Home Archives for Jill Michaux

Pay Your Credit Cards 0% in Chapter 13

Posted on June 4, 2013 Written by

zero percentBut I want to pay my debts….I just can’t do it at credit card interest rates.

What you want, then, is Chapter 13.

If the credit card company won’t agree to an interest rate that you can handle, you can impose a Chapter 13 repayment plan on them with the help of the bankruptcy court.

The creditor doesn’t have to agree.

You don’t have to negotiate.

And the bankruptcy judge will enforce the Chapter 13 plan you propose and the court confirms.

Chapter 13 works like this: you, the debtor, stay in possession of your assets. You commit to a payment plan that has to meet certain standards in the bankruptcy law.

  • Your creditors have to get as much in payments as they would in Chapter 7
  • Your payments have to be your best effort at repayment-according to formula
  • Your plan has to pay any delinquent family support or taxes in full

Beyond that, you have lots of freedom to propose plan terms. [Read more…]

Filed Under: Chapter 13

Why Your Chapter 13 Bankruptcy Was Dismissed (And How To Avoid It)

Posted on May 9, 2013 Written by

chapter 13 bankruptcy dismissalFiling a Chapter 13 bankruptcy can feel like a brand new world. Unless you do your share, it won’t last for long.

Each month, thousands of people from around the country look to the bankruptcy court to stop a foreclosure, forestall a repossession, or simply to help reorganize their finances.

The beginning of the process involves a flurry of activity – filing a proper Chapter 13 Plan, stripping off liens, jettisoning some assets and resolving issues with the Chapter 13 trustee, judge and creditors.

The goal of most Chapter 13 bankruptcy cases is the same – curing a default, catching up arrears, and discharging certain obligations after a repayment plan is completed.

If you’re going to make this happen, you’ve got to be sure to stay clear of the issues that lead your Chapter 13 case to be dismissed. [Read more…]

Filed Under: Chapter 13

Jill Michaux Re-Elected to Bankruptcy Law Network Leadership Post

Posted on June 1, 2009 Written by

Bankruptcy Law Network

Jill A Michaux was re-elected to a second term as treasurer of the Bankruptcy Law Network, LLC, at its annual meeting May 31, 2009, in Chicago.  Bankruptcy Law Network, a group of 25 nationally recognized bankruptcy attorneys, provides four portals of free online information about bankruptcy, credit, debt and mortgages from trusted and reliable sources to more than 125,000 unique visitors each month.

Filed Under: Kansas Bankruptcy News

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

Posted on March 3, 2009 Written by

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. [Read more…]

Filed Under: After Bankruptcy

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

Posted on March 2, 2009 Written by

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. [Read more…]

Filed Under: After Bankruptcy

What You Can Do to Avoid Problems with Credit After Bankruptcy

Posted on March 1, 2009 Written by

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.

Filed Under: After Bankruptcy, Credit, Financial Help

Beware of Rent-to-Own

Posted on February 28, 2009 Written by

Beware of Credit Offers Aimed at Recent Bankruptcy Filers

Rent-to-own

By renting a TV, furniture or appliance from a rent-to-own company, you will often pay three or four times more than what it would cost to buy.  The company may make even more profit on you because the item you are buying may be previously used and returned.  And if you miss a payment, the company may repossess the item leaving with you no credit for the payments you made.

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

Filed Under: Credit, Financial Help

Beware of Payday Loans, Auto Title Loans

Posted on February 26, 2009 Written by

Beware of Credit Offers Aimed at Recent Bankruptcy Filers

Small Loans

It is always best to save some money to cover unexpected expenses so you can avoid borrowing.  But if you are in need of a small loan, avoid the following high cost loans:

Payday loans

Some “check cashers” and finance companies offer to take a personal check from you and hold it without cashing it for one or two weeks.  In return, they will give you an amount of cash that is less than the amount of your check.  The difference between the amount of your check and the cash you get back in return is interest that the lender is charging you.  These payday loans are very costly.  For example, if you write a $256 check and the lender gives you $200 back as a loan for two weeks, the $56 you pay equals a 728-percent interest rate!  [Read more…]

Filed Under: Credit, Financial Help, Vehicles

Beware of "Bad Credit, No Problem"

Posted on February 25, 2009 Written by

Beware of Credit Offers Aimed at Recent Bankruptcy Filers

Be wary of auto dealers, mortgage brokers and lenders who advertise: “Bankruptcy? Bad Credit? No Credit? No Problem!”  They may give you a loan after bankruptcy, but at a very high cost.  The extra costs and fees on these loans can make it impossible for you to keep up the loan payments.  Getting this kind of loan can ruin your chances to rebuild your credit.

Mortgage Loans

If you own your home, some home improvement contractors, loan brokers and mortgage lenders may offer to give you a home equity loan despite your credit history.  These loans can be very costly and can lead to serious financial problems and even the loss of your home.  Avoid mortgage lenders that: [Read more…]

Filed Under: Credit, Financial Help

Beware of High Cost Predatory Lenders

Posted on February 23, 2009 Written by

Beware of Credit Offers Aimed at Recent Bankruptcy Filers

Avoid High Cost Predatory Lenders

Don’t assume that because you filed bankruptcy you will have to get credit on the worst terms.  If you can’t get credit on decent terms right after bankruptcy, it may be better to wait.  Most lenders will not hold the bankruptcy against you if after a few years you can show that you have avoided problems and can manage your debts.

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

Filed Under: Credit, Financial Help

Beware of Credit Repair Companies

Posted on February 22, 2009 Written by

Beware of Credit Offers Aimed at Recent Bankruptcy Filers

Credit Repair Companies

Beware of companies that claim:  “We can erase bad credit.”  These companies rarely offer valuable services for what they charge, and are often an outright scam.  The truth is that no one can erase bad credit information from your report if it is accurate.  And if there is old or inaccurate information on your credit report, you can correct it yourself for free.

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

Filed Under: Credit, Financial Help

Beware of "Secured" Credit Card Offers

Posted on February 21, 2009 Written by

Beware of  Credit Offers Aimed at Recent Bankruptcy Filers

“Secured” Credit Card

Another type of credit marketed to recent bankruptcy filers as a good way to reestablish credit involves “secured” credit cards.  These are cards where the balances are secured by a bank deposit.  The card allows you a credit limit up to the amount you have on deposit in a particular bank account.  If you can’t make the payments, you lose the money in the account.  They may be useful to establish that you can make regular monthly payments on a credit card after you have had trouble in the past.  But since almost everyone now gets unsecured credit card offers even after previous financial problems, there is less reason to consider allowing a creditor to use your bank deposits as collateral.  It is preferable not to tie up your bank account.

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

Filed Under: Credit, Financial Help

Beware of “Disguised” Reaffirmation Agreement

Posted on February 20, 2009 Written by

Beware of Credit Offers Aimed at Recent Bankruptcy Filers

“Disguised” Reaffirmation Agreement

Carefully read any credit card or other credit offer from a company that claims to represent a lender you listed in your bankruptcy or own a debt you discharged.  This may be from a debt collection company that is trying to trick you into reaffirming a debt.  The fine print of the credit offer or agreement will likely say that you will get new credit, but only if some or all of the balance from the discharged debt is added to the new account.

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

Filed Under: Credit, Discharge, Financial Help

Should I Reaffirm Department Store Credit Cards?

Posted on February 19, 2009 Written by

Some department store credit cards may be secured.  The things you buy with the credit card may be collateral.  The store might tell you that they will repossess what you bought, such as a TV, washer, or sofa, if you do not reaffirm the debt.  Most of the time, stores will not repossess used merchandise.  So, after a bankruptcy, it is much less likely that a department store would repossess “collateral” than a car lender.

However, repossession is possible.  You have to decide how important the item is to you or your family.  If you can replace it cheaply or live without it, then you should not reaffirm.  You can still shop at the store by paying cash, and the store may offer you a new credit card even if you don’t reaffirm. (Just make sure that your old balance is not added into the new account.)

For Example

Some offers to reaffirm may seem attractive at first.  Let’s say a department store lets you keep your credit card if you reaffirm $1000 out of the $2000 you owed before bankruptcy.  They say it will cost you only $25 per month and they will also give you a $500 line of credit for new purchases.  What they might not tell you is that they will give you a new credit card in a few months even if you do not reaffirm.  More importantly, though, you should understand that you are agreeing to repay $1000 plus interest that the law says you can have legally canceled.  That is a big price to pay for $500 in new credit.

Another option for keeping property with a purchase money security interest is redeeming it from the creditor for a lump sum cash payment.

Source: Your Legal Rights During and After Bankruptcy:  Making the Most of Your Bankruptcy Discharge Pamphlet, National Consumer Law Center, Boston, MA, www.nclc.org.

Filed Under: Chapter 7, Discharge

Should I Reaffirm Credit Cards?

Posted on February 18, 2009 Written by

It is almost never a good idea to reaffirm a credit card.  Reaffirming means you will pay bills that your bankruptcy would normally wipe out.  That can be a very high price to pay for the convenience of a credit card.  Try paying cash.  Then in a few years, you can probably get a new credit card, that won’t come with a large unpaid balance!

If you do reaffirm, try to get something in return, like a lower balance, no interest on the balance, or a reasonable interest rate on any new credit.  Don’t be stuck paying 18/-/21% or higher!

Source: Your Legal Rights During and After Bankruptcy:  Making the Most of Your Bankruptcy Discharge Pamphlet, National Consumer Law Center, Boston, MA, www.nclc.org.

Filed Under: Chapter 7, Discharge

Do I Have to Reaffirm Car Loans, Home Mortgages?

Posted on February 17, 2009 Written by

If you are behind on a car loan or a home mortgage and you can afford to catch up, you can reaffirm and possibly keep your car or home.  If the lender agrees to give you the time you need to get caught up on a default, this may be a good reason to reaffirm.  But if you were having trouble staying current with your payments before bankruptcy and your situation has not improved, reaffirmation may be a mistake.  The collateral is likely to be repossessed or foreclosed anyway after bankruptcy, because your obligation to make payments continues.  If you have reaffirmed, you could then be required to pay the difference between what the collateral is sold for and what you owe.

If you are up to date on your loan, you may not need to reaffirm to keep your car or home.  Some lenders will let you keep your property without signing a reaffirmation as long as you continue to make your payments.  Sometimes lenders will do so if they think the bankruptcy court will not approve the reaffirmation agreement.

Source: Your Legal Rights During and After Bankruptcy:  Making the Most of Your Bankruptcy Discharge Pamphlet, National Consumer Law Center, Boston, MA, www.nclc.org.

Filed Under: Discharge, Mortgages, Trustees, Vehicles
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