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3/4/09

Will I Lose My Retirement Fund if I File Bankruptcy?

Question:  Is my retirement account I have worked hard for all my life down the drain if I file bankruptcy?  Generally, retirement accounts are protected in bankruptcy and you get to keep them in Kansas.

KPERS, Kansas deferred compensation plan, Social Security, federal civil service, 401(k) plans, IRAs, Roth IRAs, 403(b) plans are types of retirement plans that are exempt from the reach of creditors and bankruptcy trustees.

As with all things bankruptcy, the answer to this question actually depends on the facts of your specific circumstances.  Continue Reading

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Filed Under: Exemptions & What You Get to Keep, Filing Bankruptcy
3/3/09

10 Things to Think About Before Using Your Credit Card After Bankruptcy

Ten Things to Think About Before Using Your Credit Card After Bankruptcy

1.  Establish a realistic budget.

Before using a credit card after bankruptcy, try paying cash for a while.  This will help you learn how much money you need each month to pay the basic necessities.  Don’t forget to budget for the payments on any debts you reaffirmed in your bankruptcy.

2.  It is important not to use credit cards to make up for a budget shortfall.

Credit card debt is expensive.  Sometimes credit cards are so easy to use that people forget they are loans.  Be sure to charge only things you really need and plan to pay the balance off in full each month.  If you find you are constantly using your card without being able to pay the bill in full each month, you need to consider that you are using cards to finance an unaffordable lifestyle.

3.  If you get into financial trouble, do not make it worse by using credit cards to make ends meet.Continue Reading

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Filed Under: After Bankruptcy
3/2/09

Living Expense Allowances on Bankruptcy Means Test Adjust

The allowable deductions for living expenses on the bankruptcy means test adjust for cases filed on or after March 15, 2009.  You can view the allowances, some of which are national standards and some of which are local standards, on the website for the U.S. Trustee.  See your bankruptcy attorney for application of the allowances to your situation.

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Filed Under: Filing Bankruptcy, Means Test
3/2/09

Kansas Median Income Goes Up on Bankruptcy Means Test

The Kansas median income has increased giving debtors a raise on the bankruptcy means test for cases filed on or after March 15, 2009.  The new figures by family size are:

  • one earner    $41,004
  • two people    $56,146
  • three people $63,245
  • four people   $74,626

* Add $6,900 for each individual in excess of 4.

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Filed Under: Exemptions & What You Get to Keep, Filing Bankruptcy, Means Test
3/2/09

10 Things to Think About Before Getting a New Credit Card After Bankruptcy

Ten Things to Think About Before Getting a New Credit Card After Bankruptcy

1.  Don’t apply for a credit card until you are ready.

Unfortunately, bankruptcy may not have permanently resolved all of your financial problems.  It is a bad idea to apply for new credit before you can afford it.

2.  Avoid accepting too many offers.

There is rarely a good reason to have more than one or two credit cards.  Having too much credit can lead to bad decisions and unmanageable debts, and it will lower your credit rating.  This can make it harder for you to get other lower interest rate loans.  Avoid accepting a credit card just to get a discount at a store or a “free” gift.

3.  Remember that lenders are looking for people who run up big balances, because those consumers pay the most interest.Continue Reading

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Filed Under: After Bankruptcy
3/1/09

What You Can Do to Avoid Problems with Credit After Bankruptcy

What You Can Do to Avoid Problems with Credit After Bankruptcy

* If you don’t want it, don’t get it.  If you have doubts about whether you really need the loan or service, or whether you can afford it, don’t let yourself get talked into it by a salesperson using high-pressure tactics.  You can always walk away from a bad deal, even at the last minute.

* Shop around.  You may qualify for a loan with normal rates from a reputable bank or credit union.  Don’t forget that high-cost lenders are counting on your belief that you cannot get credit on better terms elsewhere.  Do not let feelings of embarrassment about your past problems stop you from shopping around for the best credit terms.

* Compare credit terms.  Do not consider just the monthly payment.  Compare the interest rate by looking at the “annual percentage rate,” as this takes into account other fees and finance charges added on the loan.  Make sure you know exactly what fees are being charged for credit and why.

* Read before you sign.  If you have questions, get help from a qualified professional to review the paperwork.  A lender that will not let you get outside help should not be trusted.

* If you give a lender a mortgage in a refinancing deal, remember your cancellation rights.  In home mortgage refinancings, federal law gives you a right to cancel for three days after you sign the papers.  Exercise these rights if you feel you signed loan papers and got a bad deal.  Don’t let the lender talk you out of cancelling.

* Get help early.  If you begin to have financial problems, or you are thinking of consolidating unmanageable debts, get help first from a local non-profit housing or debt counseling agency.

Source: Using Credit Wisely After Bankruptcy Pamphlet, National Consumer Law Center, Boston, MA, www.nclc.org.

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Filed Under: After Bankruptcy, Credit, Financial Help
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