Bankruptcy filings are on the decline, after reaching a high 2011. Over the past five years bankruptcies have fallen by 50 percent for Chapter 7, and by 25 percent for chapter 13. Business reorganizations have fallen as well from a high of almost 12,000 in 2011 to little more than 7000 at the end of 2016. However, for those of us who have very clear memories of the previous recession there are certain markers that make one nervous. For instance, housing prices are now back at the level they were before the bubble popped. There is a huge amount of consumer debt out there in auto loans, student loans, and credit card debt. It’s hard to say with the factors in play that we’re not so much exiting a recession and recovery, but getting our heads above water before the next wave.
There’s a law in Florida that’s part of the statutes that regulate motor vehicles, and it’s about financial responsibility. This law allows a driver’s license to be suspended, not by the county or state government,not for unpaid court costs, fines, fees, or infractions, but by a creditor who has received a judgment against you in a court of law. It’s something many people don’t know about until it’s too late, and even state lawmakers know that it disproportionately affects the people least able to afford the loss of their licenses. Bankruptcy can help you get your license back legally and quickly.
The retail fallout is still going on, with more closings expected from Macy’s, Kmart, and Sears just to name a few. Mall stalwarts like The Limited and Claire’s are going out and leaving only darkened storefronts behind. Amazon, conversely, is expecting to add 100,000 jobs in the next year and a half. The brutal truth is that even after the Recession we were jammed to the rafters with retail in the form of malls. Going shopping is increasingly more likely to mean going online than going to a location, with even specialty retail holding a significant presence in e-commerce. Unfortunately all these closings mean that people who have been pinched by stagnant wages for years are losing their lifelines and now they need financial help.
This is one of the top five questions that any bankruptcy attorney is asked. The answer is “Sometimes.”
A lot of unscrupulous lawyers will sell bankruptcy services as a way to get out of an eviction proceeding that is already underway. It really depends on the circumstances under which the eviction was initiated. In general, if you received a judgment of eviction before filing for bankruptcy, your landlord would still be able to go ahead with the eviction. Once that judgment is in place, there is nothing that can stop an eviction.
Arbitration has a deservedly bad reputation of forcing vulnerable people into a procedure that is touted as a cheaper alternative to litigation. While this is generally true for the company to which the contract was signed, it is generally untrue from the point of view of the person who signed the contract. You know about Wells Fargo killing lawsuits using arbitration clauses in their former depositors’ contracts. Despite their sappy Christmas commercials and the bank’s new CEO vowing to restore customers’ battered trust in Wells Fargo, the company has outraged public opinion enough that there are bills being introduced at the state and federal level to protect consumers from forced arbitration. In fact, a federal judge has called forced arbitration, “restricting Americans access to their own courts.”
To understand just how bankruptcy can help with your credit, first you need to understand how long certain items stay on your credit report. For entries such as late payments, charge-offs, collections, tax liens, judgments, and foreclosures the magic number is seven. These items stay on your report a full seven years. Another troublesome thing is that “hard inquiries” remain visible for two years and can cause your score to dip for as much as six months. If you have enough of these entries, your credit score can be punched down from good or fair credit into bad credit. If you are living on the financial edge, it’s going to be reflected in your report, even if you are making payments.
There are people who think that bankruptcy is the worst fate ever. It’s not, and nobody gets to the point where they’re considering filing for bankruptcy without a lot of lost sleep. What bankruptcy is a way to either say, “I have nothing to pay off this debt with, or it’s ruining my life!” or “I have this debt but I can’t pay off all of it, or it will ruin my life!” or “My business has more debts than assets, but I think we could make it if I could pay some of the debt.” In this case, the options are Chapter 7 or Chapter 13 for individuals, and Chapter 11 for businesses.
Legal fees are a big source of mystery to most people, as very few have to deal with attorneys and legal matters on a regular basis. It can be confusing, as it’s one of those thing for which there can be a number of different answers for the same question.
The process of bankruptcy, even a ‘simple’ liquidation bankruptcy – also called a chapter 7 bankruptcy – is a complicated legal process. Nobody gets there without a lot of lost sleep and worry. Among the biggest questions is how to prepare for bankruptcy, and how to recover once the bankruptcy is finished. These worries are well-founded, as exiting bankruptcy successfully takes a toll on your credit, and impacts your ability to rent a place to live, obtain a car, and rebuild your credit. Here are some tips that will help you before, during, and after your chapter 7 bankruptcy.
About Chad Van Horn
Chad T. Van Horn, Esq. is a South Florida business leader and founding partner attorney of Van Horn Law Group, P.A. Through a combination of dedicated philanthropy, spirited entrepreneurship and legal expertise, he applies his resources and network to helping people. Learn more about Chad Van Horn.