search here
Category: Uncategorized
How does preference law affect my bankruptcy case?

On Behalf of O’Brien Law Firm, LLC

Posted on: June 26, 2019

The decision to declare bankruptcy is not an easy one to make. Once you have chosen to commit to the process, it is normal to have a lot of questions about this unfamiliar undertaking.

You may already understand the difference between Chapter 7 and Chapter 13 bankruptcy, but something you may not have encountered before is preference law. If you are about to move forward with a Chapter 7 bankruptcy case, this policy may impact recent debt payments.

What is preference law?

Preference law refers to a period before you file for bankruptcy. During this time, if you make a payment on a debt, or the collector garnishes wages from your paycheck, that money may need to come back. By allocating precious funds from your existing assets, you give preference to one creditor over another.

The Chapter 7 bankruptcy process may involve liquidation of non-exempt assets. The money from this step can then go toward paying down some of your debt. Any payments you make 90 days prior to officially filing may be eligible for inclusion in this stage.

Why does it exist?

Creditors and debt collectors lose out when you declare bankruptcy. To remain fair to all those involved, the government put preference law into place to keep distribution of repayment even across the board. The idea is that each collector deserves repayment as much as the rest of them.

In some cases, preference law can work in your favor. Wage garnishment is often beyond your control. You will receive several paychecks within 90 days before filing, which adds up to a substantial amount of money. You can then distribute these funds across all your debts to minimize how much of the remaining balances become discharged.

You will likely have many questions about the process if you decide to file for bankruptcy. Keep this surprising law in mind as you prepare for the next steps.

Read More
2 common reasons people procrastinate on bankruptcy

On Behalf of O’Brien Law Firm, LLC

Posted on: May 27, 2019

Making the decision to file for bankruptcy in Mississippi is not one you should make lightly. Nor should you wait too long to file. Though you may have ambivalent feelings about your financial situation and at times feel that things are not as bad as they may seem, waiting too long to take action can make your circumstances more challenging to manage in the short- and long-term.

No one enjoys struggling with debt and receiving constant demands for payment from creditors. Unfortunately, it is a reality for many households across the country. The sooner you seek professional intervention and consider bankruptcy as a solution, the less likely you will fall prey to the pitfalls of delayed action. Here are some common reasons people procrastinate about filing for bankruptcy.

Not enough income

When struggling to make ends meet because of debt, filing for bankruptcy may seem like an additional expense you cannot afford. Though the cost of bankruptcy varies, it is possible to have the costs structured into several payments during your filing. The courts take into consideration the unique circumstances of each filer’s case and use discretion to determine if an installment agreement is beneficial. In cases of extreme financial hardship, they may waive the fees.

Denial of financial circumstances

Pretending like your debts are going to disappear may seem like a good idea because it allows you to stop stressing and enables you to sleep at night. The reality is denial about your finances can make a tough situation extremely worse. Your creditors will continue their collection attempts, which can escalate into collection lawsuits that include wage garnishment, bank account levies, foreclosures and vehicle repossessions. The only way to put an end to debt is to take action, even if that action involves making arrangements to pay your debts or filing bankruptcy to make your circumstances more manageable.

Do not let the shame or embarrassment of debt keep you from doing what is necessary to make things right and get your finances back on track. Many people experience financial issues at some point in their lives. Remember, even some celebrities and the rich and famous are not immune to the pitfalls of debt and have taken advantage of the benefits and protections that bankruptcy offers.

Read More
How to reduce credit card costs

On Behalf of O’Brien Law Firm, LLC

Posted on: April 29, 2019

Credit card debt is one of the most pervasive forms of debt in American society. In 2017, the total amount of credit card debt in the country exceeded $1 trillion. The average adult in the United States has over $6,000 in debt from credit cards.

Filing for bankruptcy is available to those unable to pay off such debts. However, before that happens, you should do everything in your power to get your debt under control, so the court will see you actively attempted to pay it off on your own. You may want to consider performing the following actions prior to bankruptcy to see if they will help you.

Call to get your interest rate reduced

Many people do not realize that if they simply called their credit card company, they could probably get some leeway. Many companies have no problem reducing the interest rate for people who have trouble paying. You should not expect a major reduction with this instance. For example, if your current interest rate is at 20%, then it likely will not go down to 3%. However, even if it only goes down a little bit, it still helps.

Pay off high interest cards first

Many people have credit card debt spread across several different cards. A good strategy is to pay off the card with the higher interest rate. If you delay paying off this card, then the interest rate will only grow larger over time, forcing you to pay off a higher amount. Once you pay off that card, you can turn your attention toward cards with lower rates.

Stash your credit cards for the time being

If you continue to purchase items on your credit cards, then you will just have more interest to pay off. You should stick with a debit card or cash until you pay off the debt. Only after exhausting all options should you look into bankruptcy.

Read More
Mortgage modifications during Chapter 13 bankruptcy

On Behalf of O’Brien Law Firm, LLC

Posted on: April 27, 2019

Filing for bankruptcy can be a powerful tool to aid people in gaining a firm financial standing. For this reason, more people are considering this option.

For those who own a home, there are a few ways that a chapter 13 bankruptcy may affect you. In particular, your mortgage lender may offer you a mortgage modification. There are a few important things to know about this option.

Mortgage modification

In short, a mortgage modification occurs when a lender, or mortgagee, works with a mortgagor to restructure a mortgage loan to fit within the mortgagor’s financial restraints. It is important to understand that a mortgage modification is not a refinance. The focus of a refinance is to allow mortgagors to finance the loan again, usually at a lower interest rate. On the other hand, a mortgage modification is a change to the current mortgage repayment, to make it easier for the mortgagor to meet the terms of the mortgage. During this process, the monthly premium may go down, but the lifetime of the loan will increase.

Possible benefits

Particularly in the case of bankruptcy, a modification can help the mortgagor in his or her financial adjustment after the bankruptcy process and allow the party to maintain the home. This tends to be the greatest draw of the option. Depending upon the terms of the modification, the interest rate of the loan may be low for a few years, and when it does increase, it will not rise above the rate that was set before the modification. The process is usually smooth and quick, seeing as it involves a loan that is already in place.

The cost

Loan modifications come with some possible setbacks. The greatest possible disadvantage is the length of the loan. Many people do not realize that the restructuring of the loan comes with a new loan term. This increases the length of the loan, which in turn increases the amount the party will have to pay back. It is important to weigh the possible pros and cons as they apply to your situation.

Read More
What can bankruptcy’s “automatic stay” protect you against?

On Behalf of O’Brien Law Firm, LLC

Posted on: March 28, 2019

As someone who has decided to file for bankruptcy, you may have done so in an attempt to stop the seemingly constant onslaught of phone calls from debt collectors. Such calls can prove, at best, a nuisance, and you may also have concerns about how it looks to have debt collectors calling you up at your place of business.

By filing for bankruptcy, though, you can put a stop to these persistent phone calls, and this happens because of something called “automatic stay.” Just what is automatic stay? Once you initiate bankruptcy proceedings, the automatic stay takes effect, and your creditors can no longer attempt to collect on certain debts during this timeframe. Just what can bankruptcy’s automatic stay protect you against, in addition to creditor harassment?

Foreclosure

Typically, filing for bankruptcy will, at least temporarily, put a stop to a foreclosure against your house. If you do not stay current on your mortgage payments, though, your creditor may file to have the automatic stay removed, so you still need to keep up with your payments during this time.

Eviction

If you are renting your home and your landlord filed to have you evicted, but he or she is not yet in possession of the eviction judgment from the housing court, bankruptcy’s automatic stay should stop the eviction process. As is the case with mortgage payments, though, your landlord may still be able to evict you if you fail to keep up with your rent.

Wage garnishment

If you are experiencing one of your creditors taking some of your wages at work, bankruptcy’s automatic stay can also put a stop to the garnishment.

While these are some of the things the automatic stay can protect you against, it is important to note that there are certain debts, such as child support obligations and evictions with judgments, that it typically will not cover.

Read More
“From my initial consultation throughout the entire process, Mr. O'Brien and his staff handled my legal matters with the utmost professionalism and care. I am especially grateful for Crystal who patiently answered all my questions and put my mind to ease over and over. Thank you O'Brien Law Firm, LLC!”
– C.H.
“Thank you so much for the advice. I knew I chose the right attorney!”
– C.H.

Don’t Wait Any Longer

Request a Free Initial Meeting Now