Month: October 2019

Adding Debts to your Bankruptcy

in Bankruptcy

Bankruptcy, whether it is a Chapter 7 or Chapter 13 case, is a useful and wonderful tool you can use to dig yourself out of a bad financial situation. The only downside is that it’s pretty much a one shot deal. Think of it as a yard sale for your debt. On that day you have to unload your stuff and you can’t go back and add anything to that garage sale after the fact. That’s a broad idea of how debt in a bankruptcy works. Every penny of debt you have when the bankruptcy is filed can be part of the bankruptcy but adding debts, as a rule, can be difficult. However, there are some rare exceptions.

When can you add debt to a Chapter 7?

When you come in to our office for your bankruptcy consultation, you should bring copies of all your bills. A recent version of your credit report would also be extremely helpful as well. By doing this, you can make sure that all your debts make it into the bankruptcy petition we file with the court. But you may not bring everything or you may have a recent bill that you don’t have a copy of or that isn’t reflected on your credit report.

If you realize after the initial filing that you forgot to tell us about a debt you incurred BEFORE the petition was filed, you can notify your attorney and the petition can be modified to include that debt. Generally speaking, there is a modest fee for the additional paperwork due to the court costs incurred by us to file the updated petition. 

When can you add debt to a Chapter 13?

We can modify your Chapter 13 bankruptcy if you forgot to include a bill or debt in the pile of paperwork you gave your attorney just like we can in a Chapter 7. However, this can be a little more of a hassle if the debt is substantial or if it’s secured because it could trigger a change in your Chapter 13 repayment plan and possibly cause your Chapter 13 payment to go up. If your attorney has to redraft your repayment plan, you’ll likely have to pay an additional fee including more court costs to modify the case.

When can you add debt to a bankruptcy after the initial filing date?

Sometimes you can add debts to your bankruptcy that were incurred after your initial filing date. These situations are as follows:

  • Your Chapter 13 is dismissed and you file another Chapter 13 case. All of the new debt you incurred between the two filings can be included.
  • If you file a Chapter 7 and receive a discharge then file for Chapter 13 protection, you can add any new debts to the Chapter 13.
  • If you file a Chapter 13 and then find yourself unable to make the payments and choose to convert to a Chapter 7, all the debts you racked up between the Chapter 13 filing date and the date of conversion can be added to your new Chapter 7.

 

How to avoid having to modify your bankruptcy case

You generally want to avoid modifications if you can.  Modifying your case can add time and expense that can be avoided if you plan your case the right way.  Planning your case often seems counter intuitive because most people view bankruptcy as an option of last resort and rush into it with the first attorney they find. The better scenario is to schedule a free bankruptcy consultation with a reputable attorney who can help you. They can help you plan the best time to file so that it maximizes the impact the bankruptcy will have on your debts.  You should never try to figure out bankruptcy on your own.  A mistake can be very costly and potentially wipe out any benefit you may actually receive by filing bankruptcy. 

The second thing to consider is preparation. Preparation is imperative to the success of your case.  You will need two years worth of tax returns, 6 months worth of pay stubs, a copy of all your bills, your bank statements and any other statements you have including savings accounts, receipts for childcare, rent or mortgage statements, and any other financial agreements.  Basically anything you would need to prove your financial situation. 

The experienced attorneys at Harmon and Gorove can give you advice based on your individual circumstances. Their decades of experience can help you make sure that your filing is as successful and impactful as is possible. Do yourself a favor and invest in your future. Contact the competent and compassionate attorneys at Harmon and Gorove today for a FREE consultation.  Let us help you get your life and your financial freedom back from greedy creditors.

Is Debt that’s Discharged Really Gone?

in Bankruptcy

Can my old debt come back to haunt me?

Clients ask this constantly.  They’re scared to death that the problems they had before their bankruptcy will come back and that the relief was only temporary.

The short answer is no.

Debt that is wiped out, in your bankruptcy case is gone as a legal liability forever.

The automatic stay that stops all collection activity when your bankruptcy is filed is replaced, once your case is complete, with a discharge injunction.

But then, this is law, so nothing is quite that simple.

Personal liability

The bankruptcy discharge eliminates all personal liability for debts that can be discharged.

If you eliminate your personal liability, your former creditors can’t sue you to recover discharged debts and can’t get a judgment that allows them to place liens on your assets or garnish your wages.

Was the debt discharged

Bankruptcy law prevents some debts from being discharged in bankruptcy. If you want your debt discharged, your debts must be listed in your bankruptcy schedules in order for us to notify your creditors.  We even have to notify the creditors that can’t be discharged.

Debts that can’t be discharged include

  • Child support,
  • Student loans,
  • Recent taxes,
  • Judgments for personal injury caused by drunk driving.

Unfortunately, the discharge order that’s issued by the court once your bankruptcy has concluded doesn’t list the debts that are discharged.  It just says that debts that were dischargeable in bankruptcy are gone.

Is there a lien

The discharge eliminates your personal liability for a debt.  Some creditors have obtained liens that they have attached to certain assets before you file bankruptcy.  If they have perfected that lien it can remain as a charge against those assets.

Perfected liens are an interest in property, a claim to a piece of what you own.

Some liens survive the bankruptcy.  The lien is only a claim on what you owned at the time the bankruptcy was filed.  They can not attach it to assets you acquire after you file bankruptcy.

A lien survives unless you get a bankruptcy order that avoids the lien. Those liens can be eliminated if it impairs an exemption you claimed in the bankruptcy case.

In order to do this you must file a motion to avoid lien in your case.  This means you need to tell your attorney that a creditor might have obtained a judgment from another court and placed a judgment lien before your bankruptcy case was filed.

Do creditors know you got a discharge

Your bankruptcy filing requires that you list all your creditors with good mailing addresses. We do this so they get a notice when your discharge is entered.  Notice to creditors is also about due process because your creditors do have certain rights.

Creditors also get notified so they can participate in the bankruptcy proceedings. It allows them to exercise their rights in the case.

Once your case is discharged, the court mails a copy of the order discharging your debts to everyone on the list of creditors you provide to your attorney at the onset of your case.

If you leave creditors off the list or the debt is sold to someone else, they have no way of knowing that you’ve discharged your debts.  However, notifying creditors isn’t everything. There are rules that pertain to bankruptcy that wipe out debts, even if the creditor isn’t notified.  

So, the rule is:  the debtor’s personal liability for a dischargeable claim is wiped out forever, if the creditor got notice or if there was no payment to any creditors in the case.

If you are drowning in debt, the attorneys at Harmon and Gorove are experts in handling Chapter 7 bankruptcies. We have handled thousands of cases and helped discharge millions of dollars of debt for our clients.  If you feel the need to speak with a qualified bankruptcy attorney contact the attorneys at Harmon and Gorove to schedule a free, no obligation consultation to find out what your rights are under the Bankruptcy code. 

5 Ways to Tell People You’re Getting a Divorce

in Divorce

We all want to communicate with others, it’s one of the most basic of human needs. This is especially true in times of divorce. Wanting to communicate with people and knowing how to do it is often where problems can occur. 

In today’s world, there are more ways to communicate your divorce announcement than ever before.

Facebook

For almost anyone on earth that has access to a computer, Facebook is the dominant force in Social Media. It makes sense that you might be contemplating announcing your divorce on Facebook.  You can reach hundreds or even thousands of people with a single post. Facebook offers a number of approaches. There’s the subtle way, simply changing your relationship status from married to single, divorced or its complicated.

The downside of doing this is that your status change could trigger a barrage of messages and comments from concerned friends and family.

If you do announce your divorce like the one mentioned above, posting that on Facebook can actually be reasonably productive. You will break the news to a lot of people at one time. However, the best way to announce this kind of thing on Facebook is to prepare a joint statement with your spouse. Even with divorce, there’s strength in presenting a united front. If that’s not possible, you can always post the news alone.

Just remember one thing: Everything you post on Facebook can be used against you in court. So if you’re not doing a joint statement, keep your post short, simple and non offensive!

Mass Email

A more private alternative than social media, email is a good way to let people far and wide know the news.  It also controls WHO knows, since you’ll control who gets the email. But, this approach also has its downsides.

First, if you send a mass email to a lot of people at once through your regular email you might get tagged for spam.  That means that lots of people won’t see it.

Of course, you could send individual (and personalized) emails to everyone you know. The biggest downside to this is that custom crafting all those emails can be tiring. The final problem is that, as with Facebook, you’re likely to get a responses you’re not ready for.

Divorce Announcements

Much Like wedding announcements, divorce announcements are a thing and they are a formal way to let your friends and family know about your new development.  These should ONLY be used once your divorce is final and should NOT be used until such time.

Greeting card universe  features a number of divorce announcements.  If you do decide to send divorce announcements though, use caution. While most of them seem funny, a great deal of them border on bad taste. So if your intended recipients are easily offended, this may not be the best way to break the news to them.

Christmas Cards

Just like with Facebook, there’s two schools of thought on this way of announcing your divorce.

If you’re trying to be subtle, you can include a family photo of just you and your kids in your Christmas card.  Simply sign the card with just your name and your kids’ names. Most people can read between the lines, although some may think your spouse died.

If you choose to be more forthcoming you can always include a statement in your card about what happened this year with your family and include the announcement of the divorce in that.

This approach isn’t for everyone but it could cut down on the emails and comments you might face using social media.

Face to Face

There’s no more personal way to communicate but it’s also one of the hardest ways. It’s emotional and time consuming. When you are first starting your divorce journey, having one-on-one conversations about your divorce with anyone can be extremely challenging.

However, face to face conversations are the best way to break the news of your divorce to those who are close to you. Just make sure you keep it positive and productive.

You also need to consider the timing of the conversation. If you open up to people about your divorce too soon, you’re either going to be a sobbing mess or you’re going to be mad enough to spit nails. Your emotions are too raw for you to be anything else.

Being emotional is okay if the people you are talking to are your closest friends and family. If you’re trying to have a face to face conversation with anyone else, it’s probably best to wait until your emotions have settled down and you can talk about your divorce without becoming too emotional.  

If you’re facing the prospect of divorce call the attorneys at Harmon and Gorove today and schedule a free consultation to find out what your options are for an uncontested divorce. 

Ending your Marriage: 7 Steps to Prepare for Divorce

in Divorce

Deal with Your Emotions

Often, emotion is the driving force behind divorce.  Emotions drive every disagreement, drive people to fight in court and cause them to destroy what could otherwise be an amicable process.  When your emotions spin out of control, you’re much more likely to have a contested divorce. That said, controlling your emotions doesn’t mean you have to act like a robot or a zombie, divorce IS emotional and sometimes you’re going to break down. However, the more you keep your emotions under control the less drama you’ll experience in your divorce. One of the best things you can do in order to prepare yourself emotionally for a divorce is to see a therapist or join a support group as soon as possible.  This will allow you to have an emotional support system in place before you begin to prepare for divorce.

Get Organized & Collect Documents.

The key to a relatively easy divorce process is being organized.  You’ll need a process a small mountain of paperwork during the process.  You may need tax returns, W-2s, pay stubs, credit card statements, bank account statements.  Organizing the documents in a cohesive way is one of the biggest things you can do to make the process easier and save yourself time and money.   Beyond that, having it done before you start your divorce will allow you to focus on one LESS thing during the divorce in addition to making the process go faster.

Understand Your Finances.

If you don’t want to be on the streets or living with your parents after a divorce, you need to understand your financial situation before you start the process. That means you need to get comfortable with exactly how much you will need to survive after the divorce.  You can’t end your marriage and divide up your property without knowing how much you have and how much you owe. You can’t survive the aftermath of a divorce without knowing how much you’ve got coming in and going out after everything is said and done.

Make A Financial Plan.

Understand your financial situation is the first step, then you need to make a plan for how you’ll live after the divorce.  If you’ve been separated for a long time, you likely have a good idea about what your life will be like after divorce, however, if you’re still sharing expenses, you’re probably in for a rude awakening. Before you get divorced you have to make sure that you will have the ability to bring in enough money to live and pay all of your bills once your divorce is over, otherwise you may be faced with bankruptcy.

Get an Idea of Who you need on your Team.

You don’t have to go through the divorce alone but to prepare for divorce you need to think about who you will need to help you.  Ending a marriage is challenging and extremely complicated. Some of the people you may need to consider having at your disposal beyond a good attorney is a financial adviser, a therapist, even a good realtor isn’t a bad idea if you’re having to sell a home.  You also need to line up family and friends. You’ll need their support during this process.

Set Realistic Goals.

Most people start to prepare for divorce without ever knowing what they want.  Obviously, you want to be done with your marriage, but there’s more to divorce than that.   If you don’t ask yourself the question of “what do you want”, and invest time finding the right answer, you have very little chance of ending up happy once your divorce is over.

The sooner you can set goals for your divorce, the more likely you are to achieve them. But, before you commit to pursuing a goal, you also have to make sure that it’s realistic.   

Make Peace.

Most people don’t get married thinking the day will come where their marriage will end in divorce.  Divorce may be against every fiber of your being, but unfortunately, it happens. It doesn’t make you or your spouse a bad person, it doesn’t make you wrong or a failure.  The only thing divorce means is that your marriage didn’t work. There is a lot of baggage that come with divorce. It churns up bad feelings and emotions that can cause you trouble down the road.  You need to make peace with the process of getting a divorce so that you can come out healthy and happy.

If you feel that divorce is something that is right for you, contact the attorneys at Harmon and Gorove today to schedule a time to discuss your uncontested divorce, free of charge. 

The Side Effect of Debt

in Bankruptcy, Credit and Credit Cards

Debt is something that is a fact of life in the modern world.  Everywhere we turn, we are forced to borrow money in order to get ahead in life.  We have to borrow money for our education, our homes, our cars, even our phones and healthcare. In an ever more expensive world, debt is a burden that we must all bear.  One thing you should keep in mind though as you take on debt is that there is a side effect and debt should be used sparingly and in ways that will IMPROVE your life.

The Consequences of Debt

Debt has several side effects.  The first side effect is that you WILL pay more for an item bought using debt.  This is called interest and virtually every lender expects to be paid some amount of interest.  The second side effect is that you can face difficulty repaying that debt. When you take out loans, lenders generally look at your income vs liabilities.  That’s called debt to income ratio. If you lose your job or face a pay cut, you could find yourself stuck owing more than you can physically pay back. The third side effect of debt is that you can end  up being a slave to that debt. You’ll always feel like you have a yoke around your neck constantly pulling against you and keeping you from achieving your financial goals. Finally, the last side effect of debt is the added pressure that debt can put on you and your relationships.  Poor financial decisions is one of the leading causes of divorces and breakups. It even causes some people to rethink whether or not they wish to marry to someone.

Some Debts can be Good, but understand reality

Like I said earlier, some debt is necessary and in fact, some debts can even be beneficial.  Having a home loan can help you buy a house and build equity. Homes are often times the biggest asset the average american can own.  Home ownership is vastly higher in the U.S. than it is in most of the developed world. Student loans, when used responsibly, can help people meet educational goals that improve their lives and help them earn more money.  The biggest thing about these debts are that they need to be used sparingly and only taken out in small doses. Just because a lender says they’ll loan you $400,000 on your home doesn’t mean you should do it. Many people who took out student loans took out more than they needed or didn’t look at ways to cut costs like attending in state public schools, utilizing community colleges and technical schools or getting degrees that won’t help them achieve their financial goals.  Having $150,000 in student loan debt for a bachelor’s degree from your dream college doesn’t feel so good when the payments come due and you’re only making $20,000 a year working as a barista.

Interest is a real drain on household resources each year as well.  A typical family in America pays an average of $10,000 per year in interest and the average person could pay hundreds of thousands of dollars in interest over the course of the life of a loan, especially mortgage loans.  Imagine what you could do with that money. Pay cash for you education, save for retirement, go on a vacation, the list goes on and on. The bottom line is, when you take out debt, make sure you always ask yourself if its worth it.  Is that $5 latte worth $8 by the time you factor in interest on your credit card? Is that fancy new $50,000 car worth the $70,000 you’ll ultimately pay after you account for interest? Asking yourself these questions while looking at the big picture can help you have a brighter financial future.

Don’t put off seeking professional help

A side effect is an unwanted outcome that often places a significant burden on the person experiencing it. If you’re already experiencing the burden of debt, you should consider contacting us for a free consultation .  We meet with clients all the time who don’t want to file bankruptcy because it would hurt their credit.  What they don’t realize is that having a credit score of 800 is useless if you are already maxed out on debt.  While repaying your debt is an admirable goal, it’s not always possible or even advisable. Starting fresh is exactly what bankruptcy is all about and why we do what we do.  Filing bankruptcy is better than spending the remainder of your life in debt, never getting ahead, and never saving for retirement. At the very least, you should speak with a qualified bankruptcy attorney about how they can help you recover your financial well being using the bankruptcy code to your advantage. Consultations with a qualified, award winning attorney, are always free at Harmon and Gorove.  We’ll be honest with you about your options and never pressure you to do something that isn’t in your best interest.