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Bankruptcy can be an incredibly stressful process – typically our clients are struggling with overwhelming debt and dealing with annoying collections calls, while trying to figure out how to move forward. Most people are curious about the timeline for a typical bankruptcy case, so we thought this infographic would help easily explain the process for a typical Chapter 7 bankruptcy case.
As most of the country is experiencing the second round of coronavirus-related lockdowns, many Americans are wondering how COVID will affect the already stressed economy. While bankruptcy cases have slowed in recent months, most experts agree that the number of cases filed will rise significantly as we move into 2021.
Many Americans were able to make it through the first round of lockdowns in 2020 because of government stimulus checks, concessions from landlords, and forbearance from creditors. With no stimulus in the near term and lockdowns causing more businesses to drastically reduce hours or even shutter, it’s likely that many people will struggle.
Even with the downturn caused by COVID-19, there have been fewer bankruptcy cases in 2020 than in 2019 – there were 27% fewer cases in August 2020 compared to 2019. In all likelihood, the number of bankruptcy cases will likely skyrocket next year, possibly setting records. (more…)
The holiday season is upon us again, with Black Friday and Cyber Monday just a few weeks away. The holiday season, and Black Friday in particular, are designed to get Americans to spend as much money as possible. This year, the COVID lockdowns will change the way people shop for the holidays. The doorbuster shopping events won’t happen this year – everyone will be shopping from home.
Shopping online can be more dangerous for your debt situation, since you’re not physically at the store and paying attention to the prices of the items you’re buying. Plus, credit cards give you the illusion that you can spend more money than you currently have, so many Americans fall deeper into debt during the holiday spending season. Making matters worse, gifts bought on credit cards end up costing far more than if you paid cash, once you factor in interest rates and finance charges. There’s also the fact that if you max out your credit limit, your credit score will drop.
Once the holiday season is over, the warm fuzzies disappear, and you’re left with even more debt. This year, we thought we’d share a few holiday spending tips to help you avoid over-spending, and hopefully help you avoid any more debt. Once you realize that Black Friday is specifically designed to get you to spend more money than you planned on spending, it’s easier to avoid the holiday credit card blowout.
Many times, financial difficulty leads to stress in a marriage. In cases where the financial stress leads to divorce, the issues often lead to bankruptcy filings.
The question that we hear the most often from clients regarding divorce is “What should we do first – the divorce or the bankruptcy?”
There’s actually no easy answer for that question. Every situation is unique, so if you’re asking the same question, you should consult with an experienced bankruptcy attorney. Your attorney will be able to look at all the factors and suggest the route that will work best for you.
In general, if certain conditions are present, filing for joint bankruptcy before the divorce will be the fastest, most cost-effective option:
If your spouse won’t agree to a joint bankruptcy, you can still file bankruptcy on your own. When your debt is discharged, the creditors would then start collection efforts for the entire debt against your spouse (since the debt is the responsibility of both spouses). (more…)
Sometimes the simplest things in life can be the hardest to do. The concept of paying an invoice on time is fairly simple, but with life throwing you unexpected curve balls, getting a check in the mail or making a payment on time is sometimes the last thing on your mind. Especially during the huge unknown of COVID, it’s important to stay on top of your bills so you don’t get behind.
Even though paying bills is a mundane task, doing so on time results in several positive effects:
If you’d like to achieve these results, here are a few tips to help you get on schedule with your bill pay system.
Last month, we shot a few new commercials, and we wanted to share them here on the site… We know that the unprecedented situation caused by COVID has put many DFW residents in a precarious financial situation. If you’re struggling with debt, give us a call at 214-760-7777 for a free, no-obligation consultation. We can help you get back on the road to financial freedom.
Even with many states opened up after the lockdowns caused by the coronavirus, many companies are filing for bankruptcy – several months without income, then slow business and mounting debt are an awful combination.
Many huge companies have filed for bankruptcy, and the list continues to grow. Well-known brands have declared bankruptcy, including J.C. Penney, Neiman Marcus, J. Crew, Gold’s Gym, Tuesday Morning, Bar Louie, Dean & DeLuca, Advantage Rent a Car, and Hertz.
Coresight Research is a company that tracks retail openings and closings, and at the beginning of 2020, they projected that 8,000 stores would close. In mid 2020, they updated their projection to 25,000.
These companies won’t necessarily go out of business – filing for bankruptcy allows protection during a restructure, so debt can be shed, operations can be redesigned, and low-profit locations can be closed. (more…)
Over the last month, over 22 million Americans filed for unemployment because of the shelter in place orders that have been put in place to slow the spread of the novel coronavirus. Many small businesses have been absolutely crushed by the forced closure, and those that were able to pivot and provide modified services are still hurting due to the drastically reduced demand. If people aren’t leaving their homes, they’re simply not buying.
The number of jobless Americans is expected to continue to grow at an exponential rate. A research paper released in late March by the St. Louis Federal Reserve estimated that we could hit an unemployment rate as high as 32% – that’s about 47 million Americans.
That’s an almost mind-boggling number of people who won’t be able to pay their mortgage, rent, or other bills – let alone buy groceries and other essentials. It’s been estimated that over half of Americans have already lost some income due to the lockdown.
Federal, state, and local governments are working hard to provide financial safety nets – the Payroll Protection Program was rolled out and quickly depleted. Mortgage lenders and automotive finance companies are deferring payments, and if you meet the requirements, you’ll receive a federal stimulus check. Unfortunately, for the millions out of work, the government stimulus check simply won’t be enough to keep them afloat.
Your first step should be looking at your budget. Figure out what you can do to save money immediately. Talk to your creditors, most will try to assist you if you’ve been laid off during the pandemic. Most mortgage, car, and credit card payments can be deferred. Student loans can be deferred as well. Many cities across the country have prohibited utility shut-offs – but skipping utility bills could lead to massive debt later down the road.
Once you’ve spoken to your creditors, you’ll have a better picture of your financial obligations. If you’ve got enough in savings, that might be enough to get you through the lockdown – but you’ll need to pay attention to how much you need to spend on essentials. You might be able to last longer by deferring non-essential bills and paying your minimum amount on others.
If you’re already at the point where the money has run out, or will run out in the near future, give us a call at 214-760-7777 – we’re happy to talk through your financial picture and let you know what your options are. It’s a free, no-pressure consultation – we’re not going to force you to file for bankruptcy, and in fact, might advise against it if there are better options on the table.
If bankruptcy is inevitable, you’ll end up filing for either Chapter 7 or Chapter 13.
Chapter 7 bankruptcy allows you to wipe out your debts permanently, with no obligation to ever pay them back. Chapter 7 is best for individuals who aren’t able to pay back a significant portion (or all) of their debt. Typically, this is best when there’s a massive amount of credit card debt or a huge medical debt.
Chapter 13 bankruptcy is more of a reorganization of your debts. If you’ve got a regular income stream and have simply fallen behind, Chapter 13 is a better option. A plan is created to repay all (or most) of your debt with installment payments.
For both types of bankruptcy, you’d typically have to meet with an attorney and then go to court to get a judge to approve your case. During the COVID lockdown, everything can be done online. We can do everything over the phone or through virtual meetings, and the courts are allowing cases to be filed virutally so social distancing can still be observed.
If you’ve lost your job or been furloughed due to the coronavirus and you’re falling behind on bills, call us at 214-760-7777 – we’re here to help! Even if bankruptcy isn’t right for your situation, we’ll help point you in the right direction to help with your finances and plan for your future.
Many of our bankruptcy clients come to us with completely out of control credit card debt – but that doesn’t mean they’ve been completely irresponsible. Thanks to higher interest rates and compounding interest, just a few missed payments can put you past a point where it’s nearly impossible to catch up.
Learning to manage credit card debt is a huge step in avoiding bankruptcy. If you follow these 5 simple tips, you’ll keep your credit cards under control and avoid spiraling credit card debt.
Credit cards make it far too easy to spend money you don’t have. If you know what you can spend each month, it will be easier to avoid those spur of the moment purchases that you can’t really afford.
Compounding simple interest adds up quickly, and after about 6 months, you’ll end up with a much higher balance that’s hard to pay off. Think of your credit card interest as a small pebble that causes a huge avalanche… it starts off small, but quickly becomes a huge force.
Most Americans don’t know much about bankruptcy – they’re limited to the knowledge they get from news stories and online gossip columns. Bankruptcy is much more common that most people realize, with over a million people filing for bankruptcy every year.
Generally, people assume that bankruptcy is meant for someone who can’t control their credit card spending. In reality, bankruptcy provides financial protection for much more than just credit card debt.
To help shed some light on bankruptcy and how it can help honest, hard working families, we’re sharing the truth about the five most common bankruptcy myths. As always, if you have any other questions, please call us for a free debt consultation – we’ll take as much time as you need to fully explain how bankruptcy works. (more…)