A Memphis, TN bankruptcy lawyer from Darrell Castle & Associates, PLLC is available to speak with those who are facing severe financial hardship. Filing for bankruptcy can be used as a helpful tool when taken seriously and properly prepared for. Here are questions that clients may ask us as we are handling their bankruptcy case:
Should I run a credit report?
Prior to filing for bankruptcy, it’s a good practice to check your full credit report from several bureaus if you can. Many people don’t realize that there are errors on their reports, and now is the time to get those fixed and ensure your creditors are listed accurately. Keep in mind that filing for bankruptcy will impact your credit score and remain on your report for ten years.
Will financial counseling be mandatory?
As part of any bankruptcy process, you will have to complete a credit counseling course from a state-approved agency. You may have a few weeks or months to complete it, but it’s better to not put it off until the very last second. You need this certificate of completion to move forward in your bankruptcy case.
Do I need help from a lawyer?
There are so many lawyers that you’ll find on the internet. Do not fall for gimmicks where a lawyer says they can guarantee a certain outcome. Unfortunately when it comes to law, nothing is for sure. You must hire a lawyer that is experienced in bankruptcy specifically, as they will understand the complex nuances of this area of law. It may not be required that you have legal representation, but it can increase your odds of approval.
What else can help me during this time?
A part of filing for bankruptcy is being honest with ourselves and how we may have contributed to bankruptcy happening. This is in no way to shame the person, as money hardships can happen to anyone. Getting help from an accountant or financial professional can help you be honest about ways you could manage your money better, to prevent bankruptcy from occurring in the future for a second time.
Contact Darrell Castle & Associates, PLLC
It may initially feel embarrassing to admit the ways that you have struggled with money, but rest assured that your legal team are people you can be honest with. Comprise a list of your debts, personal loan, income, monthly expenses, and assets. Please be forthcoming about your financial situation. If you leave out any details it can make it harder for us to accomplish what needs to be done for your behalf. Consider reaching out to a Memphis, Tennessee bankruptcy lawyer from Darrell Castle & Associates, PLLC today for assistance.
Filing for bankruptcy can be incredibly intimidating. If you or someone you care about is struggling, you need to contact a Memphis, Tennessee bankruptcy lawyer from Darrell Castle and Associates, PLLC right away. Your lawyer will be able to give you advice on whether or not filing for bankruptcy is the right option for you and how to begin moving forward. Regardless of what you choose to do, speaking with a lawyer will give you the clarity you need to get your debt under control and your life back on track.
What Type of Bankruptcy Should You File For?
Typically, when an individual is considering filing for bankruptcy, they are looking at either Chapter 7 bankruptcy or Chapter 13 bankruptcy. Chapter 7 bankruptcy is typically chosen if you need to be completely debt free, while Chapter 13 is picked if you want to try to repay your debts with a payment plan. Chapter 13 bankruptcy is the way to go if you want to keep most of your assets and come up with a payment plan that you can realistically afford to pay off. Chapter 7 will free you from much of your debt, but you will also need to liquidate many of your assets and it will take longer to build your credit back after filing for Chapter 7. You should always speak with a Memphis, TN bankruptcy lawyer from Darrell Castle and Associates, PLLC before making any big decisions. We will be able to go into great detail about what each type of filing will look like for you.
Will Filing for Bankruptcy Ruin Your Life?
Absolutely not. Filing for bankruptcy has a lot of stigmas and judgments tied to it, but sometimes it is the best option for someone who has been down on their luck and just wants to get their life back. It is normal to have some concerns about filing, as it should not be a choice made lightly, but filing for bankruptcy can be a new beginning for people.
What Should You Try Before Filing for Bankruptcy?
Some helpful things people can do before choosing to file for bankruptcy is trying to work out a payment plan with creditors and sticking to a strict budget that will allow you to do so. It is very important to see where all of your money is going and try to ensure that your debts are being paid off at a steady rate. The more in tune you are with how much you owe, the better your chances are of getting out of this difficult situation.
Contact a Bankruptcy Lawyer in Tennessee Right Away
Do not hesitate to reach out to a bankruptcy lawyer from Darrell Castle and Associates, PLLC as soon as you think you may need help. It is better to get on top of things quickly, rather than waiting to see if they can be figured out. This will give you more options and power to choose which route is best for you and your family. One of our experienced lawyers will be happy to go over the details of your finances and help you figure out what the best option moving forward is.
Things You Should Do Before Filing for Bankruptcy
If you’re thinking about filing for bankruptcy, you should speak to a Memphis TN bankruptcy lawyer first. Being in debt is stressful and if you don’t know bankruptcy law, it can be intimidating and confusing deciding what to do. Having someone that is knowledgeable and experienced on your side can make all the difference. Call Darrell Castle and Associates, PLLC today to set up a free confidential consultation with our lawyers. We will clarify your legal options and next steps.
Although bankruptcy gives you a financial fresh start, it will negatively affect your credit in the beginning. Here are some important steps to take before you file for bankruptcy.
Collect Your Financial Documents | The first step you need to take is gathering all of your important financial documents. Ideally you will organize them and put them in one place so they are easily accessible. These documents should include applicable bank statements, tax returns, credit card statements, mortgage statements, loan documents, and collection letters.
Speak with a Lawyer | Declaring bankruptcy is just one option if you are in debt. A knowledgeable bankruptcy lawyer can assess your current financial situation and determine if bankruptcy is the best option for you, and if so, what kind of bankruptcy to declare.
Recognize That Bankruptcy is a Process | The pressure of debt is stressful. Collectors may be aggressively calling you frequently and you may be having a hard time paying for basic necessities. While it would be ideal if you could simply file for bankruptcy and be done, it’s unfortunately not the way it works. Chapter 7 bankruptcy typically takes between four and six months to complete as a court identifies what assets to liquidate and what debts will be repaid. And Chapter 13 bankruptcy can take even longer – between three and five years to complete – since you are completing a repayment plan. Patience is a must.
Ensure Cash is Available | When you file for bankruptcy, your bank may freeze the funds in your account and leave you without access to money. Eventually your bank will unfreeze the funds, but it can take time. To ensure that you can continue to purchase necessities such as groceries, gas, and bills, you should take out cash ahead of time. An experienced Memphis TN bankruptcy lawyer from a firm like Darrell Castle and Associates, PLLC can answer questions about the process so you understand how much money you will need in the interim.
Take a Credit Counseling Course | As part of the bankruptcy process you will need to complete a credit counseling course. This typically needs to take place before you file for bankruptcy. These courses are offered online or in person and you can usually finish them fairly quickly. Upon completion, the company you took the course through will send you a certificate that demonstrates you took the course.
Develop a Budget | To avoid finding yourself in financial trouble again in the future, you should look at your current expenses and develop a budget for going forward. Credit counseling courses can help you understand how to develop a budget, but if you need additional assistance, there are non-profit organizations and companies that can assist you.
Myths About Bankruptcy
Myth: Bankruptcy Permanently Kills Your Credit
Fact: While your credit will be impacted in the short term, in the long run, you’ll be able to rebuild it. Bankruptcy stays on your credit report for seven to 10 years, but after that, your credit score can bounce back quickly. For the first few years, you may only be able to get a secured credit card with a low limit, but responsible use of such a card can improve your credit score.
Myth: If You Recklessly Spend Before Bankruptcy You Won’t Have To Pay That Money Back
Fact: If you spend recklessly before you file for bankruptcy, you’re committing fraud. Debt that’s incurred as a result of fraud isn’t dischargeable in a bankruptcy. An attorney from Darrell Castle and Associate, PLLC might tell you to keep your spending the same before you file for bankruptcy.
Myth: Bankruptcy Discharges All Your Debt
Fact: Not all debt is dischargeable in a bankruptcy. Generally speaking, taxes, student loans and child support can’t be discharged. Most unsecured debt, such as medical bills, credit card bills, utilities and back rent can be dissolved, along with some secured debt like your car payment or mortgage. Your Memphis TN bankruptcy lawyer can give you a detailed list of what is and isn’t dischargeable in your case.
Myth: Anyone Who Files for Bankruptcy Is Financially Irresponsible
Fact: Reckless spending isn’t that common of a reason for bankruptcy. The three most common factors are job loss, long illness and divorce.
- With an unemployment rate of 4.2% as of November 2021, more than 6.9 million people are unemployed, says the U.S. Department of Labor.
- Health System Tracker reports that the cost of medical care rose from $2.59 trillion in 2010 to $3.8 trillion in 2019.
- The average cost of a divorce today is around $15,000, according to Bankrate.
Myth: You’re Going To Lose Everything in Bankruptcy
Fact: Most of your assets are safe during a bankruptcy, including your home, your car and your clothes. Other assets just aren’t that valuable to creditors. On the flip side, your Memphis TN bankruptcy lawyer from Darrell Castle and Associates, PLLC may not be able to protect your yacht or private plane.
Myth: You Can Only File a Bankruptcy Once
Fact: Your Memphis TN bankruptcy lawyer can help you file for bankruptcy more than once. With Chapter 7 bankruptcy, you can file once every eight years. With Chapter 13, you can file as soon as two years, after your repayment plan is complete.
Don’t wait. If you want a Memphis, TN bankruptcy lawyer that will represent your best interests, call Darrell Castle and Associates, PLLC now.
How to Improve Your Credit After Bankruptcy
It’s no secret that declaring bankruptcy hurts your credit. You may have more difficulty getting approved for credit cards and loans afterward. However, that doesn’t mean that you can’t rebuild your credit over time. Here are some tips to improve your credit rating after bankruptcy.
- Make payments to your non-bankruptcy accounts. Not all debts can be discharged in bankruptcy, including student loans and tax debts. If you have any secured loans that weren’t erased in bankruptcy, continue to make timely payments on them. Keeping up with these accounts may improve your credit over time.
- Apply for a secured credit card. After you declare bankruptcy, it will be more challenging to get approved for traditional credit cards initially. However, you can always apply for a secured credit card. This type of credit card requires a cash deposit and is easier to get approved for. After you make timely payments on a secured credit card for a while, you may get approved for traditional credit cards.
- Keep your balance low. It’s always wise to keep your credit card balances as low as possible. It shows lenders that you’re a responsible borrower and will be more likely to repay. Try to keep your credit utilization ratio less than 30 percent.
- Monitor your credit score. Once your bankruptcy is complete, your Memphis, TN bankruptcy lawyer may recommend keeping close tabs on your credit score. Make sure that your discharged accounts were accurately reported and that there are no red flags. While it may take a while for your credit score to go up, checking it regularly and seeing small increases can keep you motivated.
- Use a Co-signer. If you find it difficult to get approved for a loan after bankruptcy, you may consider getting a co-signer. This person agrees to pay back the loan if you don’t. Ask a trusted family member or friend in good financial standing to be a co-signer.
- Create a budget. If your goal is to rebuild your credit and avoid getting into the same situation in the future, it may be time to reassess your budget. Make a list of your expenses and think about what you can realistically cut out. While it may be difficult at first, sticking to a stricter budget can help you get your finances back on track.
How to Discuss Bankruptcy with Your Family
If you are considering filing for bankruptcy, you may wonder how to tell your family members about it. Although you don’t have to discuss your bankruptcy with your family member, you might feel like it’s the right thing to do. If this is the case, consider the following tips.
- Explain that there is nothing immoral about bankruptcy. A common misconception people have about bankruptcy is that it is immoral. They think that only financially irresponsible people declare bankruptcy. They may assume that if you were only more careful with your spending, you would not be in this situation. If you think that your family members may feel that way, calmly explain that bankruptcy is an entirely legal process and it does not make someone a bad person. Let your family members know that many people file for bankruptcy because of job losses and unexpected medical bills, not because they went on shopping sprees and were irresponsible with their money.
- Discuss the benefits of bankruptcy. Many people focus on the negatives of declaring for bankruptcy, such as ruining your credit. That is why it is important to talk about the benefits of bankruptcy with your family members from the get-go. For instance, you may want to mention that bankruptcy will give you a financial fresh start and allow you to build up a larger savings account. Also, tell your family members that you can improve your credit rating over time after bankruptcy and be eligible for loans in the future.
- Talk about the lessons you have learned. A Memphis, TN bankruptcy lawyer may suggest telling your family members about the financial lessons you have learned from filing for bankruptcy. For example, you may have established a stricter monthly budget that will make it easier for you to pay your bills on time. If your family sees that you learned something valuable after declaring bankruptcy and intend to focus on your financial future, they may be more understanding.
- Be open to answering questions. Once you have told your family members that you plan on filing for bankruptcy, they will have several questions. Make it clear that you are open to answering any questions they may have about your decision. Provide them with detailed answers so that they understand everything.
Preparing for Bankruptcy
Many Americans each year find themselves in debt they cannot pay off in a realistic time frame. Whatever the reason may be, hundreds of thousands of Americans are choosing to reset their debt and wait out the seven to ten years it takes to clear off their credit reports. Here are some steps to help prepare for what’s to come when filing for bankruptcy.
Prepare for Automatic Stay
One of the main reasons people decide to file for bankruptcy is the automatic injunction, or stay, that turns on as soon as that person files their paperwork. This is a protection for the person in debt that prevents debt collectors from attempting to collect the debt. They will no longer be able to call or send letters regarding the unsecured debts that a particular chapter of bankruptcy is set to discharge. Creditors will no longer be able to file suits or garnish wages either. A Memphis TN bankruptcy lawyer can assist with this part of the process and recommend what best to do before and during the automatic stay.
Prepare for the Right Chapter
If you risk having your home go into foreclosure, or if that is already taking place, chapter 13 is the better path to choose as compared with chapter 7. Those are the two chapters most people use who don’t have businesses and other complicated assets on the chopping block. If there aren’t many assets and a person doesn’t own a home, then chapter 7 may be the best way to go. The automatic stay triggers at the beginning of both chapters, but the downside with chapter 7 is a person could still lose their home even with the automatic stay. For information about the various other chapters in bankruptcy, speaking with an attorney from Darrell Castle and Associates, PLLC might prove to be very helpful. A Memphis TN bankruptcy lawyer who deals with this sort of thing all the time can likely offer valuable information.
Prepare for the Means Test
Each state has different measurements for people who choose to file for bankruptcy. Help from an attorney, such as one from Darrell Castle and Associates, PLLC, can be crucial for getting the process done in compliance with the law. This “means test” checks one’s income against the state’s median income. Also, if a person has filed for bankruptcy in the last eight years they may not be eligible to do it again so soon. A Memphis TN bankruptcy lawyer might be able to assist with calculating the means test as it applies to a person’s particular income and assets and then help make a list of assets that could be considered exempt from liquidation.