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Month: February 2019
Rebuilding credit after bankruptcy

On Behalf of O’Brien Law Firm, LLC

Posted on: February 28, 2019

Many people across Mississippi struggle to support themselves and their families financially, and if you count yourself among them, you may be sorting through your options and trying to figure out if a bankruptcy filing might give you the fresh start you desire. While, in many cases, filing for bankruptcy can be a great way to get your affairs in order so you can start to dig your way out of debt, your credit will most definitely take a hit after doing so.

There are, however, certain efforts you can make to help rebuild your credit after bankruptcy, which, over time, can help you raise your credit score and otherwise get back on your feet financially. Just what types of actions can you take after a bankruptcy filing to help raise your credit score?

Consider a secured loan

A secured loan is something you may be able to obtain through a local bank or credit union, and it can help boost your credit score if you stay current on all necessary payments associated with it. There are two primary kinds of secured loans. The first involves putting down a deposit and then borrowing against that money you have on deposit, while the second type involves placing money in a savings account you can access once you have made all required payments.

Consider a secured credit card

A secured credit card, meanwhile, can help you build your credit in a manner similar to a traditional credit card, but you need to fund the credit card yourself by putting down a deposit. There are typically high fees and interest rates associated with secured credit cards, though, so view this option as a temporary fix, rather than a long-term solution.

While these are two effective methods of rebuilding your credit on your own, you may also be able to do so through other methods that involve enlisting the help of others. For example, you may be able to have a close friend or family member co-sign on a loan or credit card to help you rebuild credit after bankruptcy.

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When to file for bankruptcy

On Behalf of O’Brien Law Firm, LLC

Posted on: February 25, 2019

Bankruptcy may be an option for Mississippi residents who have been overwhelmed by substantial debt. However, filing for bankruptcy can have a long-term impact on their credit. Before filing, they should consider several factors to decide whether it is the best option for them.

Debtors may want to try to negotiate a settlement with their creditors, who generally prefer obtaining a settlement rather than having the debt discharged in bankruptcy. Debtors may find it easier to negotiate a settlement if they are a few months behind on their payments, as creditors might not be inclined to reduce a debt if the payments are current.

Some debtors may benefit from credit counseling, particularly if they have been unable to reach a settlement with their creditors. With the assistance of credit counselors, it may be possible to get lower monthly payments and interest rates.

Lenders and creditors who have received judgements against debtors can be begin garnishing the wages of those debtors. If this occurs, filing for bankruptcy stop the wage garnishment and can even help debtors get some of the money that was garnished returned to them.

Medical bills that are not covered by insurance is another factor to consider in determining whether bankruptcy is the best way to resolve debt. Medical bills are the one of the main causes of bankruptcy because even with health insurance, people find it very difficult to pay those bills. By filing bankruptcy, people with substantial medical bills can pay them off using a 3-to-5-year payment plan or have them completely discharged.

A bankruptcy attorney may evaluate the financial circumstances of a client’s situation and may recommend filing a certain type of bankruptcy to stop wage garnishment. Assistance might be provided with developing a multi-year payment plan to resolve credit card debts and medical bills.

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Two-thirds of all U.S. bankruptcies related to medical bills

On Behalf of O’Brien Law Firm, LLC

Posted on: February 19, 2019

Mississippi residents who have had health emergencies likely can appreciate that medical bills are a factor in approximately two-thirds of all bankruptcy filings across the country. A study that contained this information was published in the American Journal of Public Health on Feb. 6.

For the study, a research team surveyed 910 random U.S. citizens who filed for personal bankruptcy between 2013 and 2016. They found that medical expenses ruin the finances of around 530,000 American families every year. They also found that around 66.5 percent of all bankruptcy filings were at least partially attributed to unpaid medical bills. The study is the first to explore the association between bankruptcy and medical bills since Congress passed the Affordable Care Act nearly nine years ago.

According to the lead author of the study, who is on the faculty at both the Harvard Medical School and the City University of New York’s Hunter College, the findings show that most Americans could be forced into the poorhouse after suffering just one major illness. He also said that health insurance provides inadequate protection because of co-payments, deductibles and other loopholes that push health costs back onto patients. The authors concluded that, while bankruptcy can help bail people out, the best long-term solution would involve changing the way Americans pay for health care.

Individuals who face overwhelming medical bills and other types of debt could help themselves by consulting with a bankruptcy attorney about their situation. The attorney could carefully assess the details of the case and suggest ways to stop creditor harassment and obtain debt relief. One possible solution could be to file a Chapter 7 bankruptcy petition, which could lead to the discharge of several types of unsecured obligations.

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Bankruptcy offers protection from foreclosure

On Behalf of O’Brien Law Firm, LLC

Posted on: February 14, 2019

People in Mississippi who have fallen behind on their mortgage payments face the possibility of foreclosure. While some lenders are open to loan modifications or short sales to satisfy the debt, many are not. Many lenders will begin foreclosure proceedings, which can end with the lender taking possession of the house and selling it at auction. The proceeds of the auction are then used to pay down the mortgage as well as the legal costs associated with foreclosure.

Where the lender is not willing to work with the borrower and forecloses on the property, filing for bankruptcy can protect the borrower. Once a person files for Chapter 13 or Chapter 7 bankruptcy, the court issues an Order for Relief that includes an automatic stay of collections actions. Creditors are then not allowed to attempt debt collection efforts until bankruptcy proceedings are complete. There are exceptions to the automatic stay in cases where the lender has already filed the foreclosure notice and lenders can file motions to lift the automatic stay.

Individuals who file for Chapter 13 bankruptcy set up a repayment plan as part of the bankruptcy process. The plan distributes the filer’s income to creditors, and the filer must account for current and past-due mortgage payments. If the person meets the requirements of the bankruptcy court for the length of the plan, he or she will usually avoid foreclosure and keep the home.

People who are struggling to pay down debts in Mississippi might want to speak with a lawyer. A lawyer with experience practicing bankruptcy law might be able to help by examining the facts of the case and suggesting a Chapter 13 or Chapter 7 bankruptcy filing to restructure or eliminate debts. A lawyer may be able to negotiate new payment terms with creditors or draft and file a bankruptcy petition to trigger the automatic stay.

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Second bankruptcy possible but waiting periods apply

On Behalf of O’Brien Law Firm, LLC

Posted on: February 6, 2019

Bankruptcy law recognizes that debts might overwhelm Mississippi consumers. When individuals file for bankruptcy protection, they generally do so under either Chapter 7 or Chapter 13. The form of bankruptcy determines whether eligible debts will be discharged or if the person must continue to pay creditors under a court-mandated payment plan. The chapter under which people file also establishes waiting periods before they can file for bankruptcy again.

Under a Chapter 7 bankruptcy, the court relieves a person of financial burdens by discharging many unsecured debts. After people complete this process, the law requires that they wait eight years before seeking Chapter 7 protection again. If they want to file for Chapter 13 protection, however, they only need to wait four years after completing a Chapter 7 case.

Chapter 13 bankruptcy helps people overcome financial stress by creating a manageable payment plan. This protection can help someone catch up on bills over three or five years and avoid foreclosure or wage garnishment. Someone who took advantage of Chapter 13 protection could file for Chapter 7 after waiting six years. Only two years must pass, however, if a person wants to file a second Chapter 13 petition.

A person needs to consider many factors when filing for bankruptcy a first or second time. The action stays on a credit report for many years and can endanger future employment opportunities or access to credit. A consultation with an attorney could inform a person about the pros and cons of pursuing bankruptcy relief. An attorney could determine if a person could pass a means test and describe which assets might be exempt from liquidation.

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