough, you may end up qualifying for state medical insurance or other forms of financial assistance. To bring in some income while you’re job searching, file for unemployment benefits right away. The process can take a while, and the benefits will not pay 100% of your wages, but it will help as you get over this hump. The unemployment office may also provide employment assistance such as job search or resume workshops, so be sure to take advantage of any help they offer. Update your LinkedIn and other social media accounts to show that you’re looking for work, and make sure all of your friends, family, and acquaintances know you’re job searching. You never know what connections you might make. If your job loss was due to a change in your field and there aren’t many jobs available, you may consider a career change. Before making any big changes, check https://www.careeronestop.org/ to do some research and explore potential options. Maybe this job loss will lead you in a whole new direction that will end up being for the better. Bankruptcy Solutions Dealing with a job loss is never easy, regardless of the circumstances. But if your period of unemployment drags on and on, the stress can really start to add up. If things get to the point where you can no longer keep up with bills or make minimum payments on debt, bankruptcy might be a viable solution for you. Don’t feel ashamed; many people have been in your shoes and have found relief through bankruptcy. If you’re uncertain what to do next, give me a call so that we can discuss your...
read moreFiling Bankruptcy While Unemployed
Losing your job can be a scary experience. You may worry how long it will take you to find something else, and if the unemployment goes on long enough, you may see your debt grow or start missing bill payments. If things have already been tight financially, unemployment may push you toward filing bankruptcy. Job loss is one of the top reasons people file bankruptcy, so you aren’t alone. If you don’t have a job, there are a few things you’ll need to consider before taking action. Chapter 7 One of the most important decisions you’ll make about your case is which chapter of bankruptcy you’ll file. Chapter 7 is meant for people who do not have enough disposable income, after their basic expenses are accounted for, to pay off their debt in a reasonable length of time. This is determined by conducting the means test. In these cases, being unemployed is not a problem; in fact, it makes your case stronger. If your income is below the median for a similar household in your area, you automatically pass the Means Test and are eligible for a Chapter 7. Even if you’re receiving unemployment benefits, your income may be below the median. Most Chapter 7 bankruptcies are also considered no-asset cases. This means filers do not have any non-exempt property that can be sold to repay creditors. Debts such as credit cards, medical bills, and other unsecured debts are discharged in a Chapter 7. There is a chance you may lose your home or car in a Chapter 7, but we will most likely be able to use exemptions to protect this property. Chapter 13 Some people prefer a Chapter 13, especially if their income is high or they’ve fallen behind on their mortgage and want to keep their house. Over the course of three to five years, filers make reduced payments on their debts, and at the end of that time, most debts are discharged. It may be possible to cram down a car payment, discharge a second mortgage, and roll mortgage arrearages into the payment plan. This may make non-dischargeable debts such as child support and student loans more manageable. If you’re unemployed, it may be difficult to demonstrate to the court that you’re able to keep up with your payment plan. But, if you’re receiving unemployment or other income or if your spouse has a job, a Chapter 13 may be possible. If you don’t have any income, it’s not likely the court will approve a Chapter 13, and you may need to file a Chapter 7. If you get a job during the bankruptcy process, notify me right away so that we can make the right plan. A New Start Losing your job doesn’t have to mean a dead end. It could lead you to a new career and could be the catalyst that drives you toward financial freedom through bankruptcy. Being worried is understandable, but I’m here to help. Together, we’ll get you pointed in the right...
read moreRebuilding Your Credit: Billing Disputes
Once your bankruptcy is resolved, the work of rebuilding your credit begins. You’ll want to ensure your credit report is accurate, and if not, contact the credit reporting agencies to make corrections. It’s also important to keep an eye on your bills and credit card statements to ensure accuracy. Sometimes a company may bill you twice for a purchase, your credit card company may not process a payment you’ve made, or you may discover that you’re a victim of credit card fraud. If you do notice errors, thankfully the Fair Credit Billing Act (FCBA) may make it easier to get things resolved. You’re Protected The Fair Credit Billing Act applies to accounts such as credit cards and revolving charge accounts. This does not cover loans, mortgages, etc., but it’s also very unlikely that you’d ever need to dispute these kinds of bills, since they are the same every month. If you do discover a discrepancy, your first step is to contact your creditor and to give them a written notice of your dispute. Once you give your creditor written notice of your dispute, they must meet requirements set by the federal government of addressing the issue. Within 30 days of your complaint, they must give you a written acknowledgement that they received your dispute. Your account must be corrected or an explanation must be issued within two billing cycles (this cannot be longer than 90 days.) During this process, your creditor may not close your account or tell you that they are going to report that you have skipped a payment. They also may not attempt to collect the disputed amount. Planning Your Written Notice As you prepare to contact your creditor with a written notice, it’s important to ensure that certain elements are included. You’ll need to address the notice to your creditor and include all of the pertinent information about your account, such as the account number and your full name. Give them all the details about the bill you’re disputing, including dates, vendor, and amounts. Include a statement that you believe this item or bill is incorrect and why you’re disputing the bill (you didn’t make the charge, company charged you twice, identity theft, etc.) Timing is important; you’ll need to send this notice within 60 days of receiving the bill with the mistake on it. You can find examples and templates of dispute letters online that may be helpful. Back on Track It can be frustrating to see an error on a bill, especially if you’ve worked hard to get back on your feet and clean up your credit after bankruptcy. Everything can be fixed, though. It does take some time and effort, but you can get back on track and continue to build your financial future. If you’ve been having financial difficulties and aren’t sure if you’ll be able to keep up with your bills, bankruptcy might be an option for you. I can help you make a solid plan to put your debt behind you....
read moreDealing With Credit Card Fraud
Once you have made the decision to file bankruptcy, there are many forms that will need to be completed, and you will need to include all your creditors in your paperwork. Requesting a credit report from one of the three main agencies (Trans Union, Equifax, and Experian) is a good way to ensure that you have listed everyone you owe money to. It is also a good way to ensure that everything listed on your report is accurate. It is also wise to continually monitor your credit report after your case is resolved to make sure that those debts show “discharged through bankruptcy” with a zero balance. Another benefit of keeping a close eye on your credit report is ensuring that you have not become of victim of identity theft. Credit card fraud is a crime where someone uses your credit card number to obtain cash or make fraudulent charges. If this happens to you, you will need to take some decisive action. Types of Fraud Criminals can attempt to get your personal financial information a number of ways. They will dig through your trash, steal you mail, use ATM skimming devices, and even attempt to trick you through phone calls or emails. Be alert, and guard your personal information carefully. Fraudulent activity can be accomplished in many different ways. Someone could commit identity theft through obtaining, signing, using, or forging a credit or debit card that belongs to you. A thief could also assume your identity. This happens when a thief opens credit in your name. They can do this by gathering enough information about you to fill out a credit application. They could also attempt to take over an account that you already have opened. This is accomplished by the thief changing the mailing address on your credit card and then reporting it stolen. The credit card company will mail out a new credit card under a new account to the address provided. Now the thief has access to go on a spending spree and you are left to deal with the mess left behind. A person can also commit credit card fraud by using their own card to make purchases they have no intention of paying back. What do I do Now? Noticing that you have been victimized by someone is the first step. Gather as much information as you can about the fraudulent charges, and notify the credit reporting agencies so they are able to put an alert on your credit report. Call the police and file a police report, providing as much information as possible to them. You never know if the person who committed the fraud may have been caught on a security camera. And lastly, work with your financial institution to get the charges resolved and off your record. If you need professional assistance, especially if you discover fraud as part of a bankruptcy, give me a call. I can...
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