341 Meeting Readiness

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By Attorney Christopher Carr, a Chester County bankruptcy attorney.

Tel: 610-380-7969 Email: cccarresq@aol.com WHAT IS THE 341 MEETING OF CREDITORS? Regardless of whether you file a Chapter 7 bankruptcy or Chapter 13 bankruptcy, you will be required to attend a “Meeting of Creditors” or a 341 hearing as attorneys call it. THIS IS A MISNOMER….IT IS NOT REALLY A HEARING! It has that name because it is held under oath (see below.) It is scheduled about 30‐45 days after your case is filed. Though it is called a “Meeting of Creditors,” creditors rarely attend. But the Trustee is there and HE represents the creditors! You, your attorney, and the trustee attend this meeting. It can seem quite intimidating if you do not know what to expect, but the 341 hearing is actually a fairly informal meeting designed to help the Trustee better understand what’s happening in your bankruptcy. A NOTE ON TIMING OF TRUSTEE PAYMENTS FOR CHAPTER 13 CLIENTS: Remember that your first payment to the Trustee is due THIRTY (30) DAYS AFTER YOUR PETITION IS FILED, irrespective of when the 341 is held.  WHAT TO EXPECT:  There will be a pile of Bankruptcy Information Sheets at the front of the room. Take one and read it.  You will be asked if you did (see below.) You will sit at a desk or table with your bankruptcy lawyer and the Trustee. Other people will be in the room with you, generally other bankruptcy filers and their lawyers. You will be asked first off to state your name and address and verify your identity by providing your social security card and drivers license. IF YOU DO NOT HAVE YOUR ORIGINAL SOCIAL SECURITY CARD AND SECOND FORM OF ID, THE MEETING WILL NOT BE HELD AND EVERYONE’S TIME WILL HAVE BEEN WASTED SO DON”T LEAVE IT AT HOME OR EXPECT A COPY TO DO. BRING THAT TATTERED ORIGINAL AND IF YOU DON”T HAVE ONE ORDER IT FROM THE SS OFFICE. The meeting will be recorded. The Trustee will start a tape recorder going. You will be sworn in; i.e. raise right hand solemnly swear and affirm to tell the truth. Dress is business casual for you. Be well groomed. I will be in my “lawyer suit” as will the Trustee, but you are not expected to wear one.  Be on time.  It may appear that I am running late but that is because I have a better idea of when the 341 will start than you do! Try to relax! WHAT CAN THE TRUSTEE ASK AT THE 341 MEETING? The trustee will ask you some basic questions about your bankruptcy.  Here are some of the common questions that trustees ask during the meeting. They are in no particular order. These are not all of the questions that the Trustee could ask, and he/she will not ask every question on this list. In other words, this is a very generic list. The items that are almost always asked are highlighted.

  • Did you sign the petition and the schedules your attorney is showing you?
  • Have you read the bankruptcy information sheet?
  • Did you review the bankruptcy petition and each of the schedules and the statement of financial affairs (SOFA). Is the information correct? The answer is always an assured “YES” because you will have typically signed the documents in my office and we will have gone over all of them in detail at that time.
  • Are there any corrections that need to be made to the Schedules?  There should be none.  See my piece on the importance of full disclosure within the Bankruptcy  Petition.
  • Did you list all income, assets, and debts on the Schedules? The answer is always an assured “YES” because you will have typically signed the documents in my office and we will have gone over all of them in detail at that time.
  • Have you filed all your taxes? Are the tax returns you supplied to the trustee true, correct and complete, including all schedules and W2s? (Typically we will have filed these beforehand.)
  • Are you entitled to any tax refunds?  This one is VERY popular around tax time. You and your Attorney should have discussed this one and its ramifications before the 341.
  • Have you previously filed bankruptcy? If so when?
  • Why are you filing bankruptcy?  You can be a bit creative here but see below.
  • Do you expect to receive an inheritance or property?
  • Are you a party to any law suits?
  • Do you have any domestic support obligations?
  • Have you have sold, transferred, or given away any property in the prior four years?
  • How long have you lived in Pennsylvania?
  • What do you plan to do with your house, cars, or other personal property?
  • Are you employed? What do you do?
  • How much do you earn?
  • Is your employment the same as when you filed?
  • Do you own your own home?
  • Do you own any motor vehicles? What are these?
  • Please provide appraisals for your cars and home. (Typically we will have filed these beforehand.)
  • Please provide insurance declaration pages for your home if owned and cars. (Typically we will have filed these beforehand.)
  • Do you have any retirement funds (IRA, Roth IRA, 401K etc.)?
  • Does anyone owe you money?
  • Is anyone holding money for you?

GENERAL TIPS AND CAVEATS: It is normal to be a bit nervous going into the 341 but just answer the questions put to you fully and honestly and be courteous to one and all! Do not over answer, the Trustee does not need to hear your life story. All of you financial information should be properly presented in the bankruptcy petition and there is no sense in trying to hide something from the Trustee. If you are uncooperative it may motivate the Trustee to investigate or scrutinize your petition further which will only mean more time and effort for you and your attorney. Always remember that the Trustee may act friendly but he is NOT your friend.  He represents the unsecured creditors and his job is to maximize their return from the bankruptcy (not your own). He gets paid a commission on assets he recovers from Debtors for them. I am on a first name basis with the Trustee but that does not mean we are friends! The time to report undisclosed assets, that big tax refund, debts to family or friends, that new job or the 1000 shares of Google.com or that partnership you forgot about is NOT at the 341. If you wear a big diamond ring to the 341 and didn’t disclose it, expect trouble! Other than that type of thing you have nothing to worry about! Should you have concerns about such matters you should be asking me about them NOW! See my piece on the importance of full disclosure within the Bankruptcy Petition.

 

Law Offices of Christopher C. Carr, MBA,  P.C., is a quality bankruptcy and debt relief practice, located in  Valley Township, west of Coatesville, Pennsylvania, where Attorney Christopher Carr, a Chester County bankruptcy attorney, who has over 30 years if diversified ;egal experience, concentrates on serving the residents of and businesses located within Western Chester County and Eastern Lancaster County, Pennsylvania, including the communities in and around Atglen, Bird in Hand, Caln, Christiana, Coatesville, Downingtown, Eagle, Exton, Fallowfield Gap, Honeybrook, Lancaster, Lincoln University, Modena, New Holland, Parkesburg, Paradise, Ronks, Sadsbury, Thorndale, Valley Township, Wagontown & West Chester,  Pennsylvania. If you reside or do business in the area and need assistance with a legal issue, please call Mr. Carr at (610)380-7969 or write him at cccarresq@aol.com today!  

Not Legal Advice. Copyright © 2010, 2014 by Christopher C. Carr, Esq., All rights reserved. You may reproduce materials available at this site for your own personal use and for non-commercial distribution. All copies must include this copyright statement.

Web:westchesterbankruptcyattorney.orgBlog: christophercarrlaw.wordpress.com Member: National Association of Consumer Bankruptcy Attorneys, Phi Beta Kappa & Beta Gamma Sigma.*************************************** “WE SAVE HOMES”

This is a Federally Designated Debt Relief Agency which is proud to assist individuals in need in filing for bankruptcy protection.


[1] Up to ½ hour.

Prepared 2‐25‐2014.

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FIXING YOUR CREDIT AFTER A BANKRUPTCY DISCHARGE

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By Christopher C. Carr, Esq. Chester County bankruptcy attorney.

Tel: 610-380-7969 Email: cccarresq@aol.com Web: westchesterbankruptcyattorney.org

In my prior article on the topic of post discharge activities, I discuss 11 different areas for your attention.  Below, I focus in on just one of these: credit repair.

You have received an Order of Discharge from the Courts. That does not mean that your credit is being properly reported to/by the credit bureaus however.  Fixing any errors is up to you.  Here are the steps:

  1. 60-90 days after you receive the discharge, you should call the number provided on the www.annualcreditreport.com site and order your credit reports.  (Consumers are entitled to a free credit report every year or when a negative decision is made by a creditor relying on a credit report.) You will see an option to download the report or to view it on the internet.  You should request your report be mailed to you by each of the three credit reporting agencies Equifax, Experian, and Transunion.   If you are married and filed a joint bankruptcy, both of the spouses must request their own reports.  There are many websites that will claim to be “free” but will typically start assessing a monthly fee after a trial period…don’t fall for it: www.annualcredi treport.com is the only such site authorized by federal law to provide truly free reports.
  2. You will also want to get additional reports from Telecheck, Early Warning Services, and Chexsystem if you have ever had a problem with a checking account or overdrafts.  These are the agencies that banks and credit unions rely on when the bank or credit union is making a decision about whether you can open an account with them.
  3. So, you are now up to six different reports and if married multiply this by 2.  However the review you will need to do is actually rather straightforward.  Look for a line under each of the creditors that indicates whether a balance is due.  That balance should read ZERO (unless it is a debt that is not dischargeable by law, like court ordered support, taxes, criminal fines or penalties).  There may or may not be a line saying “Chapter 7 Bankruptcy” or “Chapter 13 Bankruptcy”.  These statements refer to the reason why it is no longer a debt.
  4. If any of your creditors is still listing a balance, then the next step is to dispute the report of that creditor.  The Federal Trade Commission offers a sample dispute letter to consumers.  [The sample is here. ] You may alternatively use the form supplied with the credit report (usually found near the end of the report.)  Also send a copy of the letter to the creditor who is reporting inaccurate information.   And please, make and retain in your files two extra copies (one for your file and one for your attorney). Note that if more than one entity is reporting the debt improperly, they each must be notified separately.
  5. When a consumer disputes a credit report, the agency by law must investigate.  The creditor can either verify the accuracy, update or remove the information.   The credit reporting agency has deadlines for their response to the consumer. Generally the wrongly reported debt will now be off your report.
  6. However, if a creditor verifies the report (that is, wrongfully indicates the money is still due and owing), you should seek legal advice promptly. This is likely a violation of the discharge order of the bankruptcy court. There may also be a Fair Credit Reporting Act violation.  Your lawyer may suggest a lawsuit against the original creditor, the debt collector (if applicable) and/or the credit reporting agency. . Only a lawyer experienced in these kinds of cases can properly evaluate the situation and provide advice about your options.
  7. Just to make sure your credit is being reported correctly you may want to order your reports again in a year or whenever you are again eligible for a free report from www.annualcredi treport.com. Repeat the process above as needed.

Summary:

  1. Order your credit reports 60-80 days after your Order of Discharge
  2. Order additional reports for problem with checking account or overdrafts
  3. Carefully review  your credit reports
  4. Dispute any balances that are no longer owed with both the original creditor and the credit reporting agency.
  5. Review  responses promptly
  6. If the response says you still owe the debt, seek legal advice from an experienced attorney.
  7. Repeat in a year

Law Offices of Christopher C. Carr, MBA,  P.C., is a quality bankruptcy and debt relief practice, located in  Valley Township, west of Coatesville, Pennsylvania, where Attorney Christopher Carr, a Chester County bankruptcy attorney, who has over 30 years if diversified ;egal experience, concentrates on serving the residents of and businesses located within Western Chester County and Eastern Lancaster County, Pennsylvania, including the communities in and around Atglen, Bird in Hand, Caln, Christiana, Coatesville, Downingtown, Eagle, Exton, Fallowfield Gap, Honeybrook, Lancaster, Lincoln University, Modena, New Holland, Parkesburg, Paradise, Ronks, Sadsbury, Thorndale, Valley Township, Wagontown & West Chester,  Pennsylvania. If you reside or do business in the area and need assistance with a legal issue, please call Mr. Carr at (610)380-7969 or write him at cccarresq@aol.com today!  


I also provide HAMP, HAMP2 and other Mortgage Modification Services.

©Christopher C. Carr, Attorney at Law 2009, 2013, All Rights Reserved

Death & Divorce and Their Disparate Effect on Marital Distribution in Pennsylvania

By Christopher C. Carr, Esq. Chester County bankruptcy attorney.

A stark contrast exists in the law of Pennsylvania as between the effects of death and divorce upon marital property distribution.  In the case of divorce, the marital assets, including assets nominally titled in the name of one spouse alone but purchased with marital assets, are subject to equitable distribution (ED) as between the spouses. In the case of and by virtue of death however, the deceased spouse (or more precisely, his or her estate) loses all rights in all property held in the name of husband and wife or otherwise subject to ED unless accruing to the estate under some other law. This is because there ceases to be any counterparty in the divorce action, which as an action in equity can then no longer proceed.  With few exceptions, summarized below, the surviving spouse takes all.

      However, there is a new exception to this death/divorce disparity which was entered into the Pennsylvania statutes in 2005. Recognizing that this had  produced some highly inequitable results, the Pennsylvania General Assembly sought to remedy this when Divorce Code amendments were considered. Section 3323(d.1) was added to the Divorce Code providing that where divorce grounds have been established by the date of death of the spouse, the divorce action may proceed with the executor for the decedent being substituted as a party for the decedent. To establish grounds the following rules are set forth by the statute: a)      If a fault divorce was pending the Court needs to have found that divorce grounds are established, b)     If both parties consented to the divorce, grounds are established, or, c)      Lastly in the no fault case, if an affidavit of two year separation was filed without contest or the court found two years of separation to have elapsed and the marriage was irretrievably broken, grounds are again said to be “proven”. Where grounds are not established as of the date of death, the old rules apply. The divorce ends and each party resorts to those rights created by federal laws like ERISA, the rights of joint owners to the decedent’s interests and the rights to take against the will under the Probate Code. Taper v. Taper, 939 A.2d 969,973 (Pa. S. 2007.) COMMENT:   As our population ages, one can envision this becoming a problem of epidemic proportions. There are obviously many situations which will not fall within the aegis of the 2005 amendment and appear left to chance. One obvious example would be a fault based divorce where no court decree finding grounds for the divorce has been entered as of the date of death. This writer suggests that thePennsylvania legislature will need to take more decisive action, terminating the inequitable operation of the old rules entirely under circumstances where it can be proven that the divorcing spouse knew or should have known of the dire health status of the other spouse as of the date of the divorce petition.

Law Offices of Christopher C. Carr, MBA,  P.C., is a quality bankruptcy and debt relief practice, located in  Valley Township, west of Coatesville, Pennsylvania, where Attorney Christopher Carr, a Chester County bankruptcy attorney, who has over 30 years if diversified ;egal experience, concentrates on serving the residents of and businesses located within Western Chester County and Eastern Lancaster County, Pennsylvania, including the communities in and around Atglen, Bird in Hand, Caln, Christiana, Coatesville, Downingtown, Eagle, Exton, Fallowfield Gap, Honeybrook, Lancaster, Lincoln University, Modena, New Holland, Parkesburg, Paradise, Ronks, Sadsbury, Thorndale, Valley Township, Wagontown & West Chester,  Pennsylvania. If you reside or do business in the area and need assistance with a legal issue, please call Mr. Carr at (610)380-7969 or write him at cccarresq@aol.com today!  


©Christopher C. Carr, Attorney at Law 2009, 2013, All Rights Reserved

“CAN I GET MY CAR BACK AFTER REPOSSESSION BY FILING BANKRUPTCY”? (THE LETTER “Y” IS FOR YO-YO AUTO SALES}

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By Christopher C. Carr, Esq. Chester County bankruptcy attorney.

Tel: 610-380-7969 Email: cccarresq@aol.com

Website: westchesterbankruptcyattorney.org

A yo-yo sale is a consumer vehicle purchase under a valid signed agreement of installment sale which is followed, days or weeks later, by a phone call from a sales person at the agency that sold the vehicle who states that the consumer must return the vehicle, get a co-signer for the loan or sign new paperwork typically because, “the financing fell through.” Of course, this is impossible because the financing was locked in before the car was ever delivered but even so the befuddled consumer will fall for this line and present himself and his vehicle at the dealership for a new round of negotiations.

The way this scheme plays out the dishonest dealer will either negotiate more favorable terms after the fact or to repossess the car and resell it.   With touch ups to the paint and an (illegal) odometer rollback, he may be able to  pass it off as brand new. While yoyo sales are actually quite illegal under various federal and also state laws, they are quite prevalent especially in economic downturns. And they can result in the loss of your vehicle to repossession and oftentimes with it all the valuable property you left within it.

With the help of a skilled attorney, Yoyo’s can often be prevented especially if reported right away so they can be documented while in progress. However, you must still at least pay according to the original terms of the installment agreement or the vehicle can legitimately be repossessed by the dealer or the creditor.

Oftentimes, the Yo-yo victim, not knowing what to do or where to turn will simply stop paying his or her car payment entirely.  This is a very bad idea because they will have then not complied with the terms of the original agreement and have lost most if not all of the ammunition needed to fight the Yo-yo legally but also will ultimately lose the vehicle as well to the repo man. What remedies may be left to help you to get your car back in such a situation? Well, bankruptcy may still help, to a greater or lesser degree, depending on whether you elect to proceed under a chapter 13 or a 7.

SO, CAN I GET MY CAR BACK AFTER REPOSSESSION BY FILING A CHAPTER 13 BANKRUPTCY?

If your car has already been taken out of your driveway, and if it has not yet been sold, you can get the car back in a Chapter 13. See Note 1 below. You will not need to come current (as you do in a Chapter 7, see below), but will just have to be able to make regular Chapter 13 car payments, which will almost always be smaller than the payments that you were making before filing. See Note 2 below for an example of how the car payments can be reduced.  You usually also have to pay a reasonable repossession fee, these range in the hundreds of dollars, and wait anywhere from one week to a couple of months before getting it back.

Most vehicle lenders  will return a car voluntarily once you file a chapter 13 (provided the car is not already sold) if you show adequate insurance. This policy generally must include collision and name the finance company as a loss payee, i.e. the policy must mention the loan companyby name as the entity which gets paid first in the event of a loss or claim.

But why deal with the delay, inconvenience, added expense and potential damage to your car and/or loss of personal property involved in a typical repossession? A Chapter 13 filed before the repo man does his dirty work is your best bet.

CALL ME IF YOU ARE BEHIND IN PAYMENTS AND WE CAN AVOID THIS NASTY SCENARIO AND LOWER YOUR PAYMENTS TO BOOT. See Note 2 below.

BUT, CAN I ALSO GET MY CAR BACK AFTER REPOSSESSION BY FILING A CHAPTER 7 BANKRUPTCY:

In a Chapter 7, no, you cannot get the car back without the creditor’s permission because chapter 7 involves liquidation of the debtor’s non-exempt property. The only way that most creditors are going to agree to return your car to you is if you are able to catch up on the payments right away and sometimes the creditor will not even accept this but will accelerate the note and demand the entire balance due and owing on the vehicle. So, there is virtually no difference between this and not filing at all in terms of what you have to pay.

A Chapter 7 filed before repossession will stop the repo man temporarily, but it won’t take long for the creditor to get the court’s permission for relief from the stay and take the car anyway. The only sure way to save a car is in a Chapter 13, unless you can find a way to pay the value of the car in one lump sum but if you can chances are you probably aren’t thinking about bankruptcy.

Note 1:   In Pennsylvania where I practice, you can stop the repo man from coming on your property to take your car if you are watchful enough to spot him in the act.  That is trespass.  It is however suggested that if you meet with resistance, you call 911 and summon the local constabulary rather than attempt to defend the property yourself. This of course is not true for a sheriff who enters upon real properly with a valid writ of execution or if your car is parked on a public thoroughfare or in the parking area of your apartment building, since you do not own it.

Note 2:   For instance, let’s say you have a car that is worth $15,000.00, on which you still owe $20,000, and are paying $519.00 per month at 19% interest on a 60 month note. (This is only an example…every situation will vary.) I can always lower the interest rate down to 2 or 3 points above the prime rate and in many cases, assuming you have owned the vehicle long enough; we can set the payments based on the $15,000 valuation, rather than the $20,000 debt.

In this example, the monthly payments would be reduced to roughly $380.00, for a savings of $139 per month or a whopping $8,325 over the life of the loan, (based on the WSJ prime rate quote for 11/8/2012 of 3.25 plus 2% Risk Factor or 5.25% total.) If we are able to drop the loan down to $15,000 the payment would be only about $285 per month, for a savings of $234 per month. The same thing applies to boats, RV’s, motorcycles, motor homes, appliances, furniture, electronics, and any other secured property, except for primary residences.

©Christopher C. Carr, Attorney at Law 2009, 2012. All Rights Reserved

Law Offices of Christopher C. Carr, MBA,  P.C., is a quality bankruptcy and debt relief practice, located in  Valley Township, west of Coatesville, Pennsylvania, where Attorney Christopher Carr, a Chester County bankruptcy attorney, who has over 30 years if diversified ;egal experience, concentrates on serving the residents of and businesses located within Western Chester County and Eastern Lancaster County, Pennsylvania, including the communities in and around Atglen, Bird in Hand, Caln, Christiana, Coatesville, Downingtown, Eagle, Exton, Fallowfield Gap, Honeybrook, Lancaster, Lincoln University, Modena, New Holland, Parkesburg, Paradise, Ronks, Sadsbury, Thorndale, Valley Township, Wagontown & West Chester,  Pennsylvania. If you reside or do business in the area and need assistance with a legal issue, please call Mr. Carr at (610)380-7969 or write him at cccarresq@aol.com today!  


I also provide Mortgage Modification Services.

Other lawyers asking “Y” include:

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WHAT YOU NEED TO KNOW ABOUT CHAPTER 13 BANKRUPTCY

WHAT IS A CHAPTER 13 BANKRUPTCY?

By Christopher C. Carr, Esq. Chester County bankruptcy attorney.

Tel: 610-380-7969 Email: cccarresq@aol.com Web: westchesterbankruptcyattorney.org

13 by cappelmeister The avowed goal of bankruptcy is to give debtors a “fresh start.” What is a Chapter 13 bankruptcy and how does it go about accomplishing this? The “automatic stay” in bankruptcy applies immediately once a Chapter 13 case is filed and generally halts all collection activities, foreclosures, repossessions, sheriffs’ sales, and etc. while in effect. Let’s first look at the different types of bankruptcy proceedings.

The United States Bankruptcy Code offers two primary paths for consumers:

  • A Chapter 7 Bankruptcy: In a so called “straight” bankruptcy, the Trustee in bankruptcy seeks to liquidate the debtor’s non exempt property and distribute the proceeds to the creditors in order of priority, in exchange for discharge of all eligible debt. (Exemptions for various property classifications are set out in federal and state law.) However, certain debts such as guaranteed student loans and domestic support obligations are non-dischargeable in bankruptcy. Most 7’s are “no asset” bankruptcies.

Certain higher income debtors who do not meet the new Means Test must instead file a Chapter 13 Bankruptcy.

  • A Chapter 13 “debtor in possession” Bankruptcy: Here, unlike in Chapter 7 proceedings, the debtor retains possession of the assets (hence its nickname). In order to be confirmed by the court, the debtor must prove sufficient income to support a 3-5 year plan wherein payments on secured debt such as mortgages and auto loans (including arrears) and non-dischargeable items continue and unsecured creditors typically get paid a small portion of their debts. For debtors facing mortgage foreclosure, Chapter 13 may be the only choice to halt the process while seeking other remedies within or outside of bankruptcy. However, recent statistics indicate that only about 35% of all 13 plans are ever completed.

There are overall limits as to how much unsecured and/or secured debt a debtor may have and still utilize Chapter 7 or 13.

  • Chapter 11, a third type of Bankruptcy, is primarily used to help in debt businesses restructure. An example is the bankruptcy from which GM has successfully emerged with the help of a massive US bailout. It is much more complex, time consuming and expensive than Chapter 7 or 13, but is the sole resort for individual debtors with debt which exceeds the limits mentioned above.

Other than consumer perceptions that bankruptcy is somehow unethical or “wrong”, the primary issue with filing bankruptcy is that it remains on the debtor’s credit for up to 7 (Chapter 17) or 10 years (Chapter 13) from filing and may interfere with efforts to obtain credit, purchase or refinance a home or even obtain employment. However, it should be noted that most who seek this relief already have impaired credit and, more importantly, in reality new credit is generally extended to debtors who keep their payments current for a year or two following discharge. So, in effect bankruptcy can work to “repair” credit.

In summary, the automatic stay provides an effective if temporary refuge from foreclosure and other debt collection activities and many debtors ultimately do obtain the permanent solution to their debt problems, the “fresh start” which is the ultimate objective of the US bankruptcy laws.

©Christopher C. Carr, Attorney at Law 2009, All Rights Reserved

Law Offices of Christopher C. Carr, MBA,  P.C., is a quality bankruptcy and debt relief practice, located in  Valley Township, west of Coatesville, Pennsylvania, where Attorney Christopher Carr, a Chester County bankruptcy attorney, who has over 30 years if diversified ;egal experience, concentrates on serving the residents of and businesses located within Western Chester County and Eastern Lancaster County, Pennsylvania, including the communities in and around Atglen, Bird in Hand, Caln, Christiana, Coatesville, Downingtown, Eagle, Exton, Fallowfield Gap, Honeybrook, Lancaster, Lincoln University, Modena, New Holland, Parkesburg, Paradise, Ronks, Sadsbury, Thorndale, Valley Township, Wagontown & West Chester,  Pennsylvania. If you reside or do business in the area and need assistance with a legal issue, please call Mr. Carr at (610)380-7969 or write him at cccarresq@aol.com today!  

I also provide Mortgage Modification Services.

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V is for “Victory”: FINDING & RESTORING CREDIT AFTER A BANKRUPTCY FILING

 V is for “VICTORY”:   FINDING & RESTORING CREDIT AFTER A BANKRUPTCY FILING

By Christopher C. Carr, Esq. Chester County bankruptcy attorney.

Tel: 610-380-7969 Email: cccarresq@aol.com Web: westchesterbankruptcyattorney.org

Why do so many of us come this way?  Well, virtually all of us who seek a bankruptcy do so in order to get a “fresh start”.  That is precisely what the law says it is there for.  Elsewhere, I argue that without such a safety net there to catch us if we fail, WE COULD NOT AND WOULD NOT HAVE A ROBUST FREE MARKET ECONOMY.  So many of us are maxxed out on our credit cards and have no more purchasing power.  We seek fresh sources of credit for autos, schooling, even our everyday purchases.  So for better or for worse, it becomes critical for us to find our way back to the credit wellspring as soon as possible after, nay even during, our bankruptcy.

A Chapter 7 “liquidation type” bankruptcy filing remains on your credit report for 10 years from the date of filing.   A Chapter 13 “debtor in possession” bankruptcy filing will remain on your credit report for 7 years from the date of filing. It will be automatically removed after the expiration of the applicable period.
Does this mean that your credit will be impaired for 7 to 10 years? Does it mean you will not be able to purchase critical items on credit?    Absolutely not.

Note that the period starts from the date of filing not discharge so, for example, if you are in a Chapter 13 and complete a 3 year plan 3.5 years later, you will only have three and a half to go. And during this time and even before, you will, with persistence, be able to get credit for the things you really need (see below.) But, you can begin to rebuild your credit rating immediately upon the date of your discharge order. (In a Chapter 7 this will be granted 3-4 months after your petition is filed, typically.)   Actually, it will often prove easier to rebuild your credit after a bankruptcy filing because you will no longer have debts that are in excess of your credit limits.

Don’t even think about hiring a “Credit repair” agency. The money you pay to them could actually be used directly to repair your credit.  As any bankruptcy practitioner will tell you, it’s really no secret, the crucial thing you need to do to rebuild your credit quickly and at no added cost is to pay all of your future bills on time. After a bankruptcy filing, your payment history will be crucial.  If you are in a Chapter 13 your plan payments will be reported. It is common to see former clients who have rebuilt their ratings within 2 to 3 years after a bankruptcy. Their secret? They paid their mortgage and car loans ON TIME and didn’t miss a payment. Some ideas: Send the checks EARLY in case the mail is delayed. Set up an emergency fund, perhaps in a short term CD, to give yourself the “float” needed to make the payments in case you are short one month and then replenish it in flush months or with your tax refund. Have the mental discipline not to use it for anything else!

As an example, a recent Chapter 7 client finished his case; obtained his discharge order and exactly 30 months later (2 years and 6 months), purchased a new home and obtained a competitive mortgage rate for a 30 year fixed.

You will be able to get a new credit card after your bankruptcy case has been completed.   It is true that you are likely to be rejected once or twice, but you should be able to obtain approval for a small credit card as long as you are persistent. Your best bet may be to talk to that friendly bank manager you have known for years. And you may need to ask more than once.

There are also ways to surrender that car you are driving now and its high rate loan and purchase a new car even while in bankruptcy, believe it or not.  You will pay a somewhat higher interest rate but rates are at historically low levels now anyway.

You will also be able to apply for student loans, for yourself or for a child.  Specifically, the Bankruptcy Code (11 U.S.C. Section 525) prevents the government from discriminating against individuals on the grounds that they have filed for bankruptcy relief.  I have yet to hear of anyone being denied a student loan on bankruptcy grounds.

Law Offices of Christopher C. Carr, MBA,  P.C., is a quality bankruptcy and debt relief practice, located in  Valley Township, west of Coatesville, Pennsylvania, where Attorney Christopher Carr, a Chester County bankruptcy attorney, who has over 30 years if diversified ;egal experience, concentrates on serving the residents of and businesses located within Western Chester County and Eastern Lancaster County, Pennsylvania, including the communities in and around Atglen, Bird in Hand, Caln, Christiana, Coatesville, Downingtown, Eagle, Exton, Fallowfield Gap, Honeybrook, Lancaster, Lincoln University, Modena, New Holland, Parkesburg, Paradise, Ronks, Sadsbury, Thorndale, Valley Township, Wagontown & West Chester,  Pennsylvania. If you reside or do business in the area and need assistance with a legal issue, please call Mr. Carr at (610)380-7969 or write him at cccarresq@aol.com today!  

I also provide Mortgage Modification Services.

©Christopher C. Carr, Attorney at Law 2009, 2012, All Rights Reserved

“V” Photo by Janet McKnight

T in the bankruptcy Alphabet is for the Missing Tax Refund

By Christopher C. Carr, Esq. Chester County bankruptcy attorney.

Tel: 610-380-7969 Email: cccarresq@aol.com Web: westchesterbankruptcyattorney.org

T 5309561982_8b35ba89ec_t[1] So you filed a Chapter 7 bankruptcy and then filed for a tax refund for the same year. YOUR REFUND NEVER ARRIVES. Surprise Surprise! The bankruptcy trustee had it directed to him. A trustee’s primarily job is to represent your unsecured creditors and he/she can submit a request for your federal tax refund on behalf of the bankruptcy estate and distribute the funds to them.

Think about it, when you file for bankruptcy what is the no. 1 thing the trustee is interested in?  Your INCOME of course. And what is a tax refund really but INCOME that you let Uncle Sam hold for you (interest free). The trustee under most circumstances is entitled to it.

Could this have been avoided? The answer is most certainly “yes” with a little planning. Unless an emergency bankruptcy has to be filed to save a home from Sheriff’s sale or a car from repossession, most clients have a good deal of time between the time they come in to meet with me for the first time and filing. A good bankruptcy lawyer will examine your most recent tax return to see if your refund is too high. If so, I will advise you to immediately reduce your payroll tax deduction (by increasing your exemptions on your W-4 withholding form which you have the right to do at any time.) This will put money in your pocket NOW and you can likely show a tax refund small enough so that your trustee will not even bother with it.

Law Offices of Christopher C. Carr, MBA,  P.C., is a quality bankruptcy and debt relief practice, located in  Valley Township, west of Coatesville, Pennsylvania, where Attorney Christopher Carr, a Chester County bankruptcy attorney, who has over 30 years if diversified ;egal experience, concentrates on serving the residents of and businesses located within Western Chester County and Eastern Lancaster County, Pennsylvania, including the communities in and around Atglen, Bird in Hand, Caln, Christiana, Coatesville, Downingtown, Eagle, Exton, Fallowfield Gap, Honeybrook, Lancaster, Lincoln University, Modena, New Holland, Parkesburg, Paradise, Ronks, Sadsbury, Thorndale, Valley Township, Wagontown & West Chester,  Pennsylvania. If you reside or do business in the area and need assistance with a legal issue, please call Mr. Carr at (610)380-7969 or write him at cccarresq@aol.com today!  

I also provide Mortgage Modification Services.

Other Attorneys Blogging on the Letter T  Include: .

  1. Omaha and      Lincoln, Nebraska Bankruptcy Attorney, Ryan D. Caldwell T is for Transfers.
  2. Bankruptcy      Lawyer Jay S. Fleischman T is for Trustee.
  3. Kauai      Bankruptcy Attorney, Stuart T. Ing T is for Taxes.
  4. San Mateo      County Bankruptcy Lawyer Cathy Moran T is for Tension.
  5. Metro      Richmond Consumer and Bankruptcy Attorney Mitchell Goldstein T is for Thirteen.

©Christopher C. Carr, Attorney at Law, 2012, All Rights Reserved. See Disclaimers.

Photo by Jetheriot