Examining your options is important for anyone experiencing debt problems.  If you are considering bankruptcy or debt settlement to resolve your financial difficulties, investigate the consequences of each process before making your decision.  Below is some information about debt settlement companies and bankruptcy that you may not know:

Debt Settlement: The debt settlement process will harm your credit for years.  Creditors will report your delinquent account until it is paid.  Your report may identify settled accounts as paid less than 100%, which also adversely affects your credit score.

Bankruptcy: Any debt included in a bankruptcy appears on your credit report as discharged with a zero balance from the date you filed your bankruptcy case.  Bankruptcy stops adverse reporting so your credit report can improve.

Debt Settlement: The typical debt settlement account will resolve your debt with a lump sum payment of between 20% and 80% of the debt.

Bankruptcy: In most bankruptcy cases you pay nothing to unsecured creditors.

Debt Settlement: Any settled debt will have tax consequences and you may have to pay the IRS.

Bankruptcy: There is no tax liability for a debt discharged in bankruptcy.

Debt Settlement: You may be sued while you or your representative is attempting to settle your debt.

Bankruptcy: All lawsuits are prohibited during your bankruptcy case.

Debt Settlement: Some debt settlement companies have bad reputation.

Bankruptcy: The bankruptcy process is authorized by the United States Constitution and its laws are written by Congress.  Only licensed attorneys admitted to practice in the federal courts are able to represent bankruptcy debtors.

Debt Settlement: The debt settlement process can take more than a year.  The general rule is: the longer you don’t pay, the better the settlement.  Creditors are reluctant to accept less than full payment unless they believe that you may file bankruptcy.

Bankruptcy: The typical chapter 7 bankruptcy case takes less than five months.

If you are struggling with debt, investigate your options and speak with an experienced bankruptcy attorney.  The federal bankruptcy law is a powerful tool to eliminate your debt problem and put you on the road to financial recovery.

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Years ago it was unheard of for a debtor in an active bankruptcy to obtain an auto loan. Several years ago two companies, 722 Redemption Funding, and Fresh Start Loan Corporation, began making auto loans to debtors in bankruptcy, and now many banks have lending programs for debtors. The attitude towards bankruptcy has changed and many debtors are evaluated more on their future ability to pay the loan rather than their past financial trouble.

Obtaining an auto loan during bankruptcy is a matter of showing stable income, a good debt-to-income ratio, and some assurance that your current financial trouble is unusual and not likely to reoccur. All lenders require a loan application and the criteria for approval can vary significantly. Some lenders will not approve a loan if you have had a prior repossession. Other lenders want a substantial down payment. New auto loans often want the bankruptcy discharged before approving the loan. In all cases your vehicle choice will be restricted to a newer vehicle with low miles.

During a Chapter 7 bankruptcy the debtor and the lender are free to negotiate terms outside of the bankruptcy case. The loan is not a part of the case and is not affected by the bankruptcy discharge. For Chapter 13 debtors, any new indebtedness must be approved by the trustee and the court. In most cases the Chapter 13 debtor can obtain approval after a showing of need and ability to pay.

If you are considering bankruptcy and need to buy a different vehicle, consult with an experienced attorney. There are many different options during bankruptcy for retaining, refinancing, or purchasing a different vehicle. Call today and get the information you need to drive your financial future.

This protection is immediate and “automatic” upon filing a bankruptcy petition – no hearing is necessary. The stay is ordered by the bankruptcy court that prohibits a creditor with a claim that arose before commencement of the bankruptcy case from taking many actions, including:

• contacting the debtor to request payment (stops collection calls)
• initiating or continuing a lawsuit against the debtor (stops lawsuits)
• enforcing a judgment against the debtor (stops wage garnishments)
• repossessing personal property or foreclosing on real estate (stops repossessions and foreclosure)

While the automatic stay is immediate, it is not permanent. The stay can be contested by a creditor and lifted by the bankruptcy court after notice and a hearing. There are also a few exceptions to the automatic stay protections, for instance: the automatic stay does not prevent criminal prosecution. Likewise the automatic stay does not stop lawsuits to establish or modify alimony, maintenance, or support.

Individuals that file for bankruptcy receive this powerful advantage against creditor actions. However, the automatic stay is just one weapon in your bankruptcy attorney’s arsenal. Your attorney can use the power of the bankruptcy laws to help you make the best decisions for your family’s future financial health. If you are struggling with debt, consult with an experienced bankruptcy attorney and learn how the federal bankruptcy laws can help you.

Are you in debt? Considering filing for bankruptcy? Worried about having your wages garnished? Every day millions of Americans face financial difficulties. We are New York and New Jersey Bankruptcy attorneys with 10 years of experience. Contact Us for your free consultation.,

There are four different types of tax debts that are automatically excluded from your bankruptcy discharge:

1. unpaid taxes due within three years of the bankruptcy filing;

2. unpaid taxes for returns filed late, but within two years of the bankruptcy filing;

3. unpaid taxes for tax years when the debtor did not file a return; and

4. unpaid taxes due when the debtor filed a fraudulent return or tried to evade the tax obligation.

If you have any question whether your tax debt can be discharged during your bankruptcy, consult with your New York bankruptcy lawyer.  Some tax penalties can also be discharged, so be sure to discuss exactly what portion of your tax debt will be discharged, and what portion will survive.

Tax liens can be stripped off during a Chapter 13 bankruptcy to the extent that the lien is more than the equity in property.  Tax liens cannot be stripped or otherwise avoided in Chapter 7 bankruptcy.  However if the tax is dischargeable in a Chapter 7, the bankruptcy court should determine the extent of the tax lien against your property.

Property taxes are treated differently after filing bankruptcy.  Your personal obligation to pay property taxes can be discharged if the tax was last payable without penalty more than one year before you file bankruptcy.  However, property taxes are secured with a lien which will generally survive the discharge.  If you keep the property, you must pay the tax debt after the bankruptcy.  If the property is surrendered during the bankruptcy, you will owe nothing.

The intersection of tax and bankruptcy is a complicated area of the law.  It is important to address any tax issues early in your case and have a clear understanding of how you and your Brooklyn bankruptcy lawyer will deal with your tax debt during your chapter 7 or chapter 13 bankruptcy.

The down-side to walking away from a home is that the debt still remains.  The mortgage company will take your home through foreclosure and sell it, sometimes at a steep discount, and you will be liable for the deficiency balance.  The mortgage company may try to collect or it may assign your debt to a collection company.  Harassing phone calls, threatening letters, and finally a lawsuit are inevitable.  Often the lawsuit is filed years later and just before the statute of limitations expires.  By then you may have rebuilt your credit and be in a much better financial situation.  The effect of this lawsuit can be devastating.

Bankruptcy law can help you walk away form your home and discharge your obligation to pay any balance on a home loan once and for all.  The instant you file bankruptcy you are under the protection of the United States Bankruptcy Court and creditors are prohibited from taking any collection action against you.  The bankruptcy filing immediately stops any foreclosure or repossession action, and any lawsuit.  This protection, called the automatic stay, extends through the duration of your bankruptcy case.  A creditor must seek permission from the bankruptcy court in order to start or continue the foreclosure process while you are under bankruptcy protection.  The filing of a bankruptcy case generally forestalls the foreclosure process for months and gives you the opportunity to walk away on your own terms.

At the conclusion of your bankruptcy case you will receive an order of discharge from the bankruptcy court.  This order permanently prohibits all discharged creditors from taking collection action against you.

If you are considering walking away from your home, condo or coop in New York or New Jersey, speak with an experienced New York bankruptcy attorney and learn how bankruptcy can help mitigate your financial exposure.  An experience bankruptcy attorney in New York can explain your options and help you decide on a path that makes the most financial sense for your family.