Modesto Bankruptcy Lawyer Blog

By now you must have heard that stores are not only opening at midnight Friday, but some are even opening Thursday night to try to get a jump start on the competition.

Critics argue that by opening on Thanksgiving Day, the retailers are infringing on a holiday meant to be spent with family. Supporters say that many people incorporate shopping into their Thanksgiving holiday plans, so the earlier the better. Regardless, retailers are expecting huge numbers of shoppers Friday as the holiday shopping season is in full swing.

While many will be enticed to line up overnight or get a pre-dawn start Friday, a free-spending attitude can lead to major debt problems. The only winners in the holiday shopping season are the retailers and the credit card companies. If you've watched TV lately, you've noticed the increase in credit card advertisements. They are making a push to get people to use their cards. That's because they know people will overspend and their hidden fees and high interest rates will make them money, too.

Consumers must be careful because these predatory lending practices can cause people to have to consider bankruptcy in Modesto. For those who end up with thousands of dollars in unsecured debt such as credit card debt, bankruptcy may be the only way out.

Creditors are rarely willing to work with consumers to pay down debt. They would rather have it all. But filing for bankruptcy scares them because they know they could end up with very little. Hiring an experienced Modesto bankruptcy lawyer should be your first step if you've run into problems meeting debt obligations.

Bankruptcy is a complex process, but it can be extremely beneficial to those who use these laws to their advantage. For one, a person can clear up most or all of their debt by filing for bankruptcy. Under Chapter 7 bankruptcy in Modesto, a person can have unsecured debts cleared while possibly keeping all of their assets or having to give up a few in order to pay back some of the debt. Chapter 7 is designed for people who have little or no income.

Chapter 13 bankruptcy, however, allows people to keep their assets if they can make monthly payments over 3 to 5 years to pay back a portion of the debt. This is the least popular form of bankruptcy, but can help people who want to stay in their houses and keep their cars and other assets.

Either option may be appropriate, especially when shopping debt reaches high levels. The National Retail Federation estimates that 152 million people are expected to shop during the Black Friday weekend, a 10 percent jump from last year.

However, the organization is typically low on its estimates. Last year, it estimated 138 million shoppers and 212 million showed up to look for sales. Target, Best Buy, Kohl's and Macy's have all said they're opening at midnight Friday. Wal-Mart and Toys R Us have said they'll be open at 10 p.m. and 9 p.m., respectively, on Thursday.

Continue reading "Black Friday is Good for Retailers, Bad For Modesto Consumers Who Get Trapped in Debt" »

A recent article out of St. Louis looks at the two personal bankruptcy options available to all Americans -- Chapter 7 bankruptcy and Chapter 13 bankruptcy..

Modesto bankruptcy lawyers will take a look at which form of bankruptcy could be appropriate for the average consumer struggling with debt. Whether choosing Chapter 7 bankruptcy or Chapter 13 bankruptcy in Modesto, the consumer can obtain debt relief.

Both forms allow for either all or a majority of a person's unsecured debt to be discharged after going through the bankruptcy process. So, both are beneficial. But there are requirements for qualifying that are based on a person's income and their individual situation. That's why consulting with an experienced Modesto bankruptcy lawyer should be your first step if you're considering bankruptcy.

Chapter 7 bankruptcy is the form that most people think of when they think of bankruptcy. This is where a person's debts are discharged and they may be called on to give up some of their possessions to sell and pay off debt. But that's not always the case. There are many situations where a person has few pricey assets or they owe more on them than they're worth and creditors aren't interested in them.

That means a person can keep their assets and still have their credit card, medical and other debt wiped clean. This is a form of bankruptcy considered for non-wage earners or people who have more debt than their income can reasonably satisfy. They are unable to pay their debts either because of job loss or are overwhelmed with debt.

According to statistics from the American Bankruptcy Institute, Chapter 7 bankruptcies consistently make up about 70 percent of personal bankruptcies nationwide.

In the first two quarters of 2011, they made up 71.3 and 72.32 percent of bankruptcies, respectively. In 2010, they peaked at 73.45 percent during the second quarter and going back a few years they made up as low as 57.45 percent in 2006. The number of bankruptcies has more than doubled from 597,965 in 2006 to 1,536,799 in 2010. Numbers for 2011 should be relatively close to 2010 numbers.

But studies have shown that Chapter 13 bankruptcies have become increasingly popular. In 2005, lawmakers changed the standards for filing for Chapter 7 bankruptcy, making it more difficult. Since then, some people have been forced to file Chapter 13 because they make too much money for Chapter 7.

This may be because people who make money, but whose houses are dragging them down, are looking at bankruptcy as a viable option. If people bought a house at the peak of housing prices only to see them crumble and currently are living in a house that is worth 1/4 of what they paid for it, they may allow it to go into foreclosure.

That could be a strategic decision or it could be because of job loss or job transfer. In these cases, it may be possible for the bank to come after the homeowner and seek a deficiency judgment, which means the bank attempts to get the homeowner to pay the difference between the mortgage amount and the sale price at auction after foreclosure.

For these people, perhaps Chapter 13 bankruptcy in Modesto fits best. Under Chapter 13, all debts aren't simply discharged like in Chapter 7. In this form of bankruptcy, the debtor must set up a payment plan, typically over a 3- to 5-year period. During this time, they make monthly payments to pay back some of the debt. The exact portion is determined on a case-by-case basis.

After the payments are made, the debt is considered discharged. While this may be more expensive, it guarantees that a person's assets remain intact. This includes a house, vehicles and other assets.

Continue reading "Which Chapter of Bankruptcy in Modesto Is Right For You? 7 or 13?" »