Archive for the ‘las vegas credit repair’ 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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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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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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Las Vegas: Credit repair services. It might be a scam if…

Wednesday, September 8th, 2010

If Jeff Foxworthy were to warn you about credit repair service scams, he would say, “It might be a scam if…”

  1. They want you to pay money up front.  (Never pay money up front for any sort of credit repair service, debt relief or other non-lawyer credit or debt-related service!)  Under the Credit Repair Organizations Act it is against the law for any such services or organizations to seek payment in advance.  That, of course, doesn’t stop many credit repair services from trying to collect an up front fee from you.  So please just be careful.
  2. They guarantee removal of all negative info from your credit report.  This is not something anyone can guarantee.  It’s in the hands of credit reporting services (like Equifax).  The only way to guarantee getting rid of all negative marks on your credit report is simply to wait 7 to 10 years.  After that time, credit reporting agencies are required to remove negative information such as missed payments and bankruptcy filings.
  3. They suggest that you create a “new identity” so that you can create a new credit history.  Right, and while you’re at it you can also fake a kidnapping and spend a few years in Argentina.  Seriously, though, creating a new identity in that way is of course illegal and will only create more problems and complications in your life.  On top of that, you still bear responsibility for your outstanding debts.  If any credit repair service actually suggests this to you, just tell them you have a bridge to sell them to help pay their up front fee.

Getting back to reality, credit repair services are generally not a good option, regardless of whether they’re outright scams or not.  If you’re feeling overwhelmed by debts and looking for solutions, the best first step is always to talk with a trusted bankruptcy lawyer.  An experienced bankruptcy lawyer will be aware of all of the options available to you and will steer you in the right direction, whether that means filing for bankruptcy or exploring alternative strategies.

Please contact Haines & Krieger today at 702-880-5554 to start learning more about how we can help you.

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