R. Richard Croce, L.L.C.Relief, Restoration, Repair & Renewal2024-03-13T05:22:36Zhttps://www.richardcroce.com/feed/atom/WordPress/wp-content/uploads/sites/1402262/2021/08/cropped-Favicon-32x32.pngOn Behalf of R. Richard Croce, LLChttps://www.richardcroce.com/?p=469402024-03-13T05:22:36Z2024-03-13T05:22:36ZHave I exhausted all other options?
You should know whether or not you’ve exhausted all other options before filing for bankruptcy. Creditors are often open to working with people who reach out to them about repayment options. You can also get credit counseling and a debt management plan forgiving interest, which makes it easier to repay. These avenues show creditors you’re serious about satisfying your debt.
Do you have enough debt?
You can only file for bankruptcy if you have sufficient debt. If it’s enough to repay without burdening you, you might want to rethink it and satisfy your debt. Also, remember that bankruptcy stays on your credit report for years.
Do you have dischargeable debt?
Bankruptcy is only worth filing if you have dischargeable debts. This includes credit card debt, medical bills, personal loans and, in some cases, student loans. Anything coming from lawsuit judgments such as alimony, child support or criminal or civil actions cannot be discharged through bankruptcy, so you'll still have to pay. If you have mostly the latter, filing won’t benefit you.
Are debt collectors harassing me?
If you’re being harassed by debt collectors, it's a sign that you're a good candidate for bankruptcy. Once you file, collector calls and letters should stop as further contact is illegal.
Which type of bankruptcy can I file?
Knowing whether you can file Chapter 7 or Chapter 13 bankruptcy is crucial. If you have limited income with little to no assets, you’re eligible for Chapter 7. Chapter 13 is appropriate if you have a higher income and can afford to pay but need more time. The latter gives you 3 or 5 years to repay.
Bankruptcy isn’t for everyone, and it should be your last resort. However, filing can give you a financial fresh start.]]>On Behalf of R. Richard Croce, LLChttps://www.richardcroce.com/?p=469372024-01-15T03:28:36Z2024-01-15T03:28:36ZYour bankruptcy options explained
Depending on your financial situation, you can either file for Chapter 7 or Chapter 13 bankruptcy. To qualify for Chapter 7, you must pass the means test. If your income is under a certain amount, you can file Chapter 7 bankruptcy. Most people in this category have little to no assets.
Chapter 13 bankruptcy is suited for individuals who have higher incomes and are able to pay back their debts. Filing gives you more time to pay back your debt thanks to a repayment plan spanning three or five years.
Property you can keep after filing
Depending on the type of bankruptcy you file, you are able to keep certain property. With Chapter 7, you can keep all or almost all of your property unless it’s considered nonexempt. This includes your clothing, furniture, pensions, retirement accounts and life insurance policies, some jewelry, appliances and vehicles up to a certain amount. You can also keep your home if you’re current with mortgage payments.
If you file Chapter 13 bankruptcy, you can keep all of your property as long as you adhere to the terms of your three- or five-year repayment plan. As long as you continue paying off your debts regularly and in the agreed amounts, you shouldn’t have to part with any property. However, if you default on payments such as mortgage or car loan, you could lose your home or vehicle.
Bankruptcy is a scary subject for some, but it might be necessary. It can help you get a fresh start with your finances.]]>On Behalf of R. Richard Croce, LLChttps://www.richardcroce.com/?p=469342023-11-12T05:17:46Z2023-11-12T05:17:46ZWhy file for bankruptcy?
There are different reasons to file for bankruptcy. Often, a person has amassed too much debt to handle and cannot afford to pay back their creditors. If they have explored other avenues to alleviate their debt but have found that nothing works, bankruptcy is the next logical step. Individuals who have very few to no assets may qualify for Chapter 7 bankruptcy; this requires passing the means test. Chapter 7 allows people to discharge unsecured debts like credit card debt and personal loans.
Another reason to file for bankruptcy is that you can afford to repay your debts but need more time to do so. In that situation, you may qualify for Chapter 13 bankruptcy so that you can have anywhere from three to five years to pay back your creditors. With that extra time, you can continue paying off secured debts such as car loans and mortgages and discharge your unsecured debts.
Common bankruptcy myths
Some people believe that filing for bankruptcy spells the end of their credit. Although it’s true that bankruptcy initially causes your credit score to decrease, this isn't a permanent thing. You can qualify for a secured credit card that works on a deposit of your own money and gradually rebuild your credit.
Another myth is that married couples must jointly file bankruptcy. This isn’t true unless you both share the debt. If one person’s name is tied to the debt and the other’s is not, that spouse is exempt from filing for bankruptcy.
Perhaps the biggest reason why people fear bankruptcy is the myth that if you file, you lose everything. This is a common misconception among some that filing means you’ll lose your home, vehicle, money and all your belongings. In reality, most property is exempt; other items aren’t valuable to creditors.
Bankruptcy is not the end of the world. For some people, it’s the fresh start they need.]]>On Behalf of R. Richard Croce, LLChttps://www.richardcroce.com/?p=469302023-09-13T20:43:06Z2023-09-13T20:42:22ZWhy your score might go up
Eliminating debts that are several months past due means that you won't have any late or missed payments on your credit report. If you have outstanding credit card balances, eliminating them will reduce your credit utilization rate, which is 30% of your overall score. Getting rid of other debts can also be helpful as the amount that you owe to creditors can also weigh on your ability to get credit.
Why your score might go down
If you have a high credit score, filing for bankruptcy may hurt more than if you have poor credit. This is because you probably don't have late payments or other blemishes that will be wiped away through bankruptcy. It's possible that your score will go down by up to 200 points by filing. Typically, the greatest impact will be felt within the first year or two after filing as lenders put more emphasis on what you've done over the most recent 12 to 24 months.
Bankruptcy stays on your credit report for years
A Chapter 7 bankruptcy will stay on your credit report for up to a decade while a Chapter 13 case stays there for seven years. The fact that you attempt to pay your debts through a Chapter 13 repayment plan accounts for the difference between the two forms of protection.
The exact impact of filing for bankruptcy won't be known until you file your case and obtain a discharge. However, it may be possible to obtain new credit soon after your case is over even if your score goes down as a result of seeking protection from creditors.]]>On Behalf of R. Richard Croce, LLChttps://www.richardcroce.com/?p=469272023-07-17T01:35:50Z2023-07-17T01:35:50ZWhen the collection calls get too intense
One of the most overlooked benefits of filing for bankruptcy is the respite that it can give you from collection calls. If you are seriously behind with accounts long overdue, the calls do tend to become more insistent. You have a higher chance of getting a court judgment filed against you. Meanwhile, your negative balance grows.
Filing for bankruptcy won't wipe out all of your debts. However, it can give you the benefit of an automatic stay. The point of receiving such a stay is to erase your underlying debt. This includes lawsuits and, in some cases, even wage garnishment. The immediate result will be an end to the collection calls.
When you need to keep your home
The best way to preserve your home ownership may be to file for bankruptcy. For example, Chapter 13 is set up in such a way as to allow you to keep your home. Meanwhile, Chapter 7 allows you to discharge most of your other debts. This gives you the option to concentrate on making your mortgage payments.
When your debts are simply too much
You can't use bankruptcy to wipe out debt related to child support or, in most cases, student loans. However, if your debts are related mostly to credit cards, utility bills or business debts, bankruptcy may be your best solution.
Bankruptcy is not a magic tool that allows you to rack up debt and then escape from it. However, if you have gotten too far behind on payments, it can give you valuable breathing space. It can also be a life experience that teaches you to handle your finances more responsibly.]]>On Behalf of R. Richard Croce, LLChttps://www.richardcroce.com/?p=469072023-05-17T01:11:16Z2023-05-17T01:11:16ZWhy some assets are exempt
State and federal bankruptcy codes offer exemptions to avoid serious financial hardship. For instance, you may be allowed to keep your car to get to work each day. In addition, you may be allowed to keep power tools, a computer or other items needed to run a business or find a job. Alternatively, you may be allowed to keep appliances and other small items simply because they aren't worth anything.
Income may be seized
While a retirement account may be exempt from liquidation, distributions from that account aren't always protected from seizure. If you are filing for Chapter 7 protection, you may need to include income from distributions when taking the means test. The means test is designed to determine if you qualify for a liquidation bankruptcy or if you must file for Chapter 13 protection instead.
IRA rules may vary
If you have an IRA, your account may be only partially protected in bankruptcy. As of 2022, traditional or Roth IRA accounts worth up to $1,512,350 are fully protected while SIMPLE or SEP IRA accounts are fully protected regardless of their value. However, a judge may have leeway to grant additional protection if the facts of your case calls for it.
Seeking protection from creditors may eliminate debts while allowing you to retain some or all your assets. Chapter 7 cases are typically resolved within a few months, while a Chapter 13 case may last up to five years. Bankruptcy may remain on your credit report for up to a decade. However, it may be possible to obtain credit immediately after a discharge.]]>On Behalf of R. Richard Croce, LLChttps://www.richardcroce.com/?p=469052023-03-16T20:18:33Z2023-03-16T20:18:33ZComparing Chapter 7 and Chapter 11 bankruptcy
Your company will file for Chapter 7 bankruptcy if the end goal is to dissolve the business. Typically, this occurs when there are insufficient funds to pay the company's debts even after a restructuring. It may also be your only option if you can't get a court to approve a Chapter 11 plan. In such a scenario, your company shuts down and its assets are liquidated. Any funds that are raised will be used to pay your creditors.
In a Chapter 11 proceeding, you submit a reorganization plan that must be approved by the bankruptcy judge. Your creditors may also need to agree to some or all of the plan before it goes into effect. The company remains operational during the course of the restructure, and you generally remain in control of the business and its assets while your case is ongoing.
How to choose the right path for your business
While filing for Chapter 11 bankruptcy allows your company to remain in business, it also comes with potential pitfalls. For instance, it may take several years to complete your restructuring plan, and a Chapter 11 case may be more expensive than other relief options. If you used personal collateral to secure a loan, filing for Chapter 7 protection may offer greater protection for those assets even if it means that your business must cease operations.
Filing for business bankruptcy may have negative consequences for your company such as a decreased ability to raise additional capital even if a restructure allows it to become a stronger player in the marketplace. It may also have negative consequences for your personal credit score if you secured a business loan based on your own creditworthiness.]]>On Behalf of R. Richard Croce, LLChttps://www.richardcroce.com/?p=469032023-01-19T23:17:56Z2023-01-19T23:17:56ZBankruptcy and credit histories
Most negative items on a credit score, such as a defaulted obligation, remain on a credit score for seven years. Once seven years pass, the information disappears. The same is the case with Chapter 13 bankruptcy. However, with Chapter 7 bankruptcy, the period extends to 10 years. Chapter 7 refers to liquidation bankruptcy, while Chapter 13 involves following through on a payment plan.
Information on a credit report contributes to the numerical ranking known as a credit score. Credit scores indicate someone’s creditworthiness, and a low credit score could hurt a person's ability to procure financing and other benefits. Bankruptcy will lower a credit score significantly.
Bankruptcy and finances
While bankruptcy causes a credit score to drop, so does missing credit card payments, defaulting on obligations or amassing too much debt. Such things will happen when a debtor cannot control their financial situation. Filing for bankruptcy may help someone deal with untenable money problems and move the individual toward a better fiscal position. Struggling to pay debts month-to-month with no positive end in sight may not be the best approach to dealing with creditors.
When a debtor exits bankruptcy, they have a chance at a fresh start. However, it is essential to avoid the same actions that led the person into bankruptcy in the first place. Filers must attend mandatory credit counseling, which could assist them from repeating their past mistakes.]]>On Behalf of R. Richard Croce, LLChttps://www.richardcroce.com/?p=469002022-11-15T02:33:36Z2022-11-15T02:33:36ZFiling options for individuals
Generally speaking, there are two types of bankruptcy open to individuals. These are Chapter 7 and Chapter 13. Chapter 13 bankruptcy, also called wage-earners bankruptcy, involves restructuring debt and is designed for people who have a steady income they can use to pay down debts over a period of three to five years. Chapter 7 bankruptcy, also called liquidation bankruptcy, involves liquidated unprotected assets and discharging debts in a process that usually takes around six months.
Options for low-cost Chapter 7 bankruptcy
The fees associated with filing for Chapter 7 bankruptcy include filing fees, administrative fees, a trustee surcharge and attorneys' fees if an attorney is hired to handle the case. The filing fees can be waived though, in situations where the filer's household income is lower than 150% of the federally-established poverty level. There are also fees associated with two required credit counseling courses. Those fees are generally less than $50 each, and they may be waived as well depending on the circumstances. Many attorneys offer free consultations to discuss the situation and payment options to make filing Chapter 7 affordable.
What happens when you file Chapter 7?
When a person files for bankruptcy, a legal automatic stay immediately applies to put a hold on all collections actions. During the process, the filer's assets are categorized as exempt or non-exempt. Exempt assets are not subject to liquidation and typically include means of transportation, tools needed for work, and other assets. In around 90% of cases, individuals who file for bankruptcy keep their homes. It is not a small decision, but filing for bankruptcy protection can relieve stress and lead to a fresh financial start.]]>On Behalf of R. Richard Croce, LLChttps://www.richardcroce.com/?p=468302022-09-17T05:22:59Z2022-09-17T05:22:59ZAutomobiles and Chapter 7 bankruptcy
Bankruptcy eliminates many problems someone struggling with excessive debt faces, such as dealing with collection agencies and the threats of lawsuits. Upon filing for Chapter 7, all collection activity stops. The court then oversees the repayment of specific debts through asset liquidation. That does not mean the court will leave someone destitute or in a position where they cannot make a living. So, debtors may get to keep their cars during bankruptcy proceedings. Additional rules apply.
The court will look at the vehicle and assess the fair market value. A specified exemption allows someone to keep a car worth up to that value. Someone filing for bankruptcy may find the court less inclined to let them drive around with a luxury vehicle. So, if a vehicle is worth $40,000, the bankruptcy trustee may force the sale of the car and give the debtor the exemption amount and use the remaining sale price to pay creditors.
Points about cars and Chapter 7
There are other things bankruptcy filers might not realize about how Chapter 7 addresses vehicles. A married couple filing jointly could take two exemptions for two vehicles. Also, a wildcard exemption may allow someone to keep a car that exceeds the exemption amount.
State exemptions amounts could be better than the federal ones. Filers might wish to review state laws to determine which option is better.]]>