Ambrogio, Pletter & Associates, LLCStratford Bankruptcy Lawyer | Bridgeport CT Debt Relief Attorney2024-03-11T10:54:31Zhttps://www.ambrogiopletter.com/feed/atom/WordPressOn Behalf of Ambrogio, Pletter & Associates, LLChttps://www.ambrogiopletter.com/?p=483282024-03-06T10:46:31Z2024-03-11T10:54:31ZA creditor filing a lawsuit
The law allows creditors to seek repayment through a variety of different tactics. Sometimes, if people do not voluntarily make payments on their debts, creditors decide to take them to court. A pending creditor lawsuit could worsen someone's budgetary woes by leading to wage garnishment. A lawsuit could also endanger someone's most valuable resources. When someone files for bankruptcy, the courts grant them an automatic stay on collection efforts. Creditors typically need to dismiss lawsuits after someone files for bankruptcy.
Missed payments for a financed vehicle or home
Few collection efforts are more difficult to bounce back from than foreclosure or repossession. Someone who committed to a secured debt like a mortgage or car loan could be at risk of losing the collateral property they purchased with that financing if they fall behind on payments. Oftentimes, someone has to miss multiple mortgage payments to be at risk of foreclosure. As little as one missed car payment might lead to repossession. Filing for bankruptcy before lenders repossess a vehicle or foreclose on a home could help someone protect resources that they need for daily life.
Struggling to choose what bills to pay
Someone who cannot balance their budget is likely only going to find themselves in worsening financial circumstances over time. If someone must choose between paying their rent and covering the minimum payment on their credit cards, they may accrue numerous fees and a lot of interest on the amounts that they already owe. Even the strictest budget may not be enough to correct a scenario where household income cannot keep up with financial obligations.
A successful bankruptcy can eliminate certain debts through a discharge and give someone an opportunity to re-balance their budget. Recognizing when bankruptcy might be the best solution for someone's financial struggles could help them maximize the benefits that they’ll ultimately derive from filing.]]>On Behalf of Ambrogio, Pletter & Associates, LLChttps://www.ambrogiopletter.com/?p=483222023-12-06T08:50:01Z2023-12-11T08:49:26Za conventional Chapter 7 bankruptcy, the debtor does not have enough valuable non-exempt assets to warrant selling them off to repay creditors. This is known as a no-asset Chapter 7 bankruptcy. The term “no-asset” implies that the debtor does not possess non-exempt assets that can reasonably be liquidated for creditor repayment.
Filing for no-asset Chapter 7 bankruptcy
Before filing for liquidation bankruptcy, debtors must meet specific eligibility criteria. These criteria often involve testing and assessing the debtor’s income, expenses and ability to repay debts. Debtors are also required to undergo credit counseling from an approved agency before filing and financial management courses after filing.
Commencing the filing process involves submitting a petition, a statement of financial affairs and other relevant documents to the bankruptcy court. The debtor must also pay a filing fee. An automatic stay is initiated upon filing, halting creditor collection actions, such as foreclosures and wage garnishments. This provides debtors with immediate relief.
In a no-asset Chapter 7 bankruptcy, a trustee is appointed to review the case. The trustee issues a “no-asset” report if no non-exempt assets are identified. Once the bankruptcy process is successfully completed, eligible debts are discharged, providing debtors with a clean slate and a chance for a fresh financial start.
Advantages of no-asset Chapter 7 bankruptcy
As no assets are being sold to repay creditors, the process tends to be quicker, allowing debtors to move forward promptly. Successful completion results in the discharge of eligible debts, relieving debtors from the burden of repayment. Moreover, the automatic stay provides immediate relief from creditors’ actions, giving debtors a respite to regroup.
A no-asset Chapter 7 bankruptcy can be viable for those seeking swift debt relief when minimal non-exempt assets are involved. However, it’s essential to navigate this legal terrain with care, understanding the eligibility criteria, the filing process and the potential consequences of moving forward.]]>On Behalf of Ambrogio, Pletter & Associates, LLChttps://www.ambrogiopletter.com/?p=483072023-06-13T18:08:03Z2023-06-16T18:07:33ZSectors where debt has increased
Mortgage debt rose by $290 billion in 2022, while credit card debt increased to $986 billion. Complicating the matter is the extremely high rate of interest that many cards now have. The average credit card APR is at a record high of 19.14%. All of these factors combined lead to a money crunch for consumers with the potential of having to file for Chapter 7 bankruptcy if they can't pay their bills. With rising interest rates, consumers pay more for their desired goods and services.
This trend represents a complete reversal from 2021, when most households paid down debt with stimulus payments and avoided many big-ticket items, including luxury vacations. Current credit card interest rates show that consumers would need an extra six months to pay off the average credit card debt of $5,000 if they only make the minimum payments while also spending an additional $1,000 in interest.
What happens if I am drowning in debt?
If you have overwhelming debt, filing for bankruptcy can give you a fresh start. The type of bankruptcy you file for can affect what kind of debts are discharged. Under Chapter 7, you may be able to receive relief from unsecured debt like medical bills and credit cards, judgments, wage garnishments and older tax debts. This option is available to most consumers struggling with their bills.
To qualify for Chapter 7, you must go through a means test. This process compares your monthly income to the median income in the state of Connecticut. If your gross income for the previous six months is below the median, you will qualify for Chapter 7.]]>On Behalf of Ambrogio, Pletter & Associates, LLChttps://www.ambrogiopletter.com/?p=483052023-03-20T05:18:32Z2023-03-23T05:18:19ZNew credit reporting practices
The Biden administration should be praised for expanding existing health care laws to provide coverage for 4.2 million previously uninsured Americans, but the sharp fall in medical debt is more likely attributable to a change made in the way this debt is reported. In 2022, the three main credit reporting agencies announced that they would no longer report medical bills of less than $500 and remove accounts when they are paid. Equifax, Experian and TransUnion also extended the waiting period for reporting medical debt from six to 12 months.
Medical debt remains a serious issue
While fewer Americans may have medical debts on their credit reports, unpaid doctor and hospital bills are still a serious issue for millions of people. Medical debt in the United States exceeds almost all other consumer debts combined, and it is still a leading cause of personal bankruptcies. According to an academic study published in February, two-thirds of the people who file Chapter 7 or Chapter 13 bankruptcies each year seek debt relief because of medical bills.
Administrative sleight of hand
Consumer advocacy groups may dismiss the CFPB report as an administrative sleight of hand. Changing reporting practices may reduce the amount of medical debt on credit reports, but it does nothing to address underlying issues. Millions of Americans have found themselves in unmanageable financial situations because of an illness or injury, and filing a bankruptcy is often their only option if they want a fresh start.]]>On Behalf of Ambrogio, Pletter & Associates, LLChttps://www.ambrogiopletter.com/?p=482942022-09-07T08:41:15Z2022-09-12T08:39:58ZThe purposes of these courses
The purpose of a credit counseling course is to provide you with a better understanding of your debt relief options. This will help you determine if bankruptcy best meets your needs or if another strategy may help you pay your bills in a less drastic fashion. A debtor education course will teach you how to budget, use credit cards and go over other concepts that will reduce your chances of filing for bankruptcy again in the future.
You must take courses from approved providers
The judge in your case will only accept certificates provided by organizations approved by the U.S. Trustee Program. You can ask for a list of approved providers prior to beginning the process of filing for Chapter 7 bankruptcy. You should expect to spend about 60 minutes and $50 on credit counseling and about two hours and up to $100 on a debtor education course.
Certificates may expire
A credit counseling certificate is good for up to 180 days after you obtain it. If you fail to file for bankruptcy before it expires, you may need to retake the course. In some cases, the entity that provides your debtor education course will submit your certificate directly to the court. If your service provider doesn't do this, you are encouraged to do so yourself as quickly as possible.
Filing for bankruptcy may allow you to obtain an automatic stay, which would put a temporary end to creditor phone calls and letters. It may also put an end to lawsuits and other collection activities for the duration of your case.]]>On Behalf of Ambrogio, Pletter & Associates, LLChttps://www.ambrogiopletter.com/?p=482692022-06-14T02:22:36Z2022-06-18T02:22:08ZWhat is the means test?
The means test is a way for the court to determine whether or not you are eligible for Chapter 7 bankruptcy. It is based on your income and expenses. If your income is below the median income for your state, then you will automatically pass the means test and be able to file for Chapter 7 bankruptcy. However, if your income is above the median income, then you will have to pass a more detailed means test.
The means test sections
There are two parts to the means test. The first part of the test looks at your "current monthly income." This is your average income over the last six months. The second part of the test looks at your "disposable income." This is the amount of money you have left over after paying for your basic living expenses.
To calculate your disposable income, the court may look at your income and expenses. If you have a lot of disposable income, then you may not be able to file for Chapter 7 bankruptcy. There are a few exceptions to the means test. For example, if you are a disabled veteran, you may be exempt from the means test.
Filing for bankruptcy can feel like a daunting task, but it doesn't have to be. If you're considering filing for Chapter 7 bankruptcy, it's important to make sure you understand the means test. With a little bit of knowledge, you can make the process a lot less stressful.]]>On Behalf of Ambrogio, Pletter & Associates, LLChttps://www.ambrogiopletter.com/?p=477522022-06-14T13:41:16Z2022-06-14T12:40:50ZHow the automatic stay works
The automatic stay is a provision that prevents creditors from temporarily pursuing collection actions. The provision stays in place until the consumer gets discharged, which is commonly four to six months in Chapter 7 proceedings. This gives the trustee time to value assets, ensures that creditors get fair treatment and protects the consumer's property from seizure.
It halts wage garnishments, foreclosure, repossessions, tax collections and utility shutoffs for 20 days. It can stall evictions unless the landlord has already filed a judgment against the tenant. The automatic stay cannot stop action against debts accrued from some tax proceedings, criminal actions, pension loans or domestic support.
The automatic stay only gives a consumer protection for 30 days if they have a pending case within the last year. If the consumer has two pending cases within one year, the stay doesn't offer any protection unless they get approval.
Motion to lift the automatic stay
If a creditor disagrees with the automatic stay, they may file a motion to lift it. The consumer has 14 days to respond to the motion, or the lift is granted by default. A creditor may file this motion for many reasons, including:
Tenant and landlord disputes
Possible property depreciation during proceedings
Lawsuits against the consumer in another court
Payments in arrears with no equity in the property
The creditor must have a good reason to file a motion to lift and prove it to the court. The trustee could argue that the property has enough equity to pay creditors at the end of the case.
If creditors violate the automatic stay, they must commonly repay garnished wages. In some cases, they will face litigation filed against them.]]>On Behalf of Ambrogio, Pletter & Associates, LLChttps://www.ambrogiopletter.com/?p=477252022-01-31T16:05:46Z2022-01-31T16:05:46ZYou’ll never get credit again
One of the most common bankruptcy myths revolves around your ability to get credit. It’s a myth that if you file, you’ll never be able to apply for credit again. In reality, you may receive offers for secured credit cards after a bankruptcy discharge.
Your credit will be permanently damaged
Some people believe if you file for bankruptcy, your credit will permanently be damaged. In reality, you can work toward repairing your credit after filing. You can even get valuable information on preventing debt, which can help you improve your credit score and creditworthiness.
You can eliminate all debt
A huge bankruptcy myth is that you can eliminate all debt when you file. The reality is that you can only do that with unsecured debt such as from credit card usage. Debt that is secured like child support payments cannot be discharged.
You will lose everything if you file
It’s a common myth to believe that if you file for bankruptcy, you will lose all of your belongings and valuables. This is not true at all. You are able to keep most of your property and even the most important things such as your home and vehicle. Filing for Chapter 7 bankruptcy allows you to hold onto your prized possessions.
You can’t file more than once
Another bankruptcy misconception says that you can’t file more than once. However, by law, consumers are allowed to file more than once as long as they do so after a certain length of time. You can file Chapter 13 four years after getting a discharge with Chapter 7. You can file for Chapter 7 bankruptcy six years after getting a discharge through Chapter 13.
Myths can often be scary. Having them debunked can ease your mind about possibly filing for bankruptcy.]]>On Behalf of Ambrogio, Pletter & Associates, LLChttps://www.ambrogiopletter.com/?p=477172021-11-09T17:15:58Z2021-08-27T16:14:57ZWhat the exemption does
The exemption is contained within an act called An Act Concerning Property That Is Exempt From A Judgment Creditor, which Governor Lamont signed into law in July of this year. This Act expands the already existing exemption amounts.
As of October 1, 2021, the homestead exemption will expand to cover $250,000 worth of equity per homeowner. If two people own their home together, they could protect up to $500,000 worth of equity in the same home.
What this means for homeowners
The new homestead exemption will allow you to protect equity in your home from judgment creditors. It will also allow you to protect the equity in your home if you need to file bankruptcy. This will help you if you are worried about a judgment lien on your home.
If you owe money to a credit card, a bank, a hospital or the other party to a car accident, for example, and they sue you, all or most of the equity you’ve built up will be safe, even if you otherwise cannot cover the cost of the judgment.
This change in the law comes at the right time because property values in most of Connecticut have increased considerably over the past two years. Millions of Connecticut residents can now breathe easy knowing that they won’t lose the equity that they worked so hard to build up over the course of many years.
To learn more about the new Connecticut Homestead Exemption, and how it will protect your home from creditors, call Attorney Timothy Pletter today.]]>On Behalf of Ambrogio, Pletter & Associates, LLChttps://www.ambrogiopletter.com/?p=477132021-08-23T18:28:27Z2021-08-25T18:27:34ZWhat are over the limit fees?
Every cardholder has a credit limit. When you reach this limit, your card is usually declined, but if you proceed to make the payment, credit card companies will charge a penalty fee for going beyond your limit. This penalty is what's known as an over-the-limit fee.
How do over the limit fees work?
Credits cards are an unsecured form of debt, which means credit card companies have no collateral in case you refuse to make your payments. So, to minimize their consumer debt financial risks, they either decline you from making extra payments when you have reached your limit, or they charge you additional fees for any purchase made after reaching your limit.
You could just automatically exceed your credit limit early on, and the credit companies would charge you extra fees. However, today, you must manually agree to opt into over-limit fees; otherwise, your card will be automatically declined. By doing this, you are agreeing to extra charges when you exceed your limit by giving the credit card company the green light.
These fees could be expensive, but these depend on the credit card company you are using. However, according to the 2009 Card Act, the credit card company cannot charge you more than the amount you exceeded. For example, if you exceed your limit by $250, the company has the right to charge you fees up to $250.
How to avoid over-limit fees
The simplest and easiest way to manage your over-the-limit fees is not to choose this option. Your card will be automatically declined when you reach your limit.
If you feel like the credit card company has charged you excessively for going over the limit, then you should call them to address the issue. The first over-limit penalty should not exceed $27, and the second $38.]]>