BANKRUPTCY ATTORNEY DAVID LAUSTSEN
SERVING Allentown, Almont, Applebachsville, Bedminster, Bethlehem, Blooming Glen, Brick Tavern, Buckingham, Buckmansville, Bucksville, Bursonville, Carversville, Center Bridge, Chalfont, Churchville, Coopersburg, Danboro, Doylestown, Dublin, Durham, Dyerstown, Easton, Edison, Erwinna, Eureka, Fair Hill, Ferndale, Fountainville, Furlong, Gallows Hill, Gardenville, Green Lane, Gruversville, Harrow, Hartsville, Hatboro, Holicong, Horsham, Jamison, Keelersville, Kintnersville, Lahaska, Lansdale, Lumberville, Mechanicsville, Milford Square, Monroe, Mumbauersvile, Naceville, New Britain, New Hope, North Wales, Ottsville, Perkasie, Pipersville, Pleasant Valley, Plumsteadville, Point Pleasant, Pottstown, Quakertown, Revere, Richland, Richlandtown, Ridge Valley, Riegelsville, Rockhill, Rosedale, Sellersville, Shelley, Silverdale, Sleepy Hollow, Smithtown, Smoketown, Solebury, Souderton, Spinnerstown, Springtown, Steinsburg, Sterners Mill, Strawntown, Telford, Tinicum, Trumbauersvie, Upper Black Eddy, Warminster. Warrington, Washington Crossing, Willow Grove, Wismer, Wormansville, Wrightstown, Wycombe, Zion Hill
Bucks, Montgomery, Chester, Philadelphia, Northampton and Lehigh
Counties.
FREE CONSULTATION,
LOW RATES. FREE CALL: 888-UNLOADDEBT.
and unload debt! 215-230-4250. Learn the truth about credit cards.
CRUSHED BY CREDIT CARD OR
OTHER DEBTS?

350 S. Main Street, Suite 105
Penn's Court
DOYLESTOWN, PENNSYLVANIA
215-230-4250
1 888 UNLOADDEBT
UNLOADDEBT.COM.
YOUR
FIRST MEETING WITH ATTORNEY
LAUSTSEN
IS
AT NO CHARGE OR OBLIGATION.
Attorney Laustsen will analyze your financial
circumstances based on information that you provide us. Once we get the proper information on
your financial situation we will advise you as to your bankruptcy and
non-bankruptcy options, and the requirements that must be met before you file
for bankruptcy. We will quote you
an estimated fee for our bankruptcy services. Basic bankruptcy services from Attorney Laustsen for
Chapters 7 and 13 are generally charged at a flat fee. Both the client and the attorney will sign a Representation
Agreement that states the amount charged.
350 S. Main Street, Suite 105
Penn's Court
(215) 230-4250
(215) 230-4251 Fax
www.unloaddebt.com (web page)
David S. Laustsen, Esq. is a licensed attorney in
Pennsylvania. He holds a J.D.
Degree from Temple University School of Law and a Bachelors Degree in
Communications from Northwestern University. He is the recipient of the Milton C. Sharp Award for studies in land use planning
at Temple Law School.
He is a former State Senator in the State of South Dakota,
where he served in the Legislature for eleven years. He was a member of the Juvenile Justice Advisory
Commission and
the Local Government Study Commission in South Dakota.
He is the former owner and operator of KKAA-AM and KQAA-FM in Aberdeen,
S.D.
He was appointed by the Governor of Pennsylvania to the
Navigation Commission of the River Delaware.
He is active in amateur radio groups. He is the president of the Area Repeater Coordination
Council, and a
member of the Radio Amateur Civil Emergency Service for Bucks County.
Mr. Laustsen served as Deputy Chief Counsel to the
Pennsylvania Crime Commission, and was a consultant to the Commission in its 1990
Report on Organized Crime. He coordinates an
annual seminar for law enforcement officers on organized crime. He is the president of the Organized
Crime Roundtable,
an organization that sponsors annual seminars for law enforcement agents and
prosecutors.
Mr. Laustsen and his family live in Doylestown. His wife, Jean, is a Emmy Award winning
television producer for Fox 29-TV, Philadelphia.
IMPORTANT, THIS STATEMENT IS REQUIRED BY
THE BANKRUPTCY CODE:
IMPORTANT INFORMATION ABOUT BANKRUPTCY
ASSISTANCE SERVICES
If you decide to seek bankruptcy relief, you
can represent yourself, you can hire an attorney to represent you, or you can
get help in some localities from a bankruptcy petition preparer who is not an attorney. THE LAW REQUIRES AN ATTORNEY OR
BANKRUPTCY PETITION PREPARER TO GIVE YOU A WRITTEN CONTRACT SPECIFYING WHAT THE
ATTORNEY OR BANKRUPTCY PETITION PERPARER WILL DO FOR YOU AND HOW MUCH IT WILL
COST. Ask to see the contract before you hire
anyone.
The following information helps you understand
what must be done in a routine bankruptcy case to help you evaluate how much
service you need. Although
bankruptcy can be complex, many cases are routine.
Before filing a bankruptcy case, either you or our attorney should analyze
your eligibility for different forms of relief available under the Bankruptcy
Code and which form of relief is most likely to be beneficial to you. Be sure you understand the relief you
can obtain and its limitations. To
file a bankruptcy case, documents called Petition, Schedules and Statement of
Financial Affairs, as well as in some cases a Statement of Intention need to be
prepared correctly and filed with the bankruptcy court. Once your case starts, you and your
attorney will attend a meeting
with a bankruptcy trustee .
You'll never find this disclosure
on your credit card statement:
The Truth About Credit Cards (or What The Credit
Card Guys Don't Want To Tell You):
(Do the math):
Consumer's Union says that "a
consumer making the minimum payment on an outstanding (credit card) balance of
$10,000 with a 17% interest rate would take 50 years to pay off and cost a
total of $33,447. If the consumer were late on a single payment and the
interest rate increased to 20%, it would take 83 years to pay off and cost a
total of $58,084."
You can see that unless you make a
six-figure income, you may be trapped by credit card payments for the rest of
your life, without charging another nickel on the card.
Who needs a credit time bomb?
* * * * * * * * * * * *
A Nutshell History of Bankruptcy
Bankruptcy law is ancient. The Bible recognizes that there are
people who are trapped in debt that is so overwhelming that they cannot
possibly pay it back by their own efforts.
"At the end of every seven years
you shall grant a remission of debts. And this is the manner of remission:
every creditor shall release what the has loaned to his neighbor; he shall not
exact it of his neighbor and his brother, because the Lord's remission has been
proclaimed." Deut. 15, v. 1,2
In other words, people should strive to pay
back their debts, but at a point where they are drowning in debt that they
should be given relief.
In Medieval Italy if a tradesman
could not pay his debts, the customary law at that time was to destroy his
trading bench. So, it is believed from the term "broken bench" or
"banca rotta" arose the term "bankruptcy".
In the US, bankruptcy laws were permitted by
the U.S. Constitution. In Article
1, Section 8, Clause 4 (Bankruptcy). Congress is given the power to pass
uniform laws on the subject of bankruptcies. The founding fathers anticipated that bankruptcy law would
be a part of the legislative enactments of the Congress, and expressly permitted
it in the Constitution.
In the early days of our Republic bankruptcy
laws were enacted during economic downturns. In the 20th Century, bankruptcy laws became
permanent, but revisions were made in response to economic conditions.
YouÕre not alone
I have over a decade of experience as a bankruptcy
attorney—representing debtors and creditors. My clients refer their friends and relatives to me for help
in dealing with insurmountable debts.
My goal is to take you through the entire process of debt relief and get
you Òback on trackÓ as soon as possible—and improve your credit rating at
the same time.
A decision to file for bankruptcy should be
made only after determining that bankruptcy is the best way to deal with your
financial problems. This narrative cannot explain every aspect of the
bankruptcy process. I
offer a free consultation to review your financial situation. If you decide to
file for bankruptcy, youÕll know that my rates are reasonable and that I offer
a payment plan.
Some famous peopleÉ
P.T. Barnum
Henry John Heinz (ketchup magnate)
Henry Ford (Mr. Model T)
Mark Twain (author)
Mickey Rooney
Jerry Lee Lewis
Johnny Unitas
Wayne Newton
Kim Basinger
Debby Reynolds
And
many more, have filed for personal bankruptcy.
What Is Bankruptcy?
Bankruptcy is a legal proceeding in which a
person who cannot pay his or her bills can get a fresh financial start. The right to file
for bankruptcy is provided by federal law, and all bankruptcy cases are handled
in federal court. Filing bankruptcy immediately stops all of your creditors
from seeking to collect debts from you, at least until your debts are sorted
out according to the law. Unemployment, medical expenses, divorce or separation
and support of children, parents or other relatives often result in an
unmanageable debt. Often when an individual or couple cannot pay even the
minimum monthly payments on credit cards and loans, a bankruptcy becomes
inevitable.
Bankruptcy will immediately stop all
collection lawsuits, collection calls and letters, repossessions,
garnishments. It will stop
collectors from contacting
employers or relatives.
This protection begins with the filing of
your bankruptcy paperwork. Creditors and bill collectors are notified of a filing
for bankruptcy by the Bankruptcy Court. Once notified, the law requires that
they stop all collection efforts. As soon as you file the bankruptcy paperwork,
the court mails a notice to all the creditors listed in your bankruptcy
schedules. Allow about two weeks for the notices to reach your creditors. You
may refer your creditors to your attorney who will give your case number to the
bill collectors and creditors when they call. The creditors will then cease
calling you. If any creditors persist after they are informed about the
bankruptcy, they are subject to a lawsuit that may make them liable for
sanctions and attorneys fees.
Our office is connected with the Bankruptcy
Court electronically. A bankruptcy
case can be filed almost instantaneously provided the paperwork is complete.
What are the main reasons people
file for bankruptcy?
1.
Loss of employment/wage or salary cuts. Often people will try
to tough it out until eventually the unemployment runs out. Judgments,
repossessions and foreclosure usually follow rapidly. When in a situation of
financial distress, always pay your rent/mortgage, utilities, and car payments
first, and wait on the credit cards and unsecured loans until after you are
employed. If your unsecured debt is close to or more than what you usually make
in a year, then you should consider a bankruptcy to eliminate that burden. With
that amount of debt, it is unlikely that you could never pay it back anyway.
Let me review your finances and suggest a plan for you.
2.
Health care/lack of insurance. Scenario: Husband
loses job, can't afford COBRA coverage. Baby gets sick and couple is saddled
with huge medical bill. B. Employer doesn't offer insurance, and worker cannot
afford private health insurance.
3.
Divorce. When husband and wife separate, often the
living expenses are much more than when they lived together. If a divorce is
imminent, it makes sense for the couple to file a joint bankruptcy and get rid
of their debt before their divorce is final. Advantage: Joint or individual
bankruptcy is the same cost.
4.
Small Business Failure.
5.
Theft. Unfortunately, it is
not uncommon for a family member or a significant other to run up another
personÕs credit card bill without their knowledge. Whether or not you prosecute the individual, youÕll have a
difficult time proving that the charges were not yours or authorized by
you. A bankruptcy may be a way to
eliminate debt that you didnÕt incur, and that you donÕt have the ability to
repay.
If your debt is in
excess of your yearly compensation, it is virtually impossible for you to pay
it back at credit card interest rates. I will examine your financial situation
and make a recommendation to you.
Your appointment is at no charge.

YOU can get a Òfresh startÓ
IsnÕt it harder to file for bankruptcy
because of the new law?
While there are new paperwork requirements
mandated by a change in the law, the vast majority of clients will have no
difficulty in filing for debt relief in bankruptcy.
The new bankruptcy law requires that all
individuals filing for bankruptcy relief participate in a credit-counseling
program. This is often done on the
telephone. I will explain
the requirements to you during your free appointment.
Copies of certain documents are required. For example, copies of pay stubs for
seven months before the filing are required, and copies of your tax returns for
the last three years must be filed with the court.
There are some income requirements under the
new bankruptcy law that I will explain to you.
Marriage and Bankruptcy-
Couples who are getting married may want to
examine each other's credit reports to see if one or both of them is bringing a
load of "bad debt baggage" into the marriage. Often, one spouse has
residual credit card debt from a prior marriage or other circumstances, that
will be difficult to pay off in the future. A marriage should be a fresh start,
and a bankruptcy can enable a couple to start life together with a clean slate.
I will review your financial situation and make a recommendation to you. There
is no charge for a financial review.
Small Business Failure
Businesses fail every day---and the current
economic situation increases the likelihood of failure. Small business owners
find themselves victims of the business failure of their suppliers or
customers, and an otherwise profitable business can fail rapidly. If your
business is encountering a rocky road, you should contract me for advice. I
will review your business and personal financial situation and I may be able to
help you avoid costly mistakes. You should be concerned with your personal
liability if your company must close, and minimizing problems that arise from
the closure of a business.
If you have an operating proprietorship
business with business debts, you must disclose such debts and consult with
your bankruptcy attorney about how to proceed in either Chapter 7 or 13.
Installment Loans
We encounter many instances of consumer
installment loans in which the loan company claims a collateral interest in
home furnishings or used vehicles. Often, these interests can be avoided in a bankruptcy.
If you have a substantial credit card debt and some installment loans in which
the loan company asked you to list personal property as "collateral",
you should have me review you situation and make a recommendation.
I'm not ready to
see an attorney
Perhaps you're not ready to make an appointment, but you do want
some basic information about bankruptcy. CALL AND ASK, ITÕS A FREE CALL:
1-888-UNLOADDEBT. Remember that your first office appointment
is free, and that in almost all cases, bankruptcy services are a flat
fee, so you'll know exactly what the procedure costs in advance.
How long does a bankruptcy case last?
A Chapter 7 bankruptcy case will last about four to five months.
When we start, we will interview you and gather information about your
situation. We then prepare a draft of your bankruptcy filing and return it to
you. You review it, make any necessary corrections, and return it to us in the
provided postage paid envelope. We make any necessary changes and file it with
the court. The court will notify your creditors by mail as soon as you file.
About 6 weeks later, you and your attorney will attend a brief 5-minute meeting
with the bankruptcy trustee. Then, 5-7 months after you file, you'll receive
your discharge notice, permanently erasing your debt.
If you pay your regular bills on time after your discharge, your
credit should be rehabilitated within two years. (Ask a mortgage broker). .
Remember that your first appointment is free, and that in almost all cases,
bankruptcy services are a flat fee, so you'll know exactly what the procedure
costs in advance.

Can a bankruptcy filing help with these situations?
1. Getting
out of an expensive car loan and getting an affordable car?
YES
2.
Dumping an expensive time-share without any penalty?
YES
3.
Returning "toys" like 4-wheelers, motorcycles,
jet-skis, snowmobiles, etc. that I can't afford without a penalty?
YES
4.
Returning a leased car, without penalty, with damage or
mileage excess?
YES
5.
Getting out of a "freezer contract," health club
membership, or lawn service that you can't afford?
YES
6.
IRS taxes that were filed on time, are at least three (3) years
old, and haven't been paid?
YES
7.
A second, third, or fourth mortgage in which the lender loaned
money on our home even though there was no equity in the property?
YES
8.
A judgment lien on my house for a credit card bill?
YES
Bankruptcy myths:
1. If
I file for bankruptcy, I will lose my home.
No. I will review your situation and explain why this is almost
always not the case.
2. My
employer will find out about my bankruptcy.
Highly unlikely. Remember your employer probably objects more to
the collection calls that you may be receiving at work. As a practical matter,
your employer will not know about your case. He will not be notified, nor will
it appear in the newspaper.


3. My
credit will be ruined for seven years.
Absolutely not. In a Chapter 7 case your
credit will begin to improve after the date of discharge (4-5 months after
filing). If you continue to pay your utility bills, rent/mortgage, automobile
loans, etc. on time, your credit will be substantially improved within two
years. Your credit will just get
worse if you do nothing. If you
clear your unsecured debt in bankruptcy you may be able to qualify for
mortgages that you can afford.
4. Creditors
will sue me after the bankruptcy is over.
No, that is unlawful.
5. I
can't own anything in my name after a bankruptcy.
Boy, this is a really
old myth, and totally untrue.
6. I'll
have to pay income tax on all the debt that I discharge.
Absolutely not.
7. I
won't be able to buy a car after bankruptcy.
You know that this one
is untrue. Look at the car ads in the newspaper.
Remember that your first appointment is free,
and that in almost all cases, bankruptcy services involve a flat fee, so you'll
know exactly what the procedure costs in advance. www.unloaddebt.com
215.230.4250 for a free appointment.
What Can Bankruptcy Do for Me?
Bankruptcy may make it possible for you to:
Eliminate the legal obligation to pay most or
all of your debts. This is called a "discharge" of debts. It is
designed to give you a fresh financial start.

Stop foreclosure on your house or
mobile home and allow you an opportunity to catch up on missed payments. (Bankruptcy
does not, however, automatically eliminate mortgages and other liens on your
property without payment.)
Prevent repossession of a car or other
property, or force the creditor to return property even after it has been
repossessed.
Stop wage garnishment,
debt collection harassment, and similar creditor actions to collect a debt.
Restore or prevent termination of utility
service.
Allow you to challenge the claims of creditors
who have committed fraud or who are otherwise trying to collect more than you
really owe.
Bankruptcy cannot, however, cure every
financial problem. Nor is it the right step for every individual. In
bankruptcy, it is usually not possible to:
Eliminate certain rights of
"secured" creditors. A "secured" creditor has taken a
mortgage or other lien on property as collateral for the loan. Common examples
are car loans and home mortgages. You can force secured creditors to take
payments over time in the bankruptcy process and bankruptcy can eliminate your obligation
to pay any additional money if your property is taken. Nevertheless, you
generally cannot keep the collateral unless you continue to pay the regular
debt payments. While you can file a Chapter 13 Plan to pay the arrearages on a
mortgage, you can't force the creditor to refinance your loan at, say, a lower
interest rate or to eliminate ÒadjustmentsÓ in ARM mortgage payments.
Discharge types of debts singled out by the
bankruptcy law for special treatment, such as child support, alimony, certain other
debts related to divorce, some student loans, court restitution orders,
criminal fines, and some taxes.
Protect cosigners on your debts. When a
relative or friend has co-signed a loan, and the consumer discharges the loan
in bankruptcy, the cosigner may still have to repay all or part of the loan.
However, this may not be the case in a Chapter 13.
Discharge debts that arise after bankruptcy
has been filed.
Important Note
The following debts may be declared nondischargeable by a
bankruptcy judge in Chapter 7 if the creditor challenges your request to
discharge them. These debts may be discharged in Chapter 13. Debts you incurred on the basis of
fraud, such as lying on a credit application credit purchases of $1,150 or more
for luxury goods or services made within 60 days of filing loans or cash
advances of $1,150 or more taken within 60 days of filing debts from willful or
malicious injury to another person or another person's property debts from
embezzlement, larceny or breach of trust, and debts you owe under a divorce
decree or settlement unless after bankruptcy you would still not be able to
afford to pay them or the benefit you'd receive by the discharge outweighs any
detriment to your ex-spouse (who would have to pay them if you discharge them in
bankruptcy).
There are five types of bankruptcy cases
provided under the law:
*Chapter 7 is known as "straight" bankruptcy or
"liquidation." Typically, a debtorÕs property (car, home, household
items, most bank accounts) will be ÒexemptÓ so that the debtor keeps that
property and discharges (erases) the unsecured debt.
*Chapter 13 requires a debtor to file a plan to pay debts
(or parts of debts) from current income.
Chapter 13 is used typically for debtors whose income exceeds the median
income for the area or for debtors who need to pay mortgage or auto loan
arrearages. Chapter 13 cases are
often used to stop foreclosure.
Most people filing bankruptcy will want to
file under either chapter 7 or chapter 13. Either type of case may be filed
individually or by a married couple filing jointly. Chapter 9 is for municipalities, Chapter 11, known as
"reorganization", is used by businesses and a few individual debtors
whose debts are very large. Chapter 12 is reserved for family farmers.
Chapter 7
In a bankruptcy case under chapter 7, you file
a petition asking the court to discharge your debts. The basic idea in a
chapter 7 bankruptcy is to wipe out (discharge) your debts in exchange for your
giving up property, except for "exempt" property, which the law
allows you to keep. In most cases, all of your property will be
exempt. But property, which is not exempt, may be sold, with the money
distributed to creditors.
If you want to keep property like a home or a
car and
are behind on the payments on a mortgage or car loan, a chapter 7 case
probably will not be the right choice for you. That is because chapter 7
bankruptcy does not eliminate the right of mortgage holders or car loan
creditors to take your property to cover your debt.
Chapter 13
In a chapter 13 case you file a
"plan" showing how you will pay off some of your past-due and current
debts over three to five years. The most
important thing about a chapter 13 case is that it will allow you to keep
valuable property--especially your home and car--which might otherwise be lost, if you can make the monthly payments which the bankruptcy
law requires to be made to your creditors. In most cases, these payments will
be equal to your regular monthly payments on your mortgage or car loan, with an
extra payment to the bankruptcy trustee to get caught up on the amount you have
fallen behind. Caution: you must make your mortgage payments
and trustee payments on time or your case will be dismissed. You must obtain permission from the
bankruptcy court to sell or refinance your home during the time your case is in
effect.
(1)
own your home and are in danger of losing it because of money
problems (foreclosure or sheriff sale);
(2)
are behind on car or house payments, but can catch up if given
some time;
(3)
have valuable property, which is not exempt, but you can afford to
pay creditors from your income over time.
You will need to have enough income in chapter
13 to pay for your necessities, pay your Chapter 13 payment to the trustee, and
to keep up with the post-filing car/house payments as they come due.
In a chapter 7 case, you can keep all
property, which the law says is "exempt" from the claims of
creditors. You can choose between your exemptions under your state law or under
federal law. In many cases, the federal exemptions are better.
Federal exemptions include certain
dollar amounts for
equity in your home;
equity in your car;
household goods
things you need for your job (tools, books,
etc.);
Your right to receive certain benefits such as
social security, unemployment compensation, veteran's benefits, public
assistance, and pensions--regardless of the amount.
The amounts of the exemptions are doubled when
a married couple files together. The exemption amounts are increased on a
regular basis, but are quite liberal. IN MOST CASES, YOUR REAL ESTATE, HOUSEHOLD ITEMS AND VEHICLES
WILL BE 100% EXEMPT. State Exemptions are also available to exempt property or equity,
and may be preferable in your case.
In determining whether property is exempt, you
must keep a few things in mind. The value of real property is not the amount
you paid for it, but what it is worth now. What it is worth now is often based
on the most recent APPRAISAL for real estate tax purposes, minus the balance
owed on the mortgage(s). This
often results in real estate equity that is 100% exempt. In the case of furniture
and cars, because of depreciation, their "value" may be a lot less
than what you paid or what it would cost to buy a replacement. We all know how
fast cars depreciate, especially with high mileage and "rough"
condition. Home furnishings tend to depreciate very fast, unless they are
extremely valuable antiques.
To summarize, you equity in real property will
be based on the value of your property minus your mortgage balance(s). In most instances,
your equity [for the purposes of bankruptcy] is a lot less than you think, and will be
exempt.
While your exemptions allow you to keep
property even in a chapter 7 case, your exemptions do not make any difference
to the right of a mortgage holder or car loan creditor to take the property to
cover the debt if you are behind. In a chapter 13 case, you can keep all of
your property if your plan meets the requirements of the bankruptcy law. That
means that you will make a monthly payment to the Chapter 13 Trustee that will
pay your arrearages on home or car loans over the period of the plan. In most
cases you will have to pay the regular mortgage payment or car payment as you
would if you didn't file bankruptcy, and your payment to the trustee will take
care of the payments on which you were behind.
What Will Happen to My Home and Car If I File for
Bankruptcy?
In most cases you will not lose your home or
car during your bankruptcy case as long as your equity in the property is fully
exempt. Even if your property is not fully exempt, you will be able to keep it,
if you pay its non-exempt value to creditors in Chapter 13.
However, some of your creditors may have a
"security interest" in your home, automobile or other personal
property. This means that you gave that creditor a mortgage on the home or put
your other property up as collateral for the debt.
Bankruptcy does not make these security
interests go away. If you don't make your payments on that debt, the creditor
may be able to take and sell the home or the property, during or after the
bankruptcy case.
There are several ways that you can keep
collateral or mortgaged property after you file bankruptcy. You can agree to
keep making your payments on the debt until it is paid in full. Or you can pay the
creditor the amount that the property you want to keep is worth. In some cases
involving fraud or other improper conduct by the creditor, you may be able to
challenge the debt. If you put up
your household goods as collateral for a loan (other than a loan to
purchase the goods), you can usually keep your property without making any more
payments on that debt.
Yes! Many people believe they cannot own
anything for a period of time after filing for bankruptcy. This is not true.
You can keep your exempt property and anything you obtain after the bankruptcy
is filed. However, if you receive an inheritance, a property settlement, or
life insurance benefits within 180 days after filing for bankruptcy, that money
or property may have to be paid to your creditors if the property or money is
not exempt.
Yes, with some exceptions. Bankruptcy will
NOT normally wipe out:
(1)
money owed for child support or alimony, fines, and most taxes;
(2) debts
not listed on your bankruptcy petition;
(3) loans you got by
knowingly giving false information to a creditor, who reasonably relied on it
in making you the loan; and certain debts for luxury items incurred within 90
days of filing of a bankruptcy;
(4) debts
resulting from "willful and malicious" harm;
(5) student
loans owed to a school or government body.
(6) mortgages and
other liens which are not paid in the bankruptcy case (but bankruptcy will wipe
out your obligation to pay any additional money if the property is sold by the
creditor-this includes mortgage deficiencies and repossession deficiencies for
auto purchases and leases).
In most bankruptcy cases, you only have to go
to a proceeding called the "meeting of creditors" to meet with the
bankruptcy trustee and any creditor who chooses to come. In almost all chapter 7 and 13 cases,
creditors choose not to attend.
Most of the time, this meeting will be a short and simple procedure
where you are asked a few questions about your bankruptcy forms and your financial
situation. Normally, these meetings last about five to ten minutes. You should
bring copies of the following documents with you to the meeting:
(Mandatory) Remember, you will need your original
Social Security Card
and original DriverÕs license for the hearing. If you do not have these items with you for
each person filing, the trustee
hearing the hearing will not be held.
Seven months of
consecutive pay stubs for each income in the family
Proof of homeowners insurance on all real
properties owned.
Copies of Financial Responsibility Cards showing proof of auto insurance for all vehicles.
Statements showing your IRA, stock accounts,
mutual fund accounts,. Annuities, savings accounts, and credit union accounts,
if you have any. Bring copies of last 3 months bank statements.
Copies of complaints in any pending lawsuits
in which you are either plaintiff or defendant.
Copy of listing
agreement if your home is for sale.
Copy of last three
yearsÕ federal income tax returns.
If you operate your own business, ask your
attorney about the requirements that apply to you.
Bring copies of most recent mortgage
statements showing total amount owed. This includes first, second and any other
mortgages or Òhome equity lines of credit.Ó
Bring copies of all documents relating to sale
of real estate or automobiles in the last three years, and any inheritance that
you've received or expect.
Typically, no creditors will attend the
"meeting of creditors." Assuming that you have all of the documents
that are requested, your meeting will last ten minutes or less.
Occasionally, if complications arise, or if
you choose to dispute a debt, you may have to appear before a judge at a
hearing. If you need to go to court, you will receive notice of the court date
and time from the court and/or from Attorney Laustsen, and he will attend the
hearing with you.

Unfortunately, if you are behind on your
bills, your credit may already be bad. Bankruptcy will probably not make things
any worse. If you do nothing,
however, your credit will continue to get worse.
The fact that you've filed a bankruptcy can
appear on your credit record for seven to ten years. HOWEVER, since bankruptcy
wipes out your old debts, you are likely to be in a better position to pay your
current bills, and if you PAY ALL OF YOUR BILLS EARLY OR ON TIME (not in the so-called
"grace period") and you have a regular income, you may be able to get
new credit for automobiles or mortgage refinancing at a reasonable rate within
two years of your discharge (end of your case) in bankruptcy. Be very
careful to pay all of your bills on time after you have filed for bankruptcy,
your credit rating should be vastly improved within two years of discharge.
What about getting a mortgage? Bucks and Montgomery Counties have
first time homebuyers programs. In
the Bucks County program, you will attend a comprehensive workshop, plus some
restrictions and guidelines.
First, you need to discharge your unsecured debt if you cannot pay more
than the minimums on the credit cards plus a mortgage payment. ThatÕs where the bankruptcy comes
in. After your discharge, you can
contact the Mortgage Department of the Bucks County Housing Group at
215-598-3566 for more information.
There are numerous programs for first time and low-income buyers. Contact the BCHG or the FHA for more
information, or call us for help.
Bankruptcy filings are public records.
However, unless your employer or landlord is a creditor of yours, it is
unlikely that they will have knowledge that you filed for bankruptcy. In the
unusual case where a debtor owes his employer money, however, you must list the
employer as a creditor. If the employer is a creditor, they will receive notice
of the bankruptcy.
Federal Law in 11 U.S.C. ¤525 prohibits
governmental units and private employers from discriminating against you
because you filed a bankruptcy petition or because you failed to pay a
dischargeable debt.
If only one spouse has debts, or if only one
spouse has dischargeable debts, then your attorney may suggest that only one
spouse file. However, if your bills are addressed to both of you, it is likely
that those debts are "joint" debts, and a joint filing will be
required to eliminate that debt. Attorney Laustsen's rates are the same for
joint or individual filings.
Utility services Public utilities, such
as the electric company, cannot refuse or cut off service because you have
filed for bankruptcy. However, the utility can require a deposit for future
service and you do have to pay bills, which arise after bankruptcy is filed.
Discrimination An employer or
government agency cannot discriminate against you because you have filed for
bankruptcy.
Driver's license If you lost your
license solely because you couldn't pay court-ordered damages caused in an
accident, bankruptcy will allow you to get your license back.
Co-signers- If someone has
co-signed a loan with you and you file for bankruptcy, the co-signer may have
to pay your debt.
1. If you intend to file bankruptcy you must stop using your
credit cards. If you borrow money with the specific intent of discharging the
debt in bankruptcy instead of paying it back, the debt is not dischargeable. In
addition, three specific circumstances are worth mentioning:
(a) Certain luxury
purchases over $1500 within 60 days of the bankruptcy filing are presumed
nondischargeable; (b) cash advances and balance transfers aggregating $1500
within 60 days of the bankruptcy filing are presumed nondischargeable; and, (c)
debts involving materially false financial statements are nondischargeable
under certain circumstances.
2. Don't transfer your assets to friends, family
and business associates to protect the assets from your creditors. The transfer
may be considered a Òfraudulent conveyance.Ó If it is, you may lose both the property and your
right to a bankruptcy discharge.
3. Don't destroy any business or financial records. You can lose your
right to a bankruptcy discharge as a result.
4. Carefully choose the bills you pay. landlords, secured
creditors (auto and mortgage loans), and utilities should be paid under most
circumstances. If you pay a credit card debt that eventually will be
discharged, you may be throwing money away. We will advise you on what debts
should and should not be paid while you prepare to file a bankruptcy petition.
No. If you knowingly and fraudulently conceal an asset from the court
you have committed a felony and can be fined up to $5,000, imprisoned for up to
five years, or both.
In
a word: no.
Rule 9011 of the Rules of Bankruptcy Procedure requires you or your attorney to
certify that your petition is not filed "for any improper purpose, such as
to harass or to cause unnecessary delay.." Bankruptcy is intended as a
tool for dealing with debts that cannot otherwise be paid. You should not file
a bankruptcy petition for the sole reason of delaying a creditor's actions.
Do
I have to disclose all of my assets?
Yes. If you knowingly and fraudulently conceal an asset from the court
you have committed a felony and can be fined up to $5,000, imprisoned for
up to five years, or both. In addition, the court can deny you your discharge,
or dismiss or convert your bankruptcy proceeding.
What is Mandatory Credit Counseling?
The new bankruptcy law requires that all filers complete two
credit counseling sessions. These
may be done in person at the Credit Counseling Center (no
charge), or by telephone (fee is approximately $100. for both
sessions). We suggest the Credit
Counseling Center of Richboro 877-900-4222, a counseling agency approved by the
U.S. Bankruptcy TrusteeÕs Office.
How
long after I file for Chapter 7 bankruptcy will my credit be restored to
Ònormal.Ó
If
your credit report shows that after your bankruptcy case was discharged that
you promptly paid all of your regular bills (utilities, phone, etc.) and your
rent/mortgage and car payments, and that you have a verifiable income, you may
be able to qualify for a mortgage loan at regular rates within two years or so.
Prompt payment and verifiable income, with no credit card debt will go a long
way towards producing a higher credit score. Timely payment is a must, however. DonÕt depend on so-called Ògrace periodsÓ or your credit
will not improve. The bottom line: you can be back to ÒnormalÓ credit
within two years or so.
Can
a credit card company garnish my wages?
No,
not in Pennsylvania.
Can
they place a lien on my house?
Yes, but only after they file a lawsuit
against you and obtain a judgment.
The judgment lien accrues interest and must be paid in full when the
house is sold. Judgments may be removed
in a bankruptcy proceeding under some circumstances. Be sure to have your attorney hire a title company to do a
judgment and lien search on your real estate if you think that such debts
exist. Generally, this will
involve an additional charge of $85.00, if it is required.
Can creditors seize my bank account or take my tax
refund?
Again, a creditor must sue you, obtain a court judgment
and then obtain a writ of execution to seize your bank account.
In three situations your wages may be garnished before you
are sued:
The IRS can take everything but about $100 a week from
wages, and it can place a lien on your house or take your bank account without
a court judgment.
The Department of Education or a state guarantee agency
can garnish up to 10% of your wages if you're in default on a student loan.
A significant portion of your wages can be garnished to
pay child support or alimony.
(New) A
Pennsylvania landlord can obtain a garnishment against your pay if he/she
successfully sues you in court for unpaid rent. Such garnishments can be removed in a bankruptcy.
YOUR RIGHTS UNDER THE
FAIR DEBT COLLECTION PRACTICES ACT
WHO IS A DEBT COLLECTOR?
A debt collector is anyone, other than the
creditor, who regularly collects debts for others. This includes (1)
collection agencies, (2) attorneys who regularly collect debts or foreclose
mortgages, (3) companies that regularly acquire debts after they are allegedly
in default (there are many companies which buy bad credit card debts,
delinquent mortgages, etc.).
WHAT DEBTS ARE COVERED?
Your personal, family and household debts are
covered under the FDCPA. This includes money owed for the purchase of a
home, an automobile for general transportation, medical care, and non-business
charge accounts. Business debts are not covered, even if you are
personally liable.
HOW MAY A DEBT COLLECTOR CONTACT YOU?
A debt collector may contact you in person, by
mail, telephone or telegram. However, it cannot be at inconvenient times
or places. It cannot be before 8 a.m. or after 9 p.m., local time.
A debt collector may not contact you at work
if it should know that your employer does not permit
it.
A debt collector may not contact you if you
are represented by an attorney and the collector knows it.
CAN YOU STOP A DEBT COLLECTOR
FROM
CONTACTING YOU?
Yes. You can stop a collector from
contacting you by writing a letter to the collection agency telling them to
stop contacting you. Once the collector receives your letter, it may not
contact you again except to state that there will no further contact or to
inform you if the collector or creditor intends to take some specific action.
If you send such a letter, (1) keep a copy,
(2) send it by means that generates a receipt (e.g., certified mail, fax,
Federal Express), and (3) keep the receipt.
WHAT TYPES OF DEBT COLLECTION PRACTICES ARE
PROHIBITED?
HARASSMENT AND ABUSE
1.
Use or threat of violence or other criminal means to harm the
physical person, reputation, or property of any person.
2.
Use of obscene or profane language.
3.
Telling anyone other than a credit bureau or your spouse that you
owe the debt. Debt collectors cannot tell your employer, neighbor, credit
references, or friends that you owe the debt. A collector may not
contact such persons at all unless the collector doesn't know where
you are and is trying to locate you, and cannot in any event tell them
about the debt.
4.
Calling on the phone repeatedly or continuously with intent to
annoy, abuse, or harass any person at the called number.
5.
Calling you without identifying themselves.
6.
Taking a postdated check and not informing you in writing that it
will be deposited 3-10 business days prior to deposit.
7.
Soliciting a postdated check for the purpose of threatening or
instituting criminal prosecution.
8.
Depositing or threatening to deposit any postdated check
prior to its date.
9.
Causing charges to be made to any person for communications by
concealment of the true purpose of the communication, e.g., collect telephone
calls.
MISREPRESENTATION AND DECEPTION
10. The false
representation or implication that the debt collector is vouched for, bonded
by, or affiliated with the United States or any
State.
11. Falsely
representing the amount of debt.
12. Adding
unauthorized charges to debt. The addition of interest, attorney's fees,
collection charges, and other similar items should be examined carefully.
13. The false
representation or implication that any individual is an attorney or that any
communication is from an attorney.
14. The
representation or implication that nonpayment of any debt will result in the
arrest or imprisonment of any person or the seizure, garnishment, attachment,
or sale of any property or wages of any person unless such action is lawful and
the debt collector or creditor intends to take it.
15. Threatening to take
any action that cannot legally be taken or that is not intended to be taken.
For example, some collectors threaten to report a debtor to the Internal
Revenue Service if payment is not forthcoming.
16. Communicating or
threatening to communicate to any person credit information which is known or
which should be known to be false, including the failure to communicate that a
disputed debt is disputed. One common type of false communication is changing
the default date used to compute the seven-year period a bad debt can remain on
your credit report. A collection agency or bad debt buyer is required to use
the same date as the original creditor. Often, they use a newer date, which
allows the entry to remain on your credit report longer.
17. The use or distribution
of any written communication which simulates or is falsely represented to be a
document authorized, issued, or approved by any court, official, or agency of
the United States or any State, or which creates a false impression as to its
source, authorization, or approval.
18. The false
representation or implication that documents are legal process.
19. Using
a false name.
20. The false
representation or implication that documents are not legal process forms or do
not require action by the consumer ("you donÕt have to show up in
court").
21. The false
representation or implication that a debt collector operates or is employed by
a credit bureau.
22. Sending
you a collection message by post card.
23. Putting any
language or symbol, other than the debt collector's address, on any envelope,
including the collectorÕs name, unless it does not indicate that he is in the
debt collection business.
WHAT INFORMATION ABOUT A DEBT MUST A DEBT
COLLECTOR PROVIDE TO YOU?
Within (5) Five days after you are first
contacted, the collector must send you a written notice stating the amount of
the debt; the name of the creditor to whom the debt is owed; and explaining how
to dispute the debt.
WHAT CAN YOU DO IF A DEBT COLLECTOR
VIOLATES THE LAW?
You have the right to sue the collector in
state or federal court within ONE YEAR of the violation. You may recover up to
$1,000 statutory damages, any actual damages, plus attorneyÕs fees and court
costs. Actual damages may include excessive amounts paid, mental distress, and
damage to credit. In a class action, the debt collector may be liable for 1% of
its net worth or $500,000, whichever is less, plus actual damages. Contact me at 215-230-4250 for a free
evaluation of your complaint against a debt collector.
IN ORDER TO PROTECT YOUR RIGHTS:
1.
Save copies of all letters, notices and correspondence you get
from debt collectors. If you send them to us, we will analyze them for
you without charge.
2.
Save all voice mails and telephone messages from debt
collectors. Rerecord them onto a cassette.
3.
When dealing with a debt collector, make careful notes of whom you
talk to and what they say.
4.
Dispute in writing (not orally) all inaccurate statements and
notices you get from a creditor or debt collector. Send a confirming
letter after any oral conversations. Send correspondence by means that
will generate proof of receipt (fax, certified mail, etc.).
AFTER BANKRUPTCY DISCHARGEÉ..
I hardly owe anything, but my credit score
isnÕt that great, why?
Some lenders look at your total credit limit on each
account (credit cards, store charges, gas cards, etc.) to decide whether to
give you credit and at what interest rate. If you have ten Visa cards with a
$5,000 limit on each, and five have a zero balance and the other five have $100
each, your actual debt is $500. However, some lenders will rate you on the
basis of $50,000 of debt because you could go out tomorrow and charge that
much. Bottom line: close all inactive accounts, donÕt apply for lots of cards
and pay your bills early. Pay more than the minimum amount.
I was refused a credit card or a loan—what can I
do?
By law the lender must tell you if the decision was based
on a credit report. The lender
must give you the name and address of the credit-reporting agency. This is true
even if the credit report was only one factor in the decision. Write to the
credit-reporting agency. State that you were denied credit, insurance, or
employment by (name) on (date) based on a report from them, and you want a copy
of your report. By law the credit reporting agency must give you a free copy if
you request it within 30 days after you were turned down based on a report from
that credit reporting agency.
What if my car dies and I canÕt get credit for another
one? Can I get a car for $1,000 or
less?
Ellen Simon, a financial expert for the Associated
Press, says ÒIs
it possible to find a car for less than $1,000.?Ó She advises you to look hard and get help from a mechanic
you trust. Mark Theobald, auto
expert says that many cheap cars are being sold because they wonÕt pass
inspection or because the owner wonÕt pay to have them fixed. David Champion of
Consumer Reports
says some of the best picks for an inexpensive car are Honda Accords, Toyota
Corollas and Camry as well as Ford Taurus are good choices for drivers over 19. Avoid cars with expensive parts or V-8
engines, like Mercedes, BMW, Lexus and other imports, and avoid cars that are
easy to steal, like the 1995 Saturn SL.
How do your find them? Let your friends or family know that youÕre looking. Make a list of the models and makes
that you want. Check the bulletin
boards at retirement homes. Often
people move into assisted living residences and stop driving. Some great low mileage cars can be
found this way.
Have your car checked by a mechanic. This is crucially important! Expect
to pay about $100. for this service. Be sure to also call the U.S. Department of Education
Auto Safety Hotline at 800-424-9393 to see if there are any recalls on the car
that youÕre considering. The
Federal Trade Commission suggests that you ask the owner for maintenance
records. If the records are not
available, ask for the name of the dealership or the garage where the
maintenance and repair was done, and ask them about the car.
Car Fax www.carfax.com or Experian
Automotive www.autocheck.com will sell you a vehicle
history report that will tell you if the car has ever been the subject of an
insurance claim—totaled, flooded or burned.
Ellen Simon also suggests that once you have bought the
car, check on the insurance that the state requires. You must have liability insurance, but comprehensive
insurance is usually a waste of money on an inexpensive car. Use an anti-theft device like the
Club. You can find them on E-Bay for less
than $10.00
Be patient and thorough. YouÕll find your inexpensive car if you are willing to shop
around.
*****************************
Can you afford your house payments?
The National Low Income Housing Coalition
says that Òmost Americans who rely on just a full-time job earning the
federal minimum wage cannot afford the rent and utilities on a one- or
two-bedroom apartment.Ó
The average wage in Pennsylvania is
$13.82/hr. For a two-bedroom
rental alone, the typical worker must earn at least $15.37 an hour - nearly
three times the federal minimum wage, the NLIHC said in its annual "Out of
Reach" report.
That figure assumes that a family spends no
more than 30 percent of its gross income on rent and utilities - anything more
is generally considered unaffordable by the government.
Because of low wages, many poor Americans are
paying more than they can afford because wage increases haven't kept up with
increases in rent and utilities.
The median hourly wage in the United States is
about $14, and more than one-quarter of the population earns less than $10 an
hour, the report said.
"A lot of people continue to be squeezed
out," said Judy Levey, executive director of the Homeless and Housing
Coalition of Kentucky. "Housing here is relatively inexpensive, but
because the wages are so low, people can't afford housing,"
The report quoted federal Bureau of Labor
Statistics data that showed hourly wages rising about 2.6 percent over the past
year, slower than the 2.9 percent rise in rents recorded in the Consumer Price
Index.
Utility costs appear to be rising at a faster
rate than rents. Because of stagnant wages and the costly housing situation for
the nation's poor "has gotten worse over the last year," he said.
In Pennsylvania, an extremely low income
household (earning $17,792, 30% of the Area Median Income of $59,306) can
afford monthly rent of no more than $445, while the Fair Market Rent for a two
bedroom unit is $719.
A minimum wage earner (earning $5.15 per hour)
can afford monthly rent of no more than $268.
An SSI recipient (receiving $591 monthly) can
afford monthly rent of no more than $177, while the Fair Market Rent for a
one-bedroom unit is $596.
In Pennsylvania, a worker earning the Minimum
Wage ($5.15 per hour) must work 107 hours per week in order to afford a
two-bedroom unit at the area's Fair Market rent.
The Housing Wage in Pennsylvania is $13.82. This is the amount a
full time (40 hours per week) worker must earn per hour in order to afford a
two-bedroom unit at the area's Fair Market rent.
----National Low
Income Housing Coalition
IF YOU HIRE ATTORNEY LAUSTSEN TO REPRESENT YOU
IN A CHAPTER 7 OR 13 CASE, you will read and sign a representation agreement
that will explain all charges for legal services and filing fees.
Breaking News: Credit Card Companies Changing the Rules!
According to the New York Times, credit card companies are changing
the terms of their accounts at a historically high rate.
Consumers who carry balances from month to
month and pay finance charges regularly have traditionally thought that their
interest rates should stay the same.
Lately, however. Òlenders
employ new tactics to extract more and bigger penalties for even the slightest
financial transgressions. In the last few years, lenders have more frequently
raised customers' rates because of slip-ups elsewhere, like late payment of a
phone or utility bill, or simply because they felt a customer had taken on too
much debt.Ó
This practice, according to the New York
Times,
is called universal default.
ÒUnder universal default, the major card companies have increased the
fee charged to cardholders for being even an hour late with a payment to $39,
from $10 or less.Ó
A typical household has eight cards with
$7,500 on them, and the consumers tend to roll balances over from month to
month, never paying in full.
Credit card interest rate is theoretically
correlated to the likelihood that a borrower will make good on his debts.
Lenders typically measure those odds by a three-digit number known as a FICO
score.
Credit scores are used to determine everything
from how much a person can borrow to how much he or she pays for life insurance
to whether he or she can rent a home. A utility company in Texas even
experimented last summer with using credit scores to set prices for
electricity.
"Lenders use that score, almost like a
thermometer, to determine if they're going to grant credit or not," said
Tom Quinn, a spokesman for Fair Isaac. He estimated that his company had
calculated a credit score for about 75 percent of American adults.
The average FICO score is 720, he said. A
score below 620 lands a consumer in the riskiest category, known as subprime,
and virtually ensures the highest borrowing rates, if the consumer can obtain
any credit at all. Credit reports generally note only those payments made at
least 30 days late.
As many clients have discovered, their
Òminimum balanceÓ charges can double or triple overnight without any late charges—but
rather because the credit card company determines that a particular consumer
has too much debt. Often, this
increase in interest payment can push an otherwise responsible and current
debtor into bankruptcy.
NEW LAW GUARANTEES
FREE CREDIT REPORTS
Soon you'll be able to get your credit report
for free. A recent amendment to the federal Fair Credit Reporting Act (FCRA) requires each
of the nationwide consumer reporting companies to provide you with a free copy
of your credit report, at your request, once every 12 months, from www.annualcreditreport.com. The Federal Trade Commission (FTC), the nation's
consumer protection agency, has prepared a brochure, Your Access to
Free Credit Reports, explaining your rights and how to order a free annual
credit report.
A credit report contains information on where
you live, how you pay your bills, and whether you've been sued, arrested, or
filed for bankruptcy. Nationwide consumer reporting companies sell the
information in your report to creditors, insurers, employers, and other
businesses that use it to evaluate your applications for credit, insurance,
employment, or renting a home.
Know the difference between ÒCredit ReportÓ
and ÒCredit ReportÓ. While you are
entitled to a free annual credit report, your credit ÒscoreÓ or FICO score is
not free. Financial expert Mary
Hunt says,Ó as for your credit score, you must pay for it. And any company that offers it to you
for free is going to make you pay in some other way.Ó So, report-free, score-pay.
HOW DO I ORDER MY FREE REPORT BY MAIL?
Hunt says, Òthe only place you should ever go
to get your free copies (of your credit report) is www.annualcreditreport.com, or by completing the
Annual
Credit Report Request Form and mailing it to: Annual Credit Report
Request Service, P.O. Box 105281, Atlanta, GA 30348-5281.
When you order, you need to provide your name,
address, Social Security number, and date of birth, as well as your spouseÕs
name and Social security Number. To verify your identity, you may need to
provide some information that only you would know, like the amount of your
monthly mortgage payment.
You need to provide your name, address, Social
Security number, and date of birth. If you have moved in the last two years,
you may have to provide your previous address. To maintain the security of your
file, each nationwide consumer reporting company may ask you for some
information that only you would know, like the amount of your monthly mortgage
payment. Each company may ask you for different information because the
information each has in your file may come from different sources. www.annualcreditreport.com is the only
authorized source for your free annual credit report from the three nationwide
consumer reporting companies. www.annualcreditreport.com and the nationwide consumer reporting
companies will not send you an email asking for your personal information. If
you get an email or see a pop-up ad claiming itÕs from www.annualcreditreport.com or any of the three
nationwide consumer reporting companies, do not reply or click on any link in
the message — itÕs probably a scam. Forward any email that claims to be
from www.annualcreditreport.com or any of three
consumer-reporting companies to the FTCÕs database of deceptive spam at spam@uce.gov. www.annualcreditreport.com or any of three
consumer-reporting companies also will not call you to ask for your personal
information.
Q: Why
would I want to get a copy of my credit report?
A: You
may want to review your credit report:
because the information it contains affects
whether you can get a loan — and how much you will have to pay to borrow
money;
to make sure the information is accurate,
complete, and up-to-date before you apply for a loan for a major purchase like
a house or car, buy insurance, or apply for a job;
to help guard against identity theft. ThatÕs
when someone uses your personal information — like your name, your Social
Security number, or your credit card number — to commit fraud. Identity
thieves may use your information to open a new credit card account in your
name. Then, when they donÕt pay the bills, the delinquent account is reported
on your credit report. Inaccurate information like that could affect your
ability to get credit, insurance, or even a job.
Q: How
long does it take to get my report after I order it?
A: If you
request your report online at www.annualcreditreport.com, you should be able to
access it immediately. If you order your report by calling toll-free
877-322-8228, your report will be processed and mailed to you within 15 days.
If you order your report by mail using the Annual Credit Report Request Form,
your request will be processed and mailed to you within 15 days of receipt.
Whether you order your report online, by
phone, or by mail, it may take longer to receive your report if the nationwide
consumer reporting company needs more information to verify your identity.
There may be times when the nationwide
consumer reporting companies receive an extraordinary volume of requests for
credit reports. If that happens, you may be asked to re-submit your request.
Or, you may be told that your report will be mailed to you sometime after 15
days from your request. If either of these events occurs, the nationwide
consumer reporting companies will let you know.
WHY IS A CREDIT REPORT USEFUL IN A
BANKRUPTCY?
In preparing a bankruptcy filing, it is useful
to know all creditors that have reported that you owe money to them. You may have forgotten these creditors,
or they may be subject to a dispute.
In any event, we want to list these debts in your bankruptcy so
that they can be discharged. If you think that there are old debts
that you may have forgotten about, order a report.
WHY ORDER A CREDIT REPORT AFTER A
BANKRUPTCY?
We suggest that you order a credit report about four months after your bankruptcy
case has been discharged. All of
your unsecured debts should show as Ódischarged in bankruptcyÓ on the
report. If there are errors, and
there occasionally are, we will show you how to correct them so that your credit
report can get Òcleaned up.Ó
If you donÕt get a free credit report, you can
order a report directly from a consumer reporting company. Send a money order
for $9 for a copy of your report within a 12-month period.
To buy a copy of your report, contact:
1. Equifax
2. Experian
3 Trans
Union
A study released by the U.S. Public Interest
Research Group in June 2004 found that 79% of the consumer credit reports
surveyed contained some kind of error or mistake.[3] As a result, many
consumers frequently invoke their rights under the FCRA to review and correct
their credit reports.
Credit Reporting Agencies, as an information
furnisher, as defined by the Fair Credit Reporting Act, are companies that
provide information to consumer reporting agencies. Typically, these are
creditors, with which a consumer has some sort of credit agreement (credit card
companies, auto finance companies and mortgage banking institutions, to name a
few). However, other examples of information furnishers are collection agencies
(third-party collectors), state or municipal courts reporting a judgment of
some kind, past and present employers and bonders.
Under the FCRA, these information furnishers
may only report to a consumer's credit report under the following guidelines:
1.
They must provide complete and accurate information to the credit
rating agencies.
2.
The duty to investigate disputed information from consumers falls
on them.
3.
They must inform consumers about negative information, which has
been or is about to be placed on a consumer's credit report within 30 days.
You should follow the instructions in your
credit report that will show you where to mail your request for investigation
of a disputed account. Send your
request in writing to the credit report company on which the disputed item
appears. Include copies of all
documents that you believe support your position that you do not owe that
particular debt (or portion of debt) listed on the credit report. You should receive a written response
within thirty days.
Protect Your Privacy
You
can reduce marketing material and credit applications that you receive in the
mail, b telephone or email by writing to the Direct Marketing Association. Provide your name, address and
telephone number and email address with your request:
Mail Preference Service
C/o Direct Marketing Association
PO Box 643
Carmel, NY 10512
Telephone Preference Service
C/o Direct Marketing Association
PO Box 1559
Carmel, NY 10512
Email Preference Service
www.dmaconsumedrs.org/consumerassistance.html
Identity Theft
Identity theft is a growing problem. If someone has used your identification
to establish credit, report the incident as quickly as possible to each of the
credit reporting agencies listed below and ask that a fraud report be placed on
your file.
Experian
Equifax
TransUnion
(check the internet for current telephone
numbers—these numbers change frequently).
Important Consumer Information
Protect Your Identity
Never, never give out your bank or credit card number to anyone on
the internet unless you have initiated the contact by logging on to a known
merchantÕs URL. DO NOT respond
directly to emails purportedly from ÒPayPalÓ or (MerchantÕs Name). Communicate only through the merchantÕs
known URL.
Never give out your bank card, credit card, social security number
or financial information unless you began the transaction and you reason to
trust the merchant.
Mail Order Fraud
Remember that reliable mail order companies will not call you to
obtain personal information. Never respond to an email by clicking on it. Type the known URL into your browser.
Your U.S. Mail
Have a reliable
neighbor pick up your mail while you are away. Be sure you shred all credit card offers you receive
in the mail, donÕt put it in the trask unless well shredded.
Memorize passwords
for your computer, PDA, and mobile phone.
DonÕt use your birthday or social security number. Do not keep your passwords in your
purse, wallet or your car.
Subscribe to a credit reporting agency and check the report
regularly.
Sweepstakes
Most sweepstakes scams are ways that crooks use to get your
personal information—to steal your identity. If you are really a winner of a sweepstakes you will not be
required to pay a fee or disclose your personal information to the sweepstakes
company.
Vacation Schemes
Free vacations are usually high pressure scams to entice you to
buy a time share. If you take the Òfree tripÓ you may required to pay service
charges or buy membership in a travel club or attend a 2-hour sales pitch. Do
not respond to any mail or email promising lottery winnings. YouÕll be on the scammerÕs hit (victim)
list forever.
Medicare Rx Coverage Scams
DonÕt believe a telephone salesperson who tells you that you must
join their Medicare supplement plan
or you'll lose your other Medicare benefits. That is an illegal and deceptive scam. The Medicare prescription drug benefit
is voluntary. It supplements your other Medicare benefits.
Unsolicited Checks and Packages
If you receive an unexpected check, shred it. If you get a package from an unknown
sender, donÕt open it, return it marked Òrefused delivery.Ó
Jury Duty
DonÕt fall for the
Jury Duty scam. DonÕt disclose
your birth date and social security number, and donÕt be intimidated by someone
on the phone who tells you that you could be arrested for not appearing. Call your local courthouse and ask for
the Court AdministratorÕs office to verify all jury duty matters.
CREDIT CARDS
Millions of people get along just fine without credit
cards. If you decide that you really need a card—for example, you travel
quite a bit and need a card to reserve hotel rooms and rental cars—then
you can apply for a credit card right after you receive your discharge in bankruptcy. Your discharge will arrive usually
about six months from the time you file your chapter 7 paperwork, or within a
few months of the end of your chapter 13 plan. Typically, you will receive pre-approved credit card
offers at that time. Shop around for the best deal. DonÕt feel that you have to take the
first offer that you get. If you
have a very low income or no income, you probably wonÕt get any offers for ÒregularÓ
credit cards. You may wish to
consider applying for a ÒsecuredÓ credit card. HereÕs how a secured card works: You deposit a sum of money with a bank and are given a
credit card with a credit limit for a percentage of the amount you
deposit—as low as 50% and as high as 100%. Depending on the bank, you'll be required to deposit as
little as a few hundred dollars or
as much as a few thousand.
Unfortunately, secured credit cards can be expensive. Many
banks charge application and processing fees in addition to an annual fee. Also
the interest rate on secured credit cards is often close to 22%, while you earn
only 2% or 3% on the money you deposit. And some banks have eliminated the
grace period—that is, interest on your balance begins to accrue on the
date you charge, not 25 days later. If you find a card with a grace period and
pay your bill in full each month, you can avoid the interest charges.
Many secured credit cards have a conversion option. This
lets you convert the card into a regular credit card after several months or a
year, if you use the secured card responsibly. Because regular credit cards
typically have lower interest rates and annual fees than secured credit cards,
it's usually preferable to obtain a card with a conversion option.
To find a bank offering a secured credit card:
¥ call some local banks
¥ send $4 to Bankcard Holders of America, 524 Branch
Drive, Salem, VA 24153, and request "Building Credit: Banks Across the
Nation Offering Secured Credit Cards,"
Something New! Prepaid Credit Cards
A new development that provides a useful tool for those whose credit is impaired is the PREPAID CREDIT CARD. You can buy a prepaid credit card at the supermarket and put a balance on the card like a deposit. (this works like a telephone card). Then, if you need to have a credit card number to make hotel reservations, for example, you can give the hotel your card number and then when you check in you can pay cash.
OPEN DEPOSIT ACCOUNTS
Creditors look for bank accounts as a sign of stability.
Quite frankly, they also look for bank accounts as a source of how you will pay
your bills. The overwhelming majority of financial transactions in our society
are done by check. If you fill out a credit application and cannot provide a
checking account number, you probably won't be given credit.
A savings or money market account, too, will improve your
standing with creditors. Even if you never deposit additional money into the
account, creditors assume that people who have savings or money market accounts
use them. Having an account reassures creditors of two things: You are making
an effort to build up savings, and if you don't pay your bill and the creditor
must sue you to collect, it has a source to collect its judgment.
Just because you've had poor credit history, you shouldn't
be denied an account. Shop around and compare fees, such as check writing fees,
ATM fees, monthly service charges, the minimum balance to waive the monthly
charge, interest rates on savings and the like.
One quick way to rebuild credit is to pay your utility
bills early. Yes, I said Òearly.Ó If you get an electric bill on the
first of the month that is ÒdueÓ on the 20th, you should pay it in
full upon receipt. Utilities
almost always report to the credit bureaus.
Prompt payment will get you a figurative Ògold star.Ó
Likewise, pay your mortgage or lease upon receipt. If you have a mortgage, pay an additional amount each month
(where the payment coupon provides for Òadditional capitalÓ). Your additional payment need not be a
large amount, it can be as little as $25.00 and that may be reported in a
positive light on your credit bureau report.
OBTAIN A BANK LOAN
One way to rebuild your credit is to take some money
you've saved and open a savings account. You ask the bank to give you a loan
against the money in your account. In exchange, you have no access to your
money—you give your passbook to the bank and the bank won't give you an
ATM card for the account—so there's no risk to the bank if you fail to
make the payments. If the bank doesn't offer these types of loans, apply for a
personal loan and offer either a cosigner or to secure it against some
collateral you own.
No matter what kind of loan you
get, be sure you know the following:
¥ whether the bank reports your loan payments to credit bureaus.
This is key; the whole reason you take out the loan is to rebuild your credit.
If a bank doesn't report your payments to a credit bureau, there's no reason to
take out a passbook savings loan.
¥ the minimum deposit amount required for passbook loans.
Some banks won't give you a loan unless you have $3,000 in an account; others
will lend you money on $50. Find a bank that fits your budget.
¥ the interest rate. The interest rate on the loan is
usually much higher than what people with good credit pay. You will probably
pay between 8% and 12% interest on the loan. Yes, this means you'll lose a
little money on the transaction, but it can be worth it if you're determined to
rebuild your credit.
¥ the maximum amount you can borrow. On passbook loans, banks
won't loan you 100% of what's in your account; most will loan you between 80%
and 90%. On other loans, you will face a maximum on how much you can borrow.
¥ the repayment schedule. Banks usually give you one to
three years to repay the loan. Some banks have no minimum monthly repayment
amount on passbook loans; you could pay nothing for nearly the entire loan
period and then pay the entire balance in the last month. Although you can pay
the loan back in only one or two payments, don't. Pay it off over at least 12
months so that monthly installment payments appear on your credit file.
I strongly recommend that you purchase Rebuild Your
Credit, Solve Your Debt Problems, Nolo Press.
The paperback book contains lots of good advice on how to get and maintain
good credit. Order line is 1
800-992 6656.
If you need a credit card for travel purposes (to make
reservations), consider buying a prepaid Mastercard or Visa. These cards work just like phone
cards—you Òcharge them upÓ with money and they work just like a bank card
or credit card. Just remember that
the amount on the card is what you deposit, minus any service charges that the
card may impose. The best way to
use them is for making reservations and then pay your bill with cash,
travelerÕs check, or money order.
ATTORNEY DAVID LAUSTSEN will provide you with
counseling on whether bankruptcy is your best option. If bankruptcy is not the
right answer for you, he will suggest a range of other alternatives. He will also evaluate your situation to
determine if Chapter 7 or Chapter 13 is appropriate for your situation.

David Laustsen, Your
Bankruptcy Attorney
As with any area of the law, it is important to
carefully select an attorney who will respond to your personal situation. Your
attorney should not be too busy to meet you individually and to answer
questions as necessary. With over a decade of experience in bankruptcy matters,
Attorney Laustsen has the experience to help you get a fresh start, and do so at a
reasonable cost.
You should not hire an attorney unless he
or she agrees to represent you throughout the case, and attend all routine
hearings. You and Mr.
Laustsen will sign a Representation Agreement that states the charges for legal
services involved in your bankruptcy.
Attorney Laustsen will attend all
meetings with you, and will send you regular correspondence notifying you of the
progress of your case. Mr. Laustsen's experienced staff is available to answer
questions, and you can always talk to the attorney personally.
Attorney Laustsen is a
federally-designated Òdebt relief agency.Ó
He represents people who wish to file
for bankruptcy.
PREPARE FOR YOUR MEETING WITH ATTORNEY
LAUSTSEN
Be prepared to answer the following questions:
What types of debt are causing you the most
trouble?
What are your significant assets?
How did your debts arise and are they secured?
Is any action about to occur to foreclose or
repossess property or to shut off utility service?
What are your goals in filing the case?
What is your monthly gross income and the
monthly gross income of each member of the household?
Our job is to look at your total financial
picture to help you get the maximum debt relief possible under the law--to get
you a Fresh Start so that you can unload that debt burden once and for
all.
Free Appointment, Low Rates, Friendly Personalized Service
ATTORNEY DAVID LAUSTSEN'S OFFICE
350 S. Main Street, Suite 105
Penn's Court
DOYLESTOWN, PA 18901
215-230-4250
*
215-230-4250 
215-230-4250
Take this map with you when you go to you
appointment.
©Copyright, David S. Laustsen, 1998-2008.
Remember: The law often changes. Each case
is different. This brochure and
web domain is meant to give you general information and not to give you
specific legal advice. Please note that contact information contained herein is
provided as a service and a convenience to you. David Laustsen is not affiliated with any of these services
and cannot guarantee their effectiveness.
Two
credit counseling sessions are required for completion of a bankruptcy. To file your initial paperwork and
start your case, you must complete
at least the first counseling session. The
credit counselor will forward the completion certificate to our office by fax
or email. The certificate must be
included in your filing or it will not be accepted by the Bankruptcy Court
___Completion
certificate for either Credit Counseling Center of Richboro or other
certified Counselor. Tell the counselor that
your lawyer is David Laustsen, 350 S. Main Street, Suite 105, Penn's Court, Doylestown, PA
18901 215-230-4250.
¥
Counseling may be free if you
attend in person at the Credit
Counseling Center 832 Second Street
Pike, Richboro, PA 18954. 215
396-1880.
¥ If you elect to do your counseling by telephone (2 sessions) you will be required to pay the Credit Counseling Center, Richboro for the service. 215 396-1880.
Your
Checklist: Other Documents Required to Prepare Your Filing
___Copies of Seven
(7) consecutive months of pay stubs for every earner in the household.
__All credit card, medical, dental, utility, other bills
showing amount owed, address and account number. Please provide details of any cash advances, balance
transfers or purchases of luxury items within 90 days of filing. You must list all of your debts.
If we must add creditors to your case after the filing date, there is an additional charge of $40.00 for
preparation and the filing fee.
Please YOU
WILL NEED AN
ORIGINAL SOCIAL SECURITY CARD
FOR EACH PERSON FILING.
If you have lost
yours, you MUST apply now for a duplicate with Social Security—it is a mandatory item to be shown to the Trustee before your hearing.
___Collection agency letters
___Statement for each auto loan showing balance
owed. Any repossession paperwork?
___Statement for loans for student loans, mobile home,
motorcycle, 4- wheeler, etc.
___Statement on home loan showing balance on mortgage
(first and second, home equity line of credit, if applicable) (include statement for all Home
Equity Lines of Credit).
___Settlement statement on house purchase (HUD-1
sheet). Settlement sheets for all homes bought or sold in past 5 years.
___Copy of information on automobile accident
lawsuits.
___Copy of all lawsuits filed against you, including
foreclosure.
___Copy of tax returns for last THREE years (federal
1040 form--include all pages.) (if you have not filed taxes because of low
income, please advise us in
writing).
___If you collect Social Security, SSD, SSI, welfare,
pensions annuities—statement for each.
___Copy of deed to house, or lease for home (only if
in arrears).
___Child Support Orders, if any
___Copy of all judgments or liens, from civil cases or
tax judgments or liens
____Representation Agreement and payment to David
Laustsen, Esquire.
_____Time Share Documents, if any.
If you have a proprietorship business, in addition to the above you will need to provide
copies of:
____monthly business profit and loss statements prepared by an accountant for the past EIGHT (8) months.
FinallyÉ. You will need:
____all personal and business bank statements for 8 months prior to filing and including the date of
filing.
© 2009 David S. Laustsen, Esquire
Statement required under 11 USC ¤527(b)
IMPORTANT
INFORMATION ABOUT BANKRUPTCY ASSISTANCE SERVICES FROM AN ATTORNEY OR BANKRUPTCY
PETITION PREPARER.
If
you decide to seek bankruptcy relief, you can represent yourself, you can hire
an attorney to represent you, or you can get help in some localities from a
bankruptcy petition preparer who is not an attorney. THE LAW REQUIRES AN
ATTORNEY OR BANKRUPTCY PETITION PREPARER TO GIVE YOU A WRITTEN CONTRACT
SPECIFYING WHAT THE ATTORNEY OR BANKRUPTCY PETITION PREPARER WILL DO FOR YOU
AND HOW MUCH IT WILL COST. Ask to see the contract before you hire anyone.
ÒThe
following information helps you understand what must be done in a routine
bankruptcy case to help you evaluate how much service you need. Although
bankruptcy can be complex, many cases are routine. Before filing a bankruptcy
case, either you or your attorney should analyze your eligibility for different
forms of debt relief available under the Bankruptcy Code and which form of
relief is most likely to be beneficial to you. Be sure you understand the
relief you can obtain and its limitations. To file a bankruptcy case, documents
called Petitions, Schedules and Statement of Financial Affairs, as well as in
some cases a Statement of Intention need to be prepared correctly and filed
with the Bankruptcy court. You will have to pay a filing fee to the bankruptcy
court. Once your case starts, you will have to attend a required first meeting
of the creditors where you may be questioned by a court official called a ÒtrusteeÓ and by creditors.
If
you choose to file a chapter 7 case, you may be asked by a creditor to reaffirm
the debt. You may want help deciding whether to do so. A creditor is not
permitted to coerce you into reaffirming your debts. If you choose to file a
chapter13case in which you repay your creditors what you can afford over 3 to 5
years, you may also want help with preparing your chapter 13 plan and with the
confirmation hearing on your plan which will be before a bankruptcy judge. If
you select another type of relief under the Bankruptcy Code other than chapter
7 or Chapter 13, you will want to find out what should be done from someone familiar with that type of
relief.
Your
bankruptcy case may also involve litigation. You are generally permitted to
represent yourself in litigation in bankruptcy court, but only attorneys, not
bankruptcy petition preparers, can give legal advice.Ó