Although bankruptcy can help you overcome debt, it will negatively impact your credit score, making it more challenging to obtain credit cards, loans, and other financial products. Here are some expert tips for rebuilding your credit and finding the best credit cards after bankruptcy.

Rebuilding Your Credit After Bankruptcy

Your bankruptcy will remain on your credit score for up to a decade. Those who declare Chapter 7 bankruptcy can expect it to remain on their report for 10 years after their filing date, and Chapter 13 will remain for seven years from your filing date.

Bankruptcies can impact your credit, but you can take steps today to rebuild your creditworthiness. It may take a bit of time, but with responsible financial management, such as paying bills on time, managing credit card balances, and building a savings account, you can begin to improve your credit score a lot in a short time following your bankruptcy case.

Find Bankruptcy-Friendly Credit Cards

One of the best tools at your disposal for rebuilding your credit is obtaining a credit card and using it responsibly. Typically, cards are available to people who have gone through bankruptcy. You may have to start small, with a secured card. But it should not take long for those who went through bankruptcy to qualify for a conventional, unsecured credit card. No matter what kind of card you end up with, make sure that they report to the three major credit reporting agencies so that you get the benefit of the work you are doing to improve your credit.

An unsecured credit card does not require collateral to obtain approval. Unlike secured credit cards, which require a security deposit that serves as collateral, unsecured credit cards are approved based on your creditworthiness, income, and other factors. With an unsecured credit card, the lender assumes the risk of lending money to the borrower without any collateral in case the borrower defaults on their payments.

If you’re looking to find unsecured credit cards that accept bankruptcy, initially you will only qualify for cards with high interest rates. According to Wallethub — a website that specializes in helping people find the best financial products — one of the best unsecured credit cards for those with bad credit is the Credit One Bank Platinum Visa for Rebuilding Credit. Unfortunately, it does have steep annual fees and a less-than-ideal APR: Its APR is 28.74% variable, and it comes with a $75 annual fee for the first year and $99 for each subsequent year.

Rather than getting an unsecured credit card, you may want to consider getting secured credit cards that accept bankruptcy, as these cards typically offer better terms and a lower APR. Deposits for a secured credit card typically range from $200 to $300, but with a higher deposit, you can expect a higher credit limit. According to Investopedia — an online educational resource for finance and investing — some of the best secured credit cards include Capital One Platinum Secured, Discover it Secured, and Self Visa.

Tips for Rebuilding Your Credit with Your Credit Card

Once you obtain your secured or unsecured credit card, you need to use it responsibly to build your score. Consider taking the following actions:

• Only make purchases you can afford. Consider creating a budget to ensure you don’t overspend.

• Pay your bills on time and in full. 

• Keep your credit utilization rate below 30% as it shows lenders that you can manage your credit responsibly.

• Avoid opening too many credit card accounts. While having multiple credit cards can be beneficial for your credit score, it’s important to avoid opening too many accounts at once, as this can make you appear risky to lenders.

Becoming an Authorized User

Another option you have for rebuilding your credit is becoming an authorized user on a friend or family member’s account. As an authorized user, you are not responsible for paying the credit card bill, but you are allowed to use the card for purchases up to a certain limit set by the account holder. The credit card issuer will report the authorized user’s activity to the credit bureaus, which can improve your credit score.

However, it’s important to note that becoming an authorized user on someone else’s credit card account carries some risks. If the account holder does not make payments on time, it could negatively impact your credit score. Additionally, you should only become an authorized user for an account holder who you trust because they’ll have access to your personal information, potentially leaving you vulnerable to identity theft or fraud. For that reason, only become an authorized user for someone who’s financially responsible and trustworthy.

Contact a Bankruptcy Attorney

Finding the right credit cards after bankruptcy is a great start for rebuilding your credit, but you may need additional assistance with your finances. If you’re considering bankruptcy or recently declared in or around Indianapolis, you can contact the Sawin & Shea bankruptcy team for support.

With over 65 years of combined legal experience, you can count on us to assist you through the bankruptcy process, and we’ll work with you to get your finances back on track and rebuild your credit. Give us a call today at 317-759-1483, or you can request to schedule a FREE consultation with one of our attorneys here.

The post Rebuilding Your Finances: Credit Cards After Bankruptcy | Credit Tips appeared first on Indianapolis Bankruptcy Attorneys of Sawin & Shea.

You thought the phone calls were over – and they should be. That’s why it can be especially disheartening if creditors keep calling. Who knows how to get debt collectors to stop calling after bankruptcy? How long after filing for bankruptcy do collectors keep calling? Why would such a thing even happen? There are three reasons:

1. Some creditors simply haven’t yet received the message that you have filed for bankruptcy. Possibly the information hasn’t yet been processed and had the chance to filter through their system. This can be the case with small enterprises or with multi-level corporations.
2. Some creditors are actively trying to take advantage of you. They may be fully aware that an automatic stay is in place, but are hoping that you don’t understand your rights and will be scared into paying something.
3. You may be hearing from creditors who will not be affected by your bankruptcy. Some debts are not dischargeable:
   
   • Student loans
   • Some taxes
   • Overdue child and spousal support
   • Debts arising from willful and reckless acts, embezzlement, fraud, or larceny
   • Any debts you did not list when you filed for bankruptcy (unscheduled debts) unless the creditor learns of your bankruptcy case.

How to stop debt collector calls after filing for bankruptcy:

1. Answer the calls. You have already taken a positive step and have no need to fear phone calls from people who shouldn’t be contacting you; they are in the wrong.
2. Get the name (or employee number) of the person you are speaking to and write down all details of the call, including the date, time, company involved, and what was said. Keep all documentation, including voice messages.
3. Inform the caller that you have filed for bankruptcy and tell them to stop contacting you. Give the caller your case number.
4. If calls (or letters) continue, contact your bankruptcy attorney. Under the FDCPA (Fair Debt Collection Practices Act), third-party debt collection agents are not allowed to contact you asking for payment once you have filed for bankruptcy. It is illegal. The bankruptcy attorneys at Sawin & Shea, LLC can answer your questions and enforce your rights. At the very least, we can make sure that all information has been updated in the company’s system, and if necessary, we can pursue legal action against those who continue to illegally harass you so that you can receive compensation for your mental and emotional stress.

What if my debt cannot be discharged?

If you are being contacted about debt that is not dischargeable, you still have rights under the FDCPA. Debt collectors are not allowed to do the following:

• Call repeatedly
• Call before 8:00 a.m. or after 9:00 p.m.
• Call without identifying themselves
• Disclose your information to third parties
• Use abusive or offensive language
• Contact you after you have provided written notification that you do not want to be contacted
• Claim to be affiliated with any governmental organization if they are not
• Misrepresent the character, amount, or legal status of a debt (in other words: lie)
• Threaten to take action which is not actually intended to be taken
• Threaten to communicate or actually communicate false credit information

What if my debts have been discharged and the creditor calls keep coming?

After your bankruptcy, your creditors will receive notice of your bankruptcy discharge order. It’s not common, but sometimes debt collectors continue to demand payments from people who have had their debts discharged. If this happens to you, follow the steps outlined above.

Don’t hesitate to contact Sawin & Shea, LLC. We can inform the bankruptcy courts of what is happening, and the courts may levy fines or penalties. If necessary, we can begin legal proceedings against the debt collector who is continuing to harass you. 

A qualified legal professional knows how to get debt collectors to stop calling after bankruptcy and can help you navigate the stress of debt collectors who may or may not be obeying the law. The Indiana bankruptcy attorneys at Sawin & Shea, LLCpursue collection agencies who violate the FDCPA law, during and after your bankruptcy case. If you are struggling with creditor calls, contact us at 317-759-1483 or Send an Email for a Free Consultation. We are ready to help.

The post How to Get Debt Collectors to Stop Calling after Bankruptcy appeared first on Indianapolis Bankruptcy Attorneys of Sawin & Shea.

Unfortunately, rising inflation impacts almost everything we purchase, such as cars, homes, clothes, food, and utilities. Increased inflation makes it all the more challenging to overcome existing debts, and the rising prices increase the likelihood of more Americans going into debt.

In response to these historic inflation rates, the Fed has raised the Prime Interest Rate to 7.75%. Raising interest rates typically slows down the economy as well as the rate of inflation, but these rates have a direct impact on people’s ability to obtain new loans.

Here’s what you need to know about getting a new loan and interest rate after bankruptcy.

Inflation and Existing Debts

The rising interest rates and inflation will severely impact those who have loans with variable interest rates. A variable interest rate means that the rate of interest is subject to market changes, such as inflated interest rates. When the Federal Reserve raises interest rates, financial institutions increase their rates accordingly, so those with variable interest rate loans may need to pay more interest than when they initially borrowed the money.

For example, if you have a variable interest rate on your home’s mortgage, that interest rate may increase to reflect market conditions.

When you have a fixed interest rate, your interest remains the same over the duration of the loan.

How Rising Interest Rates Impact New Loans

In current market conditions, you can expect new loans to feature higher interest rates. Sadly, numerous people struggle to obtain reasonable loans when interest rates are this high. Higher interest rates also mean that it’ll take longer to pay off a loan’s principal amount, and those needing a car loan, mortgage, or personal loan may find themselves paying an exorbitant amount of money in interest alone.

Why File for Bankruptcy with Rising Interest Rates

If you’re struggling with overwhelming debts made worse by increased interest rates, you may want to consider filing for Chapter 13 bankruptcy. Chapter 13 bankruptcy organizes your debts into a repayment plan that lasts three to five years. This simplifies your debts and structures them into a monthly plan with a fixed interest rate.

In a Chapter 13 Plan you may also be able to obtain an in-plan fixed rate that’s lower than your loan’s original rate. For example, you could start a repayment plan with a 9% interest rate on a car loan while your vehicle’s original loan had an 18% interest rate. Other types of debts, like credit cards and medical bills are forces to take what the law says you are required to pay under an income-based test and an asset based test. Usually, this is cents on the dollar.

Filing for Chapter 13 bankruptcy is also critically important if you’re at risk of home foreclosure. As long as you keep up with your repayment plan, you will be able to keep your home. Chapter 13 bankruptcy can even stop a home foreclosure up until the sheriff’s sale. Once you file Chapter 13, part of your repayment plan will go toward catching up on your housing payments.

People also frequently use Chapter 13 bankruptcy to overcome second and third mortgages, which may have cumbersome interest rates.

Tips for Getting a Desirable Interest Rate After Bankruptcy

Although Chapter 13 bankruptcy is a great option for those struggling with debts and high-interest rates, filing will negatively impact your credit, and this can make it more difficult to find desirable loans. For example, a new auto interest rate after bankruptcy may be higher than if you hadn’t filed, and your bankruptcy will also make it more challenging for you to qualify for a mortgage with a reasonable interest rate.

That said, Chapter 13 will only remain on your credit report for seven years, and there are ways in which you can increase your likelihood of finding favorable interest rates. You can improve your credit and ability to qualify for better loans by:

• Avoiding further debt: It’s critical to avoid accumulating more debts after going through Chapter 13 bankruptcy. Your debt-to-income rate directly impacts your ability to obtain favorable loans, so incurring more debt will prevent you from qualifying for loans with reasonable interest rates.

• Check Your Credit Score After Discharging Debt: Your Chapter 13 filing will discharge certain types of debt. You need to ensure that these debts are no longer listed on your credit score. If they’re still listed, the items will continue negatively impacting your credit.

• Make On-Time Monthly Payments: You need good financial health to obtain lower interest rates. Making consistent, on-time payments shows lenders that you’re a reliable borrower. Eventually, you’ll have an easier time obtaining better interest rates.

• Rebuild Your Credit Score: Rebuilding your credit takes time and consistency, and once you have a better score, you’ll have an easier time finding reasonable interest rates. You can build your credit back up by using a secured credit card, or you can become an authorized user on another person’s credit card. You can also build credit through on-time rent and utility payments.

Contact a Chapter 13 Bankruptcy Attorney

If you need assistance in filing for bankruptcy and becoming debt-free, contact a bankruptcy attorney today! A seasoned bankruptcy lawyer can help you navigate the complexities of filing so that you make the best financial decisions moving forward. They can also help you against creditor harassment.

For experienced Chapter 13 lawyers in Indianapolis, contact the Sawin & Shea legal team. Schedule a FREE case consultation today by contacting us online here or by calling 317-759-1483.

The post How Rising Interest Rates Can Affect Your Interest Rate After Bankruptcy appeared first on Indianapolis Bankruptcy Attorneys of Sawin & Shea.

What is Chapter 7 Bankruptcy?

Chapter 7 bankruptcy is a form of personal bankruptcy that liquidates filers’ assets to discharge qualifying unsecured debts. Unsecured debts are not backed by collateral, such as car payments and home mortgages. Although the idea of liquidating your assets may sound stressful and undesirable, most of those who declare Chapter 7 can retain all of their possessions after filing.

The debts that you’ll be able to discharge with Chapter 7 bankruptcy include:

• Medical debts
• Credit card debts
• Majority of auto accident claims
• Personal loans
• Business debts
• Past-due rent debts
• Past-due utility debts
• Majority of attorney fees
• Majority of civil court judgments
• Old tax penalties and some unpaid taxes
• Repossession deficiency charges
• Collection debts
• Benefit overpayments

Although those who declare Chapter 7 can discharge many unsecured debts, they cannot discharge:

• Some types of taxes
• Debts owed to a child or former spouse that occurred because of a divorce or legal separation, including alimony and child support
• Government agency fines and penalties
• Most student loans
• Attorney fees in child custody cases
• Court penalties and fines
• Personal injury damages owed to a victim because the plaintiff drove while intoxicated
• Money owed to certain types of cooperative housing organizations
• Money owed for some kinds of tax-advantaged retirement plans

Who Can Declare Chapter 7 Bankruptcy?

Whether or not you qualify for Chapter 7 bankruptcy will depend on your income. You determine your eligibility by considering your monthly income relative to the median income within your state. You calculate your monthly income by averaging your earnings in the last six months.

If you’re an individual considering filing, you’ll compare your monthly income to other individuals. But if you have a family, you’ll compare your income to other families of the same size. You qualify for Chapter 7 bankruptcy if your monthly average is equal to or less than the median in your state.

If your average monthly income is more than your state’s median, you’ll need to pass what’s known as a “means test.” This test determines whether you have disposable income at the end of each month to pay off your unsecured debts over five years. Suppose you have enough money left over each month after necessary expenses and debt payments. In that case, the bankruptcy court will recommend that you declare Chapter 13 bankruptcy, which consolidates your debts into a three-to-five-year repayment plan.

There are also other disqualifying factors for Chapter 7 bankruptcy, including:

• You’ve already received a Chapter 7 bankruptcy discharge in the last eight years
• You’ve declared Chapter 13 bankruptcy in the previous six years

What Do You Need to File Chapter 7 Bankruptcy?

The first step you need to take to declare Chapter 7 bankruptcy is to schedule a consultation with an experienced bankruptcy attorney. They will work with you to gather your financial records, including all of your debts, expenses, assets, and income streams. You’ll also need to supply the bankruptcy court with a list of creditors, an income statement, and copies of your tax records.

After gathering all necessary documents, you must undergo an approved credit counseling session within 180 days of filing. You’ll also need to supply the court with a certificate indicating  that you’ve undergone credit counseling.

Finally, you’ll file a petition for Chapter 7 bankruptcy. You’re not required to have legal counsel, but representing yourself through the bankruptcy process can lead to costly, irreversible mistakes. It’s recommended that you hire a Chapter 7 bankruptcy attorney who can represent you and guide you through the process before filing.

What Happens After You File Chapter 7 Bankruptcy?

Filing Chapter 7 bankruptcy provides you with an automatic stay that prohibits creditors from being able to take any action to collect a debt against you, such as repossessions, wage garnishment, and legal action. Additionally, your creditors will not be allowed to contact you.

After you file, the bankruptcy court will appoint a trustee who’s in charge of reviewing your case and for non-protected assets. Your attorney will explain what you are allowed to keep through the Chapter 7 process and what might be at risk. Once again, most of those filing for Chapter 7 bankruptcy do not lose their any of their possessions. Additionally, your bankruptcy trustee will hold what is called a meeting of creditors, and you are required to attend this meeting. Creditors are allowed to attend, but they rarely do.

The Chapter 7 bankruptcy process usually takes three to four months; once you complete the process, you will discharge your qualifying debts.

Filing Bankruptcy Chapter 7 in Indiana? Contact Sawin & Shea Bankruptcy Attorneys

If you plan on filing for Chapter 7 bankruptcy, you need experienced Indiana bankruptcy attorneys who can represent you and ensure you’re on the right track to becoming debt free. For experienced bankruptcy support you can count on, contact the attorneys at Sawin & Shea, LLC at 317-759-1483, or contact us online here for a FREE case consultation.

The post Who Can Declare Chapter 7 Bankruptcy? appeared first on Indianapolis Bankruptcy Attorneys of Sawin & Shea.

Whether it’s a student loan, a small business loan, or even a car loan, many find themselves in a situation where keeping up with payments is difficult due to circumstances outside of their control. Most commonly individuals need help paying their mortgages. When you find yourself in a position where you are struggling to keep up with your loan, a mortgage modification may be the perfect solution. And in this case, contacting a mortgage modification lawyer will guarantee you find the best option for your unique situation.

What Is a Mortgage Loan Modification?

A mortgage loan modification is when the structure of a loan is modified to allow the borrower to successfully repay the loan. This is not available only to individuals who have completely defaulted on a loan. If you find yourself getting behind, speaking with a mortgage modification lawyer can put you in a position to get caught up before it’s too late.

A loan modification on a mortgage can occur in several ways, including:

1. Lowering interest rates
2. Reducing the principal 
3. Converting to a fixed-rate mortgage
4. Extending the term of the mortgage
5. Postponing payments

Questions to Ask Your Mortgage Modification Lawyer

Before hiring a mortgage modification lawyer, here are some important questions to ask to make sure you find the best fit for you and your situation.

1. Have you ever worked with my mortgage company?

• Some mortgage companies are more difficult to negotiate with than others. It’s important to know if your mortgage modification lawyer has successfully modified a loan from your lender.

2. How much will this cost?

• You are seeking help from an attorney because you are in a challenging financial position. You don’t want to get into a tight spot after obtaining counsel because you didn’t ask upfront how much the process would cost. Getting answers to your mortgage modification questions is crucial for your financial stability, but expertise does come at a cost.

3. How long is the mortgage loan modification process?

• Answering this question is important because mortgage lenders may move quickly toward foreclosure if you get behind on your mortgage commitment. This is another reason why hiring a mortgage modification lawyer is so important because they are aware of the timeline of the proceedings and can also negotiate so that you have more time to change your loan specifics.

4. Is bankruptcy a better option?

• At first, it may seem that mortgage modification is a better choice than bankruptcy, but this is not always the case. If you are still unable to keep up with your mortgage payments after it is modified, you are only prolonging the inevitable bankruptcy. Discuss how the two options will affect your credit score and future buying power. Asking your attorney these questions will help you decide what your best option will be to protect your assets and your future.

5. Will you use ‘violations of law’ as a negotiation tactic?

• As is true with many types of negotiations, there is an “easy way” and there is a “hard way.” Typically your loan can be successfully modified using traditional tactics. But occasionally the mortgage lender is unwilling to work with you to find a solution. In this case, your attorney will carefully go through your loan details looking for violations of the law and unjust tactics in the original contract. If any violations are found, your mortgage agreement could be declared null and void. Whether or not your situation could come to this, knowing that your attorney is willing to take these steps assures you that they will do whatever it takes to reach the best possible outcome for you.

Mortgage Modification Experts at Sawin & Shea

If you need to renegotiate the terms of your mortgage, contact the attorneys at Sawin & Shea, LLC. We can answer all of your mortgage modification questions and protect you and your assets from creditors. We’ve helped numerous Indiana residents modify their home loans, and we’re ready to help you. 

Contact us today at 317-759-1483, or you can schedule a FREE consultation with an attorney here. 

The post Questions to Ask Your Mortgage Modification Lawyer appeared first on Indianapolis Bankruptcy Attorneys of Sawin & Shea.

Fortunately, filing for bankruptcy offers debt relief to help you get your finances back in order, but you’ll need to avoid certain pitfalls when filing, such as overspending or accumulating more debt.

Here’s what you need to know about getting through the holidays during bankruptcy. 

Don’t Accumulate Any More Debt

If you’re already in the middle of filing for bankruptcy, any new debt that you accumulate will not be discharged. This includes credit card debt, so try to avoid racking up a substantial balance this season.

Those who are about to file for bankruptcy should also avoid accumulating substantial debt. Many debtors make the mistake of racking up more debt before filing because they figure that they’ll be able to discharge it. This is even more common during the holiday season because people spend a great deal on travel plans, gifts, and food. 

When you have a sudden increase in debt leading up to filing for bankruptcy, credit card companies may object to your bankruptcy discharge. They may even argue that you committed bankruptcy fraud, which is a federal felony. Those found guilty of bankruptcy fraud could face up to a five-year prison sentence and up to a $250,000 fine. 

Don’t Purchase Expensive Luxury Items

Although some holiday expenses are unavoidable, you should definitely avoid spending over $600 on a single luxury purchase. An item may be considered a “luxury” if it’s a product or service that’s not necessary to support you or your dependents. If you’re not sure whether some of your purchases are considered “luxury,” consult with a Chapter 7 or Chapter 13 bankruptcy attorney. 

If you make a luxury purchase of over $600 within 90 days of filing for bankruptcy, creditors will request for the bankruptcy court to not discharge the debt. This also includes gifts, so it’s critical not to spend over $600 on any one gift.

Some debtors attempt to avoid the luxury item bankruptcy provision by taking a cash advance on their credit card, but this will also likely not work. If you take a cash advance of over $950 within 70 days of filing for bankruptcy, the credit card company will argue against your debt being discharged. 

How to Cut Down on Spending This Holiday Season

It’s best to avoid accumulating more debt during the holidays, and you can do this by creating a tight budget and by staying clear of any holiday sales that may increase your spending. 

When creating your budget, calculate how much you can reasonably spend without falling into further debt. Then, create a list of necessary holiday expenses. It’s critically important to avoid going over budget this holiday season as you prepare to file for bankruptcy or continue going through the filing process.

You can also find creative ways to reduce your spending, such as introducing a Secret Santa gift exchange in your family. That way, you’re not having to purchase a gift for every member of your family. 

Additionally, if you’re hosting extended family or friends for the holidays, you can introduce a potluck system so that you don’t need to spend as much on food. 

Bankruptcy Automatic Stay

Although you need to tighten your belt and avoid more debt this holiday season, filing for bankruptcy does provide certain protections and benefits that may alleviate some of your financial stress, such as an automatic stay. 

When filing for Chapter 13 bankruptcy, your home’s mortgage payments will be restructured into your repayment plan, and creditors will not be able to repossess your home or take legal action against you thanks to the bankruptcy automatic stay. 

With Chapter 7 bankruptcy, you reaffirm your secured debts while discharging unsecured debts. Secured debts refer to debts with collateral, such as a home or car. Most of the time, Chapter 7 filers are able to reaffirm their mortgages as long as they are not behind on payments. 

If you are behind on a house or car payment, you may want to consider filing for Chapter 13 bankruptcy. 

Contact an Indiana Bankruptcy Attorney

If you need help getting started with filing bankruptcy this holiday season, consider enlisting the services of Chapter 13 or Chapter 7 bankruptcy lawyers. Qualified bankruptcy attorneys can help you improve your financial situation and can assist you if you’re the victim of creditor harassment. 
For seasoned bankruptcy attorneys in Indiana, contact Sawin & Shea, LLC. We have years of experience helping Indiana residents become debt free. Call us today at 317-759-1483, or you can schedule a FREE consultation online here.

The post How to Survive the Holidays During Bankruptcy appeared first on Indianapolis Bankruptcy Attorneys of Sawin & Shea.

Can a Creditor File a Lawsuit Against Me?

Creditors can, and most likely will, take you to court if you owe a debt such as a credit card or medical bills and cannot pay. Judgment creditors can actually take money right out of your bank account, garnish wages from your paycheck, and put a lien on your real estate in order to collect what you owe. Bankruptcy can help protect this from happening.

Will Filing Bankruptcy Stop a Civil Lawsuit?

It’s important to note that bankruptcy can help in most civil lawsuits, but not all; there are limitations. Bankruptcy does not stop the following types of cases:

• Criminal cases
• Domestic proceedings regarding divorce or dissolution
• Child custody, child support
• Establishing paternity
• Evictions in which the state court already granted a writ of possession to the landlord

The automatic hold will take effect in other civil cases:

• An outstanding credit card balance
• House foreclosure
• Eviction in cases in which and order of possession has not yet been issued to the landlord
• Debt due to a breach of contract

Does Filing for Bankruptcy Help with Liens?

First, it’s necessary to understand what exactly a lien is. A legal judgment could establish a lien against your real estate. If you don’t repay it, it’s their right to seize the real estate through a foreclosure action. Judicial liens are sometimes avoidable in bankruptcy. However, it is very important to speak with a bankruptcy attorney before the judgement is issued in a lawsuit so that you have the best chance at mitigating the effects of a judgement on your property.

If you are served with a lawsuit due to owing debt, the best decision you can make is to file for bankruptcy. Creditors can’t get a lien if they don’t have a money judgment at the time you file for a bankruptcy case, meaning you won’t have to request that the bankruptcy court remove it. 

Can I File for Bankruptcy After Losing a Lawsuit?

As stated above, filing bankruptcy after losing a lawsuit is better done sooner rather than later to avoid creditors placing liens on your property or getting a wage garnishment started against you. However, if you lose your lawsuit, you can actually still file for bankruptcy and, in most cases, discharge your legal liability on the debt.

Sawin & Shea Can Help You Clear Lawsuit Debt Through Bankruptcy

Bankruptcy is never an easy situation to navigate. Let Sawin & Shea, LLC guide you through the process and help you clear lawsuit debt. We are committed to providing compassionate and non-judgmental representation to all of our clients. Our attorneys have helped thousands of people just like you get the fresh start they deserve.Speak to an attorney today at (317) 759-1483. Or contact us online.

The post Does Bankruptcy Clear Lawsuit Debt? appeared first on Indianapolis Bankruptcy Attorneys of Sawin & Shea.

There’s nothing wrong with filing for bankruptcy, but worrying about what other people will think is understandable.

A common question that people have about the filing process is, “Will a bankruptcy trustee contact my employer?” In most cases, there’s no reason why your employer will be made aware of your bankruptcy. 

In this blog, we discuss situations in which your employer will be notified about your bankruptcy, and we also cover whether or not you can be legally fired for declaring bankruptcy.  

Will My Employer Be Notified About My Bankruptcy?

If you file for Chapter 7 or Chapter 13 bankruptcy, your employer will usually not receive any sort of notification from the bankruptcy court or the U.S. Trustee Program. There are a few cases in which your employer could be notified, but the bankruptcy procedure does not include any sort of employer notification. 

That being said, your bankruptcy is part of the public record. So if your employer goes searching for your bankruptcy records, they will be able to find out that you filed. Employers typically don’t search for this kind of information though. If they have an issue with your work performance, they’re far more likely to speak with you or reprimand you rather than look into whether or not you’ve declared bankruptcy. 

Additionally, you’re under no obligation to inform your employer about your bankruptcy, so when wondering will a bankruptcy trustee contact my employer, in most cases, the answer is no.

Some professional licenses may require you to report your bankruptcy if you’re renewing or obtaining a new certification. But this is usually just the case for licenses in certain financial industries.   

Can I Be Denied Employment Due to Bankruptcy?

If you’re interviewing for a new job, there are a few ways in which bankruptcy affects employment. If a potential employer runs a background check, they’ll discover your bankruptcy. And if they search your credit history, they’ll also likely spot your bankruptcy filing. A Chapter 7 bankruptcy remains on your credit history for ten years, and a Chapter 13 bankruptcy will stay on your credit history for seven years. 

Private employers are allowed to deny employment due to bankruptcy, but in our experience they generally do not care. Public or government employers may not. Private employers may not discriminate against an employee because of their bankruptcy status, but when applying for a job, they may choose not to offer you a position because of the bankruptcy.

Cases in Which Your Employer Will Be Notified About Your Bankruptcy

Although employers are usually not notified when an employee files for bankruptcy, there are a few scenarios in which the employer will be notified. 

Firstly, if your employer is also one of your creditors, they will receive a notification when you file. When filing for Chapter 7 or Chapter 13 bankruptcy, you are required to disclose all of your creditors, and your creditors will receive the official Notice of Bankruptcy Filing from the bankruptcy court clerk. If your employer is one of your creditors, they will definitely receive this notice.   

Additionally, your employer may find out about your bankruptcy if creditors garnished your wages before you filed. 

Creditors can garnish your wages if you fail to make payments. They can file a lawsuit against you in order to recover their money directly from your paycheck. Creditors will usually try several other methods to recover their money before garnishing your wages, but if these other methods fail, they may file a lawsuit. 

If you fail to respond to the creditor’s lawsuit within a certain period, the judge will rule a default judgment against you. Once this happens, the creditor can notify your payroll department that part of your wages will go toward paying off your debts. Your employer or supervisor won’t necessarily know about your wage garnishment, but your payroll department will. 

When you file for Chapter 7 or Chapter 13 bankruptcy, you receive an automatic stay that stops your wage garnishment. Your payroll department will then be notified that your wages will no longer be garnished. Depending on your organization, your employer or supervisor could find out about your bankruptcy because of your automatic stay. If this is the case, your employer was likely already aware of your financial situation to some degree because your wages were already garnished. If anything, they may be happy that you’re taking a step toward becoming debt free through bankruptcy. 

The final situation in which your employer could be notified only involves Chapter 13 bankruptcy. When filing for Chapter 13, you make regular payments on a Chapter 13 repayment plan for three to five years to discharge your debts. If you fail to make a payment, your court-appointed trustee may require that you enter into a voluntary wage assignment where the payment comes from your paycheck. In our district, the Trustees use a company that draws Chapter 13 payments out of your check in the same way banks set up direct account deposits Your employer just thinks that you are having that part of your check deposited in an account. Once again, depending on your court district, your employer could find out about your bankruptcy through your wage garnishment.  

Can I Be Fired for Filing Bankruptcy?

Fortunately, even if your employer finds out about your bankruptcy, they are not allowed to fire you. Title 11 of the United States Bankruptcy Code, Section 252, specifically states that an employer cannot terminate an employee because they filed for bankruptcy, and this includes both private and government employees. Firing an employee for declaring bankruptcy is considered discrimination.

Even though it’s against the law to terminate you for declaring bankruptcy, you could have difficulty advancing to a higher position within your company. This may be the case if your job involves managing money. Your employer has every right to consider how financially responsible you are before promoting you, so your financial situation could jeopardize your promotion. 

Contact an Indiana Bankruptcy Attorney

If you’re considering filing for Chapter 7 or Chapter 13 bankruptcy, you may want to consider contacting bankruptcy attorneys to help you through the process. An attorney can answer all of your questions regarding bankruptcy and employment. For bankruptcy lawyers in Indiana, contact Sawin & Shea, LLC at 317-759-1483. We offer FREE attorney consultations to help you take the first step in becoming debt free.

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Should I Allow a Voluntary Repossession with No Late Payments?

Although voluntary repossession is a better option than having your vehicle repossessed against your will, it will negatively impact your credit score and history. For that reason, you should first consider other ways to make payments or give up your vehicle. 

Firstly, if your financial problems are only temporary, you should contact your lender to see if there’s a way in which you can make late payments without being at risk of repossession. You can contact your creditor and see if you can negotiate a repayment plan that will allow you to make late payments. If possible, contact them before missing any of your car’s payments. That way, you’ll still be in good standing with your lender, increasing the likelihood that they’ll allow a repayment plan. 

Instead of a repayment plan, you could also offer to sell it back to them privately to avoid the voluntary repossession from appearing on your credit history. 

If you’re having more serious debt problems that extend beyond your vehicle, you should consider Chapter 7 or Chapter 13 bankruptcy. Filing will put an automatic stay on your possessions, and there are several options when it comes to vehicle debt in bankruptcy. A bankruptcy attorney can walk you through those options.

What Is Voluntary Repossession?

In the event that bankruptcy isn’t right for your financial situation and your lender isn’t willing to negotiate or buy back your vehicle, voluntary repossession will likely be your best option moving forward. 

Voluntary repossession is the process of giving back personal property to a lender to avoid involuntary repossession. You might surrender your vehicle voluntarily after missing payments, or if you know that you’ll be unable to make payments in the future, you might give up your vehicle to avoid having missed payments appear on your credit history. 

Lenders have the right to repossess your car if you fail to make payments or don’t obtain car insurance, so surrendering your vehicle could be your best course of action to mitigate the damage to your finances and credit. 

You can start the voluntary repossession process by contacting the lender. You simply tell them that you can no longer make payments on the vehicle, and you can schedule a time to return the car. After surrendering the vehicle, the lender will sell it in order to regain their losses. If what the lender makes at the sale of the car is less than what you owe, there will be a deficiency claim. The lender can come after you for the balance.

While speaking to your lender, you can see whether they’re willing to buy the car or allow a repayment plan rather than going straight into voluntary repossession. 

Pros and Cons of Voluntary Repossession

Although voluntary repossession is a much better alternative to having a lender repossess your car involuntarily, it has both pros and cons. 

One benefit of voluntarily surrendering your vehicle is you don’t need to worry about the embarrassment and emotional distress of having it repossessed against your will. A creditor could repossess your vehicle at any time once you fail to make payments, and they can come to your house, place of work, or any other location to obtain your car. This can cause a stressful or even humiliating situation. 

When you surrender your vehicle voluntarily, you have more control over the process and can schedule a time to give up the vehicle without it being repossessed unexpectedly. 

Unfortunately, repossession always hurts your credit regardless of whether it’s voluntary or involuntary, but a voluntary repossession will appear as a “voluntary surrender” rather than a “repossession,” which is marginally better for your credit score. 

Additionally, you may still owe your lender money after giving up your vehicle. The lender will sell your car in order to recover the money that you owe, but creditors are often unable to sell vehicles for their full loan amounts. This is common because cars depreciate over time, so they are often worth less than their loan amounts. 

For example, if your outstanding loan is for $10,000 and your lender sells the vehicle for $6,000, you’ll still be responsible for paying back the final $4,000 even though you’re no longer in possession of the car. 

How Much Does a Voluntary Repossession Affect Your Credit?

Although voluntary repossession will not negatively impact your credit as badly as involuntary repossession, it will appear on your credit history as a negative mark and will hurt your score. Additionally, if you missed car payments leading up to the voluntary repossession, that will also hurt your score and credit history. 

If you still owe money after your lender sells the vehicle, you’ll need to pay off the rest of the amount. Otherwise, the debt will go to collections, further impacting your score. 

A voluntary repossession will remain on your credit report for up to seven years, but it’s better than having multiple missed car payments and an involuntary repossession.  

Unfortunately, while the voluntary repossession remains on your credit report, you’ll have a harder time obtaining a new auto loan. 

Contact an Indiana Bankruptcy Attorney 

If you need assistance in becoming debt-free, contact the attorneys at Sawin & Shea, LLC. You don’t have to wonder how much does a voluntary repossession affect your credit. We have the answers. We’ve helped numerous Indiana residents overcome crippling debt, and we also assist victims of creditor harassment.  Contact us today at 317-759-1483, or you can schedule a FREE consultation with an attorney here.

The post How Much Does a Voluntary Repossession Affect Your Credit? appeared first on Indianapolis Bankruptcy Attorneys of Sawin & Shea.

Let’s begin by discussing the ramifications of bankruptcy on your current employment. Your co-workers have no reason to ever know that you have filed for bankruptcy unless you tell them. It’s not like that scene from The Office where Michael Scott shouts across the bullpen, “I…DECLARE…BANKRUPTCY!!!!” 

In some cases, your employer may not know about your bankruptcy proceedings, but in other cases, they will have to know.

• For example, if you have been having your wages garnished to pay back a persistent creditor, your employer would be aware that this is no longer necessary since you are in the process of Chapter 7 or Chapter 13 bankruptcy. 
• In rare cases, your repayment plan in Chapter 13 bankruptcy may require your wages to be garnished. 

However, rather than causing your employer to cast aspersions on you, bankruptcy may have the opposite effect. The fact that you have taken control of your debts and are making positive steps to either have them discharged or reorganize them is something that should garner your employer’s respect. Additionally, you may find yourself more focused on your job once an automatic stay has removed the prospect of constant harassing phone calls and letters from creditors.

If you are concerned that you will lose your job, don’t be. This is not allowed. You are legally protected from employment discrimination under the U.S. Bankruptcy Code.

If it is solely because of your bankruptcy, your employer is not allowed to:

• Terminate you
• Otherwise discriminate against you (such as by demotion)

Can I be denied employment because of bankruptcy?

• Regarding bankruptcy and getting a job, If you are applying for government positions, the law is clear: you cannot be denied employment solely because of your bankruptcy. 
• This isn’t necessarily the case with private companies. It will certainly be difficult to obtain employment where budgeting, accounting, or payroll is a major part of the job description, but if you are qualified for your position and acceptable in every other way, your bankruptcy shouldn’t be a disqualifier for most situations. 
• We recommend you mention your bankruptcy yourself, rather than waiting until you are asked about it after a credit check. This way, you can control the narrative. Student loans, crushing medical debts, credit card debts – none of these lessen your worth as an individual or as an employee.

Will my bankruptcy show up on a pre-employment check?

Yes, if the company runs a credit report. Chapter 7 bankruptcies remain on your credit report for 10 years and Chapter 13 bankruptcies remain for 7 years. You can read about this in detail in our article, How Long Does a Bankruptcy Stay on Your Credit Report? Generally, companies don’t take the time and trouble to do a pre employment check for bankruptcy unless it is the final step in hiring you. This is good news; it means that they already consider you to be a strong candidate.

Your bankruptcy will not show up on a criminal background check because you are not a criminal. Bankruptcy is not against the law. 

As we mentioned above, government agencies (federal, state, or local) cannot deny you employment simply because your bankruptcy appears on your credit report. 

As bankruptcy attorneys, we work with you through the entire bankruptcy process, including after your debts are discharged in Chapter 7 bankruptcy, or after your Chapter 13 bankruptcy period. We will check to make sure that your credit report is correct and that no creditors are continuing to report negatively or show a debt as not being discharged. 

Sawin & Shea Is Here to Help

No bankruptcy situation is completely straightforward, so don’t try to maneuver the intricacies of Indiana’s bankruptcy codes on your own. At Sawin & Shea, LLC, we understand that hiring an attorney to help you file bankruptcy is scary. We are committed to providing compassionate and non-judgmental representation to all of our clients. Our attorneys have helped thousands of people just like you get the fresh start they deserve. We are here to help understand how does bankruptcy affect your job and future credit.  

Speak to an attorney today at (317) 759-1483. Or contact us online. 

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