Archive for the ‘Chapter 7’ Category
There is no perfect time to file for bankruptcy. Ideally, you should wait to file at a point when you have not touched your credit cards for several months and your credit card charges over the past year have not taken a big jump. Further there is less chance that you will face any objection if you have made at least the minimum payment over the past 6 months or longer.
Section 523 of the Bankruptcy Code sets out a number of situations in which credit card debt will not be discharged. Section 523(a)(2)( c) makes non-dischargeable consumer debt totaling more than $500 for luxury goods and services owed to any one creditor that are incurred within 90 days of filing, or cash advances totaling $750 or more owed to any one creditor made within 70 days of filing.
Section 523(a)(2) makes non-dischargeable debt owed to a creditor that was incurred by false pretenses or by fraud.
So to sum it up, Section 523 gives credit cards at least two arguments to challenge a Debtor:
1. Recent credit card use (within 3 months) for anything but necessities like food, clothing and shelter
2. Any credit card use in the recent past (up to a year prior to filing) if a Debtor makes charges where there is no reasonable expectation of repayment.
Here’s another way to think about it: If you have lost your job, and for the last year your only source of support are credit cards and cash advances, you should not expect to avoid a challenge by the credit card issuer just because you wait 91 days after your last use of your cards.
What, then, should you do if you need to buy food or gasoline in the weeks before you actually file?
You should recognize that shortly after you file, there is a very good chance that your credit cards will all be canceled and you are going to have to find another way to pay for your food and gasoline. A bankruptcy may eliminate old debt but it will not help you pay your current or on-going bills.
As a practical matter you are not going to want to spend the money litigating Section 523 dischargeability actions. Bankruptcy litigation is expensive and if you are scraping to buy food and gasoline, you will not be able to afford litigation. The fee you pay your bankruptcy lawyer will almost never include litigation.
If you are in Southeastern Wisconsin and are having trouble with your credit card debt, contact Miller and Miller today. We have offices in Milwaukee, Germantown, and Kenosha, making sure that whether you live in Racine or Waukesha, you have a office close to home.
Breaking news:
The Obama administration has announced changes to its flagship foreclosure prevention initiative – the Home Affordable Modification Program (HAMP). Among the changes, borrowers who are struggling because of debt beyond their mortgage will be eligible for a secondary evaluation with more flexible debt-to-income criteria, and eligibility will be extended to investor-owned homes that are used as rental properties. The administration is also giving principal reductions a bigger role within the program, tripling incentives for investors that agree to write down an underwater borrower’s principal balance and offering these same incentives to the nation’s two biggest mortgage investors – Fannie Mae and Freddie Mac.
We’ll all have to stay tuned to see how this develops . . .
All too often, clients come into our office, review their credit report, and are shocked to see what is listed. Sometimes this is because there are old items that have been forgotten, but another culprit is identity theft.
As the web has evolved, so have criminals and their tactics. With websites that look similar to name brand sites, con artists can pluck information as consumers enter what they believe is a legitimate site. Once someone has stolen your identity and injured your credit score, it can be challenging to repair the damage.
“Everything is done online these days,” says Identity Theft Resource Center Social Media Coordinator Nicki Junker. “Most of the time the victims of cyber-savvy criminals won’t be able to trace where the identity theft — a crime that has seen double-digit increases in the last five years — happened.”
Identity theft often goes unnoticed until it’s too late and the damage has already been done. In 2010, around 8.6 million households had at least one person who was a victim of identity theft, up from 6.4 million households in 2005, according to a recent study by the U.S. Bureau of Justice Statistics. Identity theft cost U.S. households about $13.3 billion in 2010, with the average loss being about $2,200.
Consumers can, however, take precautions to safeguard themselves and their identities while shopping online. Junker offers five ways to protect yourself online:
1. Confirm the site is legit: Before giving any personal information, check the URL to make sure that you’re still on the same site where you plan to make your purchases and that you haven’t been moved over to a fake one. Junker said sometimes consumers are switched over to a “cyber squatter’s” site that looks similar to a retailer’s site. It’s easy to be tricked into giving up credit card and other personal information.
2. Shop securely: When you start to check out and get ready to pay for your purchases, the URL should start with “https,” which means the site is secure. A secure site uses security technology to encrypt the information you send to the site, meaning computer hackers are stopped from collecting the data as it crosses the Web. You can also look for a closed yellow padlock at the bottom of the screen. If you see an open lock, you can assume that the site is not secure.
3. Use credit cards: Federal credit laws limit the amount a con artist can take on a credit card. Debit cards don’t have the same protections. “If they have a debit card, they can clear you out,” Junker explains. “You’re much better protected using a credit card than a debit card.”
4. Google the retailer: Before buying from a website, type in the retailer’s name and the word “scam” or “complaint” into a search engine. It’s a way to check out a retailer to see if the business is legit or not.
5. Explore the site: Can you find where the company’s office is located? Does the site clearly state a refund policy? Does it promise too much? “If it sounds too good to be true, it isn’t,” Junker warns. Take your time and make sure nothing seems out of whack or iffy.
Shopping online is a convenient way to avoid store crowds and traffic. By following these web-savvy tips, your shopping experience can be safe and convenient. If you are living in Milwaukee-Waukesha-Racine area, the attorneys at Miller and Miller can help you to repair and rebuild your credit if you think there are errors. Call us at 414-277-7742 today!
While foreclosures in Wisconsin are down, the housing crisis still exists in Milwaukee, Kenosha, Waukesha, and other southeastern Wisconsin communities that Miller and Miller serves. Here is a link to an interesting article from MSN Money on why something needs to be done to remedy the housing crisis, along with a unique solution.
If you live in the Milwaukee metro area and are looking for ways to keep your home, contact Miller and Miller today. And remember that we have offices conveniently located in Milwaukee, Kenosha, and Germantown to ensure that everyone in southeastern Wisconsin has an office close by.
C. Lazarus from the Savings Experiment has a great article here on one way to manage your finances called the 50/20/30 budget. It’s a great read and a great idea. After getting a fresh start through bankruptcy, many of our Wisconsin clients are able to build on that clean slate by saavy budgeting.
If you are in the Milwaukee-Waukesha-Germantown-Kenosha area and would like to learn how to get a fresh start, call Miller and Miller today!