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Category: Bankruptcy
Handling a credit report after bankruptcy

On Behalf of O’Brien Law Firm, LLC

Posted on: February 6, 2022

Bankruptcy can be a burden in many ways. Even after you pay off your debt and get on solid footing, you still have to worry about creditors reporting your bankruptcy information.

Negative information in your credit reports can affect your financial options in the future, so you should be mindful of the ramifications. At the same, you should not feel as if your bankruptcy will leave a permanent mark.

Your creditors’ rights

For up to a decade, a credit bureau can keep your bankruptcy on your report. Your creditors can also keep negative information such as judgments and lawsuits for up to seven years in most cases. On top of this, if you do not pay some of your tax liens, this information can stay on your record for 15 years. You should keep all of this in mind if a company offers to remove negative information earlier than the standard timeframe.

Your rights

Errors can easily happen in your credit reports and you have the right to bring them into question. For one, the Consumer Financial Protection Bureau is always there if you have a complaint. Also, if you have trouble getting credit with a company because of a report, the Fair Credit Reporting Act entitles you to a free copy of the report (as long as your request is within 60 days). The company that denies you must also provide you with the phone number, name and address of the credit reporting agency.

While a bankruptcy discharge can help you, you should prepare yourself for what may come after. Understanding how credit reports work can help you repair your finances and move on.

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3 ways to take control of your credit cards

On Behalf of O’Brien Law Firm, LLC

Posted on: December 27, 2021

If you have excessive credit card debt, you are far from alone. In fact, in 2020, the average American owed more than $5,000 to credit card companies. This makes sense, as many individuals have little choice but to reach for credit cards to cover both ordinary and emergency expenses.

Having credit cards is a good way to build a good credit score. If you accumulate too much debt, however, your credit cards may work against you. Here are three ways to take control of the plastic in your wallet or purse.

1. Stay within your means

Because many credit cards offer cashback and other types of rewards, it can be tempting to pay with your card. Still, you should not let your credit cards lure you into developing poor spending habits. If you can stay within your means and pay off your credit card balances each month, you are likely to realize some immediate financial benefits.

2. Look for other options

Credit cards often come with massive interest rates. If you are not able to pay off your total balance at the end of a billing cycle, you are likely to pay more for goods and services than they are worth. Therefore, if you have an unexpected expense, it may be wise to look for other financing options. For example, your bank may offer you a loan at a lower interest rate than your credit card.

3. Open your statements

If your outstanding debt makes you uncomfortable or nervous, you may not open your credit card statements. Still, to regain control over your finances, you need to know how much debt you have, how much credit you have left and how much interest you are paying.

Ultimately, if opening your credit card statements causes you to panic, you may want to explore bankruptcy or other debt-relief options.

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An automatic stay offers protections but there are limits

On Behalf of O’Brien Law Firm, LLC

Posted on: November 3, 2021

When you file for bankruptcy, you activate an automatic stay, which puts a halt to creditor harassment.

There is even more to the implementation of an automatic stay that should allow you to sleep better at night. However, it cannot solve every problem.

Keeping the lights on

Perhaps a gas, electric or water company threatens to cut off your service because you are behind on payments. An automatic stay can prevent disconnection, usually for 20 days or more.

Avoiding foreclosure and eviction

If you are a homeowner and behind on your mortgage payments, the stay will stop foreclosure, at least until your bank finds a way to continue the process. If your landlord is threatening to evict you, the automatic stay will buy you a little more time to remain in your home. Keep in mind, however, that courts often favor the landlord in disputes with tenants and a court case once instituted is likely to continue.

Stopping wage garnishment

After you file for bankruptcy protection, an automatic stay will put an end to wage garnishment until the stay is lifted.

Understanding the limitations

There are certain situations an automatic stay cannot control. For example, it will not prevent the Internal Revenue Service from auditing you or from issuing a tax assessment. However, the automatic stay will prevent the IRS from placing a tax lien against your property. Also, the stay will not help if you owe child support payments. If you are dealing with a criminal proceeding, part of which also concerns a debt you owe, the automatic stay will stop the debt, but the criminal portion will continue.

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Can you get rid of credit card debt with bankruptcy?

On Behalf of O’Brien Law Firm, LLC

Posted on: October 22, 2021

If you have been struggling to pay for everyday items recently, it may not surprise you that prices have increased. In fact, the U.S. Bureau of Labor Statistics consumer price index shows a 5.4% jump in prices in the last year alone. This may leave you with little choice but to reach for your credit cards to make ends meet.

Credit card debt can sneak up on you quickly. If you have excessive debt or can only make the minimum payments on your cards, you may be looking for debt-relief options. Fortunately, with both Chapter 7 and Chapter 13 bankruptcy filings, you can probably discharge most or all of your credit card debt.

Chapter 7 bankruptcy

With Chapter 7 bankruptcy, you disclose all your assets and debts to the bankruptcy trustee. The trustee may then sell some of your assets to pay your creditors. There are many exemptions, though, so you are not likely to lose everything. Then, you no longer have to pay debts that qualify for discharge. Unsecured debts, like credit card balances, unusually fall into this category.

Chapter 13 bankruptcy

Chapter 13 bankruptcy works differently than Chapter 7 bankruptcy, as you and the bankruptcy trustee come up with a repayment plan for your outstanding debts. At the end of your repayment period, which may be three or five years, your remaining credit card debt is typically dischargeable. That is, once you complete your repayment plan, your qualifying credit card debt goes away.

There are many factors that influence whether your debt is dischargeable during bankruptcy. Ultimately, so nothing catches you by surprise, it is critical to explore all your legal and financial options before filing for either Chapter 7 or Chapter 13 bankruptcy protection.

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3 Truths to change your perspective on bankruptcy

On Behalf of O’Brien Law Firm, LLC

Posted on: September 17, 2021

If you are drowning in debt and your self-esteem and motivation are at their lowest, you are not alone. The truth is, facing unpayable debts can be a terrifying and stressful experience for many people. Anxiety and depression are common.

Despite everyone’s constitutional right to file for bankruptcy, there are still many lingering myths and stigmas that can keep debtors down throughout the process. To help overcome these feelings, it can be helpful to shift your perspective on things.

Debt does not define your worth

There are many reasons why a person might have debt. While some reasons might reflect personal choices like poor money management, others do not. For example, significant consumer debt in the U.S. reflects medical emergencies. Regardless, your reasons for debt do not define your worth.

Bankruptcy is a constitutional right and protection

At the end of the day, bankruptcy is one of your constitutional protections. It protects you, the consumer, not the creditors to whom you owe money. When you think about the logic of the situation, it makes sense why they would not encourage you to file; it is not in their favor.

Bankruptcy is an opportunity

For consumers who are considering bankruptcy, debt can feel crushing. Sometimes, it can feel like failing. While you may be struggling right now, filing for bankruptcy can give you the opportunity to both start over as well as increase your knowledge about personal finances and budgeting.

Undeniably, facing bankruptcy can be challenging, but changing your perspective can end up changing your entire situation.

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