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The Bankruptcy Law Clinic Blog

Friday, September 23, 2011

The truth about credit cards and bankruptcy

Use our debt calculator and learn the sobering truth of how long it will take you to pay off your credit cards if all you can do is pay the minimum.  As you move through life, the debt begins to weigh you down, keeps you from sleeping and starts to affect your family life and work and prevents you from getting ahead.  We can help!

How to tell if your credit card debt is out of control

If you can you answer yes to two or more of the following questions you may have a real problem.

  • Have you maxed out more than one credit card?
  • You don’t know how much debt you have?
  • Are you flipping debt from one credit card to another?
  • Do you leave your monthly credit card statement unopened?
  • Are you struggling to pay the minimums on your credit cards trying to preserve an inflated credit score, hoping for better days ahead?

If you answered yes to two or more of these questions, you should talk to one of our experienced bankruptcy attorneys.   The best way is to set up a free no obligation consultation by calling us at 305-663-3281.  What is more important your family or your American Express?

Credit cards post-bankruptcy

One of the common myths regarding bankruptcy is that you won’t get new credit.  Not true!  In fact, many of our clients get credit card offers within 3 months of their bankruptcy discharge.  True, these are small $500 limit cards with ugly interest rates, but they may be the key to rebuilding your credit.  Post-bankruptcy discharge, all your unsecured debts are wiped out.  Unburdened by existing debt, and with your current income, you actually become a fairly attractive candidate for new lenders.  Use these new cards responsibly (PAY THE TOTAL BALANCE EVERY MONTH) - they can be the key to reestablishing your credit history and getting a 700+ credit score within 2 to 3 years.  Some of clients have been able to finance cars at a decent rate within 12 months of the bankruptcy discharge and purchase a house within 24 months.  The key is to use new credit properly and to not run balances month to month. 

You can do it! 

To find out more set up a free no obligation consultation by calling us at 305-663-3281.

 


Wednesday, August 10, 2011

How do I pay for my bankruptcy when I'm already broke!

 

RELAX! Most of our clients are broke.  We let most clients pay for their bankruptcy on a schedule that THEY decide.  Most times they are surprised by how quickly they can pay the whole thing off and get their cases finished.

 

Get the credit card company to pay for it!

As noted North Carolina bankruptcy attorney John Orcutt says-you can use your credit card company’s money to pay.  If you are doing a chapter 7 bankruptcy (the most common), your unsecured debts (credit cards, medical bills, etc.) will be wiped out in the bankruptcy. So why not take the money that you have been using to try and make minimum payments and use some of it to pay for your bankruptcy.  If your minimum payments are $500 a month you could stop paying the credit cards and pay us $350 toward your bankruptcy, while using the remaining $150 on ordinary expenses, to breathe a little.

CALL US TODAY AT 305-663-3281

Sell something!

Today, in the land of craigslist and eBay, someone’s junk is surely someone else’s treasure.  As Orlando bankruptcy attorney Ryan Hogan says putting on a yard sale or selling an asset on eBay, is a great way to come up with some quick cash to pay for the bankruptcy.  Remember, in a chapter 7 bankruptcy you get to keep a limited amount of assets before the trustee can take them away, so why not sell them in order to pay off your bankruptcy quicker.  I just sold my old cell phone for $173 on eBay (and got a brand new free one from T-Mobile- THANKS) and a bicycle frame for $275.  What’s in your closet?

Tax Returns!

Tax returns may be at risk in a chapter 7 bankruptcy so you should always spend down your refund on legitimate ordinary expenses before filing.  Paying your attorney fees with your tax returns is a great way to solve two problems.  Already spent it?  Why not …

Borrow the money (from family or friends)!

Perhaps you’ve been silently struggling with your debts, too ashamed to let anyone know of your situation. However, filing bankruptcy is an investment in your future, a fresh start.  If you haven’t asked for help yet- now is the time.  Many of our clients have friends and family that can give them a boost and help them pay their fees. These friends and family may use their own credit cards to help pay your fees and get you filed quickly.  Just be careful, as much as you may want to, you cannot pay anybody back (even Mom and Dad) untill after your bankruptcy is complete and your debts have been discharged.  Pay anybody back earlier, and you risk losing your bankruptcy.

CALL US TODAY AT 305-663-3281

Use Retirement Funds (401k)-
LAST RESORT ONLY

OK, first off, tapping your 401k retirement funds to pay off your debts is a bad, bad, idea.  In addition to the interest and tax penalties you will be responsible for, in many cases the 401k money isn’t enough to satisfy the creditors.  Remember thatyour 401k money is protected in bankruptcy. You won’t lose it unless give it to your creditors voluntarily!  However, in very rare situations, it may make sense to use your retirement money to pay for your bankruptcy when there is simply no other way to pay for your bankruptcy and you are facing:

  • An immediate foreclosure on your home
  • Garnishment of your paycheck due to a lawsuit
  • Losing security clearance due to financial situation

Remember, once your bankruptcy is complete, you will have more cash available so you will be able to replenish your retirement account.

Two more things to remember about us:

Nearly 85% of our clients are on some sort of payment plan. While most clients are paid off in four months, we have others who take much longer.  You tell us how many months you need to pay for your bankruptcy and we’ll calculate what the payments will be.  No interest, no penalties, no hidden charges, no stress.  Remember, bankruptcy solves financial problems, not create them. When faced with overwhelming financial pressure, it’s not an easy thing to pay for a bankruptcy, however our typical client  is able to wipe out tens of thousands of dollars in debt and get a fresh start.  Wiping out 30k of debt for less than 10%?  Don’t you wish all your decisions were that easy?

CALL US TODAY AT 305-663-3281


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