Sacramento Bankruptcy & Debt Relief Attorney

Wage Garnishment Relief

Wage garnishment relief is a must for those in need. A wage garnishment is the result of an earnings withholding order. It means a creditor can collect what they are owed directly from your paycheck. Without your consent. Often creditors obtain authority to garnish wages through the sheriff’s office. Typically creditors obtain the ability to garnish wages after obtaining a judgment. They can then take the judgment to the sheriff who can then initiate a wage garnishment to collect the debt.

There is little employees can do to stop a garnishment. Some can seek a hardship waiver. But most cannot. A wage garnishment can take up to 25% of an employee’s pay. Wage garnishment relief becomes a big priority for those facing a garnishment. And for good reason.

U.S. News and World Report recently published an article depicting the need of wage garnishment relief for former students’ salaries being garnished by the U.S. Department of Education. It was for student loan repayment. And it was for a school that no longer was. No education. No degree. Now no normal paycheck. Tough spot to say the least. If student loan default can result in garnishment by the government, what does that say about the vulnerability of the American employees’ pay? It says a lot.

There are, though, ways around a garnishment. Paying off the underlying debt is an obvious choice. So is contesting the basis of the debt. But both these options are likely not to result in wage garnishment relief. Employees can rarely pay off debts resulting in garnishments. And rarely can the debts be contested. They are owed. They just can’t be paid. That’s why the wage garnishment was imposed.

The only option for many is bankruptcy. And a good option it is. Bankruptcy is often viewed as a last line of financial defense for most. And it should be. But a wage garnishment is obviously a sign of needing to play your last card. Besides, if you are facing a judgment and the need for wage garnishment relief, your credit is already impacted. Big time. Bankruptcy at this stage only serves to benefit your credit. Not to mention stopping any wage garnishment. Bankruptcy is a powerful financial tool. And a wage garnishment is predicament in need of a powerful fix.

Sacramento Bankruptcy Debt Relief

Sacramento bankruptcy debt relief is needed for many in the region. The economy in Sacramento is better since the great recession. But it is not back. Not even close. Those living and working in Sacramento know this.

Debt, though, is back. Consumer debt has risen far beyond the economy has grown. It is a recipe for Sacramento bankruptcy debt relief. When debt peaked in 2007-2008, the economy could support it. But that changed. The economy tanked. Along with it went the ability to repay that debt. The same scenario may be reemerging. But in a different dimension.

Debt is growing again. But the economy hasn’t kept pace. At least enough to support the growing debt. Debt is increasing. The economy is not keeping up with the debt. Financial problems are on the horizon. So is more debt. Financial relief is increasingly needed. So is Sacramento bankruptcy debt relief.

Bankruptcy offers debt relief by eliminating debt. It’s that simple. Sacramento bankruptcy debt relief is a solution to get a fresh financial start. This Sacramento Bee story pointed out a state legislator’s personal need to avoid mounting negative equity in her home. Bankruptcy can do this.

Bankruptcy can eliminate most forms of debt. Credit card debt can be discharged. Car repossessions cancelled. Medical bills cleared. Income taxes erased. Lines of credit, payday loans and mortgages are all subject to discharge through bankruptcy. Bankruptcy is a powerful financial tool.

Bankruptcy Discharge

Bankruptcy discharge is the legal term applied to debt elimination through bankruptcy. Filing for bankruptcy and completion of a bankruptcy case allows filers to receive a discharge. The discharge is an order issued by the bankruptcy court eliminating debt. Here is the he full explanation of a discharge according to the United States Bankruptcy Court.

People filing bankruptcy are known as debtors. Creditors are the entities debtors owe when they file for bankruptcy. Debtors in need of debt relief list their creditors in their bankruptcy paperwork, or bankruptcy petition. Upon the completion of their case, debtors receive a bankruptcy discharge. The discharge legally eliminates the debtor’s debts. It’s that simple. Creditors who try to collect after a discharge has been ordered can be subject to penalty and sanctions as this news story suggests.

Not everyone is eligible to file bankruptcy. But those who are can eliminate, or discharge, their debts thought a bankruptcy filing. Limitations exist that may prevent some from filing bankruptcy and receiving a bankruptcy discharge. These impediments to a bankruptcy discharge may be previous bankruptcy filings, excess income or too much property. If eligible, though, a bankruptcy discharge order will result from a bankruptcy filing and successful case completion.

Just filing for bankruptcy alone will not result in a bankruptcy discharge. The bankruptcy case must be approved and completed. With a Chapter 7 bankruptcy this may mean a few months form filing to discharge. A debtor usually does not have to pay anything to his creditors in a Chapter 7 bankruptcy. In a Chapter 13 bankruptcy, where a debtor does pay something to his or her creditors, this may mean a few years to obtain a discharge. Whatever the type of bankruptcy case, individual debtors receive a discharge at the successful conclusion of their case.

The bankruptcy discharge only applies to legally dischargeable debts. Not all debts can be discharged through bankruptcy. Student loans, criminal restitution and child support are common examples of debts that are not dischargeable.

Foreclosure Relief

Foreclosure relief can come in many ways. Paying you mortgage delinquency is the surest strategy. But those behind on their mortgage rarely have the money to make up the arrearage on their mortgage. That’s why they are in foreclosure in the first place. But there are ways to save your home if you are in foreclosure.

Foreclosure does not mean your home has been sold. It means it will be sold if your mortgage can’t be caught up. The foreclosure process starts with the filing of a Notice of Default and Intent to Foreclose. It is a form filed with the county recorder and mailed to the homeowner. If the arrears, or delinquent mortgage payments, are not paid within 90 days, the house will be sold. Foreclosure relief is unavailable after foreclosure sale.

Before the 90-day deadline expires, there are foreclosure relief options. Paying the past-due mortgage is usually not possible. Especially within 90 days. But working with your lender can work. Requesting a modification is a good strategy. Often a modification can put your mortgage arrears at the end of the loan. Doing so can bring your mortgage payments current. It also eliminates the foreclosure sale threat. Sometimes mortgage lenders work with homeowners. Sometimes they don’t. But it is a good option to pursue. There are also government agencies that can hep. Keepyourhomecalifornia.org is a great resource.

Borrowers must be cautious, though. Especially with looming deadlines. Even if a mortgage modification can provide foreclosure relief, it must be completed before the foreclosure period expires. That’s 90 days. That’s not a lot of time to complete a mortgage modification. But it can be done. Outside companies and individuals promising to save your home can be another risk. As this news story points out, beware of scams and pitches by people trying to prey on your foreclosure peril.

Bankruptcy may be a last resort for many. But it is a good one. Often the best for foreclosure relief. Bankruptcy can provide borrowers up to 5 years to catch up on their mortgage. That’s a lot better than 3 months. And federal law prevents a foreclosure sale for those in bankruptcy. You must continue to pay your mortgage while in bankruptcy. You also must provide repayment of your mortgage arrearage through your bankruptcy. But the bankruptcy, know as a Chapter 13, will protect your home. Bankruptcy is a great debt relief tool for those in need.

Payday Loan Relief

Payday loan relief is a common concern of those considering bankruptcy. And it should be. Payday loans are some of the most predatory loans out there. Payday loans provide quick cash. They are easy to get. But they come at a cost. A big cost. Typically payday loans charge nearly 500% interest. That is a lot even for the lending industry. As this Chicago Tribune story points out, payday lenders are taking some heat.

The way payday loans work is you post-date a check and exchange that for a quick cash loan. Lenders such as Check ‘n Go, Check Into Cash and others offer easy money for those in need. Repaying these loans is not as easy. If the post-dated check is not honored, the extreme interest rates kick in. And this is on top of the loan processing costs and fees. So if your $350 check to the payday lender offered in exchange for a $300 loan cannot be cashed when promised, watch out. No wonder so many are in need of payday loan relief.

Part of the problem, too, is the aggressive nature of the lenders. Many borrowers look to payday loan options because their credit is bad. Payday lenders are their only options. And the payday loan industry knows this. That is why they charge what they do. They can. That is little solace to borrowers who fall behind on these loans. And it is when the need for payday loan relief really shows itself.

Payday lenders charge enormous intest and excessive fees. And if you don’t pay them you need another loan to pay off the last. It becomes a cycle. For those in it, a vicious cycle. If borrowers don’t pay, payday lenders can tap the borrowers’ bank accounts. To get these loans you must provide your bank account information. All of it. And with that, payday lenders can essentially take from your account what you owe. Not good, especially if you did not know it was coming. Another reason borrowers often need payday loan relief is the aggressive nature of payday lenders. If you don’t pay the loans back, don’t expect to be ignored.

Bankruptcy is an option for payday loan relief. And it is a good option. Payday loans are unsecured debts that are commonly discharged, or eliminated, in bankruptcy. If you owe for a payday loan, you may eliminate it by filing bankruptcy.

Bankruptcy Effect on Lawsuits

Bankruptcy effect on lawsuits is a common question for those considering filing bankruptcy. Particularly so with those who are being sued. Bankruptcy filings invoke what is known as an automatic stay. It is a bankruptcy term meaning you are instantly shielded from your creditors when you file bankruptcy. This includes creditors who are suing you. And it includes creditors who have already sued you and won. No matter the creditors’ claims, they can no longer pursue a lawsuit against you if you file for bankruptcy.

Creditors can ask the bankruptcy court to continue with a lawsuit. But that is very rare. The bankruptcy effect on lawsuits is to stop them. This mens stopping lawsuits no matter where they stand. Some believe it is too late to file for bankruptcy if they have already been sued. Others think it is too late if they have already lost a lawsuit and face a judgment. Not so. The bankruptcy filing will cause the lawsuit to be dismissed. Often lawsuits prompt the filing of bankruptcies. Hulk Hogan, the wrestler, sued in a sex-tape scandal lawsuit. The party he sued filed for bankruptcy to block the lawsuit and any judgment. It is an interesting news story and a common application of filing for bankruptcy.

With the bankruptcy effect on lawsuits, not only are the suits stopped, so are the consequences. Lawsuits can result in judgments if you lose. As a law professor once told me, judgments are like hunting licenses. With a judgment a creditors can legally hunt any assets you have. Your wages, bank accounts and possessions are all fair game to a judgment. To save your stuff, lawsuits must be stopped.

If you have no defense to a lawsuit, bankruptcy is likely your only option. But it is a good one. The bankruptcy effect on lawsuits is powerful, sure and immediate.

Debt Elimination Through Bankruptcy

Why file for bankruptcy? Debt elimination though bankruptcy is the purpose for filing bankruptcy. It is also the basis of the bankruptcy discharge. A bankruptcy discharge is a court order canceling, or eliminating your debts. It’s that simple. The order is issued by the United States Bankruptcy Court.

The U.S. Bankruptcy Court is a branch within the federal court system. See here for yourself. Federal courts typically have one court per state. Some, though, like California, have more. California is divided into four federal court districts. The region encompassing Sacramento and its vicinity is the Eastern District of California. Here is a link to the bankruptcy court in Sacramento. Its official name is the United States Bankruptcy Court, Eastern District of California. Debt elimination through bankruptcy is the reason for this court system.

Consumers considering bankruptcy do so due to debt they cannot afford to repay. Debt elimination trough bankruptcy provides the necessary relief some consumers need. Bankruptcy does not allow the elimination of all debts. Some debt, like federally guaranteed student loans, past-due sales tax and damages done due to crimes cannot be discharged. This means that even if you file for bankruptcy you cannot eliminate these debts.

Though debt elimination through bankruptcy is why many people file for bankruptcy, the entire elimination of debt is not always possible. In addition to certain debts that can’t be discharged, there are income limitations. The less you make, the less debt you may have to repay. The more you make, the more you may have to repay. Most people filing Chapter 7 bankruptcy, the most common form of consumer bankruptcy filing, do not have to repay any of their debts. Those who can afford to repay at least a portion of their debts usually file Chapter 13 bankruptcy.

Whatever form of bankruptcy filing you choose, know that debt elimination through bankruptcy is the reason you are filing. Consumer debt is on the rise as this Consumer Reports article points out. And if you can’t afford to repay your debt, bankruptcy is the only option to eliminate it.

Bankruptcy Debt Relief

Bankruptcy debt relief is the purpose of filing for bankruptcy. There are many means of seeking debt relief through a bankruptcy filing. The two most common forms of consumer bankruptcy are Chapter 7 bankruptcy and Chapter 13 bankruptcy. Both provide debt relief. Chapter 7 bankruptcy allows consumers to liquidate, or eliminate, their debt. Chapter 13 bankruptcy provides for the reorganization and/or elimination of debt. There are benefits to both these forms of bankruptcy. Each consumer situation and financial fix through bankruptcy is different.

Knowing that bankruptcy debt relief is a potential for individuals and families fighting debt is a benefit on its own. Consumers unable to afford their debt are, obviously, in need of debt relief. Whether that debt relief is through filing bankruptcy or some other form of debt relief is often the biggest decision for consumers in debt. Whatever the financial solution, debt relief is the objective.

Bankruptcy debt relief is typically the most conservative and comprehensive solution to consumer debt debt. The basics of how bankruptcy works are simple. If you have more debt than income to repay it, filing bankruptcy allows you to be relieved of your debt. If you an afford to repay some of your debt, Chapter 13 bankruptcy may be your best bet to eliminate the debt you cannot afford. Chapter 13 bankruptcy can also allow you to reorganize your debt. Reorganizing your debt through Chapter 13 can give you more time to repay your debts, get caught up on secured debts (mortgages and cars) and get rid of what debt you can’t afford. Chapter 7 bankruptcy law permits you to eliminate all your debt.

Whatever the financial fix needed, whether though bankruptcy debt relief or some other method, caution is the key. Make sure your debt relief option is best for your personal financial need. Bankruptcy is applying federal law to deal with your debts. It is conservative and certain.

Other financial options besides bankruptcy debt relief might not be as certain. Debt consolidation or relief agencies often add to your debt more than they relieve it. Credit consolidators or debt settlement agencies are often owned by creditors seeking to steer you away from bankruptcy. Some even are scams. Buyer beware, as this recent news story points out.

Keep your home in bankruptcy

Can you keep your home in bankruptcy? It is a common question posed by potential bankruptcy clients. And the common answer to this question is yes. You can keep your home in bankruptcy.

Bankruptcy laws allow you to protect, or exempt, your property when you file for bankruptcy. You do not have to lose or surrender your possessions in seeking bankruptcy protection from your creditors. This means you can keep your home in bankruptcy and still eliminate your debt. There are limits, though.

To keep your home in bankruptcy there are limitations on the amount of equity you can protect. Depending on your individual bankruptcy situation sought, there are limits on the amount of equity you can have. Typically, you can keep more equity in your home if you are married, are older or even if your income is lower. So, too, the more you own in other forms of property can lessen the amount of equity allowed. cars, cash, and bank accounts are examples of property that may limit the amount of equity to keep your home in bankruptcy. Each individual bankruptcy case is different.

If you can protect, or exempt, all the equity in your house, you can still file bankruptcy and eliminate all your debt. This is often the case in a Chapter 7 bankruptcy. If filers can protect all the equity in their home, they can often eliminate all their debt through a Chapter 7 bankruptcy.

Even if you have more equity in your home than the law allows you to protect, you can still keep your home in bankruptcy if you repay some of your debt. This is often the case in a Chapter 13 bankruptcy. A Chapter 13 bankruptcy provides for repayment of your debt, even if only a percentage of your debt is repaid. And for each dollar you repay to your creditors, you can keep and extra dollar of equity in your home. If for example, you have $151,000 equity in your residence, but are only allowed to protect $150,000 in equity, you can still keep your home in bankruptcy if you pay $1,000 back to your creditors. It’s that simple.

Credit Card Debt Elimination In Bankruptcy

Credit card debt elimination in bankruptcy is one of the most common causes of bankruptcy filing. Consumer debt has increased dramatically in the past few years. The level of credit card debt is now near it‘s pre-recession level. And that’s a lot. This Consumer Reports article describes the recent rise in credit card debt. The article also describes the perils of excess credit card debt. In depicting the problem of too much credit card debt, the article points out what can be done to diminish the hard harm of the excess debt.

Eliminating credit card debt is the ideal solution to excess credit card debt. But that is easier said than done. Trimming expenses, paying your debt down faster and tapping your savings are all options to decrease your debt. These are great ideas. But not if they won’t work for you. Maybe your expenses are already shaved to the bone. Perhaps you can’t pay your debt off any faster. And what if you have no savings? If so, credit card debt elimination in bankruptcy may be your best bet.

Credit card debt elimination in bankruptcy may be your only option if your debt is beyond your ability to repay. And those in that position are not alone. Tips to improve your credit position are meaningless if you can’t employ them. And paying more on your debt often falls on deaf ears of those in debt. The reason people are in debt is often because they can’t repay it. If they could, they would.

The Consumer Reports article is right. Too much credit card debt is bad. But if you can’t repay it, credit card debt elimination in bankruptcy is your only option. And a good option it is. Though filing bankruptcy is a negative on your credit, eliminating your credit card debt you can’t repay is a positive. Weighing these options is the key to evaluating whether filing bankruptcy is the right financial option.

Sacramento Bankruptcy: Bankruptcy Myths Exposed

Over the next few weeks and posts, I will expose some of the major bankruptcy myths out there. The first, and often the most common, is that bankruptcy is a financially irresponsible move. Or that it is financially irresponsible to incur more debt than you can afford to repay. This US News report reflects many of these myths.

The reality is that most debt discharged, or eliminated, through bankruptcy, is tied to medical treatment, bills and living expenses. Rarely are debts discharged through bankruptcy perceived as financially irresponsible. That’s because they’re not. It’s a myth.

The cost of living has increased. And it has increased at a much faster pace than in years past. Just ask a college graduate with student loans, the uninsured ill, or underemployed parents trying to provide. Debt has become a necessity of American life. And that is definitely no myth.

What, then, to do with the debt? The credit card industry has tried to portray and perpetuate the myth that filing bankruptcy on your debt is financially irresponsible. But why? They don’t want there debts discharged is why. Debt you can pay is one thing. Debt you can’t repay is another. Bankruptcy is about what to do with that debt you cannot afford to repay.

And if you cannot repay your debt now, you’ll be even less like to repay it later. Debt grows more commonly than it shrinks if you cannot afford to pay it. Often incurring new debt to repay old debt becomes a way of life. When you run out of Peters to pay Paul, though, something has to give.

Trump and Bankruptcy

You are not alone if you are considering filing for bankruptcy. Donald Trump has filed bankruptcy on behalf of his businesses four times. While Donald Trump has never filed for personal bankruptcy, he has sought debt relief for several of his business interests. But, as Trump would tell you, he is wealthy. Very wealthy. Why, then, would his businesses file for bankruptcy? Perhaps the nexus between Trump and bankruptcy is partially accountable for his wealth.

As has been pointed out, Trump’s businesses accumulated too much debt. With more debt than income to afford it, Trump and bankruptcy became a team for these businesses. Though these businesses filed for Chapter 11 Bankruptcy reorganization, the bankruptcy effect was the same as the most common consumer bankruptcies (Chapter 7 and 13) individuals file. Trump filed bankruptcy to limit and eliminate his business debt. His businesses simply couldn’t afford the debt. Bankruptcy law allowed the debt to be eliminated, lessened or refinanced through the bankruptcy court. Bankruptcy can do this for business debt. And bankruptcy can do this for personal debt. It is why businesses and individuals file for bankruptcy.

Trump may have earned his fortune through “the art of the deal.” But Trump and bankruptcy teamed when the deal went south. Bankruptcy is a business move. Nobody knows this more than Trump. Considering bankruptcy as nothing more than a financial function for the betterment of his businesses served Trump well. Bankruptcy can provide the same utility to individuals filing for bankruptcy. It’s no mystery or science that debt is as much a burden to individuals as it is to businesses. By the same token, eliminating debt is a benefit to both.

Individuals, unlike businesses, are often wary of filing for bankruptcy. Perhaps there is a stigma or some sense of moral failing associated with filing for personal bankruptcy. But it shouldn’t. Debt is part of personal finance. Dealing with personal debt should be considered no different than dealing with business debt. Trump and bankruptcy teamed to deal with debt for his businesses. Individuals can do the same with bankruptcy to benefit their personal financial picture. It’s that simple.

Payday Loans in Bankruptcy

Payday loans in bankruptcy are a common connection. If you don’t make good on that $300 post-dated check you gave to the local payday loan place for $250 cash, you are in for it financially. Interest rates nearing 500% kick in when your check doesn’t clear. And the amounts you can wind up owing accumulate faster than you can say usury.

Once upon a time usury, or loaning money at unusually high interest rates, was illegal. But no more–at least when in comes to payday loans. The industry carved out an exception to usury, arguing the inflated interest rates were necessary in light of the credit risk. Maybe so, but the amount you can wind up owing from unpaid payday loans can be astronomical.

Google has banned payday loan advertisements altogether. Here’s a story reflecting Google’s rationale. This payday loan philosophy only fuels the flow of payday loans in bankruptcy. Often when payday loans are not repaid in time, other payday loans are taken out to repay the previous ones. Soon this can become a cycle. Eventually options to borrow new money to repay old money run out.

Fortunately, payday loans can be discharged in bankruptcy. This is why payday loans in bankruptcy are such a frequent pair. Particularly problematic for payday loan lenders are the collection practices they face when the debts are not repaid. Some of the most aggressive and improper debt collection strategies and schemes are perpetrated by these lenders. Collection horror stories by the plenty derive from payday loan debts. Threats to arrest, immediate wage garnishment and bank levies are some of the more common collection ruses by the payday loan industry. Granted there are legitimate payday lenders out there. But anyone loaning money at 475% interest can’t be all good.

Whatever the story or scenario that may have led to your payday loan debt, know that bankruptcy offers a fix. Find out your options by scheduling a free consultation by calling me at (916) 448-6923.

Trump’s Take on Debt and Bankruptcy

Donald Trump’s take on debt and bankruptcy is pragmatic. Limit debt accumulation but, if you can’t, consider bankruptcy to eliminate it. This New York Post article reflects the Republican’s debt philosophy.

Bankruptcy is a tool according to Trump. He’s right. Bankruptcy is a legal application to deal with debt you cannot afford to repay. It’s that simple. Whether it is a Fortune-500 business, a solo business practitioner or a single individual, the premise is the same. Debt load beyond the ability to afford is recipe for bankruptcy. This is not just Trump’s take on debt and bankruptcy. It is the basis of bankruptcy law itself.

Often individuals view bankruptcy as a last resort. Typically it is. But bankruptcy is not about what to do with debt you can repay. It is about debt your can’t pay. It is a frustrating financial situation. Stress often accompanies the debt. The source of strife, though, is often not the debt itself, but the inability to do anything about it. This is the pragmatist premise behind Trump’s take on debt and bankruptcy.

Time and knowledge often open bankruptcy options. Hope does spring eternal. And those in debt are no different. People try to repay their debts. Efforts to find ways to pay what is owed frequently finds frustration when the income isn’t there. When the same frustration repeats itself every month, soon a solution is sought. Bankruptcy is often that solution. individuals need to know that bankruptcy is an option for their debts and what it can do.

The stigma of bankruptcy for some is often an impediment to filing. But the reality is there really should be no stigma attached to using federal bankruptcy law to sort out debt problems. As Trump knows, bankruptcy is just a business decision dealing with your debt. It is a tool. Individuals should look at their financial picture with the same business perspective. Your finances are your personal business. Treating your debts as a business problem, as opposed to individual one, might allow you to better deal with your debt issues. And recognizing the worth of filing bankruptcy is one way to do it. Trump did.

Title Loans in Bankruptcy

Title loans in bankruptcy are a common connection. And for good reason. Title loans, commonly called pink slip loans, cost. They cost a lot! Title loan interest rates can reach nearly 400%.

Title loans use the equity in your vehicle as collateral for a loan. You do not have to own your car outright. But you have to have more equity in it than the loan you take. Repaying the loan is tougher than taking it out. With high interest rates come high repayments. As with payday loans, repaying title loans often involves taking out other loans to make the payments. This is a common cause why title loans in bankruptcy are common. And it is the cause why the government is now reconsidering the regulation of auto title loans and payday loans.

This USA Today story reflects the government’s potential coming crackdown on these loans. Title loans in bankruptcy are a sign that these debts can be bad news. Payday loans certainly are, and are even more prevalent in bankruptcy filings. There is, though, still an argument in favor of title and payday loans. And it stems from the same groups that most commonly discharge these debts in bankruptcy. Namely, the poor. Without them, the argument goes, many would be left without credit. Lenders claim the high interest and costs of these loans are necessary in light of the risk. The government will have to weigh these options in arguments in potentially regulating anew these industries.

If you have such debts, title loans in bankruptcy may work out for you financially. It depends on the type of bankruptcy you file. It also depends on the value of your vehicle, and how long you have had the loan. You can always eliminate title loans in bankruptcy if you give up your car. But there are also bankruptcy tricks of the trade that allow you to keep your car and reduce the amount you owe on your title loan.

Consultations are always free, which is the best way to determine your best financial options to deal with your debt. If you have title (pink slip) or payday loans, considering bankruptcy is good start to ending the amounts you are paying on these loans.

Debt, Income and Bankruptcy

Debt, income and bankruptcy are financial factors that dictate the consumer economy. Debt-to-income ratio is the starting point for evaluating consumer credit. The higher your income, the better your credit. The more debt you have, the worse your credit. Or at least that is the big picture.

Consumer credit controls the cost of financing. The better the credit, the better the cost. Debt and income are obvious factors in this formula. But how does bankruptcy fit in? Filing bankruptcy allows you to discharge your debts. This means the debts are eliminated and never have to be repaid.

Though bankruptcy is an initial negative on your credit after you file, discharging your debts at the conclusion of your bankruptcy is a big benefit. How big that benefit is to you depends on the amount of debt your discharged, or eliminated. By weighing the cost of the bankruptcy impact versus the discharged debt is the essential evaluation of whether to file for bankruptcy. If you have big debt and little income, bankruptcy may be a good option for you. If, though, your debt is not too great and your income enough to handle that debt, maybe bankruptcy is not your best bet. Every situation is different.

Even if your debt-to-income ratio seems ok, bankruptcy may still be a benefit if you have a disproportionate amount of certain debt. Typically credit card debt imbalance in your personal finances will warrant the need to file for bankruptcy. This type of debt does not enhance your income. As such, it is viewed as a drag on your credit.

By discharging your debt through a bankruptcy filing, you can clear your debt-to-income ratio. By doing so, your ratio is cleared for as long as you do not accumulate any more debt. Your bankruptcy impact is only temporary. Though a bankruptcy filing lasts on your record for years longer, improving your credit generally takes only a couple of years.

Bankruptcy and Wage Garnishments

Bankruptcy and wage garnishments are a natural duo. Though they do the opposite, they are often paired together. If you wages are being garnished, your only option often times is bankruptcy. If, that is, you intend to stop the garnishment.

A wage garnishment is a deduction taken out of your wages to pay off a debt you owe. Normally a wage garnishment is placed on your paycheck by a creditor you owe. The wage garnishment is also referred to as an earnings withholding order. Whatever it is called, a garnishment is a collection practice taken by a creditor to be paid. If bankruptcy is not filed by the wage earner, wage garnishments can tap up to 25% of your net pay. The garnishment lasts until the amount owed has been paid. Unless you file for bankruptcy.

Since a wage garnishment is a form of a court order, it is often imposed involuntarily. You don’t have to allow a garnishment. It is placed there whether you want it or not. Facing such a situation, bankruptcy and wage garnishments often intertwine. Why? Because bankruptcy will stop a garnishment.

As soon as a bankruptcy is filed, the bankruptcy automatic stay is imposed. The effect is immediate. This means that upon filing a bankruptcy, your creditors can no longer collect from you. This includes wage garnishments. This, then, is why bankruptcy and wage garnishments often go together. Take a look at this CNN report on bankruptcy and wage garnishments.

Normally wage garnishments result from judgments. If, for example, you are sued by a creditor and lose, the creditor will win a judgment. Sometimes you may not even be aware of any lawsuit against you and the creditor obtains a judgment without you ever opposing it. This is known as a default. However a creditor wins its claim, a judgment will give it authority to garnish your wages. And unless you file bankruptcy, you are essentially powerless to stop it.

Bankruptcy Can Discharge Overpayment of Unemployment and Social Security

Bankruptcy can discharge overpayment of unemployment and Social Security benefits. Like any other unsecured debt, such benefit overpayments are legally binding. But as with most other legally binding debts, bankruptcy can discharge them. There is no special provision in the law that denies the dischargeability of these debts. So if you are overpaid unemployment from the California Employment Development Department (EDD), or benefits from the Social Security Administration (SSA), you can eliminate these debts through bankruptcy.

It is common for people to be overpaid by the EDD and SSA for unemployment and other benefits. Millions of people file for and receive such benefits. Instruction and oversight covering the application for these benefits, though, is slight. Sometimes the money paid does not match the benefits earned. When the EDD or SSA finds out, debt can result. The EDD even has a link on their website concerning overpayments. But again, bankruptcy can discharge the overpayment of unemployment and Social Security Benefits.

The only limitation to bankruptcy being able discharge overpayment of unemployment and Social Security benefits is fraud. If excess benefits are obtained from false information, bankruptcy will not help. Understandably, only overpayment resulting from mistake or innocent error can be dealt with through bankruptcy. The glitch that gave rise to the overpayment must be a mistake. Nothing more. The mistake can be either on your part or the government’s. Whatever way, so long as there is no fraud, overpayment is dischargeable in bankruptcy.

If overpayment of unemployment or Social Security benefits is not discharged in bankruptcy, it must be paid. Unlike most other forms of debt, it can be collected quickly, without the need of a lawsuit. If the government overpays you, they can get it back without having to sue you. Your wages can be withheld (garnished), your tax refund tapped, or a host of other collection tools applied by the government to get their money. Since bankruptcy can discharge overpayment of unemployment and social security benefits, many choose this route.

If the government has already begun collecting for benefit overpayment, it’s not too late to file bankruptcy. Bankruptcy will still allow you to discharge those debts even if the government has already started to collect. If you want to stop your wages from being garnished or your tax refund from being intercepted, file for bankruptcy.

Bankruptcy Bang for the Buck

Bankruptcy bang for the buck is another way of saying whether filing bankruptcy will benefit you financially. In other words, will the savings of a bankruptcy outweigh the cost of filing for bankruptcy?

With the average consumer bankruptcy, credit card debt alone exceeds $23,000. This amount does not include other forms of debt. Medical bills, car repossessions, payday loans and other unsecured debts often accompany the credit card debt figure. For the average bankruptcy filer, then, there is a good bankruptcy bang for the buck.

If, just considering the average credit card debt, the amount spent on interest in a few months is more than the cost of filing a bankruptcy, there is bankruptcy bang for the buck. It is easy to see why. Spending $1,500 filing for bankruptcy is less than the interest you pay on your credit cards over a few months. Spending money on your credit card interest gets you nowhere. Filing bankruptcy gets you a discharge and your debt is done.

The traditional mindset with bankruptcy is file only as a last resort. But given the bankruptcy bang for the buck, maybe that logic is flawed. An article in the Huffington Post suggests filing right away if it is cheaper to file bankruptcy than to manage your debt for a few months. The logic makes sense.

The past mindset of bankruptcy has often been tied to reluctance. People have hesitated from filing. Perhaps fear or some supposed stigma prevents them. But no more. It is a results-oreiented society we now live in. If there is a bankruptcy bang for the buck, people will file. Filing bankruptcy is a legal right. If your finances are such that is is worthwhile, filing bankruptcy makes sense.

Discharge Student Loans?

Can you discharge student loans in bankruptcy? Maybe soon you can. Eliminating student loans though bankruptcy is not normally allowed under the current bankruptcy code. Though student loan debt is unsecured, like credit card debt and medical bills, it is not treated the same. But times may be changing.

As this editorial piece for the Los Angeles Times reflects, perhaps now is the time to reevaluate whether you can discharge student loans. Student loan debt has skyrocketed over the last decade. So have college costs. Given the tuition increases over the same span it should not be a surprise for the spike in student loan debt.

College costs have exploded and, along with it, debt. College degrees, once considered financial bedrock, have not held their value compared to their costs. If your graduate from college you should earn more. Right? Often this is not so. At least when it comes to the inflated costs to get the degree. Earning $1,000 more per month does little good if that comes with a lifetime debt of $1,200 per month. The math doesn’t make sense. Perhaps, then, now is the time to evaluate whether you should be able to discharge student loans.

Student loan can be eliminated through a separate bankruptcy proceeding. It is a costly procedure. And it takes an extreme showing of hardship to rid yourself of the student loan debt. As I have often commented to clients, you would not want to be able to discharge student loan debt. To discharge student loan debt would not be worth the hardship it would require. Showing an inability to afford the debt is not enough.

Most debt that is discharged in bankruptcy requires, primarily, a showing of inability to afford the debt. Perhaps it is time now to apply this same standard to student loans.