How Will a Bankruptcy Filing Impact My Credit?

Clearly, a bankruptcy filing is going to have a significant impact on your credit, and the exact details will vary depending upon many different factors. When it comes to your FICO score, if your score was low prior to your bankruptcy filing, the reduction will be minimal. Some people end up with better credit scores immediately after the bankruptcy. If you had a good credit rating before your bankruptcy, the score is going to plummet significantly. While your credit score is definitely going to go down if you file, there can be a silver lining. If you do nothing, your credit score will continually cascade downward month after month. On the other hand, if you take the bull by the horns and file a bankruptcy, you can begin to rebuild your credit sooner rather than later.

Chapter 7 bankruptcy is a liquidation bankruptcy, and it will wipe out all of your unsecured credit card debt. Chapter 13 is a form of bankruptcy that is called a reorganization. You continue to pay your bills with your disposable income when you file for a Chapter 13, but the debts are restructured to be more manageable. Depending on how soon after filing a bankruptcy you need good credit, a chapter 7 and chapter 13 will have different result. The type of bankruptcy that you file for also has an impact on the length of time that it will remain on your credit report. According to Experian.com, a Chapter 13 will be deleted seven years after the filing, and the duration is 10 years for Chapter 7 bankruptcy.

Many people think that they will not be able to get any type of credit for years after a bankruptcy filing, but this is not the case. Depending on the circumstances, you may be able to get credit cards and car loans shortly after your bankruptcy is finalized. However, you will wind up paying inflated rates of interest, and there will typically be significant annual fees and high interest rates on the credit cards. If you have no bad debt after the bankruptcy you will be able to qualify for a good mortgage in as little as 2 or 3 years.

Yes, a bankruptcy is going to have an impact on your credit, but it is not as severe as many individuals are led to believe. We offer no obligation, free case evaluations to people in Medford, Coos Bay, Klamath Falls, and a number of other communities in Oregon and Washington. If you will like to set up an appointment, send us a message through our contact page and we will get back to you in short order.

Is Bankruptcy My Only Option?

If your level of debt has become unmanageable, bankruptcy may be an option, but the ideal course of action will depend upon the circumstances. There are some situations that can be addressed without filing for bankruptcy, and you can always file at some future time if you find that there is really no viable alternative. Let’s look at a couple of basic scenarios that can potentially be resolved without a bankruptcy filing.

Stop Collection Agency Harassment

By law, debt collectors must adhere to certain statutory rules, but it is not entirely uncommon for them to step out of bounds. These guidelines are contained within The Fair Debt Collection Practices Act (FDCPA) that was enacted back in 1978. First and perhaps most importantly, if you choose to do so, you can send collectors a cease-and-desist letter, and they will be forced to discontinue the collection calls. Short of that, under provisions contained within the statute, debt collectors cannot contact you before eight a.m. or after nine p.m. Plus, they cannot contact you at work if they are aware of the fact that your employer does not allow you to take calls from collection agencies while you are on the job or if you have told them to not call you at work. If you have an attorney handling your debt relief efforts, the collectors will be required to speak with your lawyer and they will not be allowed to contact you personally.

There is also the matter of outright harassment. Debt collectors can be held liable if they threaten you with physical violence of any kind, and it is also illegal for them to threaten to mar your reputation. They are prohibited from using any foul or abusive language during their communications, and they must identify themselves as bill collectors when they contact you. If a bill collector violates any of these parameters, you can file a lawsuit to collect any damages that you may incur, and a successful judgment can include your legal fees and as much as $1000 in statutory damages.

Negotiate with Creditors

If credit card debt is the source of your financial difficulties, you can try to negotiate with the credit companies before the matter goes to a collection agency. Company policies vary, and the specifics of the situation will certainly be taken into account. You can ask if they will be willing to change your payment date, and you may be able to negotiate a lower interest rate. Under some circumstances, the company may be willing to provide a payment reduction on a temporary basis. These are a few possibilities, but there are others.

Schedule a Free Case Evaluation

There are a number of different debt relief strategies that can be implemented, and it can be difficult to make the right choice without the appropriate legal advice. Our service area includes Eugene, Portland, Salem, Roseburg, and a number of other cities in Oregon and Washington. If you will like to discuss your options with a local bankruptcy attorney, you can set up a free consultation if you call us right now at 1-800-682-9568.

Which Type of Bankruptcy Should I Choose?

Our law firm offers bankruptcy assistance for clients in a number of cities in Oregon and Washington, including Salem, Portland, Grants Pass, Bend, Vancouver, and TriCities. When you decide to file for bankruptcy in one of these states, you have multiple options, and the circumstances will dictate the ideal course of action. For most individuals, it will be a choice between a Chapter 7 bankruptcy and a Chapter 13 bankruptcy.

Chapter 7 is a “liquidation” bankruptcy, and you receive an automatic stay when you file. This temporarily prohibits creditors from trying to collect on debts that are outstanding. When you successfully file this type of bankruptcy, your unsecured debts like credit card balances and medical bills are completely eliminated. If you are a homeowner and you are current on your mortgage payments, as long as you do not have a great deal of equity, you can file for Chapter 7 and retain ownership of your property. You can also keep your car if you are not behind on the payments and you have limited equity in the vehicle.

In order to qualify for a Chapter 7 bankruptcy, you have to be able to pass a means test. Though there are exceptions, if your income exceeds the median income in the state of your residence, you cannot qualify for a Chapter 7 liquidation. Under these circumstances, if your debt is unmanageable, you may want to opt for a Chapter 13 reorganization.

When you file for chapter 13, you are allowed to keep all of your property, and you use your disposable income to make monthly payments that you can afford. Also, if you are not current on your home or car payments, you can make up these payments over time through the chapter 13 and retain ownership of your home or car. A chapter 7 will only temporarily delay a creditor from foreclosing or repossession if you are not current.

In addition to these two forms of bankruptcy, there is Chapter 11, which is a reorganization plan for businesses and individuals who have very high levels of debt. Chapter 12 is a reorganization bankruptcy that is available to certain family farmers and fishermen.

If you are a resident of Portland, Grants Pass, Salem, Vancouver or TriCities, we will be more than glad to provide you with a free bankruptcy case evaluation. These sessions are very relaxed, and we make every effort to make our clients completely comfortable every step of the way. You can simply click this link to take the first step, and the professionals here at OlsenDaines will take care of the rest.

What Is a Reorganization Bankruptcy?

If you are trying to gain a basic understanding of the ins and outs of bankruptcy, you will invariably come across some terms that you may not fully understand in the context within which they are being used. With this in mind, this blog post will provide a basic explanation of the term “reorganization” as it applies to bankruptcy.

Chapter 13 Bankruptcy

Some people are under the impression that your debts are simply wiped away when you file for bankruptcy. In fact, this is not necessarily the case. It all depends on the type of bankruptcy that you file coupled with unique circumstances surrounding your case. There is a type of bankruptcy called a Chapter 7, and unsecured debt like credit card balances and unpaid medical bills can be completely discharged if you file this type of bankruptcy. However, you cannot qualify for a Chapter 7 if you have enough disposable income to make reasonable payments toward your unpaid debts after your basic living expenses are met. Under these circumstances, you would have to file a Chapter 13 bankruptcy.

A Chapter 13 bankruptcy is a reorganization bankruptcy. Your debts are reorganized, and you make payments over a three-year or five-year period. You don’t lose any of your property, and if you are behind on your mortgage or your vehicle payments, you can pay back the arrearage through the payment plan. High priority debts must be paid in full, and these would things like child support, spousal support, and some income tax debt. Secured claims such as your home mortgage arrearage would also be paid in full through the terms of the reorganization plan.

However, you may wind up paying a fraction of low priority unsecured debts like credit cards balances and medical bills. In fact, you may not pay any of this debt at all if your disposable income cannot stretch that far. At the conclusion of the term, the unsecured debts would be discharged, and the creditors would not be able to seek repayment from you going forward.

Chapter 11 Bankruptcy

A Chapter 11 is another type of reorganization bankruptcy. This form of bankruptcy is primarily utilized by business entities like corporations and partnerships. However, there is a debt limit for individuals who would like to file for Chapter 13. Some of these people can opt for a Chapter 11 reorganization.

If you would like to learn more about reorganization, we would be glad to assist you. Our firm offers free case evaluations to people in Medford, Klamath Falls, Portland, and other metropolitan areas in Oregon and the state of Washington. To set the wheels in motion, send us a brief message through our contact page.

Do I Need a Lawyer to File for Bankruptcy?

Many people like to engage in do-it-yourself projects, and they have different motivations. Some individuals genuinely enjoy certain types of DIY challenges, and there are others who decide to go it alone because they want to save some money. There is nothing wrong with doing some things for yourself, and the information that can be easily obtained on the Internet makes it easier than it has ever been. However, you do have to know where the draw the line. You may feel confident replacing the alternator on your car, but do you think that you have the know-how to file for bankruptcy for yourself?

Technically speaking, you don’t have to have a license to practice law to file for bankruptcy. However, these are some rather complicated waters to try to navigate on your own as a layperson. First of all, do you know what type of bankruptcy to choose? You may hear about the fact that a Chapter 7 can make your credit card debts and medical bills disappear. This can be true, but are you sure you qualify for a Chapter 7? You have to pass a means test to qualify for this type of bankruptcy. If your income exceeds the median income in your state of residence, you won’t automatically qualify. A complex formula would be utilized to determine whether you are eligible to file a Chapter 7.

A Chapter 13 bankruptcy could be the right choice for you if you do not qualify for a Chapter 7. It can also be a better option if certain circumstances exist. For example, you cannot stop a foreclosure if you are behind on your mortgage through a Chapter 7 filing, but a Chapter 13 could allow you to repay the arrearage over time. When a Chapter 13 bankruptcy is filed, a complicated repayment plan is submitted to the court. This form of bankruptcy is so complex that there are some bankruptcy attorneys that do not handle them, so it is very unlikely that you could effectively file a Chapter 13 bankruptcy by yourself without any legal guidance.

We understand the fact that people who are experiencing financial difficulties are not particularly anxious to put out money to engage a bankruptcy lawyer. This is why we have established a very affordable fee structure, and our clients find that the value that we provide is extraordinary. Our firm offers free consultations to people in Portland, Eugene, Grants Pass, Bend, Tigard, and a few other Oregon cities, and we have locations in the state of Washington as well. If you would like to set up an appointment, send us a quick message through our contact page.

Bankruptcy Silver Lining: Learn From Your Mistakes

They say that experience is the best teacher, and this is certainly true when it comes to the way that you handle on your financial affairs. If you never make any serious mistakes, that’s the best-case scenario. However, there is a silver lining of sorts that you could draw from if bad decision-making leads you to a bankruptcy filing. Many people who have this experience use it to their advantage, and they become very responsible and financially conservative going forward.

You could start to apply a new perspective right away when you are creating post-bankruptcy budget. If you file for Chapter 13 bankruptcy, which is a reorganization, you will be required to stick to a repayment plan over a three to five-year period. The structure in and of itself will help you to develop a sense of financial discipline. After the bankruptcy has been discharged, you will invariably emerge with a better understanding of your monetary limitations as you continue to rebuild your credit standing.

The other type of bankruptcy that is most commonly used by individuals who are overwhelmed by debt is a Chapter 7 bankruptcy. With this type of bankruptcy, unsecured debts like credit cards and health care bills can be completely discharged. You would be allowed to maintain ownership of your home and your car if you are current on the payments. Once you are free of the burden of the unsecured debt, you will probably find it much easier to pay your other bills.

Perhaps surprisingly, you may be able to obtain lines of credit shortly after you file, because your debt to income ratio will improve. Plus, you would not be able to file for another Chapter 7 bankruptcy for eight years, and this would be a positive in the eyes of lenders. However, this is a dangerous area to get into right after filing for bankruptcy. Plus, the interest rates and fees will be higher to reflect the perceived risk.

If you are having trouble keeping up with your bills, you should certainly explore the legal options that are available to you. We have offices in Tacoma, Vancouver, Tri-Cities, and many different cities in the state of Oregon. Our firm offers complementary consultations, and you can set up an appointment if you send us a message through our contact page.