Life After Bankruptcy

Life without creditor harassment and the anxiety that debt causes begins after a bankruptcy is discharged. Your debt-to-income ratio is improved and lenders may even consider you less of a credit risk after filing bankruptcy since the majority of your debts were eliminated in your bankruptcy. Initially, interest rates on new loans can be relatively high, but credit is typically available immediately after receiving your bankruptcy discharge.

  • Bankruptcy - TN - How Will Bankruptcy Affect Your CreditFiling bankruptcy is not the end of your credit, but a new beginning. In fact, bankruptcy eliminates much of your debt and gives you a “fresh-start”. The credit rebuilding process can truly begin following a bankruptcy, and all of your debts discharged in bankruptcy should be reported as having a zero balance.
  • Bankruptcy - TN - How Soon to File BankruptcyWhile a bankruptcy is reported on your credit for 10 years following the filing of your case, it doesn’t mean it takes 10 years to obtain more credit. Typically, recent bankruptcy filers qualify for certain types of credit immediately after their bankruptcy is discharged.
  • Bankruptcy - TN - What Debts to KeepThe bankruptcy code requires that you disclose all of your assets and debts in your filed bankruptcy petition, even if you want to keep paying on some of those listed debts. Your bankruptcy schedules indicate these debts you intend to continue paying.
  • Bankruptcy - TN - How to Rebuild CreditOptions include applying for a credit card, keeping your house and car, or opening a bank account.
  • Bankruptcy - TN - How to Get Finances Back on TrackOne of the best times to develop a comprehensive financial plan for managing your finances in the future is immediately after your bankruptcy is discharged. The biggest mistake you can make after a bankruptcy is using the same financial strategy that led you to file bankruptcy in the first place.

Montana State Bankruptcy Laws

What Are The Montana Bankruptcy Exemptions?

MontanaMontana law protects all or a portion of your property from being seized by creditors or the bankruptcy trustee in a Chapter 7 bankruptcy. In a Chapter 13 bankruptcy, you are generally allowed to keep all of your assets and property. Certain exceptions may apply, so its wise to consult with a Montana bankruptcy attorney to find which of your assets will be protected in a bankruptcy filed in Montana. In general, the major Montana bankruptcy exemptions include:

GENERAL MONTANA EXEMPTIONS
Real Estate (the Homestead Exemption)
Up to $100,000 of equity in your homestead can be protected.
Automobiles
One motor vehicle valuing up to $2,500 can be protected.
Other Property
A total of $4,500 in aggregate value, not exceeding $600 in any one item, of household furnishings and goods, appliances, jewelry, wearing apparel, books, firearms and other sporting goods, animals, feed, crops, and musical instruments; and up to $3,000 in aggregate value of any implements, professional books, and tools of the trade.
View the complete list of Montana bankruptcy exemptions

Please remember that this page provides general information only, and is not intended to provide legal advice. The information is not a substitute for the advice of a qualified bankruptcy attorney. If you need legal assistance, consult an attorney.

Which state’s exemption laws apply in your bankruptcy?

MontanaGenerally, the laws of the state in which you lived for the 730 days (2 years) prior to filing a bankruptcy petition will apply in your bankruptcy.

If you have not lived in the same state for the 2 years immediately prior to filing your bankruptcy petition, the laws of the state in which you lived for the majority of the 180-day period preceding the 2-year period will likely apply.

If application of the preceding general rules renders you ineligible for exemptions under any states laws, you may be allowed to choose the federal exemptions applicable in your bankruptcy.

Is Montana a Community Property State?

No, Montana is not a community property state. Because it is not a community property state, you will be responsible for your spouses debts only if you voluntarily assumed those debts by, for example, co-signing on a loan given to your spouse. In a non-community property state, one spouse can file for bankruptcy and be eligible to eliminate all of their unsecured debts without the involvement of the other spouse.

How did your senator vote on the new bankruptcy laws?

Following years of intense lobbying by creditors, Congress passed the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA). How did your Senators vote on these largely pro-creditor provisions?

Baucus (D-MT) – NAY
Burns (R-MT) – YEA

Montana Bankruptcy Court Locations:

U.S. Bankruptcy Court District of Montana,
Mike Mansfield Federal Building and U.S. Courthouse

400 North Main Street
Rm. 303
Butte, MT 59701
(406) 497-1243

Note: You may not have to actually go to one of the above bankruptcy courts. Trustees often conduct your meeting at a local venue.

Although bankruptcy is federal law, the bankruptcy courts in each jurisdiction have local rules that must be followed. A local bankruptcy attorney will be familiar with the specific rules in your area.

Montana Bankruptcy Attorney Locations:

Looking for a Montana bankruptcy attorney?
Looking for a Bozeman, Montana bankruptcy attorney?

Bankruptcy and Age Restrictions

While working as a bankruptcy paralegal I had a surprising number of young adults call to ask the same question: “How old do I have to be to file bankruptcy?” The answer is fairly simple: there is no specific age restriction, but typically you have to be 18 to incur most types of debt (i.e credit cards and personal loans) so in most cases filers are 18 or older. There are tons of reasons why going bankrupt soon after your eighteenth birthday is not the smartest thing to do, but lets just start with the top 3:

  1. Troubling Your Mid 20s: According to the United States Bankruptcy Code, an individual can only file for Chapter 7 bankruptcy protection every 8 years. This means that if you file bankruptcy at the age of 18, you are putting your finances at risk until you are at least 26 years old. We all know that dozens of life changing events happen to people between the ages of 18-26 including college, marriage, children, and in some cases even purchasing a home and/or vehicle; these things will be more difficult to finance if you already have bankruptcy on your credit record.
  2. Risking Student Loan Eligibility: If an individual files for bankruptcy protection at the age of 18 and then seeks the help of federal or private student loans to pursue higher education they may face tougher eligibility requirements than other students who do not. Federal student loans are not likely to discriminate based on a bankruptcy, and in most cases they do not; the trouble with eligibility typically comes when students apply for private student loans after filing personal bankruptcy. Many private student loan companies have credit criteria that preclude people with a bankruptcy within the past 7 or 10 years from borrowing without a creditworthy cosigner.
  3. Harming Your Fresh Credit Report: Like I mentioned earlier the age of 18 is the earliest that most credit card companies will allow individuals to receive credit lines, so by filing bankruptcy soon after that you will have the mark of bankruptcy on your credit report for 7-10 years and negate that clean record you had as an 18 year old. Although that bankruptcy mark will not make it impossible to be approved for new credit, it does make things more difficult.

All of this is not to say that going bankrupt in your early 20s is a terrible decision, and it may be exactly what you need to jump start your finances in the right direction. You should just be aware of the effects bankruptcies have on individuals during and after their case is completed and also the alternatives to filing at all. Contact your credit card companies if you are a new customer and feel yourself starting to struggle with payments, or as friends or family for sound financial advice. If you are young and considering bankruptcy protection for the first time it may be in your best interest to not try to file bankruptcy yourself, and instead hire a bankruptcy lawyer to help you throughout the process.

Wisconsin State Bankruptcy Laws

What Are The Wisconsin Bankruptcy Exemptions?

WisconsinWisconsin law protects all or a portion of your property from being seized by creditors or the bankruptcy trustee in a Chapter 7 bankruptcy. In a Chapter 13 bankruptcy, you are generally allowed to keep all of your assets and property. Certain exceptions may apply, so it’s wise to consult with a Wisconsin bankruptcy attorney to find which of your assets will be protected in a bankruptcy filed in Wisconsin. In general, the major Wisconsin bankruptcy exemptions include:

GENERAL WISCONSIN EXEMPTIONS
Real Estate (the Homestead Exemption)
Up to $40,000 of equity in your homestead can be protected.
Automobiles
Up to $1,200 of equity in one motor vehicle plus any unused portion of the household goods can be protected.
Other Property
Household goods and furnishings, clothing, keepsakes, jewelry and other articles of personal adornment, appliances, books, musical instruments, firearms, sporting goods, animals or other tangible personal property not to exceed $5,000 in aggregate value; $7,500 in equipment, inventory, farm products and professional books used in a trade or business.In Wisconsin, you have the choice of electing the federal exemption statutes rather than the Wisconsin state exemptions. Consult with a Wisconsin bankruptcy attorney for more details.
View the complete list of Wisconsin bankruptcy exemptions

Please remember that this page provides general information only, and is not intended to provide legal advice. The information is not a substitute for the advice of a qualified bankruptcy attorney. If you need legal assistance, consult an attorney.

Which state’s exemption laws apply in your bankruptcy?

WisconsinGenerally, the laws of the state in which you lived for the 730 days (2 years) prior to filing a bankruptcy petition will apply in your bankruptcy.

If you have not lived in the same state for the 2 years immediately prior to filing your bankruptcy petition, the laws of the state in which you lived for the majority of the 180-day period preceding the 2-year period will likely apply.

If application of the preceding general rules renders you ineligible for exemptions under any state’s laws, you may be allowed to choose the federal exemptions applicable in your bankruptcy.

Is Wisconsin a community property state?

Yes, Wisconsin is a community property state. Because it is a community property state, you are responsible for any debts that your spouse incurred while you were married. You are therefore equally liable for your spouse’s debts even if you did not voluntarily assume liability for them by, for example, cosigning for a loan given to your spouse.

How did your senator vote on the new bankruptcy laws?

Following years of intense lobbying by creditors, Congress passed the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA). How did your Senators vote on these largely pro-creditor provisions?

Feingold (D-WI) — NAY
Kohl (D-WI) — NAY

Wisconsin Bankruptcy Court Locations:

U.S. Bankruptcy Court
126 U.S. Courthouse

517 East Wisconsin Ave.
Milwaukee, Wisconsin
53202-4581
(414) 297-3291

Madison Division
120 North Henry Street, Room 340
P.O. Box 548
Madison, WI 53701-0548
(608) 264-5178

Eau Claire Division
500 South Barstow Street
P.O. Box 5009
Eau Claire, WI 54702-5009
(715) 839-2980

Note: You may not have to actually go to one of the above bankruptcy courts. Trustees often conduct your meeting at a local venue.

Although bankruptcy is federal law, the bankruptcy courts in each jurisdiction have local rules that must be followed. A local bankruptcy attorney will be familiar with the specific rules in your area.

Wisconsin Bankruptcy Attorney Locations:

Looking for a Wisconsin bankruptcy attorney? 
Looking for a Brookfield, Wisconsin bankruptcy attorney? 
Looking for an Eau Claire, Wisconsin bankruptcy attorney? 
Looking for a Fort Atkinson, Wisconsin bankruptcy attorney?
Looking for a Madison, Wisconsin bankruptcy attorney? 
Looking for a Milwaukee, Wisconsin bankruptcy attorney?

The Differences Between Chapter 7 and Chapter 13

Chapter 7 vs Chapter 13

The biggest difference between Chapters 7 & 13 bankruptcies is the repayment of your debt. Chapter 13 bankruptcy involves a court-ordered repayment plan where a portion of your debt back is repaid to your creditors. In a Chapter 7 bankruptcy, there is no repayment plan and certain debts can simply be eliminated.

Bankruptcy Basics

Bankruptcy - Differences Chapter 7 and 13Chapter 7 bankruptcy & Chapter 13 bankruptcy both serve the same purpose: to provide relief for you debts. While they ultimately serve the same goal, each Chapter’s approach in achieving this goal is vastly different, and a bankruptcy attorney can help explain the intricacies of each.

Going Bankrupt: Repayment of Your Debt

The biggest difference between Chapters 7 & 13 bankruptcies is the repayment of your debt. Chapter 13 bankruptcy involves a court-ordered repayment plan where a portion of your debt back is repaid to your creditors. In a Chapter 7 bankruptcy, there is no repayment plan and certain debts can simply be eliminated.

Length of Chapter 7 and Chapter 13 Bankruptcy Process

The second major difference between the two chapters is the time it takes to complete each chapter’s filing process. While a Chapter 7 bankruptcy filing usually only takes 4-6 months to complete, a Chapter 13 bankruptcy is a much longer procedure and usually lasts 3-5 years.

Protecting Assets v. Possible Liquidation

Your assets are protected in a Chapter 13 bankruptcy and the bankruptcy can even help you save assets that are facing foreclosure or repossession — such as a house or car. Since a Chapter 13 bankruptcy in not a liquidation bankruptcy, you are able to keep your assets even if your states exemptions do not completely protect them. In a Chapter 7 bankruptcy, although it rarely happens, the Bankruptcy Court can liquidate your assets if they are not protected by your state’s bankruptcy exemptions. Your state probably has a specific exemption to protect a portion of equity in your house or car.

Credit Basics

Most creditors look at your credit history to determine the likelihood that you will make timely payments and pay off a future loan according to the terms of the credit agreement. Generally, creditors will offer you better loan terms if they consider you to be less likely to default on a loan, and higher rates if they consider you to be more likely to default on a loan. If your credit is very bad, it may be difficult to obtain any sort of credit or loan.

Bankruptcy - Credit Basics

Generally speaking, your credit represents your credit risk, or the likelihood of you defaulting on a loan. The information on your credit report and your credit score are often used to determine your credit risk, but lenders look at several other factors as well:

  • Income
    It is usually necessary that you demonstrate a verifiable way to repay a loan. Lenders will typically offer you better terms if you have a steady, verifiable income.
  • Liabilities
    Lenders will look at the total amount of outstanding financial obligations you have. Lenders will typically charge higher interest rates if you are financially overextended and having difficulty meeting your current obligations.
  • Assets
    Lenders will often try to determine what assets you own and their value. Creditors prefer to loan money to you if you have assets because they can be sold to repay the loan. Creditors may also be able to seize and liquidate the assets themselves if you default on the loan.
  • Public Record
    Lenders will inquire to see if you have had any previous bankruptcy filings or judgments filed against you. Although bankruptcy is a last resort, it is often considered more favorable than “bad debt” on your credit report.
  • Debt-to-Income Ratio
    Lenders will consider you to be less of a credit risk if you can demonstrate that you have a large amount of income in relation to your debts. $10,000 of debt for someone earning six figures is seen as less of a negative than it would be for someone earning the minimum wage.

If your credit is especially bad, filing for bankruptcy may actually help your credit. Creditors usually prefer to lend money to people who have eliminated all of their unsecured debts in a bankruptcy. Your credit report after a bankruptcy shows that the amount of debt owed to all previous creditors (“also referred to as “discharged creditors”) is zero. That fact, coupled with the fact that creditors know that a person who obtained a discharge of debt in a Chapter 7 bankruptcy cannot file another Chapter 7 bankruptcy for at least eight years following that discharge, can make an individual who has filed for bankruptcy a more attractive potential borrower than a potential borrower with a lot of unsecured debt.

Although lenders are looking at your credit history when they assess how much of a credit risk you are, they are actually much more concerned about your credit future. Lenders are more concerned with evaluating the likelihood that you will default on future loans, not your past credit problems. Most people’s financial futures are much brighter once they eliminate their debts in a bankruptcy, and creditors view them as less risky than somebody with unmanageable debts. If you have bad credit, a bankruptcy may be the first step towards improving your credit. You can’t properly begin to rebuild your credit until you have taken care of your bad debts, otherwise those debts will continue to drag your credit down.

Bankruptcy and Income Tax Refunds

Tax refunds are generally considered to be assets and can be taken by the bankruptcy trustee and distributed to your creditors. However, in many States it is possible to exempt all or a portion of the refund and protect it from your creditors. The Earned Income Credit portion of your refund can also be completely exempted in some States.

Another strategy often to protect your income tax refund is to “spend-down” your refund on necessities prior to the filing of the bankruptcy. Since the money is spent, it is no longer considered an asset, and the purchase of necessities generally does not create any new assets. But be careful, some states take a pro-rated portion of your income tax refund as a matter of practice and you’d find yourself owing the trustee even if you spent down your refund on necessities.

In Chapter 13 bankruptcies, some jurisdictions require that you turn over a portion of your income tax refund each year. In other jurisdictions, you are allowed to keep your income tax refund each year.

As you can see, the laws in each state do vary significantly in this area of bankruptcy law, so be sure to consult with a bankruptcy attorney familiar with the local laws before receiving your refund. Bankruptcy Laws in Your State

Many bankruptcy attorneys often see a large rush in filings during the 1st Quarter, when people receive their tax refunds and are able to pay their bankruptcy attorneys to get their cases filed. This is a legitimate way to spend-down the refund and a good way to pay for a bankruptcy filing. I expect that the anticipated economic aid package that will give most working Americans between $600 and $1200 will also cause a boost in bankruptcy filings.

The Cosigner Stay: How Filing a Chapter 13 can also Protect the Cosigners on your House, Cars and Other Debts

One of the many invaluable benefits of filing a Chapter 13 bankruptcy is what’s referred to commonly as the “Cosigner Stay”. From my experience, not many of my Chapter 13 clients realize when their case is filed that the cosigners on many of their debts are also protected from creditor collection.

Chapter 13 federal bankruptcy law protects individual cosignors on consumer debts where applicable.  So, in the common situation where you have a cosigner on your mortgage, car payment, credit card, and personal loans – the filing of your Chapter 13 bankruptcy often prevents and stops any collection activity by these creditors against your cosigner.   The protection begins as soon as the case is filed, and lasts as long as the case is open and running.  Cosigner protection will stop however if the bankruptcy court grants relief from the stay.

Two basic requirements must be met for the Cosigner Stay to apply:

First, the “stay”, or protection created by the filing of the Chapter 13 bankruptcy, does not apply to all types of debt.  The debt must be what’s called and classified as a “consumer” debt. In all instances, car payments, credit cards, and personal loans fall into this definition and the cosigners on these debts will always be protected. Tax debts and debts for professional services, such as attorney fees are not considered consumer debts and therefore won’t receive Chapter 13 cosigner protection. Depending on where you live (more specifically, what jurisdiction your Chapter 13 is filed in) will determine whether your mortgage debt is considered a “consumer” debt and whether the Cosigner Stay applies.

The second requirement that must be met is that the cosigner must be an “individual”. This simply means businesses or business entities do not qualify for cosigner protection.

Keep in mind that cosigner protection stops and ends if the bankruptcy court, in favor of the creditor, grants relief from the stay, or the Chapter 13 is closed, dismissed, or converted to another bankruptcy chapter.  The Cosigner Stay applies only to Chapter 13 bankruptcies and never to Chapter 7 or Chapter 11 bankruptcies.

Click here for more information on the Cosigner Stay or to speak with an experienced bankruptcy attorney.

Order a Credit Report

You are legally entitled to obtain a free copy of your credit report from each of the 3 major credit reporting bureaus once every 12 months. It is a good idea to order all 3 reports if you are considering filing bankruptcy, but you don’t have to order all 3 reports at the same time, and you can rotate your requests and order one free report every 4 months if you don’t need them all to prepare for a bankruptcy.

Bankruptcy - Order a Credit Report

To request your free copy, you have three options:

  1. Visit www.annualcreditreport.com
  2. Call 877-322-8228
  3. Complete the Annual Credit Report Request Form and mail it to:Annual Credit Report Request Service
    P.O. Box 105281
    Atlanta, GA 30348-5281.

To prevent identity theft, the service asks you to provide personal information that only you would know to verify your identity. You will have to pay additional fees if you also wish to obtain your credit score.

Do not contact Equifax, Experian, or Trans-Union directly for your annual free credit report. Either use the free annual credit report service above or order your credit report from a number of different Web sites. Keep in mind will probably be required to pay for the reports from the other Web sites unless you sign up for credit monitoring or other “deals” offered online.

Maine State Bankruptcy Laws

What Are The Maine Bankruptcy Exemptions?

MaineMaine law protects all or a portion of your property from being seized by creditors or the bankruptcy trustee in a Chapter 7 bankruptcy. In a Chapter 13 bankruptcy, you are generally allowed to keep all of your assets and property. Certain exceptions may apply, so it’s wise to consult with a Maine bankruptcy attorney to find which of your assets will be protected in a bankruptcy filed in Maine. In general, the major Maine bankruptcy exemptions include:

GENERAL MAINE EXEMPTIONS
Real Estate (the Homestead Exemption)
Up to $35,000 in value of real or personal property that the debtor or a dependent of the debtor uses as a residence, or in a burial plot for the debtor or a dependent of the debtor can be protected. If minor dependents live with the debtor, the debtor’s aggregate interest may not exceed $ 70,000.
Automobiles
The debtor’s interest in one motor vehicle, valuing up to $5,000, can be protected.
Other Property
The debtor’s interest, not to exceed $5,000 in value, in clothing; furniture; appliances; and similar items. the debtor’s interest, not to exceed $200 in value in any particular item; 100 percent of household furnishings, household goods, wearing apparel, appliances, books, animals, crops or musical instruments; jewelry not to exceed $750 in value; tools of the trade not to exceed $5,000 in value; and 100 percent of the value of furnaces, stoves and fuel, food, farming and fishing equipment.
View the complete list of Maine bankruptcy exemptions

Please remember that this page provides general information only, and is not intended to provide legal advice. The information is not a substitute for the advice of a qualified bankruptcy attorney. If you need legal assistance, consult an attorney.

Which state’s exemption laws apply in your bankruptcy?

MaineGenerally, the laws of the state in which you lived for the 730 days (2 years) prior to filing a bankruptcy petition will apply in your bankruptcy.

If you have not lived in the same state for the 2 years immediately prior to filing your bankruptcy petition, the laws of the state in which you lived for the majority of the 180-day period preceding the 2-year period will likely apply.

If application of the preceding general rules renders you ineligible for exemptions under any state’s laws, you may be allowed to choose the federal exemptions applicable in your bankruptcy.

Is Maine a Community Property State?

No, Maine is not a community property state. Because it is not a community property state, you will be responsible for your spouse’s debts only if you voluntarily assumed those debts by, for example, co-signing on a loan given to your spouse. In a non-community property state, one spouse can file for bankruptcy and be eligible to eliminate all of their unsecured debts without the involvement of the other spouse.

How did your senator vote on the new bankruptcy laws?

Following years of intense lobbying by creditors, Congress passed the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA). How did your Senators vote on these largely pro-creditor provisions?

Collins (R-ME) — YEA 
Snowe (R-ME) — YEA

Maine Bankruptcy Court Locations:

USBC, District of Maine
537 Congress Street, 2nd Floor
Portland, ME 04101 Bangor
(207) 780-3482

USBC, District of Maine
202 Harlow Street, 3rd Floor
Bangor, ME 04401
(207) 945-0348

Note: You may not have to actually go to one of the above bankruptcy courts. Trustees often conduct your meeting at a local venue.

Although bankruptcy is federal law, the bankruptcy courts in each jurisdiction have local rules that must be followed. A local bankruptcy attorney will be familiar with the specific rules in your area.

Maine Bankruptcy Attorney Locations:

Looking for a Maine bankruptcy attorney?
Looking for a Portland, Maine bankruptcy attorney?
Looking for an Auburn, Maine bankruptcy attorney?

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