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Car repossessed? Bankruptcy may still make sense.

Having a car repossessed due to missed loan payments can make a troubling situation feel impossible to overcome. If a lender repossesses a vehicle, is there any point in still filing bankruptcy? Oftentimes, yes, and quickly if one hopes to get the car back. Many repossessed vehicles are sold at auction for less than the balance of the loan. A creditor will likely file a lawsuit to collect the deficiency, so the borrower will still be on the hook for what is owed. If the

July 21, 2020 No Comments

New Reorganization Bankruptcy Option for Small Business Debtors

There is a brand new streamline Chapter 11 case for a small business debtor reorganization case. Subchapter V of Chapter 11 allows a streamline approach for business reorganizations that is a hybrid between an individual Chapter 13 case and a more involved Chapter 11 case. A few of the important points are highlighted below: 1. The debtor can propose a plan that must be filed within 90 days after the bankruptcy petition is filed. This plan must be “fair and equitable” which means that the

July 2, 2020 No Comments

The emotional effects of living with debt

Not all debt is bad. In fact, some debt increases your net worth or has future value – like taking out a mortgage. But even if your debt isn’t necessarily the bad kind, it still doesn’t feel good to live with. The average American household has $134,643 in debt, and it’s taking a toll on their mental health. Unfortunately, most people don’t learn how to manage their debt until they are buried in it, which comes at a heavy emotional cost. Recognizing the emotional effects

July 1, 2020 No Comments

How millennials are financially worse off than older generations

Millennials catch a lot of flak for their avocado toast and selfie-obsessed culture, but you may want to cut them so slack. Millennials are more financially behind than any generation that came before them, causing them to delay life milestones and even rely on their parents for financial support. Here are just a few financial struggles millennials have to overcome that older generations never had to deal with: The average millennial salary is $35,592 a year While U.S. wages have seen a 67% increase since 1970,

June 29, 2020 No Comments

How long does bankruptcy affect your credit?

Bankruptcy is a legal proceeding designed to help people eliminate or reorganize insurmountable debt. But while bankruptcy provides many with the clean slate they need to get back on track, it isn’t without consequences. Bankruptcy can impact your credit score more harshly than any other single financial event. While filing for bankruptcy doesn’t always result in a lower credit score, it can make it that much more challenging to get new lines of credit in the future. Depending on the type of bankruptcy you file, a

June 26, 2020 No Comments

Are bankruptcy courts becoming more forgiving toward student loan debt?

It has long frustrated many, including personal finance guru Suze Orman, why someone can use bankruptcy to eliminate debt racked up on cars, clothes, travel and other nonessentials, yet student loan debt is pretty much stuck to you for life. Individuals have received temporary relief on unmanageable student loan debt during the COVID-19 outbreak, as federal student loans have been automatically placed in administrative forbearance, allowing borrowers to stop making their payments without penalties or interest accruing. That is scheduled to end on Sept. 30,

June 24, 2020 No Comments

What is the chapter 7 means test and how does it work?

For individuals and some businesses, chapter 7 bankruptcy may be their best option for a fresh start. Referred to as the “liquidation” bankruptcy type, chapter 7 involves the debtor giving up significant assets. These assets are then distributed and sold and the money divided out to the debtor’s various creditors. To qualify for chapter 7 bankruptcy, you must first complete and file the means test forms. Generally, the purpose of the means test is to separate those debtors who may have the ability to pay

June 22, 2020 No Comments

5 Signs you’re in over your head financially

Most people in the U.S. are living with some type of debt looming over them. In 2016, American household debt, including mortgages, home equity loans, credit cards, student loans and auto loans, reached a staggering $12.58 trillion. The average household alone carries about $134,643 in debt. But how do you know when you have more debt than you can handle? Even if you can afford all of your monthly payments, you could still be putting added strain on your finances if you have too much debt.

June 22, 2020 No Comments

Chapter 13 bankruptcy can help struggling consumers start over

Bankruptcy can get a bad reputation. When people hear of someone they know filing for bankruptcy, some people assume that money mismanagement is the root cause. However, many fall into financial despair due to circumstances beyond their control. Whether it be divorce, job loss or even medical debt, any of these situations can put responsible consumers in a tight spot. The current economy is creating financial hardships As the U.S. labor market took a nose-dive earlier this year, many Americans have lost their jobs. According

June 19, 2020 No Comments

Business disruptions and bankruptcies in difficult times

The first half of 2020 has brought a one-two punch to many small business owners in Maryland, along with many other American families and businesses throughout the region and nationwide. First, the COVID-19 virus pandemic, which was defined as such in early March, brought many businesses to a slowdown or standstill, and some have not adapted or recovered well. Then came times of civil unrest in late May and early June. Many commercial properties suddenly needed to implement increased security measures, and some were broken

June 18, 2020 No Comments