Archive for the ‘las vegas credit card debt’ Category

Discharging Credit Cards Through Chapter 7 Bankruptcy

Thursday, May 3rd, 2012

A Chapter 7 bankruptcy case can discharge many financial obligations, including credit card debts. A Chapter 7 discharge means that the credit card company is permanently prohibited from trying to collect from you.  The debt is unenforceable against you, and you are not required to pay income taxes on the discharged debt.

Credit cards are classified as “unsecured debts,” the lowest category of debts during bankruptcy. Other common unsecured debts are medical bills and signature loans. The payment of an unsecured debt is not guaranteed by a pledge of property (e.g. a car loan).  Consequently, when an unsecured debt is discharged in a Chapter 7 bankruptcy, the creditor typically receives nothing.

Discharging a credit card debt in a Chapter 7 bankruptcy case comes down to one simple rule: was the debt incurred honestly? The Chapter 7 bankruptcy laws favor discharging credit card debt and giving the honest debtor a fresh start. However, the law balances the scale by withholding the discharge when the debtor is less than honest.

First, a credit card that is not listed in your Chapter 7 bankruptcy case is often excluded from your discharge. This is especially true if you continue to use the card during or after filing bankruptcy. The additional charges made after filing bankruptcy cannot be discharged, and becomes good evidence of an intent to conceal the credit card from the court and the bankruptcy filing from the creditor.

Second, if you go on a spending spree with our credit card immediately before filing bankruptcy, those charges are presumed non-dischargeable. This rule includes “luxury purchases” of more than $600 made within 90 days of the bankruptcy, as well as charges made on your card that you have no intention of repaying. The best advice is to stop using your credit card before you file bankruptcy.

Third, if you take cash advances totalling $875 within 70 days prior to filing bankruptcy, the debt is presumed non-dischargeable.

Fourth, a false statement to the credit card company on your application could be used to deny discharge of the debt. While credit card companies seldom use this tactic, if there is plain evidence of fraud (e.g. your yearly income was $20,000, but you claimed it was $200,000), the credit card company may file an adversarial action during your case and seek to deny your discharge.

Discharging credit card debt is usually a simple matter in a Chapter 7 bankruptcy case. It is very important to answer your attorney’s questions honestly and fully in order to receive the best advice. Your attorney can often avoid problems when they are revealed in advance, and can get you the relief you need.

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Do I Have To List a Credit Card With a Zero Balance?

Thursday, February 9th, 2012

People file bankruptcy for a variety of reasons. Often a bankruptcy is necessary to discharge a large financial obligation from a single catastrophic event, like a foreclosure or a large medical bill. Contrary to what some bankers and the media believe, many bankruptcy debtors have little or no credit card debt.

Some debtors have a credit card with no balance on the day the bankruptcy is filed. The Bankruptcy Code does not require you to report a zero balance credit card. If you don’t owe the credit card company on the date you file the bankruptcy case, it is not a creditor for bankruptcy purposes. If you do not list the credit card company in your bankruptcy schedules, the court will not send it a notice of your filing.

Having an open credit account can be useful to reestablish a positive credit history after your Chapter 7 bankruptcy discharge. However, your bankruptcy is a matter of public record, and most large banks and finance companies routinely compare new bankruptcy filings to their own records. Even though you may not have a balance, the credit card company may cancel the card when they discover your bankruptcy filing.

There are a few dangers that are associated with trying to keep a credit card account after bankruptcy. One danger is that the bankruptcy trustee may be able to demand that the card company turn over any large transfer of money used to pay off the account during a time when you were insolvent. Additionally, Chapter 13 debtors are prohibited from using credit cards during bankruptcy. Finally, intentionally failing to disclose a debt in your bankruptcy could land you in serious trouble with the court. If you have a credit card balance, you must report it as a debt.

If you have a credit card with a zero balance (or a very small balance) and you want to keep the card open, discuss your intention with your bankruptcy attorney. Your attorney will weigh the pros and cons of keeping the account open, and the direct you in the proper way to avoid trouble with the bankruptcy court.

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Credit Card Debt Is On The Rise

Wednesday, January 4th, 2012

A recent survey indicates a disturbing trend in the spending habits of the American consumer. After two years of moderate credit card use, new figures from Card Hub show that credit card use has significantly increased during the past year.  Consumers are on track to end 2011 with a $64 billion increase in credit card debt.

Americans are also paying off credit card debt at a slower pace. During the first quarter of each year credit card debt usually declines, mostly due to annual bonuses and tax refund checks. In 2009 and 2010, consumers paid down more in the first quarter than they charged in new debt through the end of the third quarter. This year consumers kept the cash and kept charging throughout the year. Even more disturbing is that this year’s third quarter credit card debt total was 154 percent more than in the same period last year.

Carrying large credit card debt can create serious financial problems. According to the Federal Reserve’s credit card repayment calculator, a $5,000 debt at a 15% interest rate will take 7 years to pay off at $100 per month. During this time you will pay an extra $2,896 in interest charges!

If credit card fees are eating up your paycheck, it may be time to consider bankruptcy. During Chapter 13 bankruptcy you are able to structure an affordable repayment plan to pay credit card debt. Whatever you are not able to pay will be discharged after three to five years of repayment.

If you cannot afford to repay anything towards your credit card debt, Chapter 7 may be the answer. A Chapter 7, also called a “straight bankruptcy,” lasts about five months and nothing is paid to your credit cards. Most bankruptcy debtors are able to keep everything they own while discharging debts they cannot afford to pay.

When credit card debt has taken over your finances, consult with an experienced Haines & Krieger Las Vegas bankruptcy attorney and learn how the federal bankruptcy laws can help. Call us at 702-880-5554. Don’t let credit card debt hold your paycheck hostage! Bankruptcy offers powerful protection from creditors and can discharge overwhelming debts.

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Someone New Is Watching Your Credit

Wednesday, December 28th, 2011

Most Americans are familiar with the three major credit reporting agencies: Experian, Equifax, and TransUnion. Each credit bureau assembles consumer credit transactions into a credit report and calculates a credit score. The credit bureaus also report on civil judgments, repossessions, foreclosures, and bankruptcy. Banks use this information to determine the “credit-worthiness” of applicants and the likelihood that a loan will be repaid.

The credit reporting industry is not limited to three players, Experian, Equifax, and TransUnion are simply the biggest and most recognized. A fourth large credit reporting agency is Innovis, and there are also dozens of smaller companies that collect, analyze and sell information about consumers. Since major lenders use information from the “big three,” most consumers tend to ignore the other credit reporting agencies.

Now there is a new company keeping an eye on you: CoreLogic. What makes this company significant is that it merges traditional credit report data from the national credit bureaus with supplemental information that is typically not found on a credit report. This supplemental information includes information found on lease applications, payday loan information, rent-to-own agreements, dealer financed auto loans, property ownership records, rental evictions, and child support obligations.

The new report, called a CoreScore, is meant to “provide increased transparency into a borrower’s credit history.” However, a person’s credit score is only as good as the information provided, and these new information sources only paint an inaccurate picture. For instance, a low-income person may receive an eviction notice after withholding rent for a legally justified reason.

The Fair Credit Reporting Act allows you to get one free copy of your credit file from each of three nationwide consumer credit reporting companies (Equifax, Experian and TransUnion) once every 12 months through a central source. To request your free annual report under the FCRA, go to www.annualcreditreport.com, call toll free (877) 322-8228, or use the mail request form available at the central source website and mail to Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA, 30348-5281. You may also receive a free copy of your CoreLogic Credco consumer file, including the information provided on your CoreScore report, by visiting the CoreLogic website.

Knowing the information provided in your credit file will help you identify creditors before you file bankruptcy, and can help you improve your credit after your bankruptcy is discharged. It is your credit file, so make sure you keep an eye on those credit reporting agencies watching you.

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When Can I Stop Paying Credit Cards?

Friday, July 22nd, 2011

Many clients ask, “When can I stop paying on my credit cards?” The answer seems obvious: immediately. If you are filing bankruptcy and discharging your credit card debt, you are throwing money away by continuing to pay the monthly bill. Right?

But hold on! There are good reasons to consider the consequences before stopping your credit card payments.

First, when will you file your bankruptcy case? Your first step is to work with your attorney to determine the actual date you will file. When a client is filing bankruptcy within 30 days, there are very few repercussions to consider. However, not every bankruptcy client can or should file their case immediately. Some clients may need to wait in order to qualify for Chapter 7 or lower their plan payments in a Chapter 13. Other clients may need to postpone filing to eliminate a potential preference payment issue. Every case is different.

Second, once you miss a payment you can expect collection calls. The creditor may call your home, your cell phone, or even your work phone to discuss your delinquency. These calls are at best an annoyance, and often cause additional stress. Credit card bill collectors know that the more uncomfortable you are, the greater the likelihood that you will pay them. Fortunately, once your bankruptcy case is filed, the telephone calls will stop.

Third, missed credit card payments will damage your credit. While your bankruptcy case will substantially harm your credit, missed payments additionally harm your score making it more difficult to improve your credit after bankruptcy. Some bankruptcy attorneys recommend that their clients can stop credit card payments for six months or longer – until the client is facing a legal judgment. While the bankruptcy stops any lawsuit or collection action, and discharges the credit card debt, the bankruptcy will not erase the history of non-payment.

Finally, a few clients will decide to not file bankruptcy. Clients who stop making credit card payments and later change their minds about bankruptcy are left with late payments, fees, default interest rates, and collection harassment. Be sure you are filing before you stop credit card payments!

Here is the best answer to our question: consult with an experienced Haines and Krieger Las Vegas bankruptcy attorney before making the decision to stop paying your credit cards. Your attorney can review your finances and uncover any problems that may delay your bankruptcy filing. In many cases the client is able to stop paying credit cards immediately and the case is filed quickly without any negative consequences to the client. However, every case is different and your case deserves the careful attention of a qualified professional. For a free consultation, contact us at 702-880-5554 today.

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4 good ways to increase your credit score after bankruptcy in Las Vegas

Thursday, April 14th, 2011

Won’t bankruptcy ruin my credit score?  Initially it will have a negative impact.  But over time you can rebuild your credit score.  Which is much more difficult to do if you never file for bankruptcy and remain under a large debt burden.

Here are 4 good ways to increase your credit score after bankruptcy in Las Vegas:

1.  Use your debit cards.

Instead of using credit cards, use debit cards for more of your purchases.  This makes it easier to do electronic transactions without having to incur debt and potentially high fees.  And making use of a debit card in a responsible way still reflects positively in your credit report.  Debt that you don’t pay back on the other hand will have a negative impact.

2.  Limit your credit cards

Never have more than one or two credit cards at the most.  One that you use.  And a second as a back-up in case you lose the first one.  We know it’s hard to function in today’s world without a credit card.  Some places don’t even take cash anymore.  And using a credit card responsibly does help improve your credit score.  But having too many just makes it easy to transfer balances and run up bigger debts with the thought that you’ll just deal with it later.  A perfect recipe for getting back into debt trouble.

3.  Cash is king

If you use cash, then there’s no borrowing, no interest, no penalties, no negative impact on your credit score.  It’s as simple as that.  Plus, when you use cash, you feel it.  You know you’re spending.  And that doesn’t always feel good.  But there’s a reason our bodies feel pain:  it’s a signal to stop doing what you’re doing.  Awareness is a good thing!

4.  Avoid the credit card way of life

One of the biggest debt problems comes from trying to keep up with the Joneses and live the high life, even when you can’t afford to.  Need a car so you can get to work?  That’s a loan you might need to take out.  Want to go out to a fancy dinner or on a nice vacation or buy the latest smart phone?  Don’t take out loans for these.  These need to be purchased with saved money.  Otherwise you risk fall right back into the debt trap that brought you here.

Questions about credit scores and what happens after bankruptcy?  Please contact an experienced Haines & Krieger Las Vegas bankruptcy attorney for a free initial consultation by calling 702-880-5554.

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Will my creditors still come after me if I file for bankruptcy?

Tuesday, December 7th, 2010

Once you file for bankruptcy, you’ll likely see an immediate change in the activity of your creditors.

This is partly because of the “Automatic Stay,” which forbids creditors from contacting a debtor directly (i.e., not through the debtor’s lawyer) once the bankruptcy case has been filed.  And partly because for some creditors it just may not be worth their time and money to pursue the debt.

Here are 5 things that are likely to happen once you submit your bankruptcy petition:

1.  Thanks to the Automatic Stay, creditors must immediately stop all collection activity.  That means no more collection letters or phone calls to you.  Period.  It also means they can’t continue to garnish your wages.  And any lawsuits against you are put on hold and can’t go forward during your bankruptcy case.

2.  That said, some smaller creditors may still contact you because they’re unfamiliar with the bankruptcy laws and the automatic stay.  If you have any problems with them, simply instruct them to contact your bankruptcy lawyer.  (They may not be terribly thrilled with this suggestion, but that’s the way things work in bankruptcy and there’s not anything they or you can do about it once you’ve filed.)

3.  You may never hear again from some creditors, because they’ve weighted the costs and benefits of pursuing their claim and they’ve decided it’s just not worth it.  Perhaps they don’t expect to get anything back in the case.  Or they realize that the amount they would get back is less than the amount they would have to pay a lawyer to represent them.

4.  Other creditors (those with more at stake) will file what’s known as a “proof of claim” in the case.  This is each creditor’s way of trying to get as big a piece of the asset pie as possible.  Since the pie is limited to your non-exempt assets, the proof of claim is more about creditors competing with other creditors for their share of the pie.

5.  Your bankruptcy lawyer (if he/she is a good and experienced one) will keep you up to date on the parts of the case that you need to know about and where action is required by you.  Your bankruptcy lawyer should also patiently answer all of your questions to your satisfaction.

For a free consultation, contact Haines and Krieger at 702-880-5554.

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More Las Vegas Elders Are Filing Bankruptcy

Wednesday, October 27th, 2010

A recent study by the University of Michigan School of Law has found that an increasing number of people over the age of 65 are filing for bankruptcy protection.  The study states that even before the financial meltdown of 2008, the percentage of older Americans filing bankruptcy had risen steadily, from 2 percent in 1991 to 4 percent in 2001 to 7 percent in 2007.

The reasons for these older people filing bankruptcy are varied, but the study found that “the dominant force appears to be overwhelming burdens related to credit cards.”  Researchers found that elder bankruptcy debtors reported 50% more in credit card debt than younger bankruptcy debtors.  Credit card interest and fees were cited as a reason for filing bankruptcy 50% more frequently.  This suggests that elder debtors rely upon their credit cards more that younger debtors.  The author of the study, law professor John Pottow, states, “These findings are both striking and ominous.”

Debtors over 65 had a median credit card debt of $22,562, while younger debtors had a median of $13,615.  Nearly 60 percent of elder debtors said their financial troubles resulted from medical bills.

Financial struggles can be especially overwhelming for someone on a fixed income.  While younger debtors may be able to juggle finances, increase income, or decrease expenses in order to pay off debt, in most cases an older debtor’s fixed income pays only for the bare necessities.  There are few options to paying off high interest credit card debt.  In some extreme cases an elder debtor may forego necessary medicine, food, or utilities in order to pay monthly credit card payments.

If you have an older loved-one who is experiencing credit card debt, speak with an attorney and discover how the federal bankruptcy laws can relieve burdensome credit card bills.  Bankruptcy is powerful protection against creditor harassment, lawsuits, and income garnishments.  For most elder debtors, credit card debt can be discharged without losing any property.  Call today and protect your property and your peace of mind.

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5 Reasons Senior Citizens Probably Have More Las Vegas Credit Card Debt

Monday, October 25th, 2010

Las Vegas senior citizens may not have noticed, but odds are they have more credit card debt than their younger counterparts.

Senior citizens have been filing for bankruptcy at a surprisingly high rate over the past year.  And according to a study by law professor John Pottow of the University of Michigan, credit card debt is the main reason.

Most people, if you asked them, might cite medical debt as the main cause.  But that’s actually the number two cause behind credit card debt.  Additionally, older filers on average have twice as much credit card debt when they file as do younger people.  And when you look at the 75 and older demographic, the numbers get even worse.

Why do senior citizens have much worse credit card debt than younger people?  There’s no definitive research yet on the topic, but some possible reasons might be:

1.  Credit cards are a last resort as other forms of credit are frequently not available.

2.  Less experience dealing with the ins and outs of credit cards (which perhaps includes trouble reading the fine print).

3.  Senior citizens tend to not be as aggressive about negotiating debt and interest reductions with their credit card companies.

4.  Pride.  Senior citizens may associate more of a stigma with bankruptcy.  And they may be afraid to discuss the problem with members of their family.

5.  Fixed incomes leave less room to make payments when credit card fees and interest payments start piling up.

If you’re worried about credit card debt, no matter your age, contact an experienced Haines & Krieger attorney at 702-880-5554 for a free initial consultation.  It’s private and confidential, and we’ll be able to answer all of your questions so you can start moving forward with your financial life again.

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