As a very last resort for debt relief, many people look to bankruptcy after identity theft in Jacksonville, Florida. Identity theft is a major issue throughout the United States and can leave the victim with a mess to clean up. One of the biggest results of being the victim of identity theft is having to deal with debt collectors and having a bad credit score for debts you did not acquire; even after filing a police report. After filing a police report, it is almost impossible to actually locate the individual who stole your identity. This leaves you with very few options as to how to get away from the debt that is not yours. This is also all too often the case even after you have contacted each credit card company, informed them that the account is due to identity theft and provided them with proof that the debt is not yours (including a police report). These debts can even remain on your credit report, causing a bad credit score, after disputing each indebtedness with all three credit bureaus. Continue reading →
Many times, I meet with potential clients who are in the process of weighing credit counseling v. bankruptcy in Jacksonville, Florida in hopes of achieving debt relief. These potential clients, who largely become clients, want to know what the main differences are between credit counseling and bankruptcy. I always stress the importance of my client’s goals as they try to decide which option is best for them. For some, bankruptcy is the last possible option they will consider. This is due to the bad stigma many people associate bankruptcy with, but this is why bankruptcy might make the most sense in the long run.
Let’s start with defining credit counseling. Credit counseling is when you work with an agency or company you have hired to help you come up with a plan to pay off your debt. However, you must be very careful when choosing a credit counseling agency as many charge high rates and do not actually help you pay off your debt as promised. I have many clients who have come to me after this specific experience. It is best to choose a not-for-profit agency. Continue reading →
How to rebuild your credit score after bankruptcy is a question I get asked from just about all of my clients. It is one of the most important unanimous concerns clients seem to have going into bankruptcy and it should be. In fact, the toll filing bankruptcy can take on your credit score is probably one of the most common reasons why many people in Jacksonville, Florida look at bankruptcy as a very last resort and avoid it all costs. Unfortunately, most are falsely under the assumption they will not be able to use any credit for seven to ten years after filing bankruptcy. But this is not always the case. If you start taking steps to rebuild your credit score after your bankruptcy is concluded, you could have a great credit score in just one to two years.
Here are a few simple steps you can take to rebuild your credit score after bankruptcy quickly. Continue reading →
I have written many blog posts over the years concerning the MEANS test in Jacksonville, Florida and the deductions that can be used. To jog your memory, the MEANS test is required when your income is above the median income in your state for your household size. It is meant to prohibit high-income households from filing a Chapter 7 bankruptcy. The MEANS test allows you to deduct specific expenses that can help you qualify. The MEANS test is also used to determine your disposable income in a Chapter 13 Bankruptcy, which in turn determines your Chapter 13 Plan and your monthly payments. But what types of expenses can be deducted on the MEANS test?
First, it is important to note that some expenses have predetermined amounts. Expenses such as food, utilities, housing and other necessary monthly expenses are predetermined by IRS local and national standards unless you have extenuating circumstances. Continue reading →
Bankruptcy does not have to be a dead end. Instead, it can be the beginning of something so much better. Unfortunately, most people do not see bankruptcy this way and instead equate bankruptcy with utter failure. Bankruptcy allows you relief from bad financial decisions or just poor luck and an opportunity for a fresh start. By using your mistakes as a lesson on what not to do, you can have a lot of success coming out of bankruptcy. Here are some tips for being successful after bankruptcy.
- LEARN: As already mentioned, the most important thing to do after bankruptcy is to learn from your past mistakes. It is important to identify which financial decisions led you into bankruptcy in the first place and make sure you do not repeat those mistakes. However, try not to be too hard on yourself. The decision to file bankruptcy is hard enough and comes with enough emotions already. Of course, there are most likely factors that were outside of your control, and there is nothing you can do about that.
- PLAN: Create a budget that your income can support and stick to it! Knowing what you can actually afford to spend and sticking to a budget is definitely a formula for success.
- GOALS: Set goals and work them into your budget, such as trying to save a certain amount of money each month.
- CREDIT: Reestablish your credit, BUT slowly. I always recommend that my clients get a new credit card shortly after receiving their bankruptcy discharge. However, use it for a particular purpose, such as just for gas or food, and pay it off each month and on time. With each payment, your credit will start to rebuild itself. However, keep in mind that the credit terms for this first credit card might not be very favorable. The interest rate will mostly be high and the credit limit low. However, as you use it every month and pay it off, the limit should slowly increase. After a while, apply for a second credit card and it should have more favorable terms after you have started reestablishing your credit.
- STAY POSITIVE: Going through bankruptcy can be a very difficult time in one’s life. However, it is important to also focus on the positives of bankruptcy such as the ability to start over again and build something great. If you let your despair keep you down, you will not be any more successful after bankruptcy than you were before. If necessary, seek support or advice. But do not let your despair keep you down!
Taxes. No one likes having to file taxes. If you are among the million other Americans who don’t only have to file taxes but also have to pay additional taxes each year, you really do not like taxes. When you get hit with a hefty tax bill you are likely unable to pay all of it right away. Most Americans cannot. This then leads to the question of how long do you have to pay the taxes you owe and will you owe this tax debt forever. With the 2017 tax season having come to an end earlier this week, I am sure many Americans are asking this very question right now.
Fortunately, against common belief, there is actually a statute of limitations on IRS debt. A statute of limitations is a state or federal law that sets a specific time limit on how long an entity or individual can try to collect a debt from you. The statute of limitations for the collection of IRS debt is ten years. As with most things, there are some exceptions to this rule. Continue reading →
In most Chapter 7 Bankruptcy cases, debtors do not have any property or assets the Chapter 7 Trustee can take and then distribute among the debtors’ creditors. Once the trustee completes his or her investigation into the debtor’s bankruptcy petition and supporting documentation the trustee requests, and after the 341 hearing (also known as the meeting of creditors), the trustee will file a Report of No Distribution with the court. The purpose of the Report of No Distribution is to tell the court the debtor’s creditors will not be receiving any payments.
How do you get a Report of No Distribution?
Again, a Report of No Distribution from a Trustee means that you have no assets that can be taken and given to your creditors. You either have no assets whatsoever, or you are able to protect the assets you have through exemptions.
For example, in Florida, we have a Homestead Exemption, a motor vehicle exemption of $1,000, a personal property exemption ($1,000 when claiming the Homestead Exemption and $4,000 when not claiming the homestead exemption), and a retirement account exemption. Continue reading →
When filing for bankruptcy, many consider the IRA (Individual Retirement Arrangement) and 401K exemption as the most well-known of the exemptions. This exemption allows individuals who must file bankruptcy the ability to keep their treasured retirement accounts out of their bankruptcy estate and safe from their creditors. In turn, this allows the individual to emerge from bankruptcy with their retirement accounts still 100% intact and en route to a fresh start.
But what happens if the IRA was not originally yours? What if it was inherited? Is it still safe from your creditors in bankruptcy? The answer is yes and no. If you inherited your IRA from your spouse, then it will still have the same protections as if the IRA was originally yours. However, if you inherited the IRA from someone other than your spouse, then it will not qualify for the exemption. Thus, it will be considered part of your bankruptcy estate and subject to the claims of your creditors. Continue reading →
Winn-Dixie has been a staple in Jacksonville, Florida for decades! Being based in Jacksonville has even made it a landmark for those traveling down Interstate 10. However, Southeastern Grocers, the parent company of Winn-Dixie, Bi-Lo, Harveys Supermarket and Fresco Y Mas, made the enormously difficult decision to file for Chapter 11 Bankruptcy in hopes of remaining afloat. The decision was announced Thursday, March 15, 2018. Winn-Dixie’s president and chief executive officer, Anthony Hucker has been quoted saying “[t]his course of action enables us to continue writing the story for our company and our iconic, heritage banners in the Southeast.” Southeastern Grocers operates stores in Alabama, Florida, Georgia, Louisiana, Mississippi, North Carolina and South Carolina. This announcement comes right after Amazon’s entry into the grocery business, just a few short months after the online retail giant obtained Whole Foods Market. Continue reading →
One of the best bankruptcy exemptions offered to those filing bankruptcy is the retirement account exemption. As long as your 401K or IRA is ERISA (Employee Retirement Income Security Act of 1974) qualified, then your 401k or IRA will be protected if you file bankruptcy. Amazingly, there are not a lot of limitations to this rule. This is a wonderful law as it is very common for a person’s biggest asset to be their retirement account. Some of the qualified ERISA retirement accounts include 401(k)s, 402(b)s, IRAs (Roth, SEP, and SIMPLE), Keoghs, profit-sharing plans, money purchase plans, and defined-benefit plans. It is important to note that most employer-sponsored retirements plans are ERISA safe in bankruptcy.
Many who file bankruptcy may have also taken out a 401k loan in an effort to avoid having to file bankruptcy. It is important to understand how your 401k loan will be treated in your bankruptcy. First of all, a 401k loan is not considered a regular debt and will not be treated as any other creditor. In other words, a 401k is not dischargeable through bankruptcy and you will still have to repay it after your bankruptcy is completed. Additionally, in a Chapter 7 in which assets are available to be liquidated, your 401k loan would not receive any portion of the liquidated funds as a normal creditor would. In a Chapter 13, your 401k loan would not be part of your chapter 13 plan. However, you most likely will be allowed to still make payments towards the loan through automatic deductions on your paystubs. Continue reading →