Legislation Proposed to Again Allow Tithing and Charitable Giving While in Bankruptcy

to continue tithing and giving to charities.

Tithing is a scripture-based practice followed by many Christian groups. It means giving a portion of your income, usually 10-15%, to support one’s local church. Tithes are usually donated before any personal bills or expenses are paid by the giving person.

In a recent New York case, a bankruptcy judge ruled that debtors can’t tithe or donate money to charity if they want the federal protection of a Chapter 13 bankruptcy. The New York bankruptcy judge ruled that because of the recent changes to the bankruptcy code, the $100 a week a New York couple wanted to give to their local church had to be used to pay creditors.

Before the new bankruptcy law went into effect in October, 2005, bankruptcy court judges generally permitted chapter 7&13 filers to tithe a portion of their income each month. In 1998, the passing of the Religious Liberty and Charitable Donation Protection Act allowed debtors filing for bankruptcy to exempt up to 15 percent of their annual income from creditors for tithing or charitable donations.  However, this law was unfortunately wiped out by the October, 2005 law changes.Â

Now, Senators Obama and Hatch would like to see similar law reinstated.  I for one agree with them. With all the poverty in our country and people still living in squalor from the devastation of Hurricane Katrina, the last thing Congress needs to do is stifle charitable giving by the American public.  This includes people in bankruptcy.

The bill has already passed in the Senate and has now been referred to the House.  Hopefully Congress and the President do the right thing and pass the bill.

Click here for a FREE EVALUATION with an EXPERIENCED BANKRUPTCY ATTORNEY Am I going Bankrupt? – Sure Fire Signs You’re Headed For Chapter 7

Am I going Bankrupt? – Sure Fire Signs You’re Headed For Chapter 7

It should be pretty obvious if your financial health is sick enough to warrant filing bankruptcy, but sometimes a multitude of factors just end up occurring at the same time which can easily cloud what should be a clear situation. Here’s a quick list of red flags which signal a path towards bankruptcy:

1. Creditors are calling your consistently – If you are a chronic late payer or non-payer, you will probably receive calls from your creditors, or their hired hands, wanting to know what the deal is with your debt. These calls can range from professional to intimidating. Depending on the amount you owe and the lateness of the payment, the creditor might be willing to strike a deal with you regarding a plan to pay. Be wary and consult an attorney before agreeing to any deal.

2. You have rising credit card debt – If you find your credit card statement and bill growing each month, despite your sincere effort to pay it down, you’re headed for trouble. Making minimum payments and realistically expecting to payoff your credit card balances is silly. The way interest is calculated these days and the associated fees with late or missing payments virtually eliminate any value to making minimum payments on this debt. Also, if you’re using your credit cards on purchases for everyday items in place of cash, be careful. Balances can add up very quickly and if not managed proactively, they can become unmanageable before you know it.

3. You do not have much of a nest-egg in the bank – If you are living week to week or month to month, chances are you have not had the opportunity or luxury of socking away a few bucks every time you get paid. Many folks live entire lives like this, always vulnerable to happenstance when things might go wrong. One such negative happenstance can mean financial disaster. If you find yourself in this position, you could be on the road to bankruptcy. Talking to an attorney might be a good way to make a move forward.

If your financial health has been consistently challenged despite your best efforts to find a cure, you might be on the road to bankruptcy. Be aware of your situation, don’t ignore it. Speaking to an attorney can be the first step towards solving the problem.

Can Chapter 13 Save My House?

Many people are concerned about the mortgage crisis so widely reported in the news today. Foreclosures are nationally at a record-high. Unfortunately refinancing is not an option for most because they do not have enough equity in their home, so a good alternative can be filing a Chapter 13 bankruptcy.  Filing chapter 13 bankruptcy can be used to stop an imminent foreclosure and keep a roof over one’s head. Filing a Chapter 13 bankruptcy places an automatic stay on all collection proceedings, including stopping all pending or upcoming foreclosure proceedings and/or foreclosure sales.
Filing Chapter 13 bankruptcy, however, does not mean a foreclosure sale goes forever by the wayside. You are responsible to make your current monthly mortgage payments after the filing of the Chapter 13 bankruptcy.  If these post-filing payments aren’t made, your mortgage company can reinstitute foreclosure proceedings if they obtain approval from the bankruptcy court.   Chapter 13 works best for a homeowner who has a source of income, can make their mortgage payments under the repayment plan, and has not exceeded statutory limits on debt allowed under Chapter 13 (your attorney will explain this all).
Again, filing Chapter 13 is not a fool-proof end to a possible foreclosure.  Miss payments now and your lender is free to begin foreclosure proceedings again.  But, provided you make on-time payments under your repayment plan, you have a good chance of getting back in your lender’s good graces and, more importantly, keeping your house.

Click here to contact an experienced Chapter 13 bankruptcy attorney for help.

Attorney Adam Cerza

I Just Filed Bankruptcy. Can My Employer Fire Me?

Employers can dismiss employees for many reasons. A bankruptcy filing cannot be one of them. If you’re worried about taking the next steps to filing bankruptcy because you are worried you might lose your job if your employer finds out, don’t fret. You cannot be let go because you file bankruptcy. It is considered discrimination, not different than racial or religious discrimination, and it’s against the law for any employer, private or governmental, to fire you only because you file for bankruptcy. Also, an employer cannot take any other negative action against you, such as demoting you, or reducing your pay, just because you file for bankruptcy. Such actions are discriminatory and you have legal remedies available to you if you find yourself in that position. Conversely, if you’re fired due to general incompetence, corruption, or you like to take long 3 martini lunches, filing bankruptcy will not spare you. It cannot be used as a shield against legitimate disciplinary action including termination.

Employers typically will not find out about your bankruptcy filing unless your wages have been garnished or you enter into a Chapter 13 repayment plan that is paid directly out of your paycheck. If you file bankruptcy, the wage garnishment will stop, so your employer, or at least the payroll department, will know of the filing. They’ll find out, but that is not a reason not to take the first step to restoring your financial viability.

If you’re looking for a job and you’re thinking about filing bankruptcy, the affect of the filing depends on if you are looking for a government job, or a job in private industry. No federal, state or local government agency can take your bankruptcy into account when making a hiring decision about you. However, that same protection does not exist in the private corporate world because private employers will often require a credit check prior to offering to you a new job. If you refuse to consent to the credit check, employers do not have to offer you a position. It’s certainly not the end all of any potential job, so if you’ve filed for bankruptcy, it’s best to be honest with the people you speak to in the interview process about how your financial problems are behind you now, and you’re excited to move forward with a new opportunity.

Don’t be scared to take the steps required to restore your financial health. If you’ve got a good job that you like, and you’ve developed strong relationships, and you’ve run into some hard times, most likely your employer will embrace helping you out. Not look to throw you out on the street. Filing bankruptcy shouldn’t mean giving up your career, and you have the law behind you to ensure your protection. Consult an attorney if you think you’re a victim of bankruptcy discrimination and protect that job of your dreams.

30 Percent Interest? Thoughts on the Credit Card Quagmire

Those of us who are or have been in debt know the drill. Money gets a little tight so we rely on the credit card. Maybe we even splurge on a couple nights out to feel like a normal person. Then the minimum payments get a little out of reach but, what’s this? I can get another card at 8%? Great, I’ll transfer the balance and buy some time. Now we have two balances and the minimums aren’t getting any easier to pay. Suddenly a cash advance looks really attractive. Well, needless to say these stopgap measures are exactly that. Soon the dam breaks, we miss a payment or two and the credit card companies take advantage immediately. Our APR’s skyrocket and the late fees add up, making next months payments impossible. Our credit cards have us over a barrel, but before we debate this modern-day usury, here are a couple tips to manage the insanity.

  1. Be Assertive! I know this might sound like a waste of time, but if you know you’re going to miss a payment date, call your credit card company and ask for an extension. There’s a good chance you’ll get it. At least you buy some time and hopefully avoid another late fee. And while you’re at it, take a stab at negotiating a lower APR. Credit card companies make money off you. If you can take your business elsewhere, they might make concessions here and there to keep you.
  2. DO NOT, no matter how tempting, no matter how much it makes sense at the time, no matter what your friends say, DO NOT open new lines of credit or take cash advances to pay higher interest cards. If you’re struggling to pay one card, don’t double the stress of adding another bill each month. Worse yet, cash advances carry ridiculous interest rates. Chances are if you’re taking an advance, you won’t be able to pay it back right away, so in the long run you’ll end up paying five times the amount you take in advance.

Certainly not a long-term solution, but a couple things to consider shy of filing for Chapter 7 bankruptcy or Chapter 13 bankruptcy.

What the FICO? A Quick Look Inside Your Credit Score…

While most everyone knows they have a credit score that creditors use as the end-all and be-all of a consumer’s financial responsibility, I would bet just as many don’t know who – and especially how – their magical three number credit score is determined.

Well, we can all thank Fair Isaac & Co.  for coming up the FICO score (or credit rating) that roughly 90% of U.S. banks use to judge our worthiness.  And if one wasn’t enough, we have three scores, one from each of the major credit reporting agencies.  Our scores come from information the credit bureaus keep on file about us and change over time.  While this score isn’t an exclusive indicator of whether or not we’ll be approved for a loan or get a credit card, it’s as close as you’ll get.

So how do they do it?  Each credit bureau has their own formula and lenders are not required to use any specific calculation, but here are the basics of how our score is determined:

1. Payment History – About 35% of your score comes from payment information on your accounts, whether paid in full dutifully every month or 6 months delinquent.
2. Amounts Owed – About 30% comes from amounts owed on your accounts, what kind of accounts they are and how many carry balances.
3. Length of Credit History – About 15% comes from how long an account has been open and when it was last used.
4. New Credit – About 10% comes from the number of new accounts opened and the number of new inquiries into your credit report.
5. Types of Credit Used – Finally, another 10% looks at the types of accounts you have (credit card, retail account, mortgage etc.) and the prevalence of information on each.

Hopefully this brief look will help the next time you’re wondering why three numbers can be your best friend or worst enemy.

Can a College Student File Bankruptcy?

Many people think that if you’re currently enrolled in college or a school program, you’re not allowed to file for bankruptcy. Nothing could be further from the truth! Bankruptcy laws only require that you be 18 years old, a resident of the state where you are filing from for the last two years, and be capable of making the choice to file bankruptcy voluntarily. So don’t let the fact that you’re still a student stop you from filing for bankruptcy if that’s the relief you need.

In fact, college can be the best time to file a bankruptcy. Your student loans are still in deferment, so you won’t even have to worry about them in the filing itself. Also, you won’t have that high paying salary that might actually keep you from being able to file an easy Chapter 7 liquidation until after you graduate. Why hold on to those debts until you have to pay them back for at least a three year time period? File now and save yourself the trouble.

Also, don’t worry that by filing for bankruptcy you’ll never be able to get another credit card. Most people who file for Chapter 7 bankruptcy see a flood of credit card offers after they file. The credit card companies know that you wont be eligible to file another Chapter 7 for eight more years, so to them, you are a safe bet. The trick is to read the fine print on those offers. Of ten times, they’ll start off with a twenty to thirty percent interest rate. Be selective and choose one with a ten to fifteen percent rate. Use it like a debit card and pay the balance back to zero at the end of each month. In no time at all, you’ll find your credit score steadily improving.

Once your credit has improved, you can think about financing a car, or maybe even purchasing a home, and you’ll be in good shape to do so. It’s all because you filed for bankruptcy while you were in college and then practiced responsible credit behavior after you graduated. When all’s said and done, people wont need to see your diploma to know how good you are at making the right decision.

Just remember, always consult an attorney who specializes in bankruptcy law. They know all the ins and outs to get you back on your feet and on your way to a great future. Until then, keep your eyes on the prize. And if you are looking for some additional information, check out the helpful directory Ldmstudio Directory to kill some time, too.

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