Tag Archives: bankruptcy process

What Should I Do Before Filing for Bankruptcy?

There is a lot to consider if you are thinking about filing for bankruptcy. The first determination you should make is that bankruptcy is the best way for you to deal with your financial problems. Bankruptcy is an incredibly valuable tool to help you dig yourself out of a financial hole, but every case is different. As such, you will want to go through your finances with someone who is familiar with the field of bankruptcy – your attorney. Before you file, there are some things you have to do first. Within the 180 days prior to your bankruptcy filing, you must receive budget and credit counseling from an approved credit counseling agency. During this counseling, you and your counselor will go over all possible options for your finances and budgeting. Once you complete the counseling, you will receive a certificate stating that you received the counseling. You need this…
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Credit Unions and Collateral—Watch Out for Problems

If you’re thinking about getting a credit card through a credit union, there are a few things you should know. Credit unions often participate in a practice known as cross-collateralization, where they secure your credit card debt through other property loans you have with them. If you open up a credit card through a credit union and you also have an auto loan through the same credit union, the credit union could repossess your car should you fail to make payments on the credit card.  Credit unions can be good for low interest credit lines, but they’re able to produce in part because of these types of practices. Under the cross-collateralization process, if you want to keep your car, you’re going to have to make credit card payments. This can be an issue if you’re thinking about bankruptcy—most credit card debt is unsecured and can be discharged in bankruptcy. However,…
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Do the Crime, Pay the Fines: Criminal Debts are Non-Dischargeable Debts

We wrote recently about student loans and how, for the most part, they cannot be discharged during the bankruptcy process. This week, we discuss other debts that fall into the non-dischargeable category, starting with criminal restitution and fines. Chapter 7 and Chapter 13 do not discharge criminal debts and restitution. Restitution is money owed for negligent or criminal conduct. If you’re involved in a DUI accident that results in a serious injury, for example, and you are ordered to pay court costs and restitution, you cannot discharge these debts through the bankruptcy process. In an unusual occurrence this month, an investigator working for the Florida Office of Financial Regulation wrote a letter to a bankruptcy judge asking him to delay the discharge in a bankruptcy case, because the married couple who filed bankruptcy may face criminal securities fraud charges.  Richard and Sharon Pizzuti filed Chapter 7 bankruptcy with over $8…
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