A common problem, before and after bankruptcy, is inaccurate information on your credit report. With so many companies and collection agencies reporting to the credit bureaus on so many individuals, errors occur, probably more frequently than you realize.
The Fair Credit Reporting Act is a set of laws that provide protection for consumers from this inaccurate reporting of credit information. Under the FCRA, you have the right to dispute any item on your credit report, and the credit bureau and the company or organization that reported the information to the credit bureau are responsible for correcting the inaccurate information.
If you have inaccurate information on your credit report, here are the steps to follow to get that information corrected:
First, tell the credit bureau, in writing, specifically what information is inaccurate in your report. This is often referred to as a dispute letter. Here is a link to a sample dispute letter provided by the Federal Trade Commission: http://www.consumer.ftc.gov/articles/0384-sample-letter-disputing-errors-your-credit-report.
If you have any documents that support the inaccuracy of the information in your credit report, include copies of those documents with your dispute letter.
The credit bureau should investigate your dispute and provide you the results in writing. This usually occurs within thirty (30) days of the credit bureau receiving your dispute letter.
Second, tell the company or organization that reported the inaccurate information to the credit bureau, once again, in writing, that you dispute an item in your credit report. The Federal Trade Commission has provided a sample of this letter as well: http://www.consumer.ftc.gov/articles/0485-sample-letter-disputing-errors-your-credit-report-information-providers.
Once again, it is helpful to include copies of documents that support the inaccuracy of the information with your dispute letter.
If the company or organization continues to report the information you believe is inaccurate to the credit bureau, it must inform the credit bureau of your dispute. If, upon inquiry following your dispute letter, the information is found to be inaccurate, the company or organization must inform the credit bureau in order for the information to be corrected or deleted.
It is generally a good idea to pull your credit report a few months after a resolution of inaccurate information to ensure that the credit bureau is now reporting the correct information. The FCRA requires that each of the nationwide credit bureaus provide you a free copy of your credit report, upon your request, once every 12 months. You can order your free annual reports at www.annualcreditreport.com or by calling 1-877-322-8228.
Don’t let yourself be a victim of inaccurate credit reporting. At O’Bryan Law Offices, we encourage our clients to check their credit reports periodically, even after their bankruptcy case is discharged, in order to ensure that the information being reported is accurate.
We look forward to working with you to evaluate your specific financial situation and answer your questions. Call us today at 502-339-0222 to make an appointment for a free consultation with one of our experienced bankruptcy attorneys.
The most common type of bankruptcy case is the Chapter 7 no asset case. In this case the debtor does not lose any property and unsecured creditors (e.g. credit card companies and medical bills) receive nothing. A Chapter 7 no-asset bankruptcy is usually a “quick and easy” process. The following timeline describes the process:
Meet Your Attorney
Finding a good attorney is easy. Call the O’Bryan Law Offices at 502-339-0222 for a free consultation at one of our convenient locations in southern Indiana or Kentucky. Your attorney will listen to your concerns, will identify legal issues concerning your debts, and then recommend legal solutions. While bankruptcy is not always the best option to solve a financial problem, it is a powerful tool that should be considered. Your attorney will also ask you to provide financial documentation such as tax returns, titles and deeds, and paystubs. Your attorney will take this information and draft a bankruptcy petition.
Before you can file bankruptcy you must meet receive credit counseling from an approved credit counseling agency. Your attorney will recommend an agency that is approved.
Sign and File Your Bankruptcy
Once the petition is drafted, you will meet with your attorney to review and sign your bankruptcy petition and schedules. You must verify the contents of your bankruptcy filing under penalty of perjury, so it is important to carefully review this document. You must also pay your court filing fee (currently $306).
Attend Financial Management Class
After your case is filed you will attend a course in personal financial management from an approved agency. This course must be completed before the court can enter a discharge, so you might as well get it out of the way as soon as possible.
Section 341 Meeting of Creditors with Trustee
The bankruptcy court will send out notices of your Meeting of Creditors. Your meeting will take place between 30 and 45 days after your case is filed. While creditors do not typically attend this meeting, you will answer questions under oath from the Chapter 7 Trustee about your debts and property.
The Chapter 7 Trustee’s report is due to the bankruptcy court within 10 days after your Meeting of Creditors has concluded. This report states that the Trustee has completed a review of the case and that there are no assets to administer.
Creditors have 60 days after the date first set for the Meeting of Creditors to file an objection in your case. Objections are rare, especially in Chapter 7 no asset cases.
Discharge and Conclusion
If no objection is filed and all other requirements are satisfied, the bankruptcy court will enter an order discharging your debts, and soon thereafter it will close your case.
Every bankruptcy case is different and some cases do not follow the timeline described above. The experienced bankruptcy attorneys at the O’Bryan Law Offices will conduct an investigation of your finances and can give you a very good indication of what to expect during your bankruptcy, including how long it will take. Call today at 502-339-0222 for a free consultation.
People in Kentucky and Southern Indiana file bankruptcy for a variety of reasons. Often a bankruptcy is necessary to discharge a large financial obligation from a single catastrophic event, like a foreclosure or a large medical bill. Contrary to what some bankers and the media believe, many bankruptcy debtors have little or no credit card debt.
Occasionally a debtor in the Louisville area will report a credit card with no balance on the day the bankruptcy is filed. The Bankruptcy Code does not require you to report a zero balance credit card. If you don’t owe the credit card company on the date you file the bankruptcy case, it is not a creditor for bankruptcy purposes. If you do not list the credit card company in your bankruptcy schedules, the court will not send it a notice of your filing.
Having an open credit account can be useful to reestablish a positive credit history after your Chapter 7 bankruptcy discharge. However, your bankruptcy is a matter of public record, and most large banks and finance companies routinely compare new bankruptcy filings to their own records. Even though you may not have a balance, the credit card company may cancel the card when they discover your bankruptcy filing.
There are a few dangers that are associated with trying to keep a credit card account after bankruptcy. One danger is that the bankruptcy trustee may be able to demand that the card company turn over any large transfer of money used to pay off the account during a time when you were insolvent. Additionally, Chapter 13 debtors are prohibited from using credit cards during bankruptcy. Finally, intentionally failing to disclose a debt in your bankruptcy could land you in serious trouble with the court. If you have a credit card balance, you must report it as a debt.
If you have a credit card with a zero balance (or a very small balance) and you want to keep the card open, discuss your intention with one of the experienced bankruptcy attorneys at the O’Bryan Law Offices. Your attorney will weigh the pros and cons of keeping the account open, and direct you in the proper way to avoid trouble with the bankruptcy court. Call us today at 502-339-0222 for a free bankruptcy consultation.
Just because a relative is older and living on a fixed income does not mean that he or she is also debt-free. Many older Americans struggle each month to pay unsecured debts from very modest incomes. The most common forms of unsecured debts are credit cards and medical expenses, and for many of our elderly even a small unsecure debt can be a big financial complication. Some face the difficult decision to cut back on food, prescription medicine, or home utilities in order to make minimum payments on these debts.
Many of our elderly try to avoid bankruptcy because they believe that they can pay their obligations with minimum monthly payments. The unfortunate truth is that it takes many years to pay off even a small high interest debt with minimum monthly payments. In the meantime a changed interest rate and annual fees can cause that minimum payment to increase. Additionally, forgotten payments can lead to creditor harassment or lawsuits which can result in a real estate judgment lien and/or an asset seizure.
Discussing personal bankruptcy with an older loved one can be difficult. In many cases there is great concern over losing property or income. The federal bankruptcy laws have changed significantly over the past fifty years and offer great protections for the elderly. For instance, retirement income and social security are protected from creditor garnishment during bankruptcy. In most cases all of the bankruptcy debtor’s property is exempt from turnover; however your bankruptcy attorney can discuss any property that may be at risk. The bankruptcy laws offer many options for retaining property and discharging debts. After the typical case the unsecured debts are discharged and there is more money available to pay necessary living expenses.
Another common concern is the embarrassment of bankruptcy. A personal bankruptcy is usually a very private legal process. Friends and family are not contacted and bankruptcy cases are not published in the newspaper. Only creditors and co-debtors receive notice of a personal bankruptcy.
If an older relative is struggling with debt, discuss the situation with an experienced bankruptcy attorney. The federal bankruptcy laws contain many protections that shield the assets and incomes of the elderly while discharging burdensome creditors. Don’t let the stress of credit cards and medical bills tarnish your loved one’s golden years.
In 2004 and 2005, the banking industry spent millions lobbying for tougher bankruptcy laws. Washington Mutual, Bank of America Corp., JPMorgan Chase & Co. and Citigroup Inc. collectively spent $25 million during that period. The big banks’ efforts paid off in a major overhaul of the Bankruptcy Code in 2005 making it more difficult for struggling families to discharge credit card debt. However, the banks did not foresee the current housing crisis, and new research suggests that the 2005 changes to the Bankruptcy Code may have caused mortgage default rates to rise.
A paper published by the National Bureau of Economic Research states that the 2005 changes “raised the cost of filing and reduced the amount of debt that is discharged” thereby making it more difficult for debtors “to shift funds from paying other debts to paying their mortgages[.]” In other words, before the 2005 changes, many debtors struggling with a mortgage arrears and credit card debt could file bankruptcy, discharge the credit card debt, and free-up money to pay the mortgage. The new bankruptcy provisions make this process more difficult. As a result, fewer debtors are able to afford to save their homes through the bankruptcy process.
Jay Westbrook, a professor of business law at the University of Texas Law School in Austin and a former adviser to the International Monetary Fund and the World Bank said, “Be careful what you wish for. [The banks] wanted to make sure that people kept paying their credit cards, and what they’re getting is more foreclosures.”
If you are facing overwhelming debt and want to keep your home, there are many alternatives available to you. An experienced bankruptcy attorney can review your finances and explain your legal options for discharging or repaying your debts. Bankruptcy is not the only option for saving a home from foreclosure, and many cases are successfully resolved using a combination of bankruptcy and non-bankruptcy methods. Get the facts today and solve your debt dilemma!
Debt collectors can be ruthless. Persistent telephone calls at home and work, embarrassing letters in red envelopes, calls to friends and family, and even public posts to your Facebook account are all dirty tactics that debt collectors employ to harass you into paying. Fortunately, there are laws that protect you from unlawful creditor harassment.
The Fair Debt Collection Practices Act, or FDCPA, is a federal law that protects against abusive collection practices by third party collectors. Third party collectors include collection agencies and collection attorneys. The FDCPA does not apply to business debts or to original creditors. The FDCPA prohibits certain abusive practices including:
* Telephone calls before 8 a.m. or after 9 p.m. (your time);
* Requesting payment beyond what is actually owed;
* Using abusive, profane or obscene language;
* Threatening legal action which is not permitted by law (e.g. criminal action);
* Telephone calls at work after being instructed that your employer prohibits phone calls from debt collectors;
* Contacting you directly after being instructed that you are represented by an attorney
Another federal protection is the Fair Credit Reporting Act (FCRA). The FCRA is designed to promote accuracy and ensure the privacy of the information used in consumer credit reports. The FCRA contains a dispute process for correcting inaccurate information placed on your credit report. More information about the Fair Debt Collection Practices Act and the Fair Credit Reporting Act can be found on the Federal Trade Commission’s Bureau of Consumer Protection website. The FTC is charged with enforcement of both acts.
Hiring a bankruptcy attorney provides immediate relief from creditor harassment under the FDCPA, and all collection action must cease the instant you file a bankruptcy case. This protection lasts the duration of your bankruptcy and is replaced with the bankruptcy discharge at the end of your case. A creditor who violates these bankruptcy prohibitions can face a contempt of court charge in the federal bankruptcy court.
Don’t let creditor harassment overwhelm your life. Take charge by consulting an experienced bankruptcy attorney about your debt and learn how the federal and state laws can protect your property, your income, and your peace of mind.
A common question from clients preparing to file bankruptcy is, “Do I have to list it?” “It” can be an item of property, a financial obligation, a source of income, or even a reoccurring bill. The simple answer is, “Yes!” You must list all of your assets, debts, income and expenses. The bankruptcy process expects and relies on honest disclosures from the debtor. These financial disclosures are made under oath and threat of perjury. You must disclose everything.
Disclosing ownership of an asset doesn’t mean you will lose that property. Statistically, only four percent of all Chapter 7 bankruptcy cases have an asset that is turned over to the trustee. Federal and/or state exemption laws protect most property during bankruptcy, however property exemptions are only recognized when the asset is listed and the legal exemption is properly claimed. An asset that is concealed during your bankruptcy case will not receive the full protection of the exemption laws.
Likewise, disclosing income does not mean that you will be forced into a Chapter 13 repayment case. Most debtors pass the means test without much effort. In the remaining cases, most only require small adjustments. Disclose all of your income early during the bankruptcy process, and your attorney can discuss your legal options for discharging unsecured obligations without filing a Chapter 13 repayment case.
Intentionally failing to disclose a debt means that the debt is not discharged. Unfortunately, it also means that you have committed perjury since you attested to having listed all of your debts. Perjury is a federal crime, and you may be denied a discharge. Occasionally a debtor wants to omit a creditor from the bankruptcy case. Your attorney can help you with this decision. For instance, a credit card with a zero balance is not a debt and there is no disclosure requirement. In theory, since the credit card company is not listed as a creditor, it does not receive notice of the bankruptcy, and the credit relationship is not disturbed. Realistically, the credit card company will discover the bankruptcy independently and may restrict the account.
When it comes to bankruptcy it is important to be completely honest with your attorney. Your attorney can advise you on making the best disclosure decisions while staying within the legal requirements of the bankruptcy laws. Don’t hide a financial fact! Discuss it with your attorney and protect your legal rights.
The Bankruptcy Code forgives many honest financial mistakes. However, it also provides creditor remedies for debts that may be less than honest. The Bankruptcy Code allows a creditor to object to the discharge of a credit card debt when there is evidence that the debtor has committed fraud.
A bank objecting to the discharge of a credit card debt on the basis of fraud will file an adversary case against the debtor. The fraud claim is usually one of two types: (1) fraud in obtaining the credit; or (2) fraud in incurring the credit.
A bank may claim that the debtor committed fraud in obtaining the credit card. If the creditor can prove that the card was obtained under false pretenses (i.e. that the application was false), the credit card debt may be declared non-dischargeable because of the fraud. False pretenses may include many things, but is usually lying about financial stability or income.
The bank may claim that a charge was made when the debtor was unable to repay, and had no intention to repay the debt. Because proving this may be difficult for the creditor, the bankruptcy law presumes that a charge is fraudulent if luxury goods are purchased, or a cash advance is taken, shortly before the bankruptcy case is filed. It is then up to the debtor to prove that the charge is not fraudulent or the charge is not included in the bankruptcy discharge.
Banks routinely check the bankruptcy debtor’s account for signs of fraud. Some red flag actions include:
- Filing bankruptcy on a new card;
- Taking a cash advance prior to filing;
- Charges for travel or vacation;
- A debt transfer from one card to another;
- Credit charges while unemployed; and
- Charges made after consulting a bankruptcy attorney.
The more time between the credit card activity and the bankruptcy filing, the less likely the charge will cause a discharge dispute. The best advice is: if you are considering bankruptcy, stop using your credit cards. Consult with your bankruptcy attorney regarding the best way to discharge your credit card debt.
Credit Card APRs have risen over 20% during the past two years to an all-time high of nearly 15%, according to information CreditCards.com collects from 100 of the nation’s top credit card companies. While the best interest non-introductory rates are a reasonable 7 to 13%, people with bad credit can expect to get stuck with an APR of 24% or higher.
The Credit CARD Act of 2009 stopped card companies from raising interest rates without prior notice and curtailed other abusive practices. The credit card industry has responded by increasing interest rates for future charges and on new customer accounts. Beverly Harzog of Credit.com was quoted by CNNMoney as saying, “Rates are going up because card issuers know that once you get a card they can’t raise the rates, so they’re raising rates on the front end to ensure they get the revenue from that interest.”
So what are your best options if you have poor credit? First, stay away from cards that charge high fees commonly labeled Acceptance Fee, Participation Fee, or Annual Fee. In some cases a credit card with a $250.00 credit limit may already have $175.00 in fees charged against it!
Instead, take a look at secured credit cards. These cards are available to anyone, including recently discharged bankruptcy debtors. To obtain a secured credit card you must first provide a cash collateral deposit to the bank that becomes your credit line. For example, if you deposit $500 into the account, your credit line is up to $500. If you fail to make monthly payments or honor the terms of the credit agreement, the bank simply closes your account, offsets what it is owed against the deposit, and returns the remaining money to you.
In many cases a secured credit card is reported to the three largest credit reporting bureaus (Equifax, Transunion, and Experian), so the cardholder can improve a credit score significantly with payments over time. Some banks will reward its secured cardholders who pay on time with unsecured increases to the credit line. Bankrate.com maintains a list of banks that issue secured credit cards. Be sure to investigate and compare the fees and interest rates charged by these companies before opening an account.
If you are struggle with paying your bills each month, get out of the vicious cycle of debt by using the federal bankruptcy laws. The bankruptcy discharge can be your ticket to financial stability and savings for the future. Call today and discover how bankruptcy can help you.
Bankruptcy attorneys know that owing a debt that you cannot repay causes the debtor many headaches. First, there are the collection calls and letters. These collection actions are meant to harass you into paying something on the debt. Since the creditor only has a certain number of years to collect before the statute of limitations runs, after a few years the creditor will file a lawsuit against you. After the creditor obtains a judgment, the statute of limitations clock is reset and the creditor has more time to collect by garnishing wages, or seizing bank accounts or property. In some cases, the creditor may have twenty years or more to collect on a debt! During this time fees and interest can increase the balance of the debt many times over.
An unpaid debt has serious consequences to your credit report. Any debt that is more than 90 days delinquent indicates that the individual is experiencing serious financial problems. A debt stays on your credit report for seven years after the date of the last payment. Even after the debt drops off your credit report, if the creditor sues you the judgment will be reported for an additional seven years.
One of the chief benefits of a bankruptcy discharge is it provides a final resolution of your unpaid financial obligations. The bankruptcy discharge is a permanent injunction ordered by the bankruptcy court against your creditors forbidding any collection action against you, forever. The discharge order is extremely powerful and the penalties for a creditor who violates this federal court order can be severe.
A report of your bankruptcy case will stay on your consumer credit report for ten years after the date you file bankruptcy (not from the date of your bankruptcy discharge as many believe). While on the surface a bankruptcy stays on your credit report longer than a bad debt (ten versus seven years), the truth is that a bad debt can linger and significantly harm your credit score for much longer than ten years. After a bankruptcy your debts are reported as “discharged in bankruptcy” with a balance of “zero.”
If you are struggling with debts you cannot afford to pay, consider filing bankruptcy sooner rather than later. The sooner you discharge your debts, the sooner you can begin your financial recovery. Delay in filing usually results in further harassment, lawsuits, and difficulties. Contact an experienced attorney today and discuss your legal options for discharging your debts.