Lynch & Belch, P.C.Indianapolis Bankruptcy Lawyers | Chapter 7, 132024-03-07T20:53:09Zhttps://www.lynchandbelchbankruptcy.com/feed/atom/WordPressOn Behalf of Lynch & Belch, P.C.https://www.lynchandbelchbankruptcy.com/?p=482992024-03-07T20:53:09Z2024-03-07T20:53:09ZStress and anxiety
Constant worry about how to pay off large bills can consume a person's thoughts, leading to sleepless nights and a persistent sense of dread. This kind of pressure taps into natural concerns, such as an inability to afford necessary care or the possibility of fiscal instability affecting one's family.
Depression
Research shows a link between money troubles and depression. Medical bills can make patients feel hopeless and overwhelmed. People struggling with medical debt may isolate themselves, withdraw from social activities or experience a decline in their overall happiness.
Self-esteem and relationships
The stigma of being in arrears can lead individuals to feel embarrassment or shame. This could harm their self-worth and change how they interact with others. Financial difficulties are a common source of interpersonal tension that leads to arguments between friends and family members.
Avoidance of medical care
One of the most concerning consequences of medical indebtedness is avoiding further treatments or check-ups. People in arrears may fear accruing more bills, leading them to ignore health issues and stay home. This may result in worsening health conditions, creating a vicious cycle of health problems and increasing debt.
Medical debt has profound repercussions on those struggling to pay it off. Thankfully, there are solutions for discharging the balance. Once gone, it is like a weight lifting from one's soul.]]>On Behalf of Lynch & Belch, P.C.https://www.lynchandbelchbankruptcy.com/?p=482982024-02-21T02:57:54Z2024-02-23T02:56:57ZContact your healthcare provider
To address medical debt, start by communicating with your healthcare provider. Many hospitals and medical facilities offer financial assistance programs or payment plans for patients facing financial hardship. Reach out to their billing department to discuss your situation and potential solutions.
Explore government assistance programs
Government programs such as Medicaid and Medicare provide healthcare coverage for eligible individuals with low incomes or disabilities. Additionally, some states offer assistance programs specifically designed to help with medical debt. Research the options available in your area and determine if you qualify for any assistance.
Negotiate with creditors
Do not hesitate to negotiate with creditors to lower your medical bills or arrange more manageable payment terms. Explain your financial circumstances and propose a payment plan that fits your budget. Many healthcare providers are willing to work with patients to find a mutually beneficial solution.
Seek nonprofit organizations
Several nonprofit organizations specialize in helping individuals struggling with medical debt. These organizations may provide financial assistance, negotiate with creditors on your behalf, or offer resources and guidance for managing medical expenses.
Consider debt consolidation
Consolidating medical debt into a single loan with a lower interest rate can make payments more manageable. Explore options for debt consolidation through banks, credit unions or reputable financial institutions.
By seeking assistance from various sources, you can effectively manage and reduce your medical debt burden.]]>On Behalf of Lynch & Belch, P.C.https://www.lynchandbelchbankruptcy.com/?p=482962024-02-06T19:13:17Z2024-02-08T19:13:08ZChapter 7 bankruptcy basics
Chapter 7 bankruptcy, often referred to as liquidation bankruptcy, involves the liquidation of a debtor's assets to pay off creditors. This process typically lasts a few months and results in the discharge of most unsecured debts, such as credit card debt and medical bills.
Child support obligations
Bankruptcy law, however, treats child support differently. It stands out from other forms of debt as a priority obligation and is generally not subject to discharge. This means that even if a debtor successfully files for Chapter 7, they will still be responsible for fulfilling their support obligations.
Legal protections
Public policy and the child's welfare form the basis for this reasoning. Special legal protections ensure that child support payments get paid in full because they are necessary for a child's well-being. Bankruptcy laws recognize this importance and prioritize their fulfillment above other debts.
Consequences of non-payment
Individuals should be aware that filing for Chapter 7 bankruptcy does not absolve them of their responsibility to pay child support. Failure to do so can result in serious consequences, including wage garnishment, seizure of assets and even legal penalties such as fines or imprisonment.
Those facing financial burdens should prioritize meeting their child support obligations to ensure the well-being of their children and avoid potential legal consequences.]]>On Behalf of Lynch & Belch, P.C.https://www.lynchandbelchbankruptcy.com/?p=482952024-01-25T02:10:03Z2024-01-26T02:09:05ZHow Chapter 13 bankruptcy works
Chapter 13 bankruptcy, often referred to as a "wage earner's plan," provides individuals with a structured means to reorganize their debts and establish a manageable repayment plan. Unlike Chapter 7 bankruptcy, which involves liquidating assets to discharge debts, Chapter 13 focuses on restructuring and repaying creditors over a specified period, typically three to five years. This unique feature makes it a powerful tool for homeowners facing foreclosure.
Halting foreclosure with the automatic stay
Upon filing for Chapter 13 bankruptcy, an automatic stay goes into effect. This legal provision serves as a shield against foreclosure proceedings. The automatic stay immediately puts a halt to any attempts by creditors, including mortgage lenders, to pursue collection activities or foreclose on your home. This breathing space offers homeowners the opportunity to develop a repayment plan that aligns with their financial capabilities.
Creating a feasible repayment plan
A key aspect of Chapter 13 is the formation of a repayment plan approved by the court. This plan outlines how the debtor will repay their creditors over the designated period. Importantly, it includes provisions for catching up on missed mortgage payments. By adhering to this plan, homeowners can work towards resolving their financial difficulties and ensuring the preservation of their homes.
Chapter 13 bankruptcy can serve as a powerful tool and provide a structured path toward financial recovery.]]>On Behalf of Lynch & Belch, P.C.https://www.lynchandbelchbankruptcy.com/?p=482942024-01-18T17:04:49Z2024-01-22T15:29:55Z the bankruptcy process, and that can hold you back from your plans as you rebuild your life.
That said, when you are considering filing for bankruptcy, your credit rating may not be at the top of the list of your concerns. And you can repair your damaged credit rating.
What is a credit rating?
When lenders are deciding whether to extend credit to a person (such as they do with a home mortgage) they look to credit agencies to provide them with a report on the person's credit history. This is commonly expressed as a FICO score, which is the result of a system developed by the Fair Isaac Corporation (known as FICO). To develop a FICO score, credit agencies measure five factors about a person's financial health:
Current debt
Types of credit
Any new credit accounts
Payment history
Duration of credit history
After reviewing these factors, credit agencies give the individual a score between 300 and 850. Generally speaking, lenders consider a score of 670 or higher to be a sign of a healthy credit history, and they will be more likely to lend credit to people with these scores and to give them credit at decent interest rates. By contrast, lenders are cautious of individuals who have scores lower than 670.
How bankruptcy affects your credit report
When making a report on a consumer's credit, the credit agencies make a note of any bankruptcy filings in the person's history. Exactly how far back into the person's history may depend on the type of bankruptcy involved.
If you went through Chapter 7 bankruptcy, it will stay on your credit report for 10 years. If you went through Chapter 13 bankruptcy, it will stay on your credit report for seven years. However, you should note that Chapter 13 bankruptcy can take up to five years to complete.
The In some cases, lenders won't even consider extending credit to a person who has a bankruptcy on their credit report. In other cases, lenders will do so only at a higher interest rate.
Rebuilding your credit
It isn't easy to rebuild your credit score when you still have a bankruptcy on your credit report, but it can be done. Since one of the factors making up your FICO score is your payment history, it's important to pay your bills regularly and on time whenever possible.
You may also look into other ways of improving your credit history. One way is through getting a secured credit card. This involves putting a cash deposit down in order to open a credit account. Similarly, if you have any secured debts left over from the bankruptcy process (such as a car or home loan) and you think you can pay off, you might consider a reaffirmation agreement.
You can rebuild your financial life after bankruptcy, but it takes time and care. It's wise to talk to experienced professionals about your long-term goals for your financial future.
]]>On Behalf of Lynch & Belch, P.C.https://www.lynchandbelchbankruptcy.com/?p=482912024-01-11T20:37:16Z2024-01-11T20:37:16ZChapter 7 and tax debt
Chapter 7, often referred to as liquidation bankruptcy, involves the sale of non-exempt assets to pay off creditors. When it comes to tax debt, not all types are dischargeable. Fortunately, income taxes are generally eligible for discharge if they meet specific criteria. For example, the taxpayer must have incurred the tax debt at least three years before filing for bankruptcy, filed the tax return a minimum of two years before initiating the process, and the IRS assessment must be at least 240 days old or not yet assessed.
Non-dischargeable taxes
When an individual files for bankruptcy, the treatment of the tax debt depends on the nature of the tax owed. While income tax may be eligible for discharge under specific conditions, other types of taxes are generally non-dischargeable. Additionally, any tax debt incurred through willful evasion or fraudulent activities is not dischargeable under Chapter 7. This helps to prevent intentional misuse of the bankruptcy process.
Bankruptcies provide some people with an avenue for tax relief. However, it is important for individuals to carefully assess their tax situation before filing for Chapter 7 protection.]]>On Behalf of Lynch & Belch, P.C.https://www.lynchandbelchbankruptcy.com/?p=482902024-01-04T04:30:36Z2024-01-04T04:30:36Z1. Understand your credit report
Start by obtaining a copy of your credit report from major credit bureaus. Analyze it thoroughly to identify any discrepancies or errors. Dispute inaccuracies promptly to ensure your credit report accurately reflects your financial history.
2. Create a realistic budget
Establishing a realistic budget is important for both recovering financially and maintaining that recovered state. Evaluate your income, prioritize essential expenses and allocate funds to repay outstanding debts. This disciplined approach will not only help you manage your finances but also demonstrate responsible financial behavior to creditors.
3. Obtain a secured credit card
Accruing tools that drag you further into debt may seem counterintuitive, but credit cards will not add to your debt if you pay the balance on time to prevent interest from adding up. Consider applying for secured credit cards to rebuild your credit. These cards require a security deposit that serves as collateral. By using and repaying them responsibly, you can gradually rebuild your creditworthiness. Ensure that the card issuer reports your activity to credit bureaus for maximum impact.
4. Pay your bills on time
Consistently making timely payments for utilities and other bills is a key factor in rebuilding credit. Set up automatic payments or reminders to avoid missing due dates.
According to USA Today, Americans are an estimated over $17 trillion in debt. Bankruptcy can erase or help you pay back debt, but your credit history will reflect it for a time. However, you have options to try and raise your credit score while you wait for the bankruptcy's removal from your history.]]>On Behalf of Lynch & Belch, P.C.https://www.lynchandbelchbankruptcy.com/?p=482892023-12-18T21:56:32Z2023-12-18T21:56:32ZDebunking the minimum debt myth
Contrary to a common misconception, there is no explicit minimum debt threshold for filing bankruptcy. The eligibility criteria primarily revolve around your financial situation rather than a specific debt amount.
Interestingly, the original concept of bankruptcy in Medieval England involved treating people who could not repay debts as criminals and punishing them. Fortunately, modern bankruptcy laws in the United States exist to provide relief when you suffer financial distress, no matter the precise sum you owe.
Navigating bankruptcy options
However, your circumstances also dictate the type of bankruptcy you can file for. To verify your eligibility, a federal court will scrutinize your income, expenses and overall ability to meet financial obligations.
If covering your debts places an unreasonable burden on you, you may be able to file for Chapter 7 bankruptcy. Some people call Chapter 7 "liquidation bankruptcy," as this option involves selling nonexempt assets to settle debts. If you have limited income and a dire need for a clean slate, you might be able to file for Chapter 7.
If you have a regular income and a potential path for repaying a significant portion of your debt, you may have to file for Chapter 13. Chapter 13 establishes a manageable repayment plan spanning three to five years. Therefore, you can satisfy your obligations systematically and potentially keep more of your personal assets.
As you can see, the decision to file for bankruptcy hinges on your financial circumstances rather than a predetermined debt threshold. By understanding your available options and the full scope of eligibility, you can make informed decisions about how to plot your path toward financial recovery.]]>On Behalf of Lynch & Belch, P.C.https://www.lynchandbelchbankruptcy.com/?p=482882023-12-07T19:04:06Z2023-12-07T19:04:06ZDefining Chapter 7 bankruptcy
Chapter 7 bankruptcy is the sale of a debtor's non-exempt assets to settle outstanding debts. This legal process allows individuals to discharge unsecured debts, providing a fresh start.
Protecting your home equity
In Indiana, the homestead exemption safeguards part of the homeowner's equity in a bankruptcy case. This law lets you retain a certain value of your home's equity, shielding it from liquidation during the bankruptcy process. Individuals can maintain their primary residence and a sense of stability.
The exemption has monetary limits on the amount of equity you can protect. If the equity in your home exceeds the current limit, the trustee may consider selling your home to satisfy creditors.
Reviewing other important factors
If your home's equity falls within the exemption limits and you continue making mortgage payments, the chances of retaining your home increase. However, individual circumstances may impact the trustee's decision. Examples include missed mortgage payments or significant equity beyond the state limits.
More than 239,000 Americans filed for Chapter 7 bankruptcy in 2023 according to data reported by U.S. Courts. If you decide to take this path, it could provide a fresh start for your budget. Exemptions may allow you to keep your home equity as you work to improve your finances.]]>On Behalf of Lynch & Belch, P.C.https://www.lynchandbelchbankruptcy.com/?p=482872023-12-06T16:25:35Z2023-12-06T16:25:35ZHigh fees and costs
A significant risk associated with debt consolidation companies is the potential for high fees and costs. The promise of simplifying debt payments may be appealing. However, some companies charge exorbitant fees for their services. These fees can significantly add to the overall debt burden, defeating the purpose of seeking consolidation as a means of financial relief.
Negative impact on credit scores
Debt consolidation involves restructuring and managing debts. This has the potential to impact an individual's credit score. If the debt consolidation company fails to negotiate favorable terms with creditors, it can result in a negative impact on the individual's credit score. The same holds true if a debtor fails to make payments promptly. This can make it even more challenging to secure credit or loans in the future.
Potential for scams and unethical practices
The financial industry is not immune to scams and unethical practices. Debt consolidation is no exception. Some companies may engage in deceptive practices, promising outcomes that they cannot deliver. Individuals must exercise caution and thoroughly research any debt consolidation company before entering into an agreement to avoid falling victim to scams.
Limited legal protections
Unlike certain legal options available to those facing financial challenges, debt consolidation does not offer the same level of legal protection. If a debt consolidation company fails to deliver on its promises or engages in unethical practices, individuals may have limited recourse. This lack of legal protection underscores the importance of due diligence in selecting a reputable company.
Money reports that the average American has about $21,800 worth of debt. Those facing mounting debt may want to consider bankruptcy or other options to avoid the risks that may come with working with a debt consolidation company.]]>