Important Steps To Take After Receiving Your Bankruptcy Discharge

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To rebuild your credit, we'll start with a bankruptcy worksheet

To rebuild your credit, we’ll start with a bankruptcy worksheet

Congratulations, you have successfully completed your bankruptcy and received a discharge of your debts. Other than not taking on any unnecessary debt, what should you do now in order to take advantage of your fresh start? After all, the goal is not just to get out of debt, but to thrive financially and create a better life for yourself. Here are a few steps you can take to rebuild your credit and maximize your chances of having a prosperous future:

1. Pay Your House and Car Payments On Time

If you plan to keep your home or car, continue to make your mortgage or car payments on time. The lenders will have retained their liens on the house and car, so if you want to keep them you must continue to pay for them, otherwise the lender will have a right to foreclose or repossess. And just as importantly, in order to begin rebuilding your credit, you want favorable reporting from these lenders, as house and car payments have a large impact on your credit score. Just by getting out of debt you have set yourself up to rebuild your credit within a relatively short time, and having favorable reporting from mortgage and car lenders will speed this process. Please note that if you did not reaffirm your mortgage or car loan, most likely your payments (or non-payments) will not be reported to the credit bureau. If that is the case, contact your attorney for further discussion on how to lessen the impact that non-reporting can have. If you obtained a car loan after your bankruptcy, be sure to make those payments on time, as that lender will most definitely report your payments to the credit bureaus. Continue reading

Income Tax Debt and Bankruptcy

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Do you owe income tax debt to the IRS?

Income tax debt is a very specific and troublesome sort of debt to have, but even tax debt can be treated in bankruptcy to aid a person suffering from this burden. Generally speaking, most tax debts can’t be wiped out in bankruptcy — you’ll continue to owe them at the end of a Chapter 7 bankruptcy, or you’ll have to repay them in full in a Chapter 13 bankruptcy repayment plan. But there are situations when tax debt will qualify for discharge. Here are some general rules concerning dischargeability of tax debt:

When You Can Discharge an Income Tax Debt

You can discharge (wipe out) debts for income taxes in Chapter 7 bankruptcy only if all of the following conditions are true: Continue reading

Five Benefits To Filing For Bankruptcy

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eliminate debt by filing for bankruptcyFor those who qualify, bankruptcy is truly a way out of trouble. You’ve been trying to ward off your creditors, and in doing so may be barely getting by, and living under extreme stress. Stop draining your retirement accounts and other savings and realize that bankruptcy can be very positive. Here are five benefits to filing for bankruptcy protection:

1. You Can Keep Your Home

While bankruptcy is handled through the federal court system, state law can come into play concerning your assets. Wisconsin residents filing for bankruptcy can take advantage of Wisconsin’s generous exemptions concerning the home in which they reside. If the net equity in your home is less than $75,000 ($150,000 for a married couple), you will not be in jeopardy of losing your home due to a Chapter 7 bankruptcy filing. In addition, even if your equity exceeds the exemption amount, you can still keep your home by filing a Chapter 13 bankruptcy. A skilled bankruptcy attorney will be able to let you know exactly what options are available to you concerning your home.

2. Your Creditors Will Stop Hounding You

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Stopping Wage Garnishments and Recovering Wages Garnished

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wage garnishment dollars in envelopeWhen a bankruptcy is filed, an automatic stay immediately goes into effect. This stops virtually all collection activity against the debtor. If a wage garnishment has been initiated, it now must stop. While it is always better to file the bankruptcy before any wage garnishment goes into effect, it often happens that the wage garnishment itself is what caused the debtor to finally seek bankruptcy protection. Once the bankruptcy is filed, the garnishment ceases immediately. It does not matter that the creditor doing the garnishment has obtained a judgment. That debt will be treated through the bankruptcy process regardless of whether or not it has been reduced to judgment.

In many situations, where a debtor has been garnished prior to the bankruptcy filing, the debtor’s lawyer is able to recover some or all of the debtor’s wages that have already been lost to garnishment. This is because laws that help bankruptcy trustees recover property for creditors can also be used to help the debtor. A skilled bankruptcy attorney will be well versed in these laws. Continue reading

Bankruptcy Can Help Reinstate A Suspended Driver’s License

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Riding public transportation due to a suspended drivers license?

Is Your Driver’s License Suspended For An Unpaid Judgment From An Accident?

Having your driving privileges suspended due to a judgment or debt from a car accident where you did not have car insurance is a reality in Wisconsin. Wisconsin law provides that a license may be suspended for failure to satisfy a motor vehicle accident debt. So if you wind up in an accident with no car insurance, you may end up without a license. Not having a license will prevent you from driving to work, school, or anywhere else, no matter how important or urgent. In addition, if you get pulled over driving with a suspended license, you risk fines, penalties, and possibly jail time. If you’ve had your license suspended due to an unpaid debt from an accident which you are unable to pay, you will want to seriously consider bankruptcy in order to solve your problem.

What Happens When You Get In An Accident Without Insurance?

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Why Americans Are Drowning in Medical Debt

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worried over medical debtHere is a recent article from The Atlantic, which helps to explain why so many Americans are forced to file bankruptcy due to overwhelming medical debt, despite the fact that they may have health insurance which they believed would cover the costs of their medical care.

Healthcare is the number-one cause of personal bankruptcy and is responsible for more collections than credit cards.

After his recent herniated-disk surgery, Peter Drier was ready for the $56,000 hospital charge, the $4,300 anesthesiologist bill, and the $133,000 fee for orthopedist. All were either in-network under his insurance or had been previously negotiated. But as Elisabeth Rosenthal recently explained in her great New York Times piece, he wasn’t quite prepared for a $117,000 bill from an “assistant surgeon”—an out-of-network doctor that the hospital tacked on at the last minute.

It’s practices like these that contribute to Americans’ widespread medical-debt woes. Roughly 40 percent of Americans owe collectors money for times they were sick. U.S. adults are likelier than those in other developed countries to struggle to pay their medical bills or to forgo care because of cost.

Earlier this year, the financial-advice company NerdWallet found that medical bankruptcy is the number-one cause of personal bankruptcy in the U.S. With a new report out today, the company dug into how, exactly, medical treatment leaves so many Americans broke.

Read more by Olga Khazan at TheAtlantic.com

Consumer Bankruptcy and Financial Health

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consumer-bankruptcyHere is an article published in March 2015 on the website fivethirtyeight reviewing a recent study by the National Bureau of Economic Research which shows that bankruptcy can help to greatly improve a person’s credit score and improve his chances of becoming a homeowner.

Consumer Bankruptcy and Financial Health

Authors: Will Dobbie, Paul Goldsmith-Pinkham, Crystal Yang

What they found: Filing for bankruptcy protection helps financially struggling borrowers hold onto their assets and raise their credit scores and makes them more likely to own their homes.

Why It Matters

Chapters 7 and 13 of the U.S. bankruptcy code allows individuals to reduce their debts while retaining their assets. In theory, bankruptcy is meant to give borrowers a chance to get back on their feet while giving lenders a chance to recoup at least part of what they’re owed. But measuring the impact of bankruptcy on borrowers is difficult because, by definition, people who file for bankruptcy are in financial trouble; even in a best-case scenario, they’re likely to end up worse off than people who never got into trouble in the first place. In this paper, the authors take advantage of the fact that bankruptcy cases are assigned to judges at random. Since some judges are more lenient than others, the authors are able to study the impact of bankruptcy protection on people who are in similar financial circumstances. They find that in the five years after a bankruptcy filing, people who are granted protection have a 13.2 percentage point greater probability of being homeowners and have a 14.9-point higher credit score, on average, than those not allowed to enter bankruptcy. The amount of debt they have in collection fell by $1,315 on average.

Read more at fivethirtyeight

Beware of Debt Collection Scams

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paying-billsThere is a new scheme that is flourishing around the country – scammers who pose as debt collectors and collection agencies and try to get consumers to pay them. These types of scam artists often use abusive and harassing tactics in order to frighten you into providing bank and other personal information, while you falsely believe that you are paying real debts.

Many people are unable to tell the difference between a legitimate collection agency and a scammer. But there are some red flags to watch for that indicate that the collection call you receive is probably not from a legitimate collection agency. Pay attention to these if you get a call from an alleged debt collector so you can avoid becoming the next victim. Continue reading

Common Bankruptcy Questions Answered

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image of demand for paymentIf you are getting constant calls from debt collectors because you are behind on payments to your creditors, you may wish to explore your bankruptcy options. Be aware that you have rights, even with regard to how debts are collected against you. The following is information from the Federal Trade Commission website which explains some of the laws that regulate debt collection. Remember, you have more rights than you may be aware of – if you are delinquent on one or more of your debts, the bankruptcy attorneys at the Bankruptcy Law Center can provide valuable information to you that most likely can save you thousands of dollars and hours of stress.

From the Federal Trade Commission:

Debt Collection

If you’re behind in paying your bills, or a creditor’s records mistakenly make it appear that you are, a debt collector may be contacting you.

The Federal Trade Commission (FTC), the nation’s consumer protection agency, enforces the Fair Debt Collection Practices Act (FDCPA), which prohibits debt collectors from using abusive, unfair, or deceptive practices to collect from you.

Under the FDCPA, a debt collector is someone who regularly collects debts owed to others. This includes collection agencies, lawyers who collect debts on a regular basis, and companies that buy delinquent debts and then try to collect them.

Here are some questions about your rights under the Act:

Get the answers here, from the FTC, then call an attorney at the Bankruptcy Law Center

* What types of debts are covered?

* Can a debt collector contact me any time or any place?

* How can I stop a debt collector from contacting me?

* Can a debt collector contact anyone else about my debt?

* What does the debt collector have to tell me about the debt?

* Can a debt collector keep contacting me if I don’t think I owe any money?

* What practices are off limits for debt collectors?

* Can I control which debts my payments apply to?

* Can a debt collector garnish my bank account or my wages?

* Can federal benefits be garnished?

* Do I have any recourse if I think a debt collector has violated the law?

* What should I do if a debt collector sues me?

* Where do I report a debt collector for an alleged violation?

Report any problems you have with a debt collector to your state Attorney General’s office, the Federal Trade Commission, and the Consumer Financial Protection Bureau. Many states have their own debt collection laws that are different from the federal Fair Debt Collection Practices Act. Your Attorney General’s office can help you determine your rights under your state’s law.

* For More Information

To learn more about credit-related issues, visit MyMoney.gov, the U.S. government’s portal to financial education.

Do you have other bankruptcy questions? Get them answered by the experienced bankruptcy attorneys at the Bankruptcy Law Center. Call 414-257-1900 for more information.

Beware of Bankruptcy Mills

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image of Shell game scamAt the Bankruptcy Law Center LLP, we understand that bankruptcy is a complicated process and each case requires careful attention to detail. Let’s face it: filing bankruptcy is a big deal, and you want to make sure it is done correctly. In addition to taking time to accurately discover all of the pertinent facts about your financial situation, we strive to discover each of our clients’ goals to ensure a successful outcome. But not all law firms take the time and care necessary for a successful bankruptcy. Beware of the bankruptcy mills, as they are more common than you may think.

Avoid using a bankruptcy law firm that is a bankruptcy mill. Here are some red flags. Continue reading