Modesto Bankruptcy Lawyer Blog

Short of winning the California State Lottery, bankruptcy is probably the fastest way for many overwhelmed Modesto residents to get out of debt. There are income restrictions as to who can file for Chapter 7, or total, bankruptcy, so a bankruptcy lawyer may recommend Chapter 13 bankruptcy instead. As opposed to eliminating your debt totally, Chapter 13 negotiates your debts down to a lower amount and puts you on an affordable payment plan to rid you of them over time.

That being said, many people wonder how long it actually takes for bankruptcy to clear away debts. In the case of Chapter 13 bankruptcy, it depends on the length of your payment plan, but the average plan is structured over three to five years.

For Chapter 7 bankruptcy, on the other hand, there are no payments to make. Most of your unsecured debts, like credit cards and medical bills, will be eliminated completely in a few short months. On average, people who file for Chapter 7 bankruptcy with a lawyer in Modesto can see their eligible debts gone within 90 to 120 days, although you may even start seeing the effects almost immediately since creditors and collections agencies have to stop calling once you file. Certain debts will still need to be paid, however, such as student loans, government loans, back taxes, child support and alimony.

Bankruptcy can stay on your credit report for seven to 10 years, but you can start rebuilding your credit immediately after you file for bankruptcy if you make smart financial decisions and timely payments. Contact a bankruptcy lawyer to devise a financial plan for your debts today.

Filing for bankruptcy doesn't have to be thought of as a negative financial move. Bankruptcy is truly a fresh start for people who are consumed by overwhelming debt. As a matter of fact, when you file for Chapter 7 or Chapter 13 bankruptcy, you may find that your credit actually takes a little jump up if you had a number of creditors who were reporting negative collections activity, late payments and charge-offs on your credit report prior to filing. Bankruptcy can clear all that away and give you a new financial beginning.

Personal Loans Can Kick Start Your New Way of Life
A personal loan can be the financial catalyst you need to get back on track. For example, if you filed for Chapter 7 bankruptcy and had to sell your house as a part of the bankruptcy agreement, then you might be looking to rent an apartment. However, you will need to pay a hefty down payment (often as much as the monthly rent itself) in addition to first, and maybe last, month's rent. This can quickly add up. You may also need to pay for movers, make down payments in order to turn on utilities or put a cash deposit on an unsecured credit card in order to start building up your credit again. All of these things require liquidity. A personal loan can give you the cash you need to get back on track.

In order to get a personal loan after bankruptcy, approach banks that you've had relationships with in the past. If you fell on hard times recently but have had an otherwise decent history with the institution, you may find that they are more likely to loan you money. Credit unions affiliated with your employer or labor union will also be friendlier as a general rule. You can expect to pay higher interest rates, but installment loans also help build your credit up quickly. If you need help filing for bankruptcy in Modesto, be sure to call a qualified lawyer in your area.

On April 1, 2010, the NUMMI (New United Motor Manufacturing Inc.) auto assembly plant in Fremont, CA shut it doors for good, leaving more than 4,700 employees jobless. It was the last auto plant in the entire state of California, producing more than 8 million Toyota vehicles during its 25 years of operation.

Some of the workers cried as they left for the day, while many worried about their futures. While most workers received an average severance package of around $21,000, instability in the auto manufacturing market has many worried that they'll have to declare bankruptcy in order to deal with mounting bills, the loss of health insurance and the lack of jobs within the state.

Will Filing for Bankruptcy Harm Chances for Future Employment?
Trying to get a job after filing for bankruptcy is often a concern for many people. However, bankruptcy doesn't have to hinder your chances at a job if you're upfront about your history. When you apply for any position, be honest about your bankruptcy. Explain the circumstances why you had to file and be sure to highlight your stellar credit behavior since you've filed.

Most employers check your credit history simply to make sure you're not a person who is gravely irresponsible with money or someone who would be prone to company theft or mismanagement. Although Section 525 of the U.S. Bankruptcy Code stipulates that employers cannot discriminate against you simply because you've filed for bankruptcy, it can happen if you're not clear with potential employers about your history.

At the end of the day, recent economic hard times have caused a lot of people to turn to bankruptcy, so it just doesn't mean as much to certain employers as it once did. As long as you're forthcoming and capable in your interview, bankruptcy shouldn't stop you from getting most jobs for which you're qualified.

The Federal Trade Commission has published a list of recent credit-fixing scams and fraudulent credit repair companies that are being pursued by the FTC for unlawful actions. Sadly, there are many more companies operating who have yet to be caught. In order to prevent being taken by credit rebuilding scams, Credit.com suggests that consumers take credit matters into their own hands instead of risking losing money and time with scams.

Reputable Ways to Clean Up Your Credit
- Contact the National Foundation for Credit Counseling (NFCC) to find a registered credit counseling member in your area. The NFCC is a non-profit organization that provides referrals to legitimate agencies.
- In Part One of this entry, we talked about contacting the credit bureaus (i.e. Equifax, TransUnion or Experian) to remove mistakes on your credit. This is your biggest tool in cleaning up your credit quickly. It's a good idea to also set up a fraud alert through your bank or another authorized agency that immediately spots Identity Theft on your records to prevent future dings to your wallet and your credit.
- If you've already filed for bankruptcy, the fastest way to rebuild your credit is to secure loans and credit in your name. Installment loans like auto loans and student loans are ideal, but revolving credit accounts such as credit cards or home equity lines of credit can also be very helpful in rebuilding credit.

Don't trust agencies that require upfront fees or tell you that you should not contact a credit reporting bureau on your own. These companies are likely scammers looking to take your money and access your credit report to manipulate your credit to their benefit and your detriment.

Truly, only a bankruptcy lawyer in Modesto can help you file bankruptcy and clean up your credit history through legal means. Other companies who offer to remove accurate records, such as late or missed payments, are often fraudulent and should be avoided at all costs.

There are plenty of constructive ways to rebuild your credit after you've filed for bankruptcy in Modesto. You can apply for secured credit cards and loans or you can "piggybank" on another authorized credit account to show creditors that you can make responsible financial decisions. However, there are unscrupulous companies out there looking to make quick money by taking advantage of people who are looking to rebuild their credit fast.

You need a good credit rating in order to get a car, a home or even a job, so many people are anxious to raise their FICO score immediately after filling for bankruptcy. They are drawn in by ads claiming to "fix credit fast" or "boost your credit score overnight." However, many of these claims are unsubstantiated or simply completely false. According to Fraud.org, a consumer resource website, here are some common scams people fall for when trying to rebuild their credit:

Paying for "credit repair services" upfront. It's actually illegal for a company to ask for payment prior to performing credit repair services.

Believing that a company can eliminate late/missed payments or charge-offs from your credit history. NO company can legally remove negative credit information if it is accurate, not even for a fee.

Promises to create a second credit history. This is strictly illegal in every way. Anyone offering a secondary credit score using a tax ID number or social security number other than your own is fraudulent.

If you want to clean up your credit fast, regardless of whether you've filed for bankruptcy or not, you can correct your credit report yourself. You don't need to hire a company to take off blemishes for you. All you have to do is obtain a free credit report (the government mandates that this be available for every American once a year), identify the mistakes in your credit history and contact each related creditor personally to have them removed when possible.

Most people suffer with bad credit because they simply don't know that they have mistakes on their credit histories. Check your credit score annually (at least) and take care of problems as soon as you notice them. If you want legitimate answers to your financial questions about credit and bankruptcy, contact a qualified lawyer you can trust.

If you're facing foreclosure on your Modesto home, you might be intrigued by offers that claim to be able to "save your home quickly" or "stop foreclosure now." You may have seen or even responded to newspaper ads, flyers or Internet ads that promise to get you out of debt fast without filing for bankruptcy or that claim to be able to file your bankruptcy without affecting your credit score. While there are legitimate credit counseling services that offer foreclosure assistance, there are no magic "genie lamp" services that can simply wish away your foreclosure situation.

The Better Business Bureau (BBB) and Department of Justice (DOJ) work together to educate homeowners on bankruptcy foreclosure scams around the country. Both agencies post known scams and warn consumers that scam artists will often target specific religious or ethnic groups with flyers offering homeowners quick fixes to mortgage problems.

The BBB reports that one of the most common scams involves companies telling homeowners that they can deal directly with their lender to stop foreclosure. Then, they ask the homeowners to make mortgage payments directly to their company instead of to the bank. Instead of making the payments for you or talking to your lender, though, they will just take the money and run. More scandalous con artists will even ask for the property deed or title to your home so that they can file bankruptcy in your name without your knowledge. While this will temporarily stop foreclosure, it only allows them enough time to skip town with all your money before you realize what's happened.

Look for Signs
The BBB and DOJ suggest that you proceed with caution when you come across services that:
- Have titles such as "mortgage consultant" or "foreclosure service"
- Contact you only when your home is listed for foreclosure
- Ask for a fee before providing services
- Direct you to make payments directly to them instead of your lender
- Make you sign over your property deed or title

Your best bet is to hire a reputable bankruptcy lawyer in Modesto who can take you through the bankruptcy filing process using the proper legal procedure. If something sounds too good to be true, it probably is.