The DeLuca & Associates Blog

When Should I File For Bankruptcy?

Declaring bankruptcy can be an extremely harrowing experience and should not be taken lightly. While dealing with the consequences of bankruptcy can be rough, it can be even tougher admitting you require the services of a bankruptcy attorney and need help finding your financial footing. Making the decision to file for bankruptcy may seem like a burden at first, but it can actually provide welcomed relief and a chance to rebuild your credit and start your economic life anew. Here are some tips that will help you determine if it is finally time to reach out for financial assistance and file for bankruptcy. Look at your current situation If you currently owe creditors more money than you can afford to pay, bankruptcy is a viable option that can help put an end to your financial woes. Ask yourself the following questions to see if you are in danger of having significant monetary problems. Do bill collectors call you on a regular basis? Does the thought of figuring out your financial situation scare you or make you feel out of control? Do you only make minimum payments on credit cards each month? Do you know how much you actually owe? If you answered yes to any of these questions, it may be time to at least consider filing for chapter 7 or 13 bankruptcy. Whether you have large debts that you are unable to repay or are at risk of foreclosure due to being behind in your mortgage, bankruptcy can provide relief during these difficult times. While it may be frightening throwing in the towel and admitting you require help,... read more

Getting A Credit Card After Bankruptcy

Filing for bankruptcy can be a tough experience, but the promise of a clean financial slate can put to rest any worries that you may have made the wrong decision when deciding to file. It can be difficult determining where to pick up your life and spending habits after filing for bankruptcy and one of the best ways to start getting back on your feet is with the use of a credit card. Appropriate spending with the use of a credit card can help bring up your credit score, so here are some tips on finding the right credit card after filing for bankruptcy. Look for a Secured Credit Card One of the best ways to show the credit companies that your are willing to do anything to restore your credit score is through the use of secured credit cards. Rather than lending money from a credit company, secured credit cards only allow you to borrow money from an initial deposit you make onto the card. Much like a debit card, you can only use money that is available in your account. This may seem like a waste of time and money with the interest and annual fees you’ll likely have to pay on the card, but that’s the price you will have to pay to get your credit company to inform the credit bureau that you are making payments on time. Seek Out a Trustworthy Cosigner If you have a close friend or family member that is willing to help you get out of debt, you may be able to utilize their credit to assist you in finding... read more

7 Big Businesses that have Filed for Bankruptcy

Many people assume that a company’s financial troubles cease once they reach a certain size, but that couldn’t be farther from the truth. Any business can find itself facing a financial burden that isn’t easily or quickly resolved. Here are a few big companies that had to file for bankruptcy to either keep their business afloat, or get out of business all together. Chrysler In April of 2009, the U.S. Treasury Department put Chrysler into bankruptcy in an effort to restructure the company’s debt repayment schedule. The company was put under the control of the United Automobile Workers, Fiat, and the federal government. After two years, Chrysler was once again a profitable company. Washington Mutual In what has been called the largest failure in U.S. banking history, Washington Mutual filled for bankruptcy in September of 2008. When customers withdrew $16.7 billion over the course of 10 days, the United States Office of Thrift Supervision seized control of the bank and placed into receivership with the FDIC. Its remaining subsidiaries were sold to JP Morgan Chase by the federal government.   Enron Enron made history in 2001, becoming the largest corporation to ever file for chapter 11 bankruptcy. The powerhouse energy company had been hiding billions of dollars in debt from shareholders, board members, and audit committees. By the time Enron collapsed due to scandalous accounting practices, its stock price had dropped from $90 per share to just under $1. General Motors After years of dwindling car sales, General Motors was forced to file for reorganizational bankruptcy after the U.S. financial crash. Despite already pouring $19.4 billion dollars into the... read more

Getting A New Car Loan After Filing For Bankruptcy

After filing for bankruptcy, it can be tough to begin the process of moving on with your life. If your job requires a lengthy commute, it may be difficult to find an auto loan for the vehicle you so desperately need. Fortunately, there are some things that you can do to help get the funding for a new car, even after filing for chapter 13. Here are some tips for finding a new car loan after filing for bankruptcy. Find a lender and trustee The first step that you should take when attempting to secure an auto loan following bankruptcy is to find a qualified lender that will offer you funding, as well as the support and approval of your trustee. For chapter 13 cases, it is possible to incur debt while going through bankruptcy proceedings. After explaining your situation to a bankruptcy trustee, they should recognize your need for a car and will help to find a lender that will give you the money you need. Securing an auto loan is likely going to be the toughest part of getting a new car, so take the time to find a lender that will work with you to get the money required to purchase a new ride. If you are unable to find a lender that will help you find the funds for your new vehicle, check to see if a credit union will offer you a loan. You can also see if your work will allow you to take out a loan against your 401(k) plan. Loan first, shopping later Make sure to secure a loan first before heading over... read more

The Truth Behind 3 Bankruptcy Misconceptions

If you’ve hit an economic wall, deciding to file for bankruptcy comes with a lot of baggage. After you tackle the logistics of your case—hiring a lawyer, completing the paperwork and outlining your plan of action—you’re barraged with emotional consequences and doubts. Did I just do the right thing? How will this affect my life? Will I be able to recover?  Before you drive yourself crazy, it’s good to familiarize yourself with the actualities of bankruptcy, as opposed to financial folklore. So, rest a little easier. Read the next three points provided by The CPA Journal to discover some of the common misunderstandings associated with bankruptcy.   1. You can be fired for filing a bankruptcy This is far from the truth. An employer cannot fire you for going bankrupt. The federal government protects you from this type of discrimination, and you are entitled to sue your place of work if you feel bankruptcy was the reason for your release. If this happens to you, and you choose to file legal action against your employer, he/she must provide legitimate reasons for your dismissal. 2. Only “broke” people can file for bankruptcy To qualify for bankruptcy, you must owe enough money that you do not have the funds to pay for your bills as they come in. Thus, even with a steady income, filing for bankruptcy is a viable option. Also, when filing for bankruptcy, a debtor is usually allowed to keep some of their property for financial sustainability. The properties you are allowed to keep once you are bankrupt depends on the type of bankruptcy you file and the state... read more

5 Resources That Make Filing For Bankruptcy Easier

Whether you’re facing a Chapter 7 or a Chapter 13 bankruptcy case, understanding all of the required documents, processes and legalities involved takes plenty of know-how. Once you hire a lawyer to help you navigate the legalities, you may still have a difficult time making sense of the paperwork and hidden exceptions. From self-help books to apps, there are a number of tools that can help make the entire process easier. The following five resources have been created to simplify your bankruptcy filing:   1. Federal Rules of Bankruptcy Procedure (FRBP) App In today’s day and age, there is an app for everything, and bankruptcy is no exception. This app is available to all iPhone and Android users, and it stores all of the federal rules of bankruptcy for easy access onto your mobile device. FRBP makes it possible to search for certain clauses and access information on your bankruptcy filing process at any time. 2. Bankruptcy Helper App Although seemingly similar, Bankruptcy Helper is much different from FRBP. Only available for Android users, this app helps users understand bankruptcy in the simplest terms. It also asks you a series of questions about the nature of your bankruptcy case to better tailor the app’s information to your needs, or help you decide between a Chapter 7 and Chapter 13 bankruptcy. 3. Credit Karma This completely free service helps you monitor your credit score, and it gives you information on your credit card’s status. As you’re attempting to rebuild your credit, this app will make staying on top of things easier. While it can easily be accessed from your computer,... read more

Will Filing for Chapter 13 Harm My Credit Score?

Chapter 13 bankruptcy, also known as reorganization bankruptcy, is filed by someone who wants to repay their debts over a specific period of time without liquidating their non-exempt property. In general, filing for bankruptcy will leave a mark on your credit score. Having good credit means that you’re more likely to secure loans with good terms, while it’s more difficult to obtain a loan if you are in poor credit standing. Knowing how chapter 13 bankruptcy affects your credit can help you make a more informed decision.   What is Chapter 13 Bankruptcy? A person who files for Chapter 13 bankruptcy needs to repay at least part of his or her debt. Individuals who file for this type of bankruptcy can expect it to remain on the credit report for at least seven years after the filing date. In Chapter 13 bankruptcy, you are required to repay a large portion, or all of your debts in order for your record to become clean. How Can Chapter 13 Affect a Credit Score? If you’ve filed for Chapter 13 bankruptcy, you can expect your credit score to be affected in a few different ways, including: Visibility of the bankruptcy on your credit report for seven to 10 years A short-term worsening of your credit score shortly after filing Possible credit score improvement, depending on repayment of debts and other factors Although it’s never good for a person’s credit score to file bankruptcy, doing so may alleviate some financial constraints and even allow you to improve your score over time. When you file for Chapter 13 bankruptcy, you should expect your score... read more

3 Bankruptcy Exemptions For Filing In Nevada

If you are considering filing for either Chapter 7 or Chapter 13 bankruptcy in Nevada, there are some exemptions specific to the state that you should be aware of. Although bankruptcy is largely governed by federal law, some exemptions and information are available on a state-by-state basis. Furthermore, while many exemptions are available across states, the maximum amount of the exemption is often determined by the specific state jurisdiction. These figures are updated by the state periodically. Here are three important exemptions you should learn about before filing for bankruptcy in Nevada.   1. The Nevada homestead exemption For those filing for bankruptcy in the state of Nevada, the homestead exemption allows you to protect up to $550,000 of equity in your home. Different states provide different degrees of protection. While some states measure the exemption by acreage limitations, Nevada protects property up to a specified value. 2. The Nevada motor vehicle exemption This exemption allows you to protect a maximum of $15,000 of equity in your car, truck, van or other vehicle. The Nevada motor vehicle exemption may enable you to claim even more if you are married and filing jointly, or if your car is equipped for a disability. 3. Nevada exemptions for married couples Married couples who file for a joint bankruptcy in Nevada can “double” their exemption amounts. This means you and your spouse can each claim the full exemption amount for any property belonging to both of you, such as your home. Keep in mind that this exemption can only be claimed to protect property that both of you own. Nevada updates its exemption... read more

3 Bankruptcy Options For Small Businesses

If your small business has a significant amount of debt, filing for bankruptcy could be the right path to take. Bankruptcy can help you reorganize your debts and might even assist you in saving your business. Bankruptcy can help you liquidate your company or eliminate personal liability for business debts. Depending on your specific needs, you may either file a personal bankruptcy, business bankruptcy, or both. First, it is important to understand what business debts you can be held responsible for.   Sole proprietors or general partners are considered personally liable for the obligations of the small business. In other words, if the company does not pay off its debts, creditors are allowed to take your personal assets as payment. However, limited partners or those with a limited liability company (LLC) are usually not personally responsible for the debts of their business. Depending on you business, debts, and goals, it is likely that either a Chapter 7, 11 or 13 bankruptcy is your best option. Chapter 7 bankruptcy A Chapter 7 bankruptcy can be filed either by an individual or a business entity. Individuals that own a partnership, corporation, or LLC can file for Chapter 7 on behalf of the business. This type of bankruptcy is used primarily to shut down and liquidate a business, since the company does not receive a discharge and cannot use exemptions. Chapter 7 is typically a desirable option for small business owners who want to close their business and do not want to deal with selling assets or negotiating with creditors. However, this form of bankruptcy will not eliminate your personal obligations on... read more

3 Reasons You Need A Lawyer To File For Chapter 13 Bankruptcy

Whether you’re trying to tie up your debts or simply looking to get rid of your second mortgage, filing for Chapter 13 bankruptcy will have you pinching pennies. You might think it’s easier to forgo hiring a lawyer and save where you can, but you could be digging yourself into a deeper financial hole. Chapter 13 bankruptcies are complicated and difficult to file. For this reason, most people hire an attorney to lay all of the interlocking aspects of a Chapter 13 bankruptcy on the table. Here, find an outline of the complex processes an attorney would be best qualified to handle: 1. Creating a repayment schedule For a Chapter 13 bankruptcy, you have to design your own repayment strategy. This requires specialized software and thorough planning. Using a bankruptcy lawyer to facilitate this procedure not only makes the process less difficult, but it also ensures that your plan will be more likely to be approved. 2. Additional paperwork and motions Since a Chapter 13 bankruptcy can cover a variety of financial assets, you might need to do additional paperwork for certain aspects of your case. For example, if you’re trying to squash your mortgage or other outstanding payments, you’ll have to file separate motions and documents. A lawyer will be able to tell you when these conditions apply and how you should proceed. 3. Getting your case to trial Chapter 13 bankruptcies are quite complicated, and many of these cases are dismissed by the court. You want to make sure you have all of the proper paperwork in place to complete your Chapter 13 bankruptcy, so hiring a... read more