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Why Do Celebrities File Bankruptcy?

Most of us tend to think that the only people who have money problems are those of us with lower paying jobs. But the truth is people from all walks of life experience financial pitfalls, and need help getting back on track from time to time. It might be that you have just gone through a divorce, and it took not only an emotional toll but also left you financially bereft. If that is the case, then filing for bankruptcy can help sort out your bills and make repayment more manageable. When you do that, you can also alleviate some of the emotional baggage you may be carrying around from having to have ended a marriage. Or, your case may involve an unexpected medical crisis, which leads to a large hospital or doctor bill balance. That type of event is not uncommon, and can happen to anyone. So you see, all sorts of things happen to all sorts of people, and the need to file bankruptcy can arise at any time. In fact, the need to file for bankruptcy relief is even something that some celebrities have dealt with in their past.

A quick list of celebrities and other famous people who have filed for bankruptcy include:

• 1980’s pop singer Cyndi Lauper.
• 90’s rap star MC Hammer.
• Boxing champ Mike Tyson.
• Movie director Francis Ford Coppola.
• Actress Kim Baysinger.
• Former major league pitcher Curt Schilling.

The reasons for these filings are likely just as varied as why you need to file vs. why your next-door neighbor may need to file a case. Mismanagement of money, and at a young age, is a leading cause of bankruptcy and might have attributed to some of these celebrity filings. Or a bad investment might be the reason a star had to file bankruptcy or maybe even something as ordinary as a divorce or child custody battle played a role. The bottom line is we don’t know why someone else needed to file a bankruptcy case, but certainly know our own needs. If you are not able to make ends meet, or are struggling to do so and just barely keeping your head above water, it is probably time to think about filing.

For more information about Chapter 7 and Chapter13 bankruptcy cases, and to find out what you can keep and what you have to give back if you file a case, contact us at www.DsouzaLegalGroup.com.

Is Bankruptcy Right For Me?

With scary financial headlines and worries over money, a lot of people are trying to find creative ways to stay on top of their finances. For some this could mean refinancing their home, asking for a mortgage loan modification, or downsizing from two to one car for their family. Another option is to file for bankruptcy, and this type of relief is available to just about everyone who is not able to meet their monthly obligations as they become due. That said, it is still understandable to have some hesitation and seek a few answers before making a final decision.

If you are wondering whether filing for bankruptcy is right for you, here are some factors to take into consideration:

• Whether you are able to pay all of your bills on time, or whether you are behind on some payments. If you cannot pay all of your bills and are getting collection calls or letters, filing bankruptcy will free up some of your disposable income so the purse strings are not as tight and will also put an end to the calls and letters.
• If you are being garnished, a bankruptcy filing will stop that process in its tracks. The same is true for a foreclosure. So if either of these factors is present in your situation, seeking relief through bankruptcy can provide an instant lift.
• If you have previously filed bankruptcy you will want to gain an understanding of what type of case you will now be allowed to file. The rules are a bit different for subsequent filings, and knowing what type of case you qualify for can help you to decide if you want to file a new case.

These questions, as well as those that are unique to your personal circumstances, can best be answered by a qualified bankruptcy and debt management attorney. We have experience helping people get out of debt, and can help you too. Whether you need to know the ins and outs of bankruptcy, or have questions about debt consolidation or just want to know the difference between the two, we can help. We understand it can be hard to make a decision about your money, especially when money is tight, and will take the time to answer all of your questions before proceeding on your behalf.

For more information about bankruptcy, contact us at www.DsouzaLegalGroup.com. We will help by coming up with solutions that work for you.

What Happens To The Equity In My Home When I File Bankruptcy?

Having equity in your house can help you get out of debt by selling the home and using the equity cushion to pay off other debts. Or, you could use the equity to obtain refinancing and get a lower house payment or even take out some of that equity in cash. With cash in hand you can get caught up on past due bills or get to home repairs or remodeling that you’ve been putting off until the expense could be covered. But if these are not options for you, and you have decided to file for bankruptcy instead you might be wondering if you will get to save the equity you have built up in your house. The answer depends on the type of case you file, and on how you elect to treat your home loan during your case.

Equity in your house is considered an asset in your bankruptcy case, and having any assets in a bankruptcy is a rare thing, but does happen. Here are some examples of what you might expect if you have equity in your home when you file a bankruptcy case:

• In a Chapter 7 case the Trustee’s job is to find assets and sell them for the benefit of repayment to your unsecured creditors. So does this mean your house will be sold? The answer depends on the amount of homestead exemption, and whether you are allowed to claim an exemption. The exemptions exist to protect things like home equity, and chances are you will not lose your house in bankruptcy just because there is some equity in the home.
• If you have filed a Chapter 13 the equity might be considered at your disposal to repay a percent of debt to unsecured creditors. Remember that in a Chapter 13 case you are repaying unsecured lenders, but only a percent of their total debt. That percent may increase if you have equity in your home. This does not necessarily require you to take out that equity, but it could result in a higher repayment percentage.

The way home equity is treated in your case depends on the specific facts of your case. No two cases are the same, and so require the skill of an experienced bankruptcy and debt management attorney for review.

For more information about how to manage debt, contact us at www.DsouzaLegalGroup.com. We will help by coming up with solutions that work for you.

Three Key Differences Between Chapter 7 And Chapter 13

Filing for bankruptcy is an option many distressed consumer debtors turn to when they are having a hard time paying all of their bills. But there are a lot of choices to make, once the choice to file is initially made, and knowing a bit about how the process works is helpful. Some of the decisions you have to make after you decide to file bankruptcy include when to file, how to react when lenders call for payment, and what type of case you should file. There are two types of cases, a Chapter 7 and a Chapter 13, and most people prefer to file a Chapter 7. However, the choice of chapter is not entirely up to you, so you need to understand how each chapter of bankruptcy works so you will know what to expect in your case.

Three key differences between a Chapter 7 bankruptcy case and a Chapter 13 bankruptcy case are:

• In a Chapter 7 case you are allowed to get rid of all of your unsecured debt, but in a Chapter 13 case you are required to pay back a percentage of that debt. Unsecured debt includes things like credit cards and medical bills.
• In a Chapter 7 case you will most likely have to pay the full balance on your car if you want to keep it, but in a Chapter 13 you only have to pay the vehicle’s value. You are also permitted to pay a lower interest rate on your auto loan in a Chapter 13, but in a Chapter 7 you will be asked to pay the contract rate in most instances. This difference in repayment for cars can save thousands in a Chapter 13, versus what is repaid in a Chapter 7.
• A Chapter 7 usually only takes a few months, while a Chapter 13 can last up to five 7ears. This is because in a Chapter 13 you come up with a plan of repayment, and make a plan payment to cover the majority of your debts. In this way a Chapter 13 is similar to reorganization or consolidation of debt.

As you can see, both chapter of bankruptcy offer financial relief and benefits. For a determination of what type of case you qualify to file, call our office for an in-depth analysis of your specific financial situation.

For more information about how to handle overwhelming debt, contact us at www.DsouzaLegalGroup.com. We will help by coming up with solutions that work for you.

Can I Be Turned Down To File Bankruptcy?

If you are in financial distress and thinking about filing for bankruptcy, one concern you might have is whether you will be allowed to file. Because let’s face it, if you cannot pay all of your bills you want to be sure that you have a solution, and if bankruptcy is not an option you will have to keep looking. So it becomes extremely important to know whether your request to file a case will be granted, or if the Court can block you from filing.

It is uncommon to be denied the right to file bankruptcy, but it can happen. The most common way to get a case dismissed is by having a prior filing too close in time to your current filing. Here are the rules on how often you can file for the protection of bankruptcy:

• You can file a subsequent Chapter 7 case only if 8 years from a prior Chapter 7 case has passed.
• You can file a new Chapter 13 case two years after the date you filed a prior Chapter 13.
• You have to wait four years between a Chapter 7 discharge and the initiation of a Chapter 13 case.
• If you want to file a Chapter 7 case after having filed a Chapter 13 case, the wait time in between cases is six years.

The idea behind these timelines is that by making people wait to file subsequent cases, there is a lower chance that the bankruptcy laws will be abused. When the laws were changed in 2005 many creditors complained about the frequency with which some people were filing cases. What this meant for lenders was that they would make loans, have them discharged in bankruptcy, and then lose money a short time later when they made new loans that were included in a new bankruptcy soon after the first case. So when it came time to rewrite the rules, the lenders made their voice heard and lobbied for stricter rules on re-filing. This does not mean that you cannot file more than one case, you just have to be aware of the timing.

For help with your questions about bankruptcy, contact us at www.DsouzaLegalGroup.com. We will help by coming up with solutions that help get you back on your feet.

Do I Have To List All Of My Debts If I File Bankruptcy?

Even when people are having a hard time paying their bills, there are certain things they always make sure get paid. Most often this includes the house and car payments, but can also include other debts. Some of the more popular debts that people feel compelled to pay are medical expense, and department store credit cards. This might be because the need for medical assistance comes up frequently, so patients want to stay in the good graces of their physician or dentist. Or it could be that you want to continue to charge at a certain store, so don’t want to fall behind on payments on that card. This need to pay certain debts can lead to the question of whether you have to include all debts in your case when you file bankruptcy, and the answer is yes.

Here is what is required of you when you decide to file bankruptcy:

• You must list out all of your debts, by amount and name of lender. This allows the Court to send notice of your filing to everyone you owe money, and it is that notice that will put a stop to calls and collection lawsuits.
• You have to provide the Court with information about your income, from all sources.
• You will have to go to an initial hearing and answer questions about your debts, one of those questions will be whether all of your debts have been listed in the case.
• At this hearing you might also have to answer questions from lenders. Most times the only lenders that show up to this hearing are your house and car lenders, and they will only want to know if you intend to keep the property and maintain the payments. If so, you will likely be asked to sign a reaffirmation agreement on these debts.

The thought of having to list all of your debt can be scary, especially if you have more debt than you can remember. Forgetting to list a creditor does happen, and if it does there is no need to worry. You can always amend the documents to add a forgotten lender, or ask that the Court consider them to have been listed from the get-go.

For answers to your questions about debt and what is needed to file a bankruptcy case, contact us at www.DsouzaLegalGroup.com.

Do I Get To Pick, Chapter 7 or Chapter 13?

Most people know that there are certain “chapters” of bankruptcy, but are less clear on what that means. The idea is actually pretty basic, the chapters refer to the actual chapter of the bankruptcy law. So a Chapter 7 case is simply one that follows the rules of chapter 7 of the Bankruptcy Code and a Chapter 13 case follows the rules of chapter 13. Once you understand the terminology used to define what type of case you are filing, you can then start to learn the differences between the two. The main difference is that a Chapter 7 lasts only a few months, and a Chapter 13 can last up to 5 years. Another big difference is that in a Chapter 7 you can wipe out all of your unsecured debt, but that is not an option in a Chapter 13. This rule makes most people want to file a Chapter 7, but the chapter you file is not entirely your choice.

Once the decision to file bankruptcy has been made, your attorney will then perform a complex mathematical computation to determine which chapter you are eligible to file. The calculation is called the means test, and here is a quick overview of how it works:

• Your income is examined in comparison to your secured debt.
• If you have any disposable income left over after meeting all of your secured obligations, you will qualify for a Chapter 13.
• If you do not have enough money to even pay all of your secured debts, you can file a Chapter 7.

The test looks at your income over the past several months, so you will need to come to your attorney meeting with your paystubs in hand. You will also need to know what your bills add up to each month, and have those debts classified by type; secured or unsecured. Once your data has been analyzed, we will let you know what chapter of case you can file. We will also explain each step of the process along the way, so you are comfortable with how your case is progressing.

For more information about bankruptcy, contact us today at www.DsouzaLegalGroup.com. We will go over the facts of your case and let you you’re your next step.

How Does A Chapter 13 Help Me Get Caught Up On Past Due Payments?

There are two types of consumer bankruptcies, a Chapter 7 and a Chapter 13. In both cases you are able to discharge some of your debt, which makes it easier to pay the debt that remains. Filing bankruptcy can also give you the opportunity to get caught up on your past due payments, without the hassle of having to field collection calls from your creditors. These benefits make filing for bankruptcy an attractive option, but you do need to understand how a Chapter 13 is different from a Chapter 7 and how filing a Chapter 13 can help you get caught up on past due debts.

When you file a Chapter 13 bankruptcy you will come up with a plan of repayment for your debts. The plan will include a proposal of what you intend to pay for your car, for your house, and for your other debts. A Chapter 13 case also includes a provision for repayment of arrearages, especially past due mortgage payments, in a way that lets you get caught up over time rather than all at once. Here are some other distinguishing features of a Chapter 13 bankruptcy case:

• The case can last for up to five years, and during that time you will make a monthly Plan payment to the Trustee.
• The Trustee will disburse that payment to your creditors, in proportion to the debt they are owed.
• You can pay the value of your car instead of what is due, and might even be able to pay that value at a lower interest rate.
• Your house payment can be paid through the Plan, including the past due amounts. If you opted for a Chapter 7 these arrears would have to be paid up front but in a Chapter 13 you can pay them out over your Plan.
• At the end of your case, you will be considered current on debts, depending on how you repaid them throughout the case. Some debts may remain due after the case is over, but you should not come out of the case in “default” on any obligation.

The major difference between the two types of cases is that in a Chapter 7 you get to eliminate all of your unsecured debt. But, in a Chapter 13 you will pay back a percent of your unsecured obligations. In most cases the percentage is very low, and after the case is final you will not have to pay the remaining portion.

If you are considering filing bankruptcy to help eliminate debt, contact us at www.DsouzaLegalGroup.com.

Can My Mortgage Lender Foreclose While I’m In Bankruptcy?

If you have received notice that your house is in foreclosure, or that it is about to go into foreclosure, you have to act fast. There are several avenues you can pursue, one of which is to ask your lender to modify your mortgage loan. If that does not work, you can see if there is another lender who will refinance for you, paying off your existing mortgage and making you a new loan. But for a lot of distressed homeowners, the best answer is to file for bankruptcy. This can be especially helpful if a foreclosure proceeding has already been initiated against you or if you are have been getting calls from your mortgage lender about past due payments.

When you file for bankruptcy, there are certain things your lenders are no longer allowed to do. One of those things is to start or maintain a foreclosure. Here are a few of the other benefits you will get when you seek the protection bankruptcy has to offer:

• If your paycheck or bank account is being garnished, the garnishment has to be released.
• If you are behind on your car payments, the lender cannot call to collect or take any action to repossess your car.
• Threatening phone calls and letters from collector and collection agencies have to stop.

Filing for bankruptcy can be a huge relief. You will no longer have to struggle to pay all of your bills every month, and when your case is over you should owe less than when your case was started. This is accomplished by either reducing what you owe, or wiping it out entirely. But do keep in mind that if you want to keep property, you will have to keep making payments. This is made more manageable when you no longer have to pay all of your bills though, and all of the sudden you can find yourself with money left over from each paycheck rather than making it stretch. If you are having trouble keeping up with all of your expenses, call our office to find out how bankruptcy can help you. We have helped other people file cases and get out debt, and can help you too!

For more information about bankruptcy, contact us at www.DsouzaLegalGroup.com.

Five Ways Bankruptcy Can Help You

It is always a good idea to learn all you can about something you are thinking about doing, before you actually take the steps required. For example, if you are considering taking up skiing, you would likely research the different types of skis and ski equipment and take a few lessons before hitting the slopes. The same can be said of legal issues, and especially those that deal with your money. It is helpful to know how your spending habits can impact your cash flow, and what you can do if you have more bills than you have income. One thing you can do is to refinance or consolidate your debt. But you might also give the idea of filing for bankruptcy some real thought.

Bankruptcy is a very real solution for thousands of consumers a year. Here are five ways filing bankruptcy can help you:

• The moment you file a case, your creditors are prohibited from contacting you. This includes a rule that they cannot sue you, they cannot continue with a lawsuit that was started before you filed bankruptcy, they cannot repossess your car or foreclose on your home, and they cannot garnish your wages or bank account.
• If you qualify for a Chapter 7, you are allowed to eliminate all of your unsecured debt. This means no more payments to high interest rate credit cards.
• If you file a Chapter 13, you can pay the value of your car rather than what is owed. This can save thousands on your car payment over time. You might also be entitled to pay a lower interest rate, and this can save you money as well. The ability to do this depends on your specific circumstances, and we can tell you what to expect.
• You will learn budgeting tools that can be used in the future, so you know how to avoid financial traps down the road.
• At the end of your case you will have a fresh start with your money, and this is a good chance to start over with a new plan for your budget and your family’s needs.

Filing bankruptcy is no longer considered taboo, and should be strongly considered if you are struggling. We have helped others alleviate the burden of financial stress, and can help you too.

For more information about bankruptcy, contact us at www.DsouzaLegalGroup.com. We will help by coming up with solutions that work for you.