Sacramento Bankruptcy & Debt Relief Attorney

Health Insurance Holes

Medical care continues to be one of consumers’ biggest costs. Understandably, then, medical insurance is vital. Health insurance holes, though, can leave some exposed. Health insurance may not cover some costs or other procedures. It may cover more but come with higher co-pays. No matter the cause, health insurance holes come with a cost. If you have medical care needs that exceed your insurance coverage, debt can follow.

According to a Harvard study documented in this story, approximately half of consumer bankruptcies are caused by medical bills. Health insurance holes often lead to medical debt. Debt that cannot be afforded.

Like other forms of debt that can’t be afforded, bankruptcy may be a solution. Health insurance holes are a cause of potential debt. Like credit card debt, car repossessions or other unsecured debt, medical bills may prompt consumer bankruptcy. Unlike other forms of debt, though, medical care costs often come with a higher price tag.

If you have health insurance holes that result in uncovered medical bills, those bills are likely larger than your other debts. Tens of thousands of dollars in credit card debt can accumulate over years. Tens of thousands of dollars in medical care costs can accumulate over hours or days. If you are not covered by insurance, dealing with that debt is often impossible.

Given the costs, and repeated increases, in healthcare insurance premiums and co-payments, health insurance holes are increasingly inevitable. If you then need medical care for treatment not covered, debt is an obvious byproduct.

Bankruptcy and Credit Card Debt

Eliminate credit card debt through bankruptcy or pay it off? That is the question. For many consumers, though, it is a loaded question. They would like to pay off their credit card debt, but they can’t. And they know it. What, then, to do? Eliminating (or discharging it in bankruptcy parlance) is the only viable option for many.

Credit counseling often provides tips to reduce your credit card debt. Tactics such as paying off high interest credit card debt first is a prudent policy. Eliminating non-necessary expenditures and creating a budget are others. But the bottom line is it takes money to pay off your debt. If you don’t have it, you can’t do it.

Paying only minimum payments will get you nowhere. It’s only financial benefit is to the credit card industry. Using this credit card debt calculator confirms for many that there is no way to pay off their credit card debt. Ever.

Bankruptcy viablity takes into consideration a calculation, too. As addressed in other areas of this website, there is a cost-benefit analysis in determining whether a bankruptcy is worthwhile. Is it better for your financial well-being to have the amount of debt you have and no bankruptcy? Or would it be better to file bankruptcy and eliminate your debt? That is the real question to consider.

Obviously, too, your income, housing costs and other living expenses are part of this financial evaluation. These issues dictate whether you can repay your debts. If you can’t, bankruptcy may be your only option.

Kanye West Filing Bankruptcy?

Is Kanye West filing bankruptcy? He could. But we’ll see if he does. The point of this post is that someone worth a purported $100 million can file for bankruptcy. Normally such wealth doesn’t warrant a bankruptcy. With $50 million in debt, though, maybe it will.

The purpose of bankruptcy, whether you are Kanye West or you are you, is protection from creditors. Kanye West could need protection from his creditors and could be filing bankruptcy. According to this TMZ story, he may have the debt to make it worthwhile.

Anyone can file for bankruptcy who is eligible. Your financial worth cannot deny you access to bankruptcy protection. Granted you may have to repay all your creditors if you are worth $100 million, but you can do it on your terms.

Bankruptcy is a financial tool to del with your debt. Maybe you file bankruptcy because you can’t afford any of it. Maybe you file because you can only pay part of it. An maybe, why Kanye West may be filing bankruptcy, you do it because you need to rearrange your debt to manage it. There are many reasons to file for bankruptcy.

Creditors often cause conditions that give rise to bankruptcy filings. Lawsuits and judgments are common culprits. If, for example, you are sued and a judgment issued against you, you wages may be garnished. Your assets seized or frozen. Or any number of other options creditors can take to recover the money they are owed.

Student Loan Bankruptcy

You can have student loans, and you can file bankruptcy. But getting rid of a student loan though bankruptcy is a tough trick. Not that you can’t do it. But eliminating student loans in a bankruptcy is hard. Perhaps I should say hardship. That, though, is what it takes to discharge student loans through bankruptcy. Showing of hardship is the key to allowing a student loan to be discharged in bankruptcy.

The type of hardship to eliminate a student loan in bankruptcy goes way beyond basic hardships of life. Losing your job likely won’t do it. Losing your ability to work might. Workplace injury probably not. Paralysis maybe. You get the point. It takes a significant showing of hardship to discharge student loans. In a recent news article, the Supreme Court denied a possible appeal to the rules of student loan debt and bankruptcy. By denying the hearing, the Supreme Court let stand the lower court’s findings of law. The hardship analysis touched on here is laid out in detail in the story.

Even if you could establish the necessary hardship to eliminate your student loan through a bankruptcy filing, there is more you would have to do. To discharge a student loan you would have to bring a separate filing within the bankruptcy court while your case is pending. This is called an adversary proceeding. And the separate proceeding costs a separate fee, likely far more than the cost of the bankruptcy filing.

What then to do if you can’t discharge your student loan debt through bankruptcy? For most, eliminating other debts is a common scenario. If you have credit card debt, that can be eliminated, or discharged, in bankruptcy. Same if you have medical bills, car repossessions, lines of credit or other unsecured debts. Eliminating these debts might lighten your financial load, allowing you to afford your student loans.

Every individual and case is different. Learning your bankruptcy options may free your cash flow for student loans.

Mortgage Strip-Off in Bankruptcy

A mortgage is a secured debt. If it is not repaid, the property securing the debt can be taken back by the lender. Typically a foreclosure results when the mortgage is not made. Foreclosures are addressed in other areas of this website. Suffice it to say for this topic, though, foreclosure is the process of selling your home to satisfy the debt you didn’t pay. But a mortgage can also be stripped off in a bankruptcy.

Bankruptcy can stop a foreclosure. It can prevent your home from being sold. If you want to keep your home, you will still have to pay your mortgage even if you file for bankruptcy. But bankruptcy can buy you time. It can allow you the time you need, up to five years, to get current on your mortgage. And as long as you make your bankruptcy payments, your home is protected from your bank or mortgage company.

You can also eliminate, or strip off, a mortgage through a bankruptcy. But you must establish that the loan is entirely unsecured. What this means is that the security, or collateral, for your mortgage loan is no more. Usually such a scenario results when you borrow against your home that is already mortgaged. Taking out equity in the form of a second mortgage or home equity line of credit (HELOC) are common examples. To take out such a loan there must be equity in your home. There must be at least enough equity to cover the loan. If you home was worth $175,000, and you had a $1000,000 first mortgage, you had $75,000 worth of equity to borrow against. Think of the real estate bubble or boom when “everyone” had equity and “everyone” borrowed against it. Taking out such loans was commonplace.

But, as we all know, the real estate boom went bust. Mortgages and home equity lines of credit (HELOC) lost their collateral when the homes that secured their debt lost their equitImage result for mortgage loan upside downy. To draw from the example above, the home that was worth $175,000 may now be worth only $90,000. If so, the equity evaporated to the point where there wouldn’t even be enough to cover the first mortgage. Nothing would be left be way of security for the second. Not only would the house be underwater, the first mortgage on its own would be upside down. With no equity left to cover the second mortgage or home equity line of credit (HELOC), the loan would be entirely unsecured.

If you have a loan that was once secured against your home but is now entirely unsecured, it can be stripped off in a bankruptcy. But this can be done only through a Chapter 13 bankruptcy. Attempts have been made to do it through a Chapter 7, but the US Supreme Court would not allow it. This NY Times story covered the case where an attempt was made to strip off a mortgage as part of a Chapter 7 bankruptcy.

Sacramento Bankruptcy: What is a Bankruptcy Conversion?

Bankruptcy conversion is changing the chapter of your bankruptcy filing after you have already filed. Types of bankruptcy are organized by chapters of the federal law that created them. Though there are many types of bankruptcy chapters, the most common for consumers are Chapter 7 and 13. Other areas of this website address all of the differences between Chapter 13 and 7 bankruptcies. But for this issue, suffice it to say that you repay at least some of your debts in a Chapter 13 (bankruptcy reorganization), but none in a Chapter 7 (bankruptcy liquidation).

If you file for one type (or chapter) of bankruptcy and, later, decide to do another before your case is complete, you can convert your bankruptcy. This means that you change your case from one form of bankruptcy filing to another without having to refile your case. Much of the information in your new bankruptcy chapter will have to be provided after you convert. But you won’t have to refile another case to do it.

Refiling a bankruptcy often comes with a penalty. To prevent people from filing too many bankruptcies, particularly in quick succession, Congress imposed restrictions on later filings to inhibit them. If, for whatever reason (and there can be many), you do need to refile a bankruptcy, it can be done. Usually, too, there is no penalty for doing so, especially if the cases are spread broadly over time. But if someone files bankruptcy 3 times in year, there likely would be problems. By being able to convert your case, you eliminate possible problems with future bankruptcy needs.

Converting your bankruptcy can also save you money. Instead of having to refile a brand new case with a brand new filing fee, you only have to pay a conversion fee, which saves you hundreds of dollars.

Most importantly for a conversion, it gets you where you want–or need–to be. For example, if you are in the midst of a Chapter 13 bankruptcy reorganization and can no longer afford your plan payments, you may need to convert to a Chapter 7 liquidation. Bankruptcy conversion laws allow you to do this. Loss of a job or other financial obstacles that can prompt a bankruptcy filing can also prompt a bankruptcy conversion.

Bankruptcy Credit Counseling

Bankruptcy credit counseling is a requirement of the bankruptcy system. It mandates that someone who files bankruptcy must undergo credit counseling before filing bankruptcy and, again, after filing but before the bankruptcy is discharged. It is not difficult to do, nor is it expensive. But it must be done.

Unless bankruptcy credit counseling is obtained before filing, you are not eligible to file. And if you don’t get a second credit counseling session after you file, you won’t receive a discharge. It is a must in the bankruptcy filing process since Congress imposed it as a requirement in 2005.

The purpose of pre-filing bankruptcy credit counseling is to alert consumers to possible bankruptcy alternatives before they file. Almost never, though, are other options besides bankruptcy recommended in the counseling process. That’t because people filing bankruptcy cannot afford their debts, which is why they have begun the bankruptcy process. But if they could, bankruptcy credit counseling could reveal that possibility. Even if you know bankruptcy is your only option, you must still undertake pre-filing bankruptcy credit counseling.

After you have filed, but before your case can be concluded with a discharge, you must take a second credit counseling session commonly called debtor education. Debtor education does just what it says. It educates debtors on debt, financial considerations and budgeting. All this is an effort to counsel the consumer to avoid future financial failings. Though bankruptcy is not always brought on by financial fault, debtor education bankruptcy credit counseling seeks to avoid that future potential.

Cost for bankruptcy credit counseling varies. Typically credit counseling sessions cost less than $25. Upon completion of credit counseling, a certificate of completion is issued. I file these forms for you to reflect completion of your bankruptcy credit counseling requirement.

Bankruptcy and Student Loans

Bankruptcy does not normally allow for the discharge of student loans. Only under an extreme hardship can a student loan be discharged. These guidelines give the degree of difficulty of eliminating student loans through bankruptcy. Unemployment and other debt obligations will rarely do the trick to discharge a student loan through a bankruptcy. As I have mentioned to clients over the years, you wouldn’t want the hardship it takes to qualify for the elimination of student loans in a bankruptcy.

Efforts have been made to allow the elimination of student loans in bankruptcy. But, to date, nothing has changed. The Youtube video below presents a picture of the efforts made to make student loans more likely to be discharged through a bankruptcy filing.

What, then, to do? Your best bet is to eliminate all the debts you can through bankruptcy if this is your best debt elimination option. Often times getting rid of other debt will allow you to manage your student loans.

Whether you might qualify for student loan hardship allowing you to eliminate your student loans in a bankruptcy is a factual analysis. Since student loans are often the biggest consumer debts, a free consultation to determine whether student loans can be discharged is well worth the price!

Medical Bills and Bankruptcy

Medical bills are the prime factor for filing bankruptcy in the United States. According to the Huffington Post, as well as numerous other sources, it is the main reason.

Medical bills prompt bankruptcy filings for a variety of reasons, not the least of which is the high price of medical care cost in America. Insurance availability is another ingredient. Though Obamacare has created more coverage in years past, costs have escalated, as have co-payments. The end result is more medical care debt income to cover it.

Medical care is not optional. At least it shouldn’t be. But in America it often is. Faced with the dilemma between medical care and unaffordable expense, bankruptcy may be a necessity. Bankruptcy can deal with medical care debt. But neglected medical care has no cure.

Medical care costs frequently overshadow other financial obligations which, in turn, can cause even further debt. Using credit cards to pay for medical care has become increasingly common. CareCredit is a credit agency devoted to medical care costs and treatment.

Medical care costs, too, often come with aggressive collection tactics. While it does not seem fair, often the most aggressive collection companies and agencies represent medical care providers.

Bankruptcy and the Bankruptcy Means Test

The bankruptcy Means Test was a qualification standard adopted by Congress in 2005 for bankruptcy filers. It essentially determines whether you qualify for a bankruptcy liquidation, better known as a Chapter 7 bankruptcy. If you do not qualify for a Chapter 7 bankruptcy, the Means Test establishes the amount of your debt you must repay though a debt reorganization, most commonly a Chapter 13 bankruptcy.

The Means Test was established by the Department of Justice. Here is a link to their site. The Means Test is not difficult to apply, though it can be complex if you have higher income or your personal finances themselves are complex.

Even if your income is above the Means Test limit, you may still qualify for a Chapter 7 bankruptcy liquidation. Expenses are taken into consideration and, if higher than the norm, they may offset your income allowing you to qualify. There are other factors, too, that impact the figures for the Means Test. Suffice it to say, there is a lot that goes into the Means Test.

And even if you do not qualify for a Chapter 7 bankruptcy under the Means Test, you can still qualify for filing bankruptcy under a Chapter 13 bankruptcy reorganization. This means you have to pay back a portion of your debts; but it also means that whatever portion of debt you don’t repay is discharged.

Sometimes, too, there are benefits to filing a Chapter 13 bankruptcy to reorganize your debt. Since you repaying a portion of your debt in a Chapter 13 bankruptcy, the government provides incentives to guide you in this direction. Many of the benefits of filing for Chapter 13 are found throughout this website.

Sacramento Bankruptcy: Debt Relief Alternatives

Bankruptcy is an option to eliminate or reorganize your debt. There are other alternatives besides bankruptcy, though. Debt relief companies and agencies can help, but be cautious taking this route.

Many debt relief companies and agencies promise to provide results, but don’t deliver. While there are certainly legitimate enterprises offering help for those in need of debt relief, many do not do as promised. Often payments are not made to creditors, there are hidden fees and no protection from lawsuits. Scams can sometimes occur as this story suggests. Sometimes the debt relief company or agency becomes yet another creditors piled on top of the rest of your debt.

The debt relief industry, not taking into account bankruptcy practitioners, is a multi-billion dollar industry. Many times, too, the debt relief companies and agencies are owned by the very creditors your are seeking to suppress. A common scenario is when you contact a creditor, say a credit card company, and convey a concern you have with your debt, interest rate, minimum payments or a host of other potential problems. They can refer you to a debt relief company or agency that, surprise, is owned by the same creditor. The purpose of the “debt relief” in this setting is not to manage or lower your debt; it is to funnel as much money as possible to the parent creditor company. This does not help you.

Debt relief organizations, even if effective at minimizing your debt, do not protect you from potential lawsuits. While a bankruptcy prevents a creditor from even contacting you, much less suing you, debt relief companies can’t do this.

Another pitfall to potential debt relief companies and agencies is that if they do arrange for a payoff of your debt over time, you are not paying your debt. Credit ratings and scores can be damaged more detrimentally than even a bankruptcy in such settings.

Sacramento Bankruptcy: Donald Trump Filed 4 Times (Don’t Be Deterred by a Supposed Bankruptcy Stigma)

Bankruptcy is a powerful tool to eliminate or reorganize your debt. When your debt is beyond your ability to repay, bankruptcy can be a way out.

Individual debt relief is no different than a business filing. The point is to pay what you can and eliminate what you can’t. Business filing are done for the sake of the enterprise. Personal bankruptcies should be viewed in the same light. Though the enterprise in a personal filing is self, the concept of debt relief is the same. As Donald Trump declared in response to his business interests filing bankruptcy 4 times, it is “smart”. See for yourself his bankruptcy story.

Bankruptcy law allows you protection from your creditors. Don’t be dissuaded by a supposed bankruptcy stigma. Filing bankruptcy in a business setting is seen as strategic and financially wise. Personal bankruptcy should be perceived the same. If you have the legal opportunity to eliminate your debt or dwell on your inability to repay it, choose the former rather than the latter!

Sacramento Bankruptcy: Credit Card Debt

Credit card debt is one of the most common forms of debt for bankruptcy filings in the Sacramento region.

There are a number of reasons credit card debt can cause bankruptcy. The ease of ability to obtain credit card debt is first factor to consider. Often consumers are bombarded with credit card applications, cash advances and debt consolidation offers. Rarely are these offers solicited.

Once the credit card companies obtain your business, they continue to encourage further credit use and, in so doing, foster further debt. If the debt with one credit card debt becomes beyond the ability to repay, at least realistically, other credit card companies are alway there to “rescue” you financially with more debt. Low introductory interest rates, promotions and teasers to draw you in are part and parcel of credit card marketing strategies. This strategy is particularly so amongst younger americans as this study suggests. When the low interest rates and payments expire, consumers are often left with only more debt. Soon robbing Peter to pay Paul can become a lifestyle.

Credit card companies have an obvious interest in extending credit: profit. Loaning money is one of the most profitable businesses in America. Only relatively recently have credit card companies been required to show how long it would take to repay your debt if you made only the minimum payment each month. Those figures will show the obvious profit built into their payments.

As credit card companies pad their profits, consumer debt grows. Debt can begin to beget more debt. It’s a tough cycle to break once you are in it.

Sacramento Bankruptcy: Foreclosure Basics

If you are facing foreclosure of your home, there are some basics you need to know.

A foreclosure does not mean your home is sold. Your house is still yours. A foreclosure is notice warning you of a mortgage delinquency. If you do not come current with your mortgage arrears (amount you are behind on your mortgage payments), the lender can sell your home to collect what they are owed. But before they can sell your home, they must give you 90 days to catch up on your mortgage.

If you cannot catch up on your payments within the 90 days, you can stop the lender from selling your home by filing bankruptcy. That does not mean, though, you don’t have to pay the delinquent portion of your mortgage if you want to stay in your home. But a bankruptcy can buy you time–up to 5 years–to catch up on your payments and, in so doing, continue to keep your home.

Modifying your mortgage may be an alternative if bankruptcy won’t work. There are a number of government agencies out there to help. KeepYourHomeCalifornia.org is a good one. Just know that if you can’t bargain your way out of a foreclosure with your lender, bankruptcy is a great option.

Sacramento Bankruptcy: Bankruptcy News

Get the latest in bankruptcy news from The Wall Street Journal. Learn about bankruptcy changes and trends on the national front. For what to know about Sacramento bankruptcy, schedule a free consultation today!

Sacramento Bankruptcy: Improved Economy Prompts Bankruptcy Filings

Bankruptcy is a reflection of credit and the debt that goes along with it. As the economy slowly improves, credit is reemerging and, along with it, a confidence to use it. When that debt cannot be managed, bankruptcy may be a byproduct. As this news article reflects, bankruptcy filing flattened as credit dried up in the recent recession. Now, though, credit is coming back.

Taking on new credit is a sign of a strengthening economy. But when the debt can’t be repaid, bankruptcy may be an option.

Sacramento Bankruptcy: Medical Care & Prescription Costs

Medical care and prescription costs are some of the most common expenses facing consumers considering bankruptcy in today’s economy. Costs for medical care and prescriptions are outpacing incomes, particularly fixed incomes. The retired and disabled are bearing the brunt of these increases and, with them, their buying power decreases by the day.

Prescription drug costs have exploded, leaving many without necessary drug treatment due to their inability to afford their prescription costs. Rising insurance premiums, co-pays and coverage gaps only exacerbate the problem. It’s not that something has got to give; something already gave.

Consumers are left in the lurch looking to provide for their health and, at the same time, afford it financially. This CNBC article paints the picture.

What then to do? Debt has become a byproduct of healthcare in America. If you can afford to repay the debt, you have a way out. If not, bankruptcy may be your only option. Though bankruptcy is a final straw alternative for many, it is valuable resource for many facing health care and prescriptions costs beyond their budget. Medical and prescription bills are dischargeable debts that are eliminated upon a bankruptcy discharge. Food for thought for those in debt due to healthcare.

Sacramento Bankruptcy: NFL (Not For Long) Bankruptcy History

With the start of the playoffs, ratings and revenue surge in the NFL and, along with it, players earn bonuses beyond their salaries. Those riches, though, are temporary. The average career in the NFL is less than 4 years. When football careers end, lifestyles for many often don’t. Debt results when spending exceeds income.

More debt than income to repay it is not a concept immune to any profession. Ex-NFL players, statistically speaking, file bankruptcy more frequently than the norm. The attached story illustrates this phenomenon.

While there are factors in every financial field and family that can precipitate bankruptcy, know that you are not alone if you need to file bankruptcy.

For those more interested in NFL scores than bankruptcy statistics, click here.

Sacramento Bankruptcy: Credit Card Debt Cost

Credit card debt interest cost for the average consumer in 2015 exceeded $2,600 according to a recent survey. Eliminating credit card and other consumer debt was the crux of the survey’s conclusion for consumers to regain financial stability. Money spent on credit card interest and other charges buys nothing and results in no return.

Much credit card and consumer debt is driven by the rising cost of living for most americans. While there are other options to deal with your debt, including loan consolidation and borrowing against your home equity, such alternatives do not eliminate your debt; they only lessen or elongate the loan costs.

Bankruptcy discharges your debt. It is eliminated. Often with individuals facing growing consumer and credit card debt, that debt does not diminish. With rising credit costs comes the need to obtain more credit which then creates more costs. Robbing Peter to pay Paul suddenly can become a lifestyle. If further borrowing no longer is an option, at least not one that can be tolerated any longer, bankruptcy may your best solution.

Sacramento Bankruptcy: Coping with Debt

Debt can be dealt with in many ways. Bankruptcy is an option, but is likely not a first alternative. Read the Federal Trade Commissions thoughts on coping with debt. Though initial options to resolve your debt, such as consolidation and refinancing, may eliminate your debt problem, creating more debt to solve a debt dilemma can be a risky proposition. Borrowing more may only make the problem worse.

Bankruptcy is about what to do when what you have done before doesn’t work. Even if a last option, bankruptcy offers a safety net of last resort to resolve your debt crisis.

Rarely do you have to surrender your property when you file for bankruptcy. Exemption laws allow you to protect a certain amount of property you have. The vast majority of time this means all the property you have. Bankruptcy is an option available to you.