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Stephen H. Swift

Stephen H. Swift

Managing Attorney
Law Office of Stephen H. Swift, P.C.

15 Jul 2012

A Colorado bankruptcy can provide you relief from a long list of creditors.

Our Chapter 7 bankruptcy attorneys know that this includes credit card bills outstanding medical balances and business debts.

However, there are certain debts that are almost never dischargeable. Generally, those are going to include student loans and taxes, though there are special circumstances in which you can apply for an exception.


Child support payments, however, you will almost certainly continue to pay.

That was the issue in the case of Florida v. Davis, recently heard by the U.S. Appeals Court for the Eleventh Circuit. Although this was a Florida case, the same general principles with regard to child support and bankruptcy apply here in Colorado.

Here are the facts, as outlined in court documents:

Mr. Davis and his wife were married in 1997. They divorced in 2003 in Illinois. Mr. Davis moved to Florida, and it was that state's department of revenue that oversaw the child support payments for which he was obligated.

Then in 2008, an involuntary Chapter 11 bankruptcy was filed against Mr. Davis. This is a rare situation in which creditors seek relief from the bankruptcy court.

In the list of creditors spelled out in the filing, there was $180,000 that Mr. Davis owed Ms. Davis for child support. The bankruptcy court required proof of claim from each of the creditors. However, neither the state's department of revenue nor Ms. Davis filed any paperwork.

The debts were formally discharged by the court in May 2009.

The following month, the state department of revenue filed a proof of claim for the $180,000 owed to Ms. Davis.

The bankruptcy court, however, determined that neither Ms. Davis nor the department of revenue could seek relief due to res judicata, or in other words, the case had already been decided and closed.

The case was then taken to the appellate court.

The appellate court determined that while Mr. Davis did have to pay the child support - it was not a debt that could be discharged in the bankruptcy process - the department could not seek interest or liability because it had not properly met the court's deadlines.

Although child support can't be discharged in a bankruptcy, filing frees up your income from other obligations so that you will be able to pay. 

Contact us today for more information.

 

25 Jun 2012

There are a large number of so-called debt settlement agencies advertising services that boast that they can help you avoid a Chapter 13 bankruptcy in Colorado Springs.

If you have overdue medical bills, late car payments and credit cards with sky-high interest, you know you have to take some form of action. And it can be tempting to want to avoid any negative marks on your credit.

But Colorado Springs bankruptcy lawyers know that first of all, a lot of these companies pose a buyer beware situation. A lot of them charge high rates for actions you may be able to take yourself, and some have even been pursued criminally for fraud.

A Chapter 13 bankruptcy, on the other hand, is a federally-approved process that is overseen according to strict legal standards, and when it's all done, you are free from debt.

The other thing about a Chapter 13, versus a Chapter 7, is that lenders and other institutions tend to look upon it less harshly because you are actually paying off a good portion of what you owe. Additionally, you have the protection of legally blocking your creditors from harassing you or coming after you for more once the process is done.

Now, if you decide to go with a debt settlement or credit management company, as mentioned before there is always the possibility of fraud. But also, you're generally going to be looking at higher monthly payments than what could be arranged in a Chapter 13 plan. Plus, in a Chapter 13, you're paying back a portion of the debt, rather than all of it, which is what you'll do with a debt management plan.

With a debt management plan, you're also looking at likely paying on those debts for a longer period of time. Plus, your creditors might not all agree to the terms of the plan (whereas in a bankruptcy, they would be legally compelled to do so). This is probably going to mean you'll be paying higher fees and balances for those agencies.

And also, it's not clear that there's really even much benefit to your credit score, as debt management plans are also reported to credit reporting agencies.

26 Mar 2015

If you are facing foreclosure, it won't be long before your friends and family start offering advice. You may hear about some proven strategies to keep the mortgage company at bay, and other actions that may help you avoid foreclosure. But first it is important to understand foreclosure.


What is foreclosure?

A bank foreclosure is a legal process through which a mortgage lender can take possession of your home when you are not making the monthly mortgage payments. While it is different in every state, it usually follows that when you miss a few payments on the mortgage, the lender will send a default letter. This letter usually urges the borrower to make payments to catch up or to make some alternative arrangement with the bank. However, if the situation is not fixed within a few months of this letter, the bank will begin the foreclosure process.

What is the foreclosure process like?

After a loan has been in default for a month or two, the bank will send Sheriff's Sale Notice. Usually, this sale is scheduled to take place within four weeks of the date of the letter. Sheriff's sales are auctions where people can bid on the house; however the lender is usually the winner of the auction. In certain situations, the lender can attempt to collect any balance of the loan above the price paid at the sheriff's sale. This debt is called a "deficiency" but it usually a dischargeable debt in bankruptcy.

On the day of the sale, the lender assumes ownership of the property and the "redemption period" starts. This period of time is designed to protect the borrower's from abuse by the lender and it usually lasts for six months. During this time, the borrower can remain in the home, but doesn't have to pay the mortgage or property taxes. The borrower may also buy back the home at the price paid at the auction, but this might be impossible since lenders won't give loans to people right after a foreclosure. At the end of the redemption period, the borrowers can be evicted from the home.

How can bankruptcy help?

Filing for bankruptcy during a foreclosure can help in a couple of ways, but it must have been filed before the sheriff's sale. For one, a Chapter 13 bankruptcy can help you catch up on payments if you fell behind on your mortgage. Secondly, Chapter 7 allows you to stay in the home longer while stopping the lender from collecting a deficiency after taking the home.

Chapter 13 and foreclosure

If you fall behind on your house payments but you still have a large enough income to pay the mortgage, then Chapter 13 might be the ideal solution. This is particularly true when you have some equity in the home and want to hold on to it. A Chapter 13 bankruptcy allows you to pay back the amount your fell behind over the period of three to five years, while continuing to make regular mortgage payments. Once the arrears are paid, the mortgage will no longer be in default.

Chapter 7 and foreclosure

If you fell "underwater" on your mortgage because the balance is higher than the value of your home, or you can no longer afford to make monthly mortgage payments, then Chapter 7 may be just the fix. Chapter 7 bankruptcy legally protects you from any actions taken to collect a debt, including the sheriff's sale on a foreclosed home. While the lender can still ask the court to hold a sheriff's sale, the protections of Chapter 7 can last up to three months. In the case of a Chapter 7 bankruptcy, you can gain an additional 1 to 3 months in the home without paying a mortgage.

Perhaps more importantly, a Chapter 7 bankruptcy discharges any deficiency debt that may result from the house selling at auction for less than the balance of the mortgage. In cases where the deficiency judgment is quite large; which can occur when the house is remortgaged or underwater, a Chapter 7 filing can be quite helpful.

10 Jul 2012

Many people contemplating filing for a Chapter 7 bankruptcy worry that they may not be able to save their home.

Our Denver bankruptcy attorneys know, however, that the truth of the matter is bankruptcy is often one of your only options for saving your home.

While it's not going to be the solution for everyone, there are many people who can benefit. Consulting with an experienced bankruptcy lawyer is the only way to know for sure, but here are some thoughts to help you as you weigh your options:


A bankruptcy will halt a foreclosure proceeding. It will effectively end the creditor harassment. This gives you time to reorganize your finances and in some instances, catch up on your missed or late payments.

It's generally going to be one of the best options for you to explore if you are behind on your payments but you still have ongoing and steady income.

In fact, a lender can't foreclose or even try to collect debt from you once you've filed. A Chapter 7 will delay the foreclosure. It may also help you to ward it off altogether by freeing you from other debt so that you have the means to be able to pay your mortgage.

Another possibility is filing for a Chapter 13 bankruptcy. This option allows you time to fix your finances, usually within the course of three to five years. In this scenarios, the court will set an income-based budget with monthly payments handled by the bankruptcy trustees.

These trustees in turn pay those bills, first attacking the secured debt. Then, they focus on unsecured debt, starting with any back taxes you owe. After that comes debts such as medical bills and credit cards. After that, trustees will pay the remaining bills, usually for a few cents on the dollar.

If borrowers are able to keep up with those payments, they can usually come out of a bankruptcy with their home still in their possession.

What the court generally can't do is reduce your mortgage debt down to what the home is actually worth (a big concern for the many homeowners who are underwater) or lower interest rates or loan terms.

However, given some recent financial settlements finalized to hold some of the largest banks accountable for foreclosure abuses, there may be some additional remedies you may seek in terms of loan modification.

Contact us today for more information.

20 Jan 2012

USA Today is reporting that consumers increased their debt in November by more than $20 billion, the largest monthly increase in a decade.

What this shows our Colorado Springs bankruptcy lawyers is not that the economy is in a better position than it has been in years, but more likely that consumers used their credit cards more during the winter holiday season.

For those whose expenses are in tough shape, bankruptcy in Colorado Springs can help them get out from the predatory practices of credit card companies. These businesses consistently send out invitations for consumers to get their plastic, even if it's not in their best interests.


They offer "perks" and "rewards" that are highly unattainable or require consumers to spend big and pay it off quickly. And if a person misses a payment or pays it late, they are instantly slammed with late fees and hidden fees that consumers didn't even know existed. Companies can then try to increase interest rates, just another tactic to try to keep consumers in their grasp as they battle with debt.

USA Today reports that consumers added $20 billion in debt in November, the biggest monthly jump in nearly a decade. Not including mortgage debt, Americans owe $2.48 trillion. Consumer credit increased at an annual rate of 10 percent, while credit card debt increased at an annual rate of 8.5 percent.

The November 2011 increase was the largest since November 2001, when consumers borrowed $28 billion just a few months after the September 11 terrorist attacks.

Some analysts believe that this shows consumers are feeling more confident in the economy, which has had modest gains in recent months. Our Colorado Springs bankruptcy lawyers believe it may also have to do with the ongoing unemployment struggles that many Americans are dealing with. The less money they have, the more they rely on credit card loans.

Consumers should be glad to know that filing for bankruptcy in Colorado Springs can wipe out credit card debt, regardless of the amount. This is an important tool to utilize for consumers who are behind on payments and don't see help in sight.

If you are struggling with debt and need to speak with an experienced Colorado Springs bankruptcy lawyer, contact attorney Stephen H. Swift at 866-893-2440 or 719-359-8179 for a free initial consultation.

Additional Resources:

November boost in consumer debt is most in 10 yearsby Michael Winter, USA Today

18 Sep 2016

It makes sense that if you are filing for bankruptcy, you aren't in a position to pay a fortune to an attorney to help you do it. Some people turn to a lawyer who will do it for a few hundred dollars, while others try to navigate the process on their own.

But our Colorado Chapter 7 bankruptcy attorneys want you to know the truth: This is one area where you really can not afford NOT to hire an experienced lawyer.  Failing to do this is likely to cost you much more in the end.


We work especially hard to keep our rates competitive, as we understand the challenges that our bankruptcy clients are currently facing. But we also want our clients to know that we refuse to cut corners, as many of the $500-a-case bankruptcy attorneys will.

Here's what you risk when you hire a cheap attorney with little to no experience in bankruptcy law:

  • Not having all eligible debts included in the filing;
  • Untimely or sloppy paperwork that could result in unfavorable rulings;
  • Getting slapped later with additional fees because the attorney was too inexperienced to realize the time associated with properly filing a bankruptcy claim;
  • Having your case dismissed without discharge.

This is certainly not to say that all low-cost bankruptcy attorneys are bad at what they do, and you also can't necessarily assume that just because an attorney is priced high that he or she is better.

So sure, you might find someone who will do a decent job for a few hundred dollars, particularly if your case is uncomplicated. But you take an enormous risk when you do this because if you end up stuck paying debts that would have otherwise discharged, that few hundred dollars you saved on an attorney will be spent to these creditors in the long-run.

The mistake many people make is assuming they can't afford one because of how much they owe. But what's important to note is that when you file for bankruptcy, you will likely be advised to stop paying all or most of your creditors immediately. These are debts that are going to eventually be discharged anyway, so it's often pointless to continue paying. What this also means is that if you have some form of income, you should be able to afford a qualified attorney.

Contact us today to see how we can help. 

20 Oct 2012

Colorado Springs foreclosure lawyers know that many people fell victim to the housing market implosion, whereby home values were grossly inflated, as were the homebuyers' suitability for the loans to obtain them.

However, it appears the negligence might not have ended there, as evidenced by a class action lawsuit filed on behalf of homeowners throughout the country alleging major banks were complicit in the Libor manipulation rate.

You may be familiar with Libor rate after countless entities including local governments and community banks all filed suit against some of the major banks following the scandal. Libor is short for the "London Interbank Offered Rate," and it is a collection of rates that is set for 10 currencies across 15 different time zones for a range of time periods. It could be for a particular day or it could be set for a year. Essentially, it's intended to measure the cost of borrowing among the world's largest financial institutions, which trade tens of billions of dollars in loans and hundreds of trillions in derivatives.


This past summer, Barclay's, one of Britain's largest banks, was accused of manipulating that rate. The bank reached a settlement of more than $450 million, and other settlements involving large U.S. banks are in the works.

So how does this affect homeowners? The Libor rate is the basis for which many of these banks set their interest rates for various loans. The lawsuit contends that nearly 1 million American homeowners were affected by inflated interest rates that were spiked due to the Libor rate manipulation. Banks reportedly earned hundreds of millions of dollars, if not billions, from the fraud, according to plaintiff attorneys.

On average, this resulted in about $300 extra a year in interest.

This doesn't sound like much, but it's certainly not helping. Plus, the bigger issue is that it shows the kind of tactics you are up against when you're trying to fight a Colorado Springs foreclosure.

Our Colorado Springs foreclosure attorneys are experienced in battling with big banks to have interest rates and principal payments reduced so that you can stay in your home. If you are trying to fight off foreclosure in Colorado, call us today

16 Dec 2015

Whether you're struggling to make mortgage payments or seriously behind, foreclosure is a scary proposition. Not only would this be devastating to your lifestyle, but you may be concerned about its impact on your credit. But isn't every major financial problem going to damage your credit? When it comes to your FICO score, is it much different to go through foreclosure or bankruptcy, complete a short-sale, or request a loan modification from your bank?


While it may seem to be a minor, there is actually a significant difference between these options. Before you decide what to do, find out which activity will have the greatest impact on your credit score.

Your credit score

Every person is assigned a number by a credit scoring company that predicts your likelihood of default on payment obligations. This number is called a FICO score. Each credit reporting agency uses a different set of factors and calculations to get to this score, but most of the information they use is contained within your credit report. For this reason, it is very important to look at your credit report often, just in case there are any errors in reporting.

A FICO is required in 90 percent of all mortgage applications, so it is a number that could impact both your buying power and interest rate.

What influences your FICO score?

Payment history accounts for 35% of this score, which means if you pay your bills late your number will be lower. The more recent the problem, the more it will affect your score.

Outstanding debt accounts for 30 percent. If the amount you owe to a creditor is close to the credit limit, this will negatively impact your credit score. Also, carrying a balance on several accounts will reduce your score because it will seem like you are overextended.

Length of credit history accounts for 15 percent, which means the longer you've had an account open, the better it is for your score. However, new credit (10 percent) shows you've been applying for many new credit limits, which could negatively impact your score.

Finally, the type of credit you have will account for 10 percent. FICO looks for a healthy mix, including both revolving and installment loans, but this will only be important when there is little information available to determine your score.

What happens when you file for bankruptcy?

A bankruptcy filing will show up on your credit report for 10 years, which is three years longer than most other negative information, such as short-sales, foreclosures and loan modifications.

The impact of foreclosure on your credit score

If your credit score is high to begin with, any kind of financial distress will cause a deeper dive than if your score was already low. In fact, borrowers with higher FICO scores could see a drop of 100 or more points. Additionally, it will take longer to get back to an original score if that score is high, but the number of years it takes to rebuild will largely depend on your future payment history and debt load.

If you have excellent payment behavior and your available credit increases, your score will improve more quickly than if you continue to make some late payments and are remain overextended.

Foreclosure, bankruptcy and short-sale often impact borrowers' scores so dramatically because borrowers only resort to these measures when they are seriously delinquent.

What about loan modifications and forbearances?

If your lender reports that you are "paying under a partial agreement," this could have a negative impact on your FICO score, but a lot depends on how your loan modification is reported. Either way, if you are no longer paying your mortgage as originally agreed, it will have some impact on your score.

Bankruptcy is worse for your credit score

Statistics from FICO indicate that bankruptcy is slightly worse for your credit score than foreclosure, forbearance, short-sale, or a loan modification. When comparing foreclosure to short-sale, borrowers who faced foreclosure took longer to rebuild credit than those who completed a short-sale. This can be attributed to the fact that foreclosure is normally triggered by such life events as a job loss, divorce or medical problem, conditions which will likely continue long after the foreclosure.

Keep in mind, however, that these statistics reflect the average situation, and everyone's financial situation is different. ¬¬

Photo Courtesy of Stuart Miles / FreeDigitalPhotos.net

25 Jul 2012

There's no doubt you've heard the phrase, "Bankruptcy should be a last resort."

For people who are in relatively good financial shape, that's probably a good mantra to keep. The whole idea of bankruptcy is not to make it easy for people to avoid debts they can easily pay off.


However, Colorado Springs Chapter 7 bankruptcy attorneys know that for people who are struggling with mountains of debt, waiting to file until you're out of all other options can be dangerous, and the reasons are numerous.

Often, we see clients who have dragged their financial burdens on far longer than was necessary - because they were seeing bankruptcy as the last option.

But the fact is, you save yourself an enormous amount of stress and further financial trouble by exploring it as an option sooner.

By not doing so, first of all, your health is likely to suffer. We have worked with countless clients who had become physically ill as a result of their financial woes. Not only is their stress high, but they don't sleep. Some drink alcohol or overeat or chain smoke. Others suffer from depression. The bottom line is it's not a healthy way to live your life.

Secondly, it's highly possible that you'll end up making some costly, and maybe even irreversible, financial mistakes. This is easy enough to do. For example, some people cash out their retirement in order to pay off their credit cards, only to later realize they'll have to file for bankruptcy anyway. They'll never get that retirement money back, and the credit card debt would have been forgiven.

Thirdly, you may think you don't need to file because you're treading water with your finances. But the fact is, that's all you're doing, and without the relief that bankruptcy provides, you won't get any farther.  That means you won't ever be able to save up enough for retirement or pay off your student loans or have any savings cushion. Again, it's not a healthy way to live your life - and you have options.

 

26 Feb 2014

In some circles, bankruptcy is viewed as a taboo subject. People immediately assume that those who file for personal bankruptcy are simply irresponsible with money or they are trying to escape from paying their bills. In reality, however, this is rarely the case.


Bankruptcy attorneys and other financial experts are quick to point out how many successful people they know who have filed for bankruptcy in the past. The fact is that bankruptcy offers an individual protection from creditors who might otherwise place an enormous burden on them.

Without bankruptcy protection, people who are saddled with debt would be at the mercy of their creditors, who could file judgments, garnish wages and place liens on their property. Bankruptcy allows an individual the opportunity to prove to their creditors that he or she is not capable of meeting expenses, while allowing him or her to make an attempt at restitution.

Why is an attempt at restitution so important?

Bankruptcy filers are often judged harshly by those who assume they are just trying to escape debt. They wrongly believe that one's personal bankruptcy allows them to get off the hook completely. While some of the filer's debts may be discharged in Chapter 7 and Chapter 13 bankruptcy, the court still requires them to make an attempt at restitution. In a Chapter 7 bankruptcy, the filer must forfeit any assets that are not protected, or exempt, by state bankruptcy laws. The proceeds from the sale of these assets is then used to pay back creditors. In Chapter 13 bankruptcy, filers are expected to create a repayment plan with the court, which essentially settles their debts over a period of 3 to 5 years.

While restitution may not be complete, it is an important aspect to bankruptcy protection because it requires the filer to bear some responsibility instead of walking away debt-free. Personal bankruptcy is certainly not something one should aspire to, but for most people it is a much better alternative than hiding from creditors. It offers protection from creditors and it offers a means to a fresh start. It is wise for those seeking protection to work directly with a Colorado Springs bankruptcy attorney for advice on starting the process.

How will bankruptcy affect your credit score?

Even those who are willing to deal with the emotional repercussions of bankruptcy might not be so thrilled about the damage it will do to their credit score. In fact, other than emotional stress, credit score is what filers worry about the most. It is true that a bankruptcy filing can show up on your credit score for up to ten years, so If you find that bankruptcy protection is the best option for your financial future you will want to start repairing your credit score as soon as possible.

The following are a few considerations to help Colorado residents with repairing their credit score.

  • It is not uncommon for credit reports to be inaccurate, so bankruptcy filers should first get copies of their "pre-bankruptcy" credit reports. This helps to ensure that any closed accounts are listed as such, and the debts listed actually belong on the report.
  • Each of the three largest credit bureaus is required to provide individuals with one free credit report per year. Individuals are encouraged to take advantage of this, so if something is amiss it can be disputed and changed right away.
  • While one might worry about getting another credit card immediately after bankruptcy, it is probably a good idea to do so. A secured credit card is backed up by a deposit put down by the cardholder, meaning the line of credit is the same amount as the deposit. Because of this, most people are approved for this type of card. It is just one way to that people rebuild their credit score.
  • Pay your bills on time. This may seem pretty obvious, but it important to carry it out. It might mean developing new habits, cutting back on extras and sticking to a payment schedule, but it will gradually rebuild your credit score. Remember, 35% of your credit score is attributable to payment history.

Finally, if you are considering bankruptcy in Colorado, consult with an experienced Colorado Springs bankruptcy lawyer. Be prepared to ask questions and learn about all of your options before making a decision.

 

18 Feb 2017

In this financially turbulent time, many Americans have found themselves facing foreclosure. It’s not an altogether strange story… Being able to make a mortgage payment is getting harder and harder as more people lose their jobs.

It only takes getting behind on one payment, and then before you know it, you can be paying huge amounts of interest. Creditors want to you owe them as much money as possible, which is why they entice you into vehicles, property, or other goods that would normally be beyond your means.


It may have seemed like a miracle that a credit company was willing to loan you the money to buy a great new house, but there was nothing miraculous about it. For them, it’s a win-win proposition. If you pay the money back, then it’s no problem for them. But if you fail to pay on time, they’ll just keep taking and taking until you have nothing left.

That’s why filing for bankruptcy is such an important part of your rights as an American. If you’ve bought a house beyond your means, or if you’ve suffered a bad turn of luck, you may be facing foreclosure. If your house is foreclosed, you may have nowhere else to go, but the credit companies don’t care. That’s not their problem.

If you file for bankruptcy any time before the foreclosure sale date, your property can be protected under bankruptcy law, and in most cases, you can even just keep the house!

03 Feb 2018

If you owe money, and most Americans do, you’re probably being harassed by calls from creditors. They call at odd hours of the day, hoping to trick you into answering the phone, and make it so that whenever your phone rings, you have a moment of dread when you see a number you don’t recognize.

That’s really only the start of the problems, too. Creditors can repossess your property, garnish your wages, and more.

There’s more to consider than just physical harassment, though. The stress of constantly living in fear of creditors can have emotional damages, too: anxiety, depression, and plenty of others. It can get in the way of you working to your full potential, and even take the joy out of life.


That’s where bankruptcy comes in.

When bankruptcy is filed, an automatic stay is issued to creditors, which means that they can no longer attempt to collect from you. Practically overnight, the harassing phone calls will stop, and there’s a good chance that when the bankruptcy is over, they won’t start again.

Filing for bankruptcy offers you protection from creditors through the duration of the process. That means no calls, no repossessions, no garnishments, or anything.

Any good bankruptcy attorney will make sure that even when the process ends and the stay expires, the creditors will leave you alone. That’s because it’s their job to create a plan that works for you, so that you can pay back any debts that survive the bankruptcy process.

If you file properly and don’t overspend again in the future, bankruptcy means never getting another collections call.

29 Jul 2013

Any decent financial advisor will be careful to warn clients against the perils of taking on too much debt. Not only will a heavy debt load damage your credit score, it will put you at a much higher risk for bankruptcy, especially if you suffer a job loss.


Bankruptcy presents some major challenges for individuals and families, who may need to give up some major assets in exchange for a "clean slate," so one would expect them to do everything possible to avoid a second bankruptcy. But old habits die hard, and without good financial counseling a person remains vulnerable through poor decision-making.

After interviewing several financial consultants and bankruptcy attorneys, it is obvious that something needs to change. One bankruptcy should be enough for anyone's lifetime, so be sure to make these lifestyle changes immediately.

Four changes to make after bankruptcy:

Live within your means. This statement has different meanings to different people, but in an effort to keep it simple; "living within your means" is spending only the money you have coming in currently. This means no purchases on items you cannot afford, and paying the full balance of any credit card purchases every month.

Begin rebuilding credit scores only by purchasing what you know you can afford. While it may be true that buying a car, getting credit cards or renting an apartment will speed your post-bankruptcy rebound, it can be dangerous to take on too many obligations too quickly. Be smart about the method you use to rebuild your credit score, and keep your monthly payments affordable.

Build an emergency fund. This will help in many ways, but first and foremost it will keep you from incurring unnecessary debt. Examples include unexpected medical bills, job loss, or replacing major appliances. When the cash is in the bank, there is no need to pull out the credit card.

Create an honest budget. Start by knowing exactly how much you bring home each week or month. Be sure all your expenses and bills can be paid through this income. Only then will you be able to avoid racking up more debt and falling into a dangerous financial situation.

Other important changes to make right away:

  • Make a very specific monthly budget that includes all of your expenses as precisely as possible, making sure to account for everything that is coming in and out of the household. For subjective expenses, such as food, be realistic and don't underestimate spending.
  • Don't compare yourself to others. Looks can be deceiving; it's hard to figure out people's financial situations just by looking at them. People will often spend needlessly and buy a bunch of luxury items only to find they don't have any money left over at the end of the month.
  • Avoid credit cards unless you are using them to rebuild creditworthiness. If you must make a purchase on a credit card, paying it in full should be counted within your monthly budget.
  • Practice restraint. If you fell into bankruptcy because of careless spending, realize that you are going to have to constantly resist the urge to buy things. Don't make large purchases you can't afford.
  • Get organized. Have your budget and documents neatly filed away and easily accessible. This can help you adjust your budget accordingly.

The best way to avoid a second bankruptcy is to properly deal with the habits that got you into bankruptcy in the first place. You need to train yourself to recognize your own behaviors and make an immediate plan to combat them. However, if you still find yourself in a desperate financial situation there are things that can be done right away. A Colorado Springs bankruptcy attorney can help get you back on track.

 

27 Nov 2016

It should come as no surprise to learn that singles are less affluent compared to other family structures. According to recent research by the MetLife Mature Market Institute, singles reported the lowest income levels (averaging $32,000), the lowest asset levels ($110,000) and the lowest rates of homeownership (43 percent). A surprisingly low 17 percent said they were on track to reach their retirement savings goals and 20 percent hadn't even started saving. The biggest worries for singles were affording their living expenses and maintaining their standard of living in retirement.



Most of the financial stress originates from relying on one income instead of two. This makes singles more vulnerable than couples who enjoy double earnings. Additionally, singles tend to earn less money and have lower education levels than their married peers, whether they have children or not. The study also reported that singles between the ages of 45 and 80 were less likely to have taken steps to pay off debt than married couples of the same age.

Changing demographics raise economic concerns

The MetLife study comes at a time when the country's demographics have already shifted in favor of single-person households. In fact, the U.S Census Bureau reported that single-earner households had grown to 31 million as of 2010, a 15 percent increase over the previous ten years. Meanwhile, traditional husband-wife households are on the decline, making up less than half of all households in America. If singles continue to be financially insecure, this trend could prove to be troubling for the economy.

Of course there are always individuals that buck the trends and find a way to make single life sound better. Eleanore Wells, a singles expert and author of "The Spinsterlicious Life," said it is far easier for her to save for retirement, because her money is her own and she can spend it how she wants to. Wells isn't the only one who feels this way. Many divorcees say they are better off single than they were as a couple, especially if their partner was less financially responsible.

Are singles more likely to declare bankruptcy?

Single people face more financial stresses than couples, but bankruptcy is usually caused by major economic stresses, such as a lost home, lower wages or unemployment. Any significant financial strain is likely to result in bankruptcy, but it's even harder to dig out of debt when you're facing it alone.

Singles are also less likely to seek the advice of a financial counselor, and less likely to save for retirement. The MetLife study found that couples were far more likely than their single counterparts to pay off debt or have met with a professional to help them map out their finances.

All of this stress on singles ultimately results in a higher rate of Colorado bankruptcy filings for single-headed households. But there is a bright side of bankruptcy; it can give you a fresh start and a clean financial slate. A successful bankruptcy is unrivaled in terms of the freedom it offers. One of the benefits of being single during the bankruptcy process is that you won't have to worry about jointly-held debts, as is often the concern with couples or recently-separated individuals.

A consultation with a Colorado Springs bankruptcy attorney will help you determine if bankruptcy is the right solution for your debt problems.  Many people try debt counseling first, or a debt consolidation loan.  An attorney specializing in bankruptcy can advise you on the best course of action. 

29 Nov 2013

As we close in on the holiday season, it's easy to get in over your head with credit card spending. According to Yahoo! Finance ("Top 5 Reasons Why People Go Bankrupt"), poor use of credit is the third most likely cause of bankruptcy.


When credit comes easy, some people just cannot control their spending. Before they know it, credit card bills, installment loans, car payments and "same as cash" plans become a burden too heavy to carry. If the borrower is unable to make minimum monthly payments on this debt, or secure a debt consolidation loan, bankruptcy becomes the inevitable alternative.

Statistics show that even when some borrowers consolidate credit card debt, this only delays the inevitable bankruptcy filing. While a home equity loan might be worth considering, it's never smart to overuse this option. If this payment becomes unmanageable as well, borrowers may find themselves facing foreclosure.

The lure of overindulgence

Just like we eat too much between Thanksgiving and New Year's Day, Americans also tend to spend too much. It's no surprise that every January 1st we all "resolve" to put an end to these vices, but it's much easier to eat healthier than it is to break our spending habits. Even the most financially savvy adults tend to rack up large credit card bills during the holiday season.

A little self-discipline

Although it's tempting to spend more than you can afford, a disciplined approach can help you maintain financial sanity.

Why limit holiday credit card purchases? Simply put, credit cards give the illusion that you can buy more. Even if you shop for bargains, gifts bought on credit cards end up costing more money. By the time you add in the months of finance charges, you will ultimately pay a lot more for these gifts than if you had paid cash. High credit card balances affect your credit score too, especially if you are spending more than 30 percent of your credit limit.

8 Tips for Avoiding Holiday Debt

Stick to these spending principles and you will keep your holiday spending to a minimum. Here's how to put them into practice.

  1. Save up first – Paying cash instead of using a credit card will help you avoid holiday debt all together. If it's too late to start saving for this year, start it in January. Put aside a little something each pay period and use that to finance your holiday purchases. Most people find that they spend more wisely when they are paying in cash.
  2. Set up a budget before you start – The savviest holiday shoppers plan purchases in advance. Don't just go out to the stores, armed with coupons, and start shopping. Decide first what you will buy for each person on your list, and how much you are willing to spend. No matter how tempting it is, use discipline and don't go over your budget.
  3. Make a list and check it twice – We've all heard that popular song about Santa making his list, so why not do the same? You may be known among family and friends for your generosity, but that doesn't mean you need to spend more than anyone else. Why not spend more time being creative about your gift-giving. Consider handmade gift baskets, fancier wrappings, home-baked treats, or unique and meaningful gifts? In the end, these gifts will be more memorable than that pricey designer sweater.
  4. Use layaway – The ease of personal credit caused layaway to disappear for a few years, but it's making a comeback. Many larger retailers, such as Walmart and Kmart, are bringing it back into fashion. When you start shopping early enough, it's possible to pay a little bit toward your holiday purchases each month, thereby paying for them completely before the holidays.
  5. Don't shop for yourself – This is probably one of the hardest things to do during the holidays. With all those "doorbuster" specials on Black Friday and all the time spent in stores, it's easy to double your holiday purchases by shopping for yourself. Save your personal purchases for the post-holiday season. No matter how great the prices are now, they will be even more enticing on December 26th, and by that time you may have received what you wanted from others.
  6. Shop online first – Shopping online is a more "directed" and "considered" activity, making it harder to buy on impulse. By browsing a store's inventory online, you can quickly decide what you really want to buy before you leave the house.
  7. Leave your credit cards at home – When credit cards are removed from your wallet, you will be forced to use the money you already have. It is much easier to stick with a budget when you are shopping with your available cash. If you must use a credit card for purchases, pick one card and set a realistic spending limit for your shopping trip.
  8. Only buy what you can afford to pay – Here is a sobering way to view credit card purchases: You are borrowing from your future income. The only way to get ahead financially is to live in the present moment with your purchases. This means if you cannot afford to pay your balance off next month, you are mortgaging your future. Think about it. Do you want to pay for this momentary until next holiday season?

These tips can prevent you from falling victim to credit card debt, one of the leading causes of bankruptcy.  For more information on personal debt managment and bankruptcy, consult with a Colorado Springs bankruptcy lawyer. 

 

20 Jun 2012

 

It may come as a surprise to some people to hear that a Colorado Springs bankruptcy can actually be looked back upon as being a positive thing.

As "Real Housewife" Teresa Giudice explained recently on the show, the bankruptcy "made us stronger."

Our Colorado Springs bankruptcy lawyers know that many of our clients express that the whole process is freeing. That's not to say it is without its challenges or that it's easy. In fact, this is why it's critical to have an experienced attorney by your side, helping you sort through the details. It can be a difficult choice to make, but once it's all over, the reward is a fresh start.


Guidice and her husband, Joe, who are from New Jersey, filed for a joint petition, which means their filings have to be separately discharged.

There has been a great deal of back-and-forth between the Guidices, the lawyers and the bankruptcy trustees. In fact, Joe Guidice actually abandoned his effort to have his debts forgiven through the process after invoking his Fifth Amendment right to avoid self-incrimination. The court had claimed he was hiding assets and income, including a pizza restaurant, a boat and expensive gifts and trips - something that was reportedly learned after the trustee viewed episodes of the show that were filmed around the time the bankruptcy was filed.

Generally, if a bankruptcy trustee believes that someone is lying to the court, they will make a criminal referral to federal prosecutors. This is not a place you want to be. After consulting with a criminal defense lawyer, Joe reportedly agreed to withdraw his bankruptcy petition. That means he's still on the hook for his debts. That means that he would still be responsible for payment of the debts they hold jointly, even if Teresa is absolved of liability.

Teresa is nearing the end of her pursuit to have  her debts discharged through a Chapter 7 bankruptcy.

In a recent episode, she reportedly said she was beginning to see the light at the end of the tunnel.

24 Sep 2013

We've all heard the statistics about job loss and credit card spending, and many believe these are the main roads to bankruptcy. During the recession, many families faced extended unemployment, which led to foreclosure and enormous debt loads. Perhaps this explains why unemployment is often touted as an obvious bankruptcy culprit. Many people are surprised to learn that the most common cause of bankruptcy in America is not unemployment or credit card spending; it is medical debt. When an unexpected emergency comes up and a family is uninsured, medical debt is enough to wipe out their assets immediately. A recent report from the American Journal of Medicine said more than 60% of bankruptcy filings were directly resulting from unforeseen medical bills. Not only are these bills expensive; they also involve long-term costs that can push a family's finances over the cliff.


Is all medical debt incurred by the uninsured?

Surprisingly, many of the recent bankruptcy filings were from people who had some form of insurance, but not enough. As if the hospital bills are not enough, serious illnesses often require missed time at work for the family breadwinners, which can be debilitating all by itself. Many of the more affordable insurance policies have high co-payments, exclusions and deductibles, plus other coverage loopholes.

If you are struggling under the weight of overwhelming hospital charges, doctor bills or any other kind of medical debt, bankruptcy may be the only reasonable solution. Depending on the type of bankruptcy you choose, your bills could be eliminated entirely or significantly reduced. Of course, bankruptcy is not without its challenges. It can have a long-lasting impact on your creditworthiness and it could complicate many areas of your financial life.

Hiring a bankruptcy lawyer

There are few legal petitions that require the use of an attorney; so many bankruptcy filers feel confident representing themselves. While this may seem like the more practical choice, it is not recommended for bankruptcy. Bankruptcy needs to be handled by someone with experience handling Chapter 7 and Chapter 13 petitions. An experienced attorney will be able to show you the best way forward and protect your interests in bankruptcy court. When a medically-related bankruptcy is complete, you may find that your medical bills are either eliminated or significantly reduced.

Chapter 7 or Chapter 13 bankruptcy

Filing for Chapter 7 bankruptcy usually wipes out all unsecured debt, which includes medical debt. However, it is important to note that once you have filed for bankruptcy you may not do so again for another six years. This means that should you get sick during that time period you may be more vulnerable to legal issues and liable to pay all related bills. Most bankruptcy lawyers will recommend a post-bankruptcy strategy that includes maintaining medical insurance with full coverage.

Filing for Chapter 13 bankruptcy is another option when you are "under water" with medical bills. This type of filing will consolidated all of your debts into a manageable repayment plan. Similar to business reorganization, this option allows you to repay the bills over a 3 to 5 year time frame. While it may not be as forgiving as the Chapter 7 model, Chapter 13 allows you to hold onto most of your property. In many cases, this option is only viable for individuals with a stable discretionary income. The key benefit is the extra time it allows individuals to overcome their financial burdens.

As hospitals and providers raise their prices each year, medical bills are becoming a major issue for thousands of households. The high cost of health care continues to be the most stressful financial burden for United States citizens. If you find yourself in a predicament with excessive medical debt, a Colorado Springs bankruptcy attorney will be able to help you eliminate or reduce the amount of your bills. Contact an experienced bankruptcy lawyer for more information.

Photo Courtesy of CoolDesign / FreeDigitalPhotos.net

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