Filing Bankruptcy for the Second Time

Can You File for Bankruptcy More than Once?

You may have filed personal bankruptcy with the best of intentions, hoping to put your financial challenges behind you. Circumstances can change that, though—you may experience injury or illness without adequate insurance, or you may lose your job at a difficult time. Fortunately, you can seek bankruptcy protection more than once. There are some restrictions, though.

Under the federal bankruptcy laws, you may not receive a discharge in a Chapter 7 bankruptcy proceeding for at least eight years after the date of a prior Chapter 7 discharge. You may, however, seek to reorganize your debt under Chapter 13 after only four years, if your prior discharge was in Chapter 7.

If you reorganized your debt under Chapter 13, you can file another reorganization petition after just two years. However, if you want to obtain a discharge in a Chapter 7 bankruptcy proceeding after reorganization in Chapter 13, you must wait at least six years.

These rules, however, apply to discharges rather than filings. The bankruptcy law does not prohibit your from filing a bankruptcy petition immediately after a discharge in bankruptcy—you just can’t obtain a second discharge in bankruptcy before the specified time period has elapsed. For example, many debtors file and complete a Chapter 7, permanently discharging some of their debts. However, once the bankruptcy proceeding is complete, they may start receiving harassing calls and letters from creditors who were not discharged. The debtor may then file a Chapter 13 petition to invoke the provisions of the automatic stay.

Contact John Hargrave and Associates

We have provided comprehensive counsel to individuals in and around Barrington, New Jersey, since 1977. To schedule a free initial consultation, contact our office by e-mail or call us at 856-547-6500.

The Automatic Stay in Bankruptcy

The Benefit of the Automatic Stay in Bankruptcy

The federal bankruptcy laws were enacted to give individuals and business owners a way to get a fresh financial start. But Congress also recognized the need to provide relief from aggressive collection efforts. That relief comes in the form of the automatic stay.

When you file a bankruptcy petition, whether in Chapter 7 or Chapter 13, the automatic stay automatically goes into effect. The automatic stay prohibits your creditors or their representatives from calling, writing or taking any action outside of the bankruptcy proceeding to try to collect a debt from you. The automatic stay applies to creditors and their legal counsel, collections agencies, and most governmental entities. Some specific provisions of the automatic stay include:

  • Foreclosure proceedings—An automatic stay will suspend (but not terminate) foreclosure proceedings
  • Evictions—The automatic stay can stall the eviction process for a few days, unless your landlord has already obtained a judgment of possession or can show that you are endangering the property
  • Utilities—Typically, an automatic stay will suspend the disconnection of services for up to 20 days
  • Wage garnishments—The automatic stay stops any garnishment proceeding

Exceptions to the Automatic Stay

You cannot use the automatic stay to stop or suspend:

  • Criminal proceedings
  • Child or spousal support actions
  • Some tax actions
  • The withdrawal of funds from your paycheck to repay a pension or retirement plan loan

The bankruptcy court has the authority to lift or remove the automatic stay, if a creditor can show that the stay serves no purpose. If you have real property with no equity, and have no way to make payments on the property, the bankruptcy court may lift the stay so that your lender can foreclose and protect its interests.

Contact John Hargrave and Associates

We have provided comprehensive counsel to individuals in and around Barrington, New Jersey, since 1977. To schedule a free initial consultation, contact our office by e-mail or call us at 856-547-6500.

Is Your Past Haunting You?

The Zombie Apocalypse probably won’t occur, but these creatures can still haunt your credit report, even if you filed bankruptcy.

Also known as debt scavengers, zombie debt-buyers purchase delinquent credit card accounts, overdue payday loans and other unsecured debt that the original lender wrote off as uncollectible. Since the debt may be eight or nine years old, or even older, the purchaser only pays a few cents on the dollar for the right to collect the account. Typically, after running a skip trace to find the debtor’s current contact information, the letters and phone calls begin.

Legally, a debt-buyer is supposed to provide written verification of the debt upon request. Since these accounts are so old, the original records may have been lost or destroyed. Many time, a zombie debt-buyer may only have a name, account number and outstanding balance.

Dealing with Zombie Debt During a Chapter 7

If you get a call from a debt collector before your bankruptcy is discharged, tell the caller that you have hired a bankruptcy lawyer and provide them with your attorney’s name and phone number. That’s all you need to do. Do not volunteer any other information and politely refuse to answer any questions. If you receive a letter, give it to your attorney.

If you get another call or letter, repeat the same process. Do not argue with the person about the debt. Let your lawyer handle that for you.

Dealing with Zombie Debt After a Chapter 7

Once you receive your discharge order, keep a copy of both the petition and order close at hand, because you’ll probably need them again.

Monitor your credit report closely. If another debt-buyer appears, be proactive and send them a copy of the discharge order. If they call, politely give them the case number and discharge date and then hang up. If they keep calling, you may need to speak to an attorney to get the harassment to stop.

Contact John Hargrave and Associates

We have provided comprehensive counsel to individuals in and around Barrington, New Jersey, since 1977. To schedule a free initial consultation, contact our office by e-mail or call us at 856-547-6500.

The Two Most Common Personal Bankruptcy Options

Your Personal Bankruptcy Options

If you are considering filing for personal bankruptcy protection, you can easily be confused about the different options available to you. Here are the basic options for obtaining personal bankruptcy protection.

Chapter 7 Case

In a Chapter 7 bankruptcy proceeding, you are allowed to replace with most debts certain debts in exchange for the sale of some of your assets. There are some limitations on the debts you may discharge. Customarily, you cannot discharge the debt on secured assets—homes or cars—and still keep the property. Additionally, child support and alimony arrearages cannot be wiped out in bankruptcy, and student loan and tax debts are very difficult to discharge.

With respect to things you are financing like your car or home if you want to keep it you have to continue to make the payments. If the thing you are financing is work less than what you owe, you have the option to give it back to the lender and owe them nothing or keep it but continue with the payments.

Under the revisions to the federal bankruptcy laws in 2005, you must now qualify for Chapter 7 by submitting to a means test, where the bankruptcy court determines if you make too much money to be in Chapter 7, in which case your options are to file Chapter 13 or no bankruptcy.

Chapter 13 Reorganization

In a Chapter 13 petition, you work out new payment arrangements with your creditors, agreeing to settle your debts over a three-to-five year period. Often, you will be able to get late fees and penalties waived. As long as you honor your new commitments, your creditors cannot make any additional efforts to collect on a debt.

The Automatic Stay

Whether you file for protection under Chapter 7 or Chapter 13, you are immediately entitled to the protection of the automatic stay, which prevents your creditors from calling, writing or taking any legal action outside of the bankruptcy proceeding to collect a debt from you.

Contact John Hargrave and Associates

We have provided comprehensive counsel to individuals in and around Barrington, New Jersey, since 1977. To schedule a free initial consultation, contact our office by e-mail or call us at 856-547-6500.

How Long Will a Bankruptcy Affect My Credit?

How Long Will a Bankruptcy Filing Impact Your Credit?

If you have opted for bankruptcy as a way to get your finances under control, you may be wondering how long the bankruptcy filing will remain on your credit report, and how long it will have an impact on your ability to obtain credit.

How long the bankruptcy will actually appear on your credit report depends on the type of bankruptcy you filed. With Chapter 7 liquidation, where you permanently discharge debts, your credit report will reflect the bankruptcy filing for 10 years. With Chapter 13, though, where you agree to repay your creditors under new terms, the bankruptcy filing only shows up for seven years. There are some situations where the bankruptcy may stay on your credit record for a longer period. For example, if you apply for a loan in excess of $150,000, the potential lender may see the bankruptcy filing, even though it has been more than 10 years.

How to Minimize the Impact of a Bankruptcy on Your Ability to Obtain Credit

When a potential lender considers your creditworthiness, they will likely look at your credit report. In many instances, though, that will be only one of many factors. Many lenders are far more interested in what you have done lately, as opposed to what you did a number of years ago. If your credit report shows that you have made all payments in a timely manner since your bankruptcy, a lender may be inclined to extend credit, perceiving that you have developed new habits, or that the bankruptcy was the result of an illness, injury or other unforeseen incident, and not the result of poor money management.

The other important thing to do, if you want to improve your chances of getting credit, is to minimize the use of available credit. If you have a credit card, don’t use it unless absolutely necessary, and pay it off every month or as soon as possible.

Contact John Hargrave and Associates

We have provided comprehensive counsel to individuals in and around Barrington, New Jersey, since 1977. To schedule a free initial consultation, contact our office by e-mail or call us at 856-547-6500.

Recovering From Chapter 7

In most cases, a Chapter 7 Bankruptcy is discharged only a few months after the filing debt. So, an experienced bankruptcy attorney in Camden can get your family a fresh financial start almost immediately. Once you’re free of the obligation to repay many outstanding debts, what should happen then?

Why People File, and How Bankruptcy Helps

Some people file Chapter 7 in the wake of a short-term financial crisis, such as a job loss, a divorce or a serious illness. 76 percent of American families live from paycheck to paycheck, so most lack savings to weather these rough fiscal storms. Once you’re back at the starting line, you’re in a position to resume the spending and money management patterns that you exercised before.

Other people file bankruptcy because of a financial reverse. Perhaps income from a stock portfolio dried up due to the economic downturn, a home mortgage became unaffordable or a small startup business never really got started. Bankruptcy eliminates the debts that you cannot pay, which generally solves these problems.

Still others have made poor financial decisions. They’ve overspent on luxury items or amassed gambling debts. Bankruptcy, and especially the debtor education class, is a good way to reassess spending habits and get on the right track.

The truth is that most people file bankruptcy due to some combination of all these issues; for example, a family might have been barely able to service its credit card debt, and then a few days in the hospital put them permanently in the red.

Moving Forward

It’s very important to stay current on secured debts, like your car note and home mortgage. Paying your bills on time is the best way to build your credit score.

Once you receive a Chapter 7 discharge you may be inundated with credit card offers. That’s because the lenders know that you cannot file another Chapter 7 for another eight years. While there’s no need to go overboard, talk to your attorney about the best card for you. Charge something every month and pay off the balance every month, and your FICO score will go up even further.

Contact John Hargrave and Associates

We have provided comprehensive counsel to individuals in and around Barrington, New Jersey, since 1977. To schedule a free initial consultation, contact our office by e-mail or call us at 856-547-6500.

When Can I Start Rebuilding My Credit after a Bankruptcy?

How Soon Can You Start Reestablishing Credit after Bankruptcy?

If you’ve had to file bankruptcy, for any reason whatsoever, you may be wondering how soon you can start to rebuild your credit, as well as the best ways to do so.

You Can Start Immediately

There are no legal restrictions on how soon you can begin to reestablish credit after a bankruptcy. Though you may find fewer opportunities to do so, and incur greater expense, there are companies that will take the risk. You should understand, though, that the interest rates and penalties assessed to sub-prime borrowers (which you will be after a bankruptcy filing) are significantly higher than for most borrowers.

The reality, though, is that you should take some time to get on your feet before you try to incur any new and significant debt. By simply paying your existing obligations—rent, utilities—in a timely manner, you start to rebuild your creditworthiness.

Depending on the type of bankruptcy you filed, you may actually become more attractive to some lenders after a bankruptcy. In fact, it’s pretty common for persons who’ve just completed a bankruptcy to start receiving offers for credit cards, often within a month. Some may be secured credit cards—where you must deposit a certain amount to have the card—but they can help you begin to rebuild yoru credit. The key is making payments in a timely manner.

If you filed Chapter 7 liquidation, your debt-to-income ratio, one factor considered by lenders, will be dramatically reduced. If you have income, but little debt, a lender may perceive that you can afford to take on a new obligation. You can reap the same benefit in Chapter 13, but it typically takes longer, as you will be paying down existing debts over a three-to-five year period.

Contact John Hargrave and Associates

We have provided comprehensive counsel to individuals in and around Barrington, New Jersey, since 1977. To schedule a free initial consultation, contact our office by e-mail or call us at 856-547-6500.

Should You File For Bankruptcy?

One of the crucial reasons that individuals file for bankruptcy is to receive relief from their creditors. The initial relief arrives in the form of an automatic stay. The automatic stay goes into effect immediately upon filing for bankruptcy. In general, the stay prohibits collectors from continuing collection activities unless and until the Court gives them permission to continue.

Bankruptcy advertisements often claim to:

The automatic stay, applied when applicable, ceases all of these actions.

Chapter 7 Bankruptcy

Chapter 7 is a “liquidation” bankruptcy. If an individual receives a discharge in their bankruptcy, the Debtor’s personal liability to pay for most of their debt is removed. Therefore, a chapter 7 can bring relief from creditors and resolve the debt issues. However, there are many exceptions, so it is vital to seek an experienced attorney.

Valid reasons to file under chapter 7 include:

  • Relief from the collection process when left with no other alternatives
  • In order to deal with the debt that has become unmanageable (outside the assistance of bankruptcy)

Whether you have reached the threshold in the above areas is the determining factor for whether or not to file.

Is Bankruptcy Right for You?

Learn whether bankruptcy is the right choice for you. Talk your debt-relief options over with an experienced attorney at the southern New Jersey law firm of John Hargrave and Associates. We offer free confidential consultations. Call 856-547-6500, or contact us online.

“Meaningful Review” by Collections Attorneys

U.S. District Judge Kevin McNulty, in the District of New Jersey, ruled last week in Bock v. Pressler & Pressler that a debt collection law firm violated the FDCPA (Fair Debt Collection Practices Act). The law firm apparently did not conduct a “meaningful review” of a collection claim filed against a consumer.

Bock had filed a federal court action against Pressler, alleging that Pressler had filed their State complaint against Bock without meaningful review by an attorney. His case work (Pressler employees working on behalf of the debt holder – Midland Funding LLC) was carried out by non-attorneys (a non-issue), but when it came time for the attorney review prior to filing the case with the State, the firm’s computer system shows a file accessed for review for only four seconds.

The standards set forth in the case Lesher v. The Law Offices Of Mitchell N. Kay in 2011 played a role in Judge McNulty’s decision. McNulty wrote that Lesher “establishes that it is false and misleading, within the meaning of FDCPA, for an attorney to send a debt collection letter without having meaningfully reviewed the case.”

Credit Card Debt HELP When You Need it Most

Regular, hard-working people get in over their heads with credit card debt and collections for many reasons. No matter how you got into deep credit card debt, there is a way out. In this country we do not put people in debtor’s prisons. Rather, our Constitution, as originally written in 1797, provides people the opportunity for a fresh financial start. Eliminating credit card debt can seem next to impossible when you don’t know your options. Our debt-relief attorneys can help you understand your options so you can make an informed decision about filing for bankruptcy and eliminating credit card debt.

Contact John Hargrave and Associates

The law firm of John Hargrave and Associates in Barrington, New Jersey, can help you regain your financial footing. Contact us online or call 856-547-6500 to schedule a free consultation with an attorney who has been helping people resolve difficult financial issues since 1977.

Dealing With the Emotions of Bankruptcy

The Emotional Toll That Comes With a Bankruptcy Filing

Maybe you are just considering filing for bankruptcy protection, or maybe the process is complete or nearly complete. Here are some of the common emotions people express when considering or involved in a bankruptcy proceeding — shame, sadness, anger, grief, helplessness.

In our culture, which has wrongfully associated bankruptcy with failure, these emotions are neither uncommon nor unrealistic. But they are unfair, and here’s why.

The Bankruptcy Laws Were Enacted as a Benefit, not as a Punishment

Bankruptcy laws have been around for centuries. The famous Dutch painter, Rembrandt, sought protection in bankruptcy. Legislators have understood for hundreds of years that financial struggles are seldom the result of careless or profligate behavior, but are more often a consequence of bad luck or circumstance.

Studies support these conclusions. In research conducted at Harvard University, fewer than one percent of bankruptcy filings involved any abuse of the system. In fact, the single factor that most often led to bankruptcy was illness or injury.

Some of the Most Successful People in History Sought Bankruptcy Protection

The myth that bankruptcy is a sign of failure is most powerfully refuted by looking at some of the people who have filed for bankruptcy — Henry Ford, Donald Trump, Mark Twain and Abraham Lincoln.

Dealing With the Emotions That Come With a Bankruptcy Filing

If you are inclined to beat yourself up because you had to file for bankruptcy, remember that you are in good company, and understand that the bankruptcy laws were put in place to help you do exactly what you are doing — get a fresh start. Don’t let the judgments of others, most or all of whom have never experienced the difficulties you face, keep you from getting the benefits the law was intended to provide.

Contact John Hargrave and Associates

We have provided comprehensive bankruptcy counsel to individuals in and around Barrington, New Jersey, since 1977. To schedule a free initial consultation, contact our office by e-mail or call us at 856-759-6022 (toll free at 866-662-3191).