That's it, you've had it! After struggling for months, or even years, to pay your debts, you are ready to consider filing for bankruptcy. The time has come to find a bankruptcy lawyer but you have no idea what to look for, or which questions to ask. It's not uncommon to see a bankruptcy attorney advertise on television. Some even advertise on billboards, but you can't be sure. It might be awkward to ask friends and family for a recommendation, so most people opt for an online search.
Believe it or not, a lot can be learned just by reading through an attorney's web site, but you shouldn't stop there. Filing for bankruptcy is pretty serious and it requires the right representation. Here are some ways to find, and then select, the best bankruptcy lawyer for you.
Look for signs of professionalism
Before you get started, it makes sense to check in with some professional organizations. Membership in organizations such as the National Association of Consumer Bankruptcy Attorneys, is a good indication that the firm or attorney is up to date on the latest developments. Once you locate a few members in your area, visit the web site for your state's bar association and check their certification. Most states will have special certification requirements for practicing bankruptcy law. A certification is given when the lawyer has been practicing for a minimum number of years and spends at 50 percent of the time on bankruptcy cases. A peer review and a passing score on a written exam will also be required.
Credentials and association memberships will give you the assurance that an attorney has all the practical knowledge necessary to help you, even if your case gets complicated. It will also tell you that the attorney takes professionalism seriously.
Prepare to interview a few bankruptcy lawyers
After you have found a few firms or lawyers that look interesting, take a look at their web sites. They should include a clearly written statement of educational information about bankruptcy, plus financial forms that you can download and in preparation for filing.
Schedule a few appointments and as for a free consultation. It may be tempting to go with the first one you like, but plan on seeing more than one. You should feel perfectly comfortable with the attorney and confident in his or her abilities. To save time, complete any forms you find on the web site and bring them along. Bring a list of questions you might have and use the same list of questions with each attorney. The answers you get may help you determine which one to hire.
What should you look for in a bankruptcy lawyer?
While professionalism and rapport are important, it is also essential that you trust the person you hire. Look for the following qualities during your initial consultation.
Do they discuss with you the alternative bankruptcy solutions? For example, an attorney should tell you that a Chapter 7, or complete cancellation of eligible debts, isn't the only answer. Other options should be explored whenever possible, such as credit counseling or negotiation with creditors. A Chapter 13 bankruptcy might also be on the table if you have enough income to support at least some of your liabilities, or if you own property that could be seized in a Chapter 7 filing. It is important to understand the full range of possible resolutions before making a decision that you could later regret.
Does the attorney express a passion for his or her profession? It is important that your lawyer is personally involved and enthusiastic about the process. Many attorneys find their work rewarding and fascinating. Find out what drove them to specialize in bankruptcy law and listen carefully to the response. To be honest, there are few other practice areas where an attorney can do so much good for a client in such a short period of time.
Do they listen to you closely and understand your situation? Declaring bankruptcy can be a painful decision and there are plenty of emotions involved. You will want an empathetic attorney who is interested in helping you reach your goals, but who also shows a willingness to ask you probing questions. If the lawyer doesn't ask you how you about your biggest concerns, or what got into your financial predicament, he or she may not be viewing you as an individual. You should walk out of your meeting feeling like the attorney really wants to help you.
Imagine a credit card that charged a 36 percent APR, slapped you with a fee when your credit limit increased and cost you $400 a year just to own -- yet, the company tells you they're doing you a favor.
It's a reality.
Our Colorado Springs bankruptcy attorneys know that credit cards with predatory lending practices are one of the main reasons so many people get embroiled in debt. We previously discussed how many people are choosing to avoid using credit cards in order to avoid having to seek debt relief or file for a Colorado Springs bankruptcy. This card represents one of the most shameful examples of why people are backing away.
The platinum card, distributed by First Premier, (FIRST PREMIER, if you can dig it) already has nearly 3 million customers, according to CNNMoney, and it solicits another 1.5 million every month. The company's CEO claims the business is doing people a favor, because the card is aimed at people with poor credit, who might otherwise not be able to get a credit card. The fees are justified, he said, because of the risk the company is taking on.
One has to wonder, though, whether customers who are already struggling financially could possibly beneift from being slammed with such outrageous fees.
The CEO of CardHub, which allows users to compare credit cards online before applying, was quoted by CNNMoney as saying that perhaps the worst of those fees involves a credit limit increase fee, which charges the customer 25 percent of whatever amount the limit is increased by. So if your spending limit is increased by $200, you pay an automatic $50 fee. Another online credit card comparison site CEO says he knows of no other company that does that.
"While (First Premier) is bragging about helping people back on their feet, they're in fact beating people when they're down," he said.
We understand that credit cards can be very useful - they can help improve your credit score and sometimes, you can't make major purchases unless you have some credit history. But a card like this isn't your only option if your credit is bad.
One different option is a secured card, which come with lower fees because the card holder has to deposit their own money into the account. That mitigates the lender's risk, without forcing the card holder to be shackled by fees.
The U.S. Federal Reserve has reported that consumer credit overall has bounced back in August, following a sharp decline a month earlier.
Southern Colorado bankruptcy attorneys know this means more people are feeling comfortable with taking on more credit card debt. This can be viewed as a positive thing in terms of our overall economy, but it can also quickly launch a downward spiral, particularly if an individual is hit with an unforeseen financial crisis, such as a lay-off or major illness.
A Chapter 7 bankruptcy in Denver is one way these individuals can find relief. The proceeding allows you to end the creditor harassment and erase most of your debts.
The Reserve reports that credit debt rose to $18.1 billion in August, which marks the highest rise since May of this year, and a marked increase from July, when credit fell by $2.5 billion.
Combine that with the fact that the country's jobless rate still stands at about 8 percent, and it's clear we're not financially out of the woods.
If you are one of those who is taking on more credit debt, consider the following tips to help you keep it in check:
Part of heading off serious debt problems is recognizing when you may be heading toward them.
Our Southern Colorado Chapter 7 bankruptcy lawyers have seen a number of clients who file for bankruptcy years after the warning signs started flashing.
In some cases, there wasn't much they could do about it. When you get derailed by an illness or a job loss, you may have little choice but to roll with the punches.
Other times, though, you may be able to address certain issues and establish alternatives.
One of the prime examples of this is credit card use. Credit card companies are experts at making money, and their ultimate goal is to make money off you, whether through annual fees or high interest rates or missed payment penalties.
The average consumer has three credit cards, according to credit bureau Experian. Only 15 percent have more than seven cards. Reuters recently profiled a man who had 40 credit cards - and was making money off of the cash back rewards! But the fact is, that is extremely rare. The issue is not so much how many cards you have, but rather how much credit you are using.
Typically, as long as you don't apply for too many cards at once, you could have a dozen credit cards and not be in trouble. In fact, it may actually boost your credit score if you have credit that you aren't using.
However, the problem is when you take out more credit than what you can afford. The more credit cards you have, the more tempted you will be to utilize that credit.
So let's say you have $100,000 in credit that is available to you. If you have $10,000 in credit actually charged on those cards, you have a 10 percent credit utilization ratio. FICO indicates that those consumers who have the best credit scores (generally defined as 760 and over) have a credit utilization ratio of 7 percent.
So as with anything else, the bottom line is to control your actual spending. If you can have more cards and honestly say you won't take out the credit on them, by all means, have more. However, if you worry that having access to that credit may tempt you to dig yourself deeper in debt, simply decline those offers.
Bereaved family members have enough to contend with when someone passes away without having to shoulder the burden of left-over debts.
You should know that you aren't responsible for debts that weren't in your name or that you did not co-sign for. That doesn't mean widows and widowers especially won't suffer a financial blow.
Here are some things you need to know:
The credit card companies and other creditors have the right to collect their payments from the deceased person's estate. If it's a secured debt, such as a vehicle payment, the vehicle may be repossessed and resold, with the remaining balance, if there is any, billed to the estate.
However, if there is not enough to cover the debt from the estate, creditors are generally out of luck, and must eat that cost.
If it's unsecured debt, such as a student loan, creditors can still collect the remaining balance from the estate.
Of course, this may affect any beneficiaries of the estate as the amount they can collect will dwindle based on the debts owed. However, beneficiaries won't be held responsible for the remaining balances on bills if the estate won't cover it.
However, there are some exceptions. If your spouse passes away and you had multiple joint accounts, joint debts or had co-signed for some of those debts, you can still be held responsible for the entire amount. This is often a harsh reality when spouses die, particularly because your income has effectively been halved (or more) by your loss, but your expenses haven't decreased.
You may be able to offset some of that cost through any life insurance policies you may collect, but that may not cover everything.
This is why many widows and widowers end up filling for Chapter 7 bankruptcy in the wake of a death, particularly if the deceased was the primary wage-earner for the family. Adjustments must be made in your monthly costs in order for you to get by. Sometimes, the only way to get rid of that debt is to have it erased in a bankruptcy.
As Colorado Springs residents continue to grapple with a massive, fast-moving wildfire that has already killed at least two people, destroyed more than 350 homes and damaged dozens more, many may have just been pushed over the edge to a Chapter 7 bankruptcy.
It's no surprise that many were already suffering financially prior to this. Now, many have lost everything.
Our Colorado Springs bankruptcy lawyers know that despite the stringent guidelines imposed by the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, special provisions were set forth to protect those who had suffered a major natural disaster, such as flooding, a hurricane, or tornado - or a fire.
Specifically, these provisions were created in the wake of Hurricane Katrina. Part of it deals specifically with bankruptcy fraud, which the courts do take very seriously. Usually, if you don't have sufficient or proper paperwork, your case might be closed, your debts deemed non-dischargeable or you might even be prosecuted. But these new provisions allow that if you're important documents or other paperwork was destroyed as a result of a natural disaster, you can't be prosecuted or penalized for that.
In that same vein, the normal deadlines and meetings that you may have been otherwise compelled to meet become more flexible. One example might be that a debtor might not be able to leave their location due to flooding. So in turn, if they do not attend their credit counseling meetings as a result, they can't be penalized for that.
Plus, while the Bankruptcy Abuse Prevention and Consumer Protection Act was designed to make it more difficult to file for bankruptcy (in an effort to drive down fraud), the natural disaster provisions actually make it easier for you to file if you've been affected by an act of nature. In part, that involves waiving lost property through the means test, waiving your credit counseling requirements and, as we mentioned earlier, not punishing you for not having the proper documentation that may have been lost in the disaster.
Those whose homes may have been damaged or destroyed by this blaze may feel financially ruined and hopeless. We can help.
Colorado Springs foreclosures still account for a large part of the market sales, according to a recent report by the Denver Business Journal.
For those battling a foreclosure, it's more than dollars and cents. It's about an emotional attachment to the place you call home, and choosing to let it go can be extremely difficult. It also may not be necessary.
Our Colorado Springs foreclosure lawyers can help you sort through the pieces to determine what your best option is.
The most recent statistics, culled from a Realty Trac quarterly sales report, indicates that although sales of foreclosures are actually down nearly 14 percent compared to this time last year, foreclosures still accounted for nearly a third of all home sales in the state.
Throughout Colorado, that equaled nearly 7,000 foreclosures sold, with an average price of approximately $180,000.
What is somewhat encouraging is that when you look at foreclosure sales across the rest of the country, Colorado is actually in better shape than most places. The average price for bank-owned foreclosure sales in the U.S. was about $20,000 less than in Colorado.
Rebounding home prices mean that the housing market overall is in better shape - which could mean you might actually be less underwater on your payments than you once were. That doesn't mean foreclosure might not make sense for you - but it may give you a little more leverage than you might have had otherwise.
The state with the highest number of foreclosure sales was Nevada, which reported nearly 60 percent of home sales were attributable to foreclosures. That was actually a drop of 5 percent from last year, though the average price per foreclosed home there was slightly less than $117,000.
California reported high foreclosure rates as well, with about 47 percent of total home sales. There, average prices were about $235,000 (though California has always had a more expensive cost of living than most states).
In some cases, Realty Trac analysts have said that an increasing number of distressed homeowners are looking to short sales to avoid foreclosures. This is one option to avoid the stain of a foreclosure on your credit score, but still get you out from underneath an underwater home.
Colorado bankruptcy attorneys know that with wedding season coming up, many brides have visions of destination vows, mile-high wedding cakes and princess gowns.
But all of that can quickly lead to a Colorado Springs bankruptcy, if you're not careful. Of course, parents want to give their children a memorable and special occasion. They reason that it's a once-in-a-lifetime event.
While there may be certain aspects upon which you can certainly splurge, it's important not to get yourself into a pattern of debt for a one-day event, no matter how special. Consider that according to TheKnot.com, the average wedding cake costs a whopping $550. For a cake.
So the key is to spend smartly.
Here are some ideas for ways to keep your wedding costs down:
One trick to try is to have the first layer of your cake be a yummy sheet cake. But for aesthetic purposes, consider using a cardboard "fake cake," or a decorated foam set that sits atop one layer of the real stuff. That way, you cut the bottom layer for pictures, then wheel it in the back for the bottom layer to be cut and served. No one is any wiser and you just saved several hundred dollars. Or, consider serving cupcakes instead.
Consider hosting this event at a relative's home and serving cheese and meat trays and salads from a local deli or supermarket. This could save you bundles.
Of course, it would be rude not to feed your wedding guests at all. But the time of day will determine what kind of food you should feed them. And if you have an earlier wedding (say, morning or early afternoon), you can opt for breakfast or lunch food, which can be a whole lot less expensive than a dinner. Think waffles, French toast and omelets versus salmon and braised beef.
You can curb your costs here by serving wine, beer and perhaps a "signature" drink, which can be less costly than stocking up on various kinds of high-end liquor. You may even want to consider skipping the champagne toast, or substituting sparkling cider instead.
When medical bills stack up, the ensuing Colorado debt can seem insurmountable.
Our Colorado Springs debt relief attorneys understand that these snowballing bills can present severe financial challenges. Sometimes, individuals are forced to choose between paying a doctor bill and buying groceries. Often, they end up paying off medical bills using credit cards, which then force them to pay astronomical interest rates - which can also result in a seemingly unscalable hole of debt.
What you may not realize is that just because you owe a particular balance on a medical bill doesn't always mean that figure is concrete. In fact, you can often negotiate to lower those rates - especially when health care companies consider that the alternative is not getting paid whatsoever.
Individuals have reportedly cut some of their medical bills in half. Part of it involves your willingness to pay at least part of it upfront. For example, a $3,000 bill was reduced to a $1,500 bill when the patient agreed to pay that $1,500 upfront.
This is expected to be an increasing trend, as out-of-pocket costs for health care are climbing ever-higher. In fact, some 40 million Americans last year were enrolled in health care plans that mandated a $1,000 deductible for individuals and $2,000 for families - almost double what it was just a handful of years ago. It's no wonder medical debt is such a huge problem in this country.
One tactic is to directly ask the source. If you know that your insurance doesn't cover a procedure, or worse if you are totally uninsured, ask your doctor if he or she would be willing to have you pay whatever Medicare might reimburse them for. That might possibly take 30 to 40 percent off the price from the get-go. The "Health Care Blue Book" can help to give you a better idea of what health care providers are typically paid by insurance companies.
Another thing to consider is shopping around for health care services. Some places might provide the same procedure for far less.
You may also consider asking the doctor's billing office if they might be willing to cut some of the price if you pay it upfront.
Additionally, have an idea of the tests you might need and those you don't. Unnecessary blood work or other tests are sometimes ordered simply because that's part of procedure - but the costs add up. Talk to your doctor about whether such tests are actually necessary.
And of course, you always have the option to consult with a Colorado Springs debt relief attorney, who can assist you in negotiating especially high medical and credit card debts.
Those facing a Colorado Springs foreclosure will have to wait it out a few more weeks before it is revealed whether Freddie Mac and Fannie Mae mortgages rates will be reduced for underwater homeowners.
Our Colorado Springs foreclosure attorneys know that the possibility of losing your home is nerve-wracking, not only for what it might mean in terms of your immediate future (i.e., where we will we live, will my kids have to change schools, etc.), but also your long-term credit.
We can help you sort through the details and determine your best option moving forward.
The question raised by a recent CNNMoney article was whether a principal mortgage reduction for some of the pair's combined 3 million loans will actually help homeowners.
At first, the Federal Housing Administration had resisted taking this action, saying it would be too expensive for tax-payers, who ultimately fund them. But the calls to action have been renewed, following a $26 billion settlement between five major banks and attorneys general in 49 states that would lower principal mortgage payments for some 1 million homeowners whose loans aren't backed by Freddie and Fannie.
Internal studies, however, had suggested that such a move would essentially equal a costly bailout for embattled homeowners - by already weary taxpayers.
Now, though, President Obama has offered three times the incentives if they will reduce their principal mortgage payments under the Home Affordable Mortgage Program, called HAMP. So now, the administration is taking another look to see if such a move would make financial sense.
While Fannie and Freddie-backed loans are about 3 million total, about 75 percent of those homeowners wouldn't qualify because they have kept up on their payments. So ultimately, about 750,000 might be eligible for a reduction under the criteria. That's a relatively small percentage, considering there are about 11 million underwater homeowners throughout the country.
The hope is that the move would ultimately reduce the number of foreclosures by helping to keep people in their homes. There's a concern, though, that this move might encourage individuals to strategically default, in order to take advantage of the program.
While it remains to be seen what the federal mortgage giants will decide, contacting a Colorado Springs foreclosure defense attorney will help you figure out what your best options are.