Consumer & Small Business Bankruptcy AttorneysWe are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code. 1. How long will my case take and what does it entail? 2. If I want one, how do I get my credit report? 3. What information do I have to give to the credit bureaus if I want a copy of my report? 4. Are credit reports available online? 6. From best to worst, what can appear on my credit report? 7. For how long does information stay on my credit report? 8. If I have bad credit now, will I have to wait 7 to 10 years before I can get a loan? 9. After I get my credit report what do I do? 10. If there are errors, what do I do? 11. Suppose I found more than one error? 12. May I correct negative information on my credit report? 13. How come challenging a credit entry is effective? 14. If the negative item I challenged is confirmed by the lender, what do I do? 15. What if all my attempts to have an item removed fail because the lender keeps verifying them? 16. What is the process by which a lender decides if I am credit worthy? 17. How does a lender qualify me for credit? 18. Is there a reason to apply for as many credit cards as possible? 19. If I am turned down for credit what do I do? 20. If I do not pay lenders what can they do? 21. Is there a way to get bill collectors off my back? 1. How long will my case take and what does it entail? A basic consumer case takes about four months to complete. After you meet with one of our attorneys you will be required to sign a bankruptcy petition under penalty of perjury that the information contained therein is true and accurate. Once this is completed we will be able to file your case. Within about 45 days a hearing will be conducted. This hearing is called a "meeting of creditors" and we realize this is a very stressful event for our clients. One of our attorneys will be with you during this entire event. After this hearing, your creditors will have a certain date within which they may object to your discharge. Once this date is past, you will receive your discharge from the Court. 2. If I want one, how do I get my credit report? The three credit bureaus are: 3. What information do I have to give to the credit bureaus if I want a copy of my report? Name, current address, previous address (if you moved in the last 5 years), social security number, date of birth, copy of your valid driver's license, billing statement or utility bill with your address clearly marked, your signature. 4. Are credit reports available online? Credit bureaus give the following information: Your open accounts, credit limits, current balances, number of late payments, collection actions, tax liens, and whether you own your own home or not. Your credit history contains information that creditors use to evaluate and determine your ability and willingness to repay credit. 6. From best to worst, what can appear on my credit report? Credit inquiries, credit rejections, late payments, past due and unpaid payments, court judgments, collections, loan defaults, repossession, foreclosure, and bankruptcy. 7. For how long does information stay on my credit report? Negative information stays on your credit file for anywhere from 3 to 7 years. 8. If I have bad credit now, will I have to wait 7 to 10 years before I can get a loan? Practically, you can have an A-rated credit report within 2 years of even bankruptcy. This is because lenders are much more interested in your present circumstances than what happened to you 3 to 10 years ago. Rebuilding your credit can be done rather quickly through a systematic plan. Keep in mind that positive credit information stays on your credit report forever. Also, obtaining and keeping one job is important. The longer you stay with an employer the more reliable the income. 9. After I get my credit report what do I do? Look for negative items like past due history, collections and profit and loss, inquiries, and public records (bankruptcies, liens, court judgments). If any of these are inaccurate, dispute them directly with the credit bureau. Tell them that pursuant to the Fair Debts Collections Practices Act you demand that it be removed. Do this in writing. 10. If there are errors, what do I do? The Fair Debt Collections Practices Act states that all erroneous or unfair credit information has to be eliminated from your file. All consumers have the right to challenge the accuracy of their credit report. Once you challenge the accuracy of a particular item, the credit bureau must investigate that item within 30 days. If the credit bureau finds the item erroneous, or cannot confirm or deny it, it must be removed immediately from your credit file. 11. Suppose I found more than one error? Challenge each error separately, in writing only. Do not call the credit bureau. Wait until one item is resolved before challenging another. If you challenge a whole bunch of items, the credit bureau will send you a letter saying that your disputes are irrelevant or frivolous, and they will do nothing further. You have to patient when dealing with the credit bureaus. Deal with each item one at a time. 12. May I correct negative information on my credit report? Yes. Challenging the accuracy or completeness of an item is the best way to have a negative item removed. It is best if you can include documentation that supports your challenge. If negative information is outdated, you again need to bring this to the attention of the credit bureau in writing. If the credit bureau fails to verify the items you challenged within a reasonable time (defined as 30 business days) from the date your challenge was received, the Act gives you the right to have the challenged item removed from your report. 13. How come challenging a credit entry is effective? One, the credit bureaus were too busy during a particular period that they could not re-verify the item you challenged within the time limit, and therefore they removed it. Two, because of human error correct information was inadvertently deleted. Three, after two or three years a closed or inactive file is often stored offsite by your old lenders, and so they cannot access it, and as a result they do not respond to the credit bureau because it is too much work. 14. If the negative item I challenged is confirmed by the lender, what do I do? They will not be removed from your credit file. Wait one to six months and then try again with a written challenge. 15. What if all my attempts to have an item removed fail because the lender keeps verifying them? You need to talk directly to the lender and see if you can convince them to come to a settlement. If you agree to pay them off make sure you get in writing that any negative information from your credit file will be removed. 16. What is the process by which a lender decides if I am credit worthy? After applying for credit, normally you give permission to the lender to get your credit report from a credit bureau. Lenders use this credit report to work a short-term debt-to-income ratio, where they calculate your present short-term debt payments (excluding your mortgage), and divide the total by your total annual income. Lenders will refuse you credit if your short-term debt is more than 20% of your annual income. The second method lenders use is to add up your monthly bills (not including rent or mortgage and utilities) and divide the total by your gross income (before taxes). With this method, lenders are looking for a ratio of under 35%. 17. How does a lender qualify me for credit? Most look at the number of years you have worked at your present job, the kind of work you do (the worst to best being: manual work, clerical, self-employed, managerial, professional), the number and nature of negative entries in your credit report, the amount of credit you currently have, savings and or checking accounts with the lender, length of time at your present address, is the telephone in your own name, do you own your home? 18. Is there a reason to apply for as many credit cards as possible? Absolutely not. It greatly decreases your chances of getting approved. Most lenders will look at your total unused credit on all your cards. If you were to max out all your cards, would you be able to pay it all off on the income you presently make? Lenders normally assume that you would not be able to. 19. If I am turned down for credit what do I do? The law requires that the lender tell you the specific reasons why you were rejected and the name and address of the credit bureau that provided your credit report. You can appeal your rejection by sending a letter to the lender explaining why you are a better credit risk than your credit report indicates. But it is best to rebuild your credit before applying for credit again. 20. If I do not pay lenders what can they do? Not paying your bills is not a crime (except for the IRS, of course). In the case of a secured loan, the lender can foreclose on the property that secures the loan. Unsecured lenders can get a court judgment and attach your property and become secured creditors (have a lien placed on your home, car, bank account etc.) A lender can also have your wages garnished. 21. Is there a way to get bill collectors off my back? Yes. First, once you have retained our law firm bill collectors are no longer allowed to contact you directly. Merely give them the name and phone number of our firm, tell them you are going to file bankruptcy and that we told you not to talk to them. They are not allowed to contact you once you have retained a lawyer. Note that it is important that you do retain us with at least a portion of the fee, as our office will verify this fact before we tell them we have been retained. If collectors are being deceptive or harassing you, you may sue them in civil court. By law, collectors can only call you between 8AM and 9PM. A collector cannot contact you at your place of employment. A collector must not make false or misleading statements, or make abusive remarks, or harass you. Nor can a collector call your family or friends to collect your debt. If collectors are harassing you, you should immediately write a Cease and Desist Letter, telling them to stop calling you, and to stop any further communication with you. Send this letter by certified mail, return receipt requested. By federal law, they must stop contacting you with the exception of a letter stating that their collection efforts have ended, or the collection agency intends to take specific action against you (that is, sue you). Generally, collection agencies do not sue, so don't loose sleep over it. If however you get a letter from a lawyer, you must forward that immediately to us. Remember a lawyer can sue you and obtain a judgment and garnish wages and property. 4833 RUGBY AVENUE 119 N. HENRY STREET What are the Effects of a Salary Increase on a Wage-Earner Plan Under Chapter 13?What Are the Effects of a Salary Increase on a Wage-Earner Plan Under Chapter 13?When a Chapter 13 debtor enters into a wage-earner plan, he or she commits the next three to five years' disposable income — that portion of the debtor's income not required to meet the necessary needs of the debtor and his or her dependents — to the repayment of debt. Often, a debtor's income will increase after the plan is in place, and the question arises as to what becomes of this increase in income. It seems only fair that if the payment plan does not project paying debts in full and more income than was planned for is actually realized that the extra money should go to the creditors, and not be retained by the debtor. In fact, courts often subscribe to this view that the debtor should not be unjustly enriched to the detriment of creditors. However, the debtor may be allowed to retain the increase in income unless the increase is significant and there are no offsetting increases in expenses. Plan modifications may be requested in a court motion by the trustee, by an unsecured creditor or by the debtor him or herself. All interested parties are notified and if there are objections to the proposed modification, the court will hold a hearing. Whether changes in salary will prompt the court to change the payment plan depends on a complete consideration of all of the relevant circumstances. During the plan a debtor may receive more income than planned because he or she changes jobs, gets a raise or starts a second job. However, it may not always be necessary to make corresponding changes to the payment plan, usually by increasing the amount of payments or decreasing the time period in which payments are to be made. The Bankruptcy Code does not literally provide much guidance about what standard should be applied to a request for modification under these circumstances. However, some courts look at whether the increase in the debtor's income is significant or if the increase was unexpected, and may be more apt to adjust payments under those circumstances. The court will likely consider not only the salary increase, but also whether there has been a corresponding increase in disposable income on which the payments are based. Disposable income is the amount of the debtor's salary that is left after deducting all reasonable living expenses. If the debtor's expenses increase along with his or her salary, the debtor's disposable income may not change and the payment plan will not need to change either. It could be disheartening to a debtor to receive a raise and have to turn it all over to the trustee for debt repayment, but that is not always the effect of a salary increase. A bankruptcy lawyer at our firm can answer these and other Chapter 13 questions as they arise, providing information, reassurance and competent and zealous advocacy throughout the bankruptcy process. Copyright © 2011 FindLaw, a Thomson Reuters business DISCLAIMER: This site and any information contained herein are intended for informational purposes only and should not be construed as legal advice. Seek competent counsel for advice on any legal matter. |
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