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July 2013 Archives

How Personal Injury Awards Are Handled In Bankruptcy

Most people are concerned about their physical assets when filing a bankruptcy case. However, it is important to consider your intangible assets too. Many people who are entitled to settlement payments from a car accident or other personal injury matter should discuss their case with a qualified bankruptcy lawyer at Levitt & Slafkes, PC. The Federal Bankruptcy Exemptions often do not provide much protection to personal injury settlement payments.  The real protection is provided to lost wages and medical expenses. Section 522(D)(11)(D) of the Bankruptcy Code allows the exemptions of personal injury recovery up to $21,625, except for pain and suffering or for pecuniary loss.  A "wild card" exemption can be claimed if you have no equity in your home (or you do not own a home).  This means is that the way your lawyer has your settlement payment classified may play a huge role in whether or not you get to keep your money. Many states, including New Jersey, have their own set of exemptions that a debtor may choose to claim instead of the federal exemptions. Deciding which set of exemptions to use can be confusing, so you should contact Levitt & Slafkes, PC to discuss what options are best for you. If you are interested in learning how filing a bankruptcy case can benefit you, contact Levitt & Slafkes, PC, at 973-323-2953. You can also reach us by filling out our online form. We represent debtors in Chapter 7, Chapter 13 and Chapter 11 filings. Let us help you get the fresh financial start you need today.

Could Our Nation Be Saved by Amending the Bankruptcy Code?

According to CNBC, there are some people who believe that if the Bankruptcy Code was amended to allow the discharge of student loans, many Americans who are struggling financially would be saved. The CNBC article reports that student loans account for approximately $1 trillion of debt! Between student loans and mortgage debt discharge, most individuals could obtain a true financial fresh start.

Many college graduates have a significant amount of debt and a difficult time finding employment. Currently, bankruptcy law only allows the discharge of student loans after a showing of "undue hardship." To learn more about this standard, read our blog titled "Will Student Loans in New Jersey Increase?" There are several pieces of legislation pending before Congress seeking to allow the discharge of private or commercial student loans.

Bankruptcy & Your Inheritance

If you are considering filing for bankruptcy, but you believe you may be receiving a substantial inheritance soon, contact Levitt & Slafkes, PC. There are certain dates that matter in your bankruptcy case. The date that the bankruptcy case or the estate of the deceased is settled or closed does not matter.  The day you filed your bankruptcy case and the date of death of the person who left you the inheritance are the dates that are important. Under bankruptcy law, if you inherit money within 180 days of filing a Chapter 7, the money can be used to pay your creditors.  In a Chapter 13, if you inherit money within 180 days of your case, the amount of the inheritance will be factored into determining how much you must pay into a Chapter 13 plan to pay your creditors. It is important to note that the inheritance may also be property of the bankruptcy estate in a Chapter 13, even after the 180 days has expired.  A Chapter 13 trustee may contend that "good faith" requires that you devote any excess money or assets to the plan. If you are considering filing a Chapter 7 or Chapter 13 and you believe that an inheritance is possible, it is important to confer with experienced bankruptcy attorneys. The legal team at Levitt & Slafkes, PC can review your individual circumstances and explain all of your options. We are bankruptcy lawyers who know how to make a difference in your financial situation. We have experience you can rely on and we care about your results. Contact our New Jersey law firm online by filling out the form or by calling 973-323-2953 to schedule a free initial consultation with an attorney at Levitt & Slafkes, PC.

Your Credit Score & How Bankruptcy Impacts It

It is a common belief that filing for bankruptcy ruins your credit score forever, but this is NOT true. While improving your credit after a Chapter 7 or Chapter 13 takes time, with patience and self-discipline, it can be done. It is important to understand what factors the credit reporting agencies look at in calculating your credit score.  Some of the factors are: •Payment history - it is essential that you review your credit report (the three major credit reporting companies are Experian, Equifax, and TransUnion) yearly to confirm it is accurate.  If you find any errors, be sure to have them removed. •Amount of debt owed - after your bankruptcy case, you will probably have very little remaining debt, but you may have secured debt such as your mortgage or vehicle loan.  Paying down your secured debt should still be a priority and it will help improve your credit score. •Recent credit history - paying your bills on time and maintaining credit cards with only low balances is very important.  After your bankruptcy filing, it is vital that you demonstrate responsible credit card use. •Types of credit being used - having secured and unsecured credit is common, but remember that the best strategy for managing your debt is to use credit only when necessary. Contact Levitt & Slafkes, PC to help you with your bankruptcy filing and also assist you in creating a plan for rebuilding your credit! If you are interested in learning how filing a bankruptcy case can benefit you, contact Levitt & Slafkes, PC, at 973-323-2953. You can also reach us by filling out our online form. We represent debtors in Chapter 7, Chapter 13 and Chapter 11 filings. Let us help you get the fresh financial start you need today.  

Need to File Bankruptcy AGAIN?

If you have previously filed a Chapter 7 or Chapter 13 case and you are struggling financially again, you are probably wondering if you will be allowed to file another bankruptcy. In short, you can file a second bankruptcy case, but there are some limitations. Typically, if your previous bankruptcy case was dismissed and you did not receive a discharge from the court, then you can file a new bankruptcy case at any time.  Below is a summary of the other scenarios for filing a second bankruptcy: First case was a Chapter 7 If your first case was a Chapter 7 bankruptcy and you received a discharge from the court: •you cannot file another Chapter 7 case and receive a discharge for 8 years from the day your first case was filed. •you cannot file a Chapter 13 bankruptcy and receive a discharge for 4 years from the day your first case was filed. First case was a Chapter 13 If your first case was under Chapter 13 and you received a discharge from the court: •you cannot file a Chapter 7 bankruptcy and receive a discharge for 6 years from the day your first case was filed. •you can file another Chapter 13 bankruptcy after 2 years have passed from the time you filed your first case. A "Chapter 20" is not actually a chapter under the bankruptcy code. It generally refers to a debtor who files a Chapter right after a Chapter 7 case is completed. When you file a Chapter 13 after a Chapter 7 without waiting four years, a discharge is not granted in the Chapter 13 case. However, there are other benefits that might help your financial situation. If you are planning to file a second bankruptcy, contact Levitt & Slafkes, PC for advice and guidance you can trust. We are bankruptcy lawyers who know how to make a difference in your financial situation. The attorneys at Levitt & Slafkes, PC have experience you can rely on and we care about your results. Contact our New Jersey law firm online by filling out the form or by calling 973-323-2953 to schedule a free initial consultation.  

Worried About Who Will Find Out About Your Bankruptcy Filing?

If you are delaying filing a Chapter 7 or Chapter 13 bankruptcy because you are concerned who will find out about it, hopefully this blog will calm your fears. While bankruptcy filings are a matter of public record, the reality is that your family and friends are unlikely to ever know about your filing, unless you owe them money or you tell them yourself. When you file a case, you must disclose all of your debts, assets, creditors, income and expenses. Your creditors will receive notice of your filing, which means anyone you owe money to will know that you filed a case. It is essential that you understand, however, that you should never try to pay certain debts prior to your filing in order to prevent the friend or relative from finding out about your bankruptcy.  We will discuss this topic further in a future blog, but it could result in your family member being served with a lawsuit rather than a simple court notice. Many debtors worry about their employer discovering the bankruptcy filing. Again, if for some reason you owe your employer money, notice will be given. An employer may also discover your filing by requesting a copy of your credit report. Finally, if you file a Chapter 13 case and your plan payments are made by payroll deductions, whoever writes your paychecks will have notice of your case. Otherwise, most employers do not know when an employee seeks bankruptcy protection. It is understandable that you do not want the whole world to know you filed for bankruptcy, but in today's economy, bankruptcies are more widely accepted. Most people are facing financial struggles and many have filed for bankruptcy too, you just didn't know about it! If you are interested in learning more about bankruptcy, contact Levitt & Slafkes, P.C. We are experienced in handling a variety of bankruptcy issues. Our offices are conveniently located in South Orange, New Jersey. Please call us at 973-323-2953 or online to schedule your free initial consultation today.

Medical Bills Reported as #1 Cause of Personal Bankruptcy

We recently discussed the link between healthcare costs and bankruptcy in our blog titled "Medical Issues Can Lead to Bankruptcy." According to CNBC, recent studies by NerdWallet Health, show startling statistics revealing that healthcare is the leading cause of personal bankruptcy filings. It is estimated that medical bills will contribute to approximately 1.7 million people seeking bankruptcy relief in 2013, surpassing credit card debt or foreclosures as the cause of financial hardship. In its study, NerdWallet Health analyzed data from the U.S. Census, Centers for Disease Control, the federal court system and the Commonwealth Fund. The report estimates that in America in 2013:

Recent Case Provides Hope for Discharging Student Loans

In a recent appeal before the U.S. 9th Circuit Court of Appeals, Michael Hedlund has given hope to students drowning in student loan debt. Mr. Hedlund was able to discharge (eliminate) $58,000 of his $85,000 student loan debt. Hedlund's case may be important to you because he was a middle-wage earner, not an individual in extreme poverty. He incurred his student loans with the intent of becoming an attorney, but after failing the bar exam several times, he gave up on becoming an lawyer. Hedlund got a job as a juvenile court services counselor, but he still could not afford to pay his overwhelming student loan debt. After numerous attempts to resolve his financial difficulties through debt relief options, Hedlund finally filed for bankruptcy. In order to discharge student loans, a debtor must prove "undue hardship" that means showing:

Bankruptcy versus Short Sales in New Jersey

If you are struggling to pay your mortgage and trying to avoid foreclosure, you are likely considering filing for bankruptcy or attempting a short sale. Many clients ask which option is better. The answer depends on your unique circumstances, but below are a few things to consider: •Treatment of deficiency balance.  A deficiency balance is any amount that remains due and owing on the mortgage loan after the house is sold. In many states, including New Jersey, there is no guarantee that the mortgage lender will agree to waive the deficiency after a short sale.  In some states, the law requires the mortgage lender to accept the short sale as payment in full.  However, if  you file a bankruptcy case, you can usually discharge all of your deficiency balance. •Your financial picture.  In a short sale, the only debt being dealt with is your mortgage.  Thus, if your financial struggles extend beyond your mortgage, a short sale only solves the one financial issue. When you file a bankruptcy case, you deal with ALL of your financial troubles.  By filing a bankruptcy case, you can bring all of your creditors into your case and handle your financial issues at one time. •Time involved.  The procedure for a short sale can be complex and time-consuming.  A short sale involves several parties and at the end of the short sale, there is no guarantee that your sale will close successfully.  When you file a bankruptcy case, you are provided immediate relief from your creditors.  When you complete your bankruptcy, you will receive a discharge order that could potentially eliminate all or a large majority of your debt. If you are struggling to pay your mortgage and/or you are facing foreclosure of your home, you should contact Levitt & Slafkes, P.C. to discuss your various options. If you are interested in learning more about Chapter 13 bankruptcy cases or lien stripping, contact Levitt & Slafkes, P.C. We are experienced in handling a variety of bankruptcy issues. Our offices are conveniently located in South Orange, New Jersey. Please call us at 973-323-2953 or online to schedule your free initial consultation today.

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