Why You Should Hire A Bankruptcy Attorney To Help You With Debt Settlement

Written by Peter Mullison, Colorado Bankruptcy Attorney

Hiring A Bankruptcy Attorney To Help With Debt Settlement

One of the things I like about being a bankruptcy lawyer is helping people avoid bankruptcy. Believe it or not, that’s my primary objective when someone comes in for a consultation. I try to look at their financial situation from every possible perspective to see if there is an alternative to bankruptcy.

One way that I can help someone avoid bankruptcy is when they are dealing with a particularly aggressive creditor with the potential client has tried to settle. The potential client has tried to negotiate a settlement, but the creditor won’t give any ground. If the potential client retains me, I get to work preparing a petition. I go over all of his income, assets, debts, and expenses. Whether the client is eligible for Chapter 7 or has to file Chapter 13 bankruptcy, we now have leverage to negotiate settlement. Most times the creditor will receive much less if my client files bankruptcy than if it agrees to settlement terms.

Even if the settlement offer is the same as before the client came to me, my position as a bankruptcy lawyer adds weight to the negotiations.If the creditor asks for it, I can provide a draft of the bankruptcy petition the client intends to file if settlement talks fail.

Of course, my client also needs to understand the potential tax consequences of debt settlement. That’s a factor he’ll have to weigh in making the decision to settle the debt or filing bankruptcy. Bankruptcy eliminates the tax consequences of debt forgiveness.

If you need help settling your debts, we hope you’ll come in for a free consultation with an experienced Colorado bankruptcy attorney to see how we can help. You can schedule an appointment by calling 303.331.3403 or by using our online scheduling system.

We are Denver, Colorado bankruptcy attorneys. We help people who have been blindsided by life's events find their way to financial recovery.
3773 Cherry Creek Drive North, Suite 575
Denver, CO
80209
US
Phone: 303.331.3403
Fax: 303.261.8290

What Are The Most Common Debts You Can Eliminate By Filing Bankruptcy?

Written by Peter Mullison, Colorado Bankruptcy Attorney

What Are The Most Common Debts You Can Eliminate By Filing Bankruptcy

It occurred to me the other day that in my consultations and writing I focus a lot on what bankruptcy cannot do or what debts bankruptcy cannot eliminate. I suppose I do that mainly because of all the misinformation about bankruptcy. As a result, I tend to give less attention to the kinds of debt that bankruptcy can eliminate. But I am surprised to sometimes hear that people have gotten the wrong information about whether certain common debts can be discharged.

For the most part, bankruptcy can get rid of typical consumer debt. That includes credit cards, car loans, mortgages, home equity loans, payday loans, and even lending club loans. Bankruptcy will also eliminate medical bills from hospitals, doctors, and emergency service providers. Bankruptcy can get rid of amounts due after breaking a lease and for unpaid utility bills, including cell phone contracts. Debts that have arisen from running a business, such as franchise contracts, business leases, and other business-related contracts can also be eliminated.

Of course, this isn’t a complete list of debts that bankruptcy will get rid of, but you get the idea. More types of debts than not can be eliminated and most people can take care of 100% of their debts in bankruptcy, whether Chapter 7 or Chapter 13.

If you have any questions about whether you can eliminate your debts and get a fresh financial start by filing bankruptcy, we hope you’ll come in for a free, no-obligation consultation with an experienced Colorado bankruptcy lawyer. You can schedule your appointment by calling 303.331.3403 or by using our online scheduling system.

We are Denver, Colorado bankruptcy attorneys. We help people who have been blindsided by life's unexpected events find their way to financial recovery.
3773 Cherry Creek Drive North, Suite 575
Denver, CO
80209
US
Phone: 303.331.3403
Fax: 303.261.8290

 

Should I File Chapter 7 Or Chapter 13 Bankruptcy To Keep My House?

Written by Peter Mullison, Colorado Bankruptcy Attorney

Should I File Chapter 7 Or Chapter 13 Bankruptcy To Keep My Home

The biggest concern that people who own or are buying their home have when they come in to see me for a consultation is whether or not they’ll be able to keep their home. The good news is that bankruptcy offers options that typically allow someone to keep their home, either in Chapter 13 or Chapter 7. When someone asks me if they can file bankruptcy and keep their home, I usually ask them why they are asking. I need to know if they have fallen behind on their mortgage payments. Being current or behind behind with payments can make a big difference in whether or not someone files Chapter 7 or Chapter 13 bankruptcy.

As long as someone qualifies for Chapter 7 bankruptcy (meaning their household income is within the Chapter 7 limits) and is current on their mortgage payments, he or she can probably file Chapter 7 bankruptcy. One other question I’ll ask is how much equity there is in the home. If there is excessive equity (meaning that the home’s value is more than what is owed), then Chapter 13 bankruptcy or not filing bankruptcy at all may be the better options.

If someone has fallen significantly behind on their mortgage payments (more than three months), Chapter 13 bankruptcy is probably a better option than Chapter 7. Chapter 13 allows someone to get caught up on their mortgage over the course of three to five years. Chapter 7 doesn’t have that mechanism.

The bottom line is that wanting to keep your home doesn’t mean you have to file Chapter 13 bankruptcy. If you’re current on your mortgage and have less than $60,000 in equity ($90,000 if you or a family member is disabled or over 60) and are within the Chapter 7 income limits, Chapter 7 is probably a viable option. Being able to file Chapter 7 means that you’ll be through the bankruptcy process much sooner (four months versus three to five years) and won’t have to repay any of your unsecured creditors.

Of course there are several other factors that can determine whether someone should file one chapter of bankruptcy as opposed to another. Owning a home is just one of them. The best way to decide is by talking with someone who has extensive experience helping people through the bankruptcy process.

If you have questions about how bankruptcy can help you keep your home, we hope you’ll come in for a free, no-obligation consultation with an experienced Colorado bankruptcy lawyer. You can schedule an appointment by calling 303.331.3403 or by using our online scheduling system.

We are Denver, Colorado bankruptcy lawyers. We help people who have been blindsided by life's unexpected events find their way to financial recovery.
3773 Cherry Creek North Drive, Suite 575
Denver, CO
80209
Phone: 303.331.3403
Fax: 303.261.8290

How To Avoid Medical Bankruptcy: Apply For Financial Assitance

Written by Peter Mullison, Colorado Bankruptcy Attorney

How To Avoid Medical Bankruptcy

You May Be Able To Avoid Medical Bankruptcy By Applying For Financial Assistance

Earlier this year I was visited by an older woman who needed some help with medical bills that she couldn’t manage. She had suffered a heart attack and had to visit the emergency room and stay in the hospital for a few days. Shortly after she left she got a bill in the mail for $65,000. She came to me wanting to know if I could help; however, she didn’t want to file bankruptcy. She wanted to know if I could help her settle the debt. After I explained to her that I couldn’t guarantee that the hospital would negotiate with me, I agreed to try and help her.

Since her account had already moved to a collection agency, I sent them a letter explaining her financial situation and that, while she was contemplating bankruptcy, she would prefer to avoid it by settling for a lower amount that she thought she could manage. I followed up with a phone call about a week later. When I talked to the collection agency, they explained to me that before the hospital could agree to settle for a lower amount, my client would have to apply for financial assistance. What that entails is filling out an application explaining why you believe you qualify for a reduction in the amount you owe. It also involves providing certain financial information. In this case it involved providing tax returns, bank statements, and documents to show how much she was making as a self-employed person.

The hospital sent followup letters asking for clarification as well as a phone interview between my client and the hospital. Finally, about about two and a half months, we got a response. The hospital agreed to forgive the entire amount of my client’s debt! As you can imagine, she was thrilled. And I was pleased to be able to help someone with such a huge financial burden without resorting to bankruptcy.

In the future, I’ll use this tool as much as possible to help clients avoid bankruptcy. I imagine that part of what helped her case was how recent her treatment had been. She came to me within a few weeks of getting the bill. It’s hard to say if it would have been possible to settle the debt after it had been sold to multiple collection agencies. Of course, this bill was also from the hospital. Private doctors likely will not have a debt forgiveness program.

If you have questions about how applying for financial aid to reduce your medical bills, or whether bankruptcy may be a good option, we hope you’ll come in for a free, no-obligation consultation with an experienced Colorado bankruptcy lawyer. You can schedule an appointment by calling 303.331.3403 or by using our online scheduling system.

We are Denver, Colorado bankruptcy attorneys. We help people who have been blindsided by life's unexpected events find their way to a financial fresh start.
3773 Cherry Creek North Drive, Suite 575
Denver, CO
80209
US
Phone: 303.331.3403
Fax: 303.261.8290

How Soon Will I Qualify For A Home Loan After Bankruptcy?

Written by Peter Mullison, Colorado Bankruptcy Attorney

How Long Before I Can Buy A House After Bankruptcy

Of all the questions I get asked during consultations with potential clients, “When will I be able to buy a house?” has to be in the top five. They are concerned about how bankruptcy will affect their financial future and how long they’ll have to wait before they’ll be approved for a mortgage. Unfortunately, there is no fixed answer for everyone. But for most people, it’s sooner than you think.

First, it depends on whether someone files Chapter 7 or Chapter 13 bankruptcy. Second, it depends on what kind of mortgage they apply for. There are conventional mortgages, Federal Housing Administration (FHA) mortgages, and Veterans Administration (VA) mortgages.

It’s generally accepted that someone who has filed a Chapter 7 bankruptcy can expect to qualify for a convention mortgage four years after getting their discharge (which happens about four months after their petition is filed). A Chapter 7 filer can likely qualify for an FHA loan within one to two years from their discharge, assuming they otherwise qualify for an FHA loan. Finally, a Chapter 7 filer can expect to to qualify for a VA loan within two years from their discharge.

Qualifying for a mortgage after a Chapter 13 bankruptcy can take longer, since the court won’t issue a discharge order in a Chapter 13 until between three and five years after a Chapter 13 case is filed. A Chapter 13 filer can expect to qualify for a conventional mortgage between two and four years after getting their discharge. They can expect to qualify for a FHA mortgage after they have made 12 months of payments to their Chapter 13 trustee with no late payments. The same timeframe applies to VA loans.

Of course, whether someone qualifies for a mortgage depends on other factors besides when they filed bankruptcy. The lender will also look at their income and debts. The above are simply guidelines. Your ability to get a mortgage after bankruptcy will depend on your personal financial situation.

If you have questions about how bankruptcy can affect your financial future, we hope you’ll come in for a free, no-obligation consultation for a free, no-obligation consultation with an experienced Colorado bankruptcy lawyer. You can schedule an appointment by calling 303.331.3403 or by using our online scheduling system.

We are Denver, Colorado bankruptcy attorneys. We help people who have been blindsided by life's unexpected events find their way to financial recovery.
3773 Cherry Creek Drive North, Suite 575
Denver, CO
80209
US
Phone: 303.331.3403
Fax: 303.261.8290

How Veterans Can Avoid The Bankruptcy Means Test

Written by Peter Mullison, Colorado Bankruptcy Attorney

Veterans And The Bankruptcy Means TestAs a navy veteran, veteran issues are near to my heart. It seems that more and more I am meeting with people who have been recently separated from the military for disability reasons. While most of these individuals are receiving veteran disability benefits which place their income well within the median income for their household size (and consequently make them eligible for Chapter 7 bankruptcy), from time to time, I meet with people whose income places them above the median levels set by the United States Census Bureau.

Because of their disabled veteran status, they may still be entitled to relief under Chapter 7 of the Bankruptcy Code. If a veteran is a disabled and his or her debts occurred primarily during a period of active duty or while performing “homeland defense activity”, he or she does not have to complete the Bankruptcy Form B22 means test.

While this is arguably a limited exception to the means test for which few will qualify, it emphasizes the importance of making sure you find a bankruptcy lawyer who will thoroughly examine your financial situation and make sure that, if bankruptcy is your best option, you make it through the process safely and take full advantage of its power to give you a fresh financial start.

If you have questions about how to manage debts that you acquired while you served in the military, we hope you’ll come in for a free, no-obligation consultation with an experienced Colorado bankruptcy lawyer. You can schedule an appointment by calling 303.331.3403 or by using our online scheduling system.

We are Denver, Colorado bankruptcy attorneys. We help people who have been blindsided by life's unexpected events find their way back to financial recovery.
3773 Cherry Creek Drive North, Suite 575
Denver, CO
80209
US
Phone: 303.331.3403
Fax: 303.261.8290

Credit Repair AgenciesIf you’re like most people who come into our office for a consultation, you consider bankruptcy to be an option of last resort. Like you, these people have tried other approaches to getting their debt under control or improving their credit rating.

If you are trying to improve your credit score, you may have come across agencies that promise to “repair” your credit score. Before you pay someone, do your homework. You should also know about the Colorado Credit Services Organization Act which regulates these credit repair agencies.

The Act provides that:

Before you sign a credit repair agreement, the credit repair company must disclose to you in writing:

  • How you can correct your credit report yourself under Colorado and federal law;
  • Your right to cancel the agreement for any reason within five working days (a detachable cancellation form must be included);
  • The total fee, conditions of payments, and a full and detailed description of the services to be performed; and
  • A copy of your credit report, with the incorrect information indicated.
    Note: The Federal Telemarketing Rule prohibits credit repair companies from collecting any advance fees other than those connected with the cost of obtaining credit reports.

Consumers should beware of the following credit repair practices:

  • Promises to remove any negative information or bankruptcies from your credit report. This will occur only through the passage of time. Credit repair companies may be able to temporarily delete information, but once it is re-verified, it may again appear on your credit report.
  • Requests for advance payment for services, including by post-dated checks. This is illegal under federal law and it is difficult to recover any money paid in advance.
  • Promises to improve your credit standing by showing you how to obtain and use a tax identification number or a false social security number in place of your actual social security number. This may be illegal.

Some other reminders:

  • You can correct any error in your credit report yourself, without paying a fee, by contacting the credit bureaus directly.
  • Do not pay advance fees to a credit repair company.
  • Do not contract with or send money to an out of state credit repair company. Because it is difficult to enforce Colorado law against out of state companies, it may be impossible to recover your money if problems arise.
  • If you decide to use a credit repair company, keep a record of all payments you make by keeping the canceled checks, or getting receipts for payments by cash or money order.

If you have questions about what the benefits of bankruptcy are over other types of debt management approaches, we hope you’ll come in for a free, no-obligation consultation with an experienced Colorado bankruptcy lawyer. You can schedule an appointment by calling 303.331.3403 or by using our online scheduling system.

We are Denver, Colorado bankruptcy lawyers. We help people who have been blindsided by life's unexpected events find their way to financial recovery.
3773 Cherry Creek Drive North, Suite 575
Denver, CO
80209
US
Phone: 303.331.3403
Fax: 303.261.8290

 

How To Rebuild Your Credit After Bankruptcy – Pay Off Your Credit Cards Every Month

Written by Peter Mullison, Colorado Bankruptcy Attorney

How To Rebuild Your Credit After Bankruptcy

As you can imagine, you should expect that filing bankruptcy will make your credit score drop. Depending on what your score was before you filed, it can take a fairly significant hit. One of the biggest misconceptions, though, is that you won’t be able to get credit for ten years after you file. You might be surprised to learn that you’ll be offered new credit shortly after you file. Unfortunately, the interest rate on those offers will be ridiculous.

The good news is that by taking certain steps after your bankruptcy, you can rebuild your credit score and get your interest rates down. One of the better ways to rebuild your credit is by using a secured credit card. Secured credit cards are offered by many lenders, just do an online search. A secured credit card requires you to pay a deposit, say $500. At that point you’ll be given a $500 line of credit.

Historically, the advice given in using the card to rebuild your credit was to pay the minimum amount. That advice appears to be changing. Now credit bureaus are recommending that you pay the balance in full every month. Practically speaking this is good advice as well. You don’t want to put yourself in a position where you can’t repay your debt. Instead, use your new secured card for monthly living expenses like groceries, gas, and clothing. At the end of the month, pay the balance in full. This should be a good approach in making sure you can repay that debt. By using this simple technique your ability to get credit at reasonable interest rates will come sooner than you think, and you may even be able to afford a mortgage before you know it.

If you have questions about how you can rebuild credit score after you file personal bankruptcy, we hope you’ll come in for a free, no-obligation consultation with an experienced Colorado bankruptcy lawyer. You can schedule your appointment by calling 303.331.3403 or by using our online scheduling system.

We are Denver, Colorado bankruptcy attorneys. We help people who have been blindsided by life's unexpected events find their way to financial recovery.
3773 Cherry Creek Drive North, Suite 575
Denver, CO
80209
US
Phone: 303.331.3403
Fax: 303.261.8290

 

The Hidden Cost Of A Deed In Lieu Of Foreclosure

Written by Peter Mullison, Colorado Bankruptcy Attorney

Deed In Lieu Of ForeclosureLenders will sometime offer customers whose homes have been placed into foreclosure status an alternate path. As its name suggests, a “deed in lieu of foreclosure” is not foreclosure, but there are consequences that are just as serious.

When a lender forecloses on a home, it has to jump through many legal hoops to take possession of the home. You can imagine that it would just as soon not have to go to all the trouble. In some instances, they will offer the homeowner a deed in lieu of a foreclosure. Instead of a foreclosure, the homeowner instead signs a deed over to the lender. The deed in lieu short circuits the foreclosure process and allows the lender to take possession of the home without it going to the trouble of the foreclosure process.

The upside for the homeowner is that she gets the transfer of the home out of the way. If she’s lucky, the lender may also offer some cash for signing the deed in lieu. If she’s very lucky, the lender may agree not to pursue her for any shortfall owing on her mortgage.

Unfortunately, the lender cannot promise that there won’t be any ill consequences. When the next January rolls around, the homeowner can expect to find an unwelcome piece of mail in her mailbox. It will be an IRS Form 1099 showing that some of the debt from her mortgage was forgiven. That forgiven debt will be considered income by the IRS, and it will be taxed. You can almost bet that the homeowner will be unprepared for that tax bill.

If you receive such a 1099 and can’t pay the taxes, you should consider filing bankruptcy before it becomes a tax liability. While you can eliminate a deficiency from the sale of a home in bankruptcy, it will take at least three years to get rid of taxes you owe.

If you have questions about the consequences of a deed in lieu of foreclosure and how bankruptcy may help after you sign one, we hope you’ll come in for a free, no-obligation consultation with an experienced Colorado bankruptcy lawyer. You can schedule an appointment by calling 303.331.3403 of by using our online scheduling system.

We are Denver, Colorado bankruptcy lawyers. We help people who have been blindsided by life's unexpected events find their way to financial recovery.
3773 Cherry Creek Drive North, Suite 575
Denver, CO
80209
Phone: 303.331.3403
Fax: 303.261.8290

How To Tell If A Debt Collector Is Legitimate

Written by Peter Mullison, Colorado Bankruptcy Attorney

Make Sure You Owe A Debt Before You Pay Anyone Over The Phone

Make Sure You Owe A Debt Before You Pay Anyone Over The Phone

If you’ve ever been late to pay your creditors, you know that it doesn’t take long for them to get in touch with you. It’s rare for them to let a week after you’ve missed a payment before they give you a call. At first, they’ll be sympathetic and seem like they want to help. Eventually, though, their tone will change. If you’ve gone through a hard patch and haven’t been able to pay any of your creditors, you could be getting calls from several collectors. Debts change hands over and over and it’s hard to keep track of who is collecting what debt.

In some cases you may even be wondering if the debt collector is trying to collect a legitimate debt or is trying to intimidate you into paying a debt that you don’t owe. Here are a few ways to tell if a collector is real:

  • The debt collector threatens you. A legitimate debt collector won’t resort to threatening you with criminal action, like having the sheriff show up to arrest you or letting your telling your neighbors that you’re not paying your bills. On the other hand, a legitimate debt collector can let you know that they may pursue civil legal action.
  • The debt collector won’t give you any information on the debt he is trying to collector or you don’t recognize the debt. The debt collector should be willing to disclose all information about the amount you owe, including who the original creditor was.
  • The debt collector refuses to give you their address or phone number. The debt collector shouldn’t try to keep their identity a secret.
  • The debt collector asks for sensitive personal financial information. Be careful about the information you provide to anyone that you aren’t certain of. Legitimate creditors should already have that information.

Bankruptcy can stop debt collectors fromĀ  contacting you. We hope you’ll come in for a free, no-obligation consultation with an experienced Colorado bankruptcy attorney to see if bankruptcy may be a good option for you. You can schedule an appointment by calling 303.331.3403 or by using our online scheduling system.

We are Denver, Colorado bankruptcy lawyers. We help people who have been blindsided by life's unexpected events find their way to financial recovery.
3773 Cherry Creek Drive North, Suite 575
Denver, CO
80209
US
Phone: 303.331.3403
Fax: 303.261.8290