Category: <span>News</span>

Whether or not you know it, you may be living your life in a financial sweatbox right this very moment. “Financial sweatbox” is a phrase that refers to the stressful time people are often forced to endure preceding bankruptcy. Life in a financial sweatbox may include non-stop harassing phone calls from debt collectors and angry financial institutions, loss of utilities, sleepless nights filled with anxiety over simple things like grocery shopping, the loss of a home or other assets, and living without basic necessities that most people would take for granted. Living this way can cause even the most resilient person to lose hope, but fortunately, there is a way out so long as you’re brave enough to go for it.

Bankruptcy is the fresh start that so many are looking for; however, now more than ever before people are choosing to live in this perpetual state of misery rather than filing for bankruptcy simply out of fear. Filing for bankruptcy can indeed be a very scary thing filled with uncertainty, especially when you don’t even fully understand what it is or how it will affect your future. You might even believe that you can get ahead of your own financial problems if only you had a little more time, but often enough that is exactly how you end up in the financial sweatbox. Soon missed payments incur fees and other penalties and before you know it your debt has multiplied exponentially and you truly are stuck.

With as many as two-thirds of people living life in a financial sweatbox for more than two years and one-third exceeding five years, it is essential now more than ever to stand up and take back control of your life. Bankruptcy should be no less scary than facing years of turmoil and heartache waiting for your situation to improve all on its own, so what are you waiting for? Anyone living life in a financial sweatbox should investigate their bankruptcy options sooner rather than later to ensure an ideal outcome. If you are suffering relentless harassment, fear, and financial loss with no end in sight, it may be time to do what is right for you and your family and reach out to bankruptcy lawyers, like Cathy C. Church and Cara Korhonen at Church and Korhonen, PC, for help as soon as possible. No one ever wants to file for bankruptcy, but living life in a financial sweatbox is no way to live either. Call Church and Korhonen, PC, toll-free at 1.800.758.5611 or simply fill out the form in the sidebar to begin taking steps to a more sound financial future, greater peace of mind and a fresh start.

As education, transportation, food, energy, water, fuel, property, and entertainment become increasingly more expensive, those leading this country seem to have forgotten to increase one very important thing: the income and wages of the American people who are expected to buy all this stuff.

Debt and poverty are quickly becoming less of a horror story from the news, and more of a reality for hundreds of millions of people in this country. Many people don’t fully understand why this happens since they look back and see that things used to be so much cheaper decades ago, gas for $0.25 right? But they forget to account for the fluctuations in the value of our currency over the years. In as little as 60 years, our currency has depreciated in value at an alarming rate. In 1959, one US dollar was worth ten in today’s standards. Our money loses its value, and everything around us rises in cost to accommodate those fluctuations, except income. Thus we see a populous of people incapable of keeping up with the dramatic inflation.

Unfortunately, until we see some major changes, the problem only seems to be getting worse. Any adult knows that money and financial stress can be a consuming issue, affecting even your relationships. With constant fights about money being one of the leading causes of divorce, and the frustration of never being able to keep up with your expenses causing loss of sleep, lack of focus, and more. It isn’t hard to see why adults today are so stressed. Finding a place to thrive in this country has become a full-time job in and of itself, with college graduates working multiple minimum wage jobs just to keep up.

Our economy is a very delicate and complex house of cards with so many unique, yet equally essential components that hold everything together. Currency value, cost of living, income, education level, employment availability, taxes, and even environment can impact our economy. Regardless, there has to be a better way. If we truly want to make our country a better place, changes need to be made. Until then, Church and Korhonen, PC, will do everything in our power to help the people who are currently suffering. Debt can be incredibly scary, but luckily we are here to help.

If you are experiencing insufferable debt or are in need of legal advice, call Church and Korhonen, PC, toll-free at 1.800.758.5611 or simply fill out the form in the sidebar to begin taking steps to a more sound financial future, greater peace of mind and a fresh start.

For those who are not familiar with bankruptcy and how it works, it might surprise you that there are  different kinds. Different situations require specific filing, but the most common two are Chapter 7 and Chapter 13. Which type you need to file may depend on things like overall income, existing assets, current debt, future financial goals, and more. Here are a few of the differences between the two that might help you figure out what your best course of action is.

Types

Chapter 7 is a type of bankruptcy known as liquidation. This process is designed to help eliminate unsecured debts. Chapter 13 is a type of reorganization in which debtors are eligible for a repayment plan based off a portion of the existing debt. This type of bankruptcy is for people with at least some form of income, and may be the only filing option depending on what your income is.

Who

Unlike Chapter 7, which allows business to file for bankruptcy, only a sole proprietor or individual can file for a Chapter 13 bankruptcy.

Restrictions

Because a Chapter 7 erases all debt, only those who have little to no income can qualify. Anyone who makes “too much” money will be required to file a Chapter 13.

Time

Typically with a Chapter 7 bankruptcy, it will take approximately three to five months to receive a discharge. For Chapter 13, you will not receive a discharge until all your agreed payments have been made, which may take up to five years depending on your payment plan.

Property and Assets

It might seem nice to see all your debt erased, but with a Chapter 7 you are giving up any non-exempt property to a trustee who will sell it to pay off your debt. With a Chapter 13 you are able to retain the rights to your property, but may be required to pay an amount equal to its value. If you don’t have any non-exempt assets a Chapter 7 will work perfectly for you, but for those who would prefer to hang onto their belongings, a Chapter 13 is the way to go.

Overall Benefits

Chapter 7 is perfect for low-income people, families, and businesses with no assets, and can allow them to make a fresh start and move forward with their lives. A Chapter 13 is perfect for anyone with a lot to lose. The ability to retain assets and property, as well as the accomplishment of paying off your debt can make Chapter 13 a worthy consideration.

Overall Downsides

Chapter 7 may be your only option, but it can mean saying goodbye to a lifetime of memories if your home is put into foreclosure or your assets are repossessed. It can be a traumatic and embarrassing situation for anyone. For Chapter 13, the obvious downside is that you still have to pay off your debt, which can be no fun at all. For years you will have that extra bill every month which can make getting back on your feet more difficult.

Filing for bankruptcy for anyone can be a terrible experience. There may be plenty of ups and downs for both types of filing, but it will be your personal situation that determines which type of bankruptcy you will be required to file. If you are experiencing financial hardships or are in need of legal advice, all Church and Korhonen, PC, toll-free at 1.800.758.5611 or simply fill out the form in the sidebar to begin taking steps to a more sound financial future, greater peace of mind and a fresh start.

FDIC Consumer News:

A credit report provides a record of your history of paying loans and bills, including any late payments. These reports are important because they can affect your ability to qualify for a low-cost loan or insurance policy, rent an apartment or find a job. However, a recent Federal Trade Commission (FTC) study found that a number of consumers had errors on their credit reports that could lead to them paying more for loans. What can you do to improve your credit reports?

Pay your bills on time. “If you’re late 30 days or more, the lender may report your account as delinquent to a credit reporting agency, and that will damage your credit history,” said Kirk Daniels, Acting Section Chief in the FDIC’s Consumer Protection Branch. “But your credit history will improve over time if you can avoid another late payment on your record.”

Reduce the amount that you owe on credit cards and other lines of credit. That will help improve your credit score, a numerical summary of your credit record as prepared by one of many companies. If you close an account you have paid in full and haven’t used in a while, your debt-to-credit ratio (the amount you owe on credit cards compared to your credit limit) will increase. That could be interpreted as a sign that you have taken on more debt that you can handle. One option is to avoid closing unused accounts until you have paid down any large balances on another credit card.

Review your credit reports regularly for errors or signs of identity theft. You are entitled to receive at least one free credit report every 12 months from each of the nation’s three main credit bureaus (Equifax, Experian and TransUnion). Start at www.annualcreditreport.com or call 1-877-322-8228. If you find errors, contact the credit bureau directly. Also be cautious of other Web sites and services advertising “free” credit reports because these may be attempts to sell you something else or even scams to collect personal information.

“If possible, request your credit report well before you apply for a loan to give you time to correct any inaccurate information,” said Evelyn Manley, an FDIC Senior Consumer Affairs Specialist.

There also are “specialty” credit bureaus that, for example, track a person’s history of handling a checking account. For information on your right to see and correct these companies’ reports, visit the federal Consumer Financial Protection Bureau (CFPB) Web site at www.consumerfinance.gov/blog/you-have-a-right-to-see-specialty-consumer-reports-too.

For more tips, visit the FTC’s “Credit and Loans” page at www.consumer.ftc.gov/topics/credit-and-loans, plus the Fall 2011 issue of FDIC Consumer News(www.fdic.gov/consumers/consumer/news/cnfall11/credit.html).

Before you can determine if Chapter 7 Bankruptcy is the right choice for you, you first should take some time, think about your situation, and ask yourself the following three questions.

Are You Judgment Proof?

If you really don’t have much income, own any outrageously expensive items, have multiple vehicles, or any other valuable property, you likely won’t need to file for any type of bankruptcy because you’re “judgment proof.” Being judgment proof basically means that you don’t have anything valuable enough for a creditor to take and use toward your debts, therefore you’re somewhat protected.

On the other hand, if you do have a surplus of assets considered valuable enough to pay down your debts, Chapter 7 bankruptcy may be able to help provide relief from anxious creditors and collections procedures. Just remember, if you have a significantly higher income than most, you may not qualify for Chapter 7 bankruptcy.

Will It Really Be Worth It?

What type and how much debt you actually have makes a big difference in terms of whether or not you should begin the process of filing for Chapter 7 bankruptcy. For instance, there are quite a few types of debt that actually cannot be discharged during bankruptcy, including government debts, student loans, child support, alimony, and more. Also, if your debt is not completely overwhelming and there is still a chance you could successfully pay it all off over the next few years all by yourself, bankruptcy should definitely not be your go-to financial solution.

However, if you and your family are being buried beneath mountains of credit card debt, medical bills, and other expensive balances with no hope in sight, Chapter 7 bankruptcy may be worth it for you.

Are You Really Ready To Surrender Your Assets?

When you file for Chapter 7 bankruptcy, the sacrifice you make to have all your debts wiped away is that you have to give up a lot (all “nonexempt” property). You will only get to keep what is deemed necessary (“exempt” property), which means you will have to start over with the bare essentials. Some examples of non-exempt property you may have to say goodbye to during bankruptcy include:

• Valuable Musical Instruments (unless you earn an income as a professional musician);
• Personal Collections (coins, stamps, baseball cards, etc.);
• Family Heirlooms;
• Additional Vehicles (including recreational vehicles);
• Additional Properties (vacation homes or other real estate);
• Financial Investments (cash, bank accounts, bonds, stocks, etc.).

Whether after considering your answers to these questions you feel like Chapter 7 bankruptcy may not be right for you, or you’ve decided that Chapter 7 bankruptcy is the best option for you to regain control of your life, we urge you to let our season bankruptcy attorneys at Church and Korhonen, PC help you make sure you’re making the right decision. Call Church and Korhonen, PC, toll-free at 1.800.758.5611 or simply fill out the form in the sidebar to begin taking steps to a more sound financial future, greater peace of mind and a fresh start.

Bankruptcy may seem like a one-and-done cure-all for all your financial troubles, but there are actually a surprising number of different kinds of debt you can’t lose in bankruptcy – even if you’re filing for Chapter 7 bankruptcy. Below are just a few examples.

Government Debts

In most cases, taxes, penalties, customs, or any other government debts you’ve acquired cannot be discharged in bankruptcy. However, special circumstances may apply, so make sure you speak with your bankruptcy attorney about these debts.

Alimony & Child Support

There is no type of bankruptcy that allows for the forfeit of a person’s responsibility to make their alimony or child support payments.

Student Loans

If you thought you could go to college, and then immediately declare bankruptcy to wipe your slate clean early in life, you’re gravely mistaken. Student loans are only ever discharged in extreme situations in which a person is determined by the court to have already done everything they could possibly do to keep current on their payments.

Property Liens

Sadly, your home mortgage and/or other property liens cannot be discharged along with your other debt no matter which type of bankruptcy you file. In fact, if your income is deemed too low to qualify for a Chapter 13 bankruptcy, your home or property may even be foreclosed upon to help cover the cost of your other debts.

Auto Loans

Like a home mortgage, auto loans cannot be discharged during bankruptcy, and may even be at risk of liquidation depending on the type of bankruptcy you file. Fortunately, if you want to keep your car, all you have to do is “reaffirm” your auto loan and continue making your payments in full, and on time.

Criminal Debts

If you owe money for any sort of criminal charges, including those related to larceny, fraud, embezzlement, drunk driving, or any other “willful and reckless acts,” these debts cannot be discharged.

New Credit Card Debt

Just because you’re planning to file for bankruptcy, doesn’t mean you can go on one last shopping bender before you go clean for good. Any recent charges or purchases you make can be seen and scrutinized by the very people who determine whether or not you’re even allowed to file for bankruptcy – and how do you think that judge is going to feel when you plead with him about not being able to pay off medical bills when you just wracked up another several hundred dollars in credit card debt on fancy restaurants and new shoes?

Debt That’s Not Yours

You’d be surprised at how many times people try to file for bankruptcy, and have debt discharged, only to find out that the debt in question isn’t even in their name. If you are divorced or think there is any possibility your debt is not your own, make sure you discuss it with your bankruptcy attorney to avoid any unnecessary hassle.

For more information regarding your unique situation, such as which debts you will and will not be able to discharge, we urge you to get in touch with our remarkable bankruptcy attorneys at Church and Korhonen, PC, today. Call Church and Korhonen, PC, toll-free at 1.800.758.5611 or simply fill out the form in the sidebar to begin taking steps to a more sound financial future, greater peace of mind and a fresh start.

The differences between Chapter 7 bankruptcy and Chapter 13 may not be all that apparent to those who don’t have a firm understanding of what bankruptcy is, but they are significant. Knowing the distinctions between the two can mean the difference between your fresh start and a truly complicated mess.

Chapter 7 Bankruptcy

If you’ve always believed there was only one type of bankruptcy, and it offered a totally clean slate, you we’re likely thinking of Chapter 7 bankruptcy. To file for Chapter 7 bankruptcy , a judge has to swoop in and determine if your income is not suitable enough to support a repayment plan. Your assets, including your home and vehicles, are surrendered and sold to help pay off your unsecured debts, and any amount leftover is then wiped away with the exception of student loans, child support, and other government debts. In order to qualify for Chapter 7 bankruptcy, a filer must earn less in income than the median income of their state. However, the entire process can typically be completed in only a few months. Though a Chapter 7 bankruptcy will persist as a blemish on your credit report for up to 10 years, it is the best way to wipe your hands clean of almost all financial obligations with minimal inconvenience.

Chapter 13 Bankruptcy

Depending on your income, this may be the only type of bankruptcy you’re able to file, but the good new is Chapter 13 is almost everyone’s preferred type of bankruptcy. It allows debtors to maintain possession of their assets by agreeing to a reasonable 3 to 5 year repayment plan based on their current income and quantity of debt, and will even forgive your remaining debt once the agreed upon time frame is met. In addition to avoiding the liquidation of all your assets, Chapter 13 bankruptcy will only stay on your credit report for up to seven years! Sure you’re agreeing to keep paying off your debts versus just tossing them aside like you would with a Chapter 7, but the long-term rewards are much greater.

Which Should You File?

There are benefits and consequences on both sides, and you may not have as much of a choice as you think when it comes to choosing which way you’d like to file. The only way to know for sure you’re making the right decision for your family is to put your trust in knowledgeable, caring bankruptcy attorneys who want to help you succeed, like ours at Church and Korhonen, PC. Reach out to one of our exceptional bankruptcy lawyers, today, to learn more. Call Church and Korhonen, PC, toll-free at 1.800.758.5611 or simply fill out the form in the sidebar to begin taking steps to a more sound financial future, greater peace of mind and a fresh start.

If you are struggling to the point where you don’t know what you’re going to do anymore, you may have a lot of questions about bankruptcy and how it will affect your family. To help you out, we have put together some important information that will hopefully clear things up.

What Actually Is Bankruptcy?

Bankruptcy is a legal process in which you tell a judge of the court that you can no longer afford to pay your debts. Steps will be taken to examine your finances, assets, and liabilities to determine if your debts can/should be discharged. Once a judge determines you were right and there is no feasible way for you to pay off your debt you will be able to officially declare bankruptcy.

What Does Bankruptcy Do?

Depending on the circumstances of your unique situation, bankruptcy may be able to halt the foreclosure of your home, the repossession of your property, or even the garnishment of your wages. At its core, bankruptcy will eliminate much, but often not all, of your debt. Bankruptcy will not eliminate:

• Alimony
• Child Support
• Government Debts (taxes, fines, etc.)
• High value items purchased before you filed for bankruptcy, including motor vehicles or jewelry.

Each bankruptcy case is different, meaning you may still have to pay back some of your debt even if a majority of it is discharged. To determine exactly what and how much you will need to pay back, you should always consult with experienced bankruptcy attorneys, like ours at Church and Korhonen, PC.

Types of Bankruptcy

There are two primary types of bankruptcy you can file.

• Chapter 7 bankruptcy involves the court selling most of your assets to pay off your debt, with any remaining debt being erased. You may lose your vehicle, or your home, and it will stay on your credit report for up to 10 years. A person can only file for Chapter 7 bankruptcy if a court decides your income is insufficient to pay off your debt.
• Chapter 13 bankruptcy is more of a payment plan. The court recognizes your willingness to pay off your debt and will agree to monitor your budget to make sure you’re making your payments over the course of an agreed upon time frame. This form of bankruptcy is often the preferred option considering it allows debtors to keep their assets and will fall off a credit report after only seven years.

Consequences Of Bankruptcy

Although bankruptcy can be very helpful if you have nowhere left to turn, there are admittedly some consequences you should be prepared for.

• Bankruptcies are considered public knowledge. This means that once you file, any potential employers, financial institutions, or businesses you contact in the future can find out all about it.
• It can make buying things a lot harder since getting a loan can be difficult once you’ve filed for bankruptcy. In fact, it has been known to take up to four years for most people to qualify for a mortgage loan after filing for bankruptcy.
• Filing for bankruptcy can be really expensive. The mandatory filing fee’s alone can be several hundred dollars.

Final Thoughts?

Filing for bankruptcy is a big deal, and not a decision that should be taken lightly. If you are concerned that bankruptcy is the only option left for you, we urge you to get in touch with our seasoned bankruptcy attorneys at Church and Korhonen, PC. We can help you determine exactly what is best for you and your family! Call Church and Korhonen, PC, toll-free at 1.800.758.5611 or simply fill out the form in the sidebar to begin taking steps to a more sound financial future, greater peace of mind and a fresh start.