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Things To Consider Before Contacting A Los Angeles Bankruptcy Attorney

Things To Consider Before Contacting A Los Angeles Bankruptcy Attorney

The idea of filing for bankruptcy can be scary and confusing. It is not a decision to enter into without the proper information. You may have seen an advertisement for a Los Angeles bankruptcy attorney on television or on a website, and the idea of paying a few lawyer fees and having your debt wiped out may seem like magic. But before you decide to file for bankruptcy, you should educate your self about the process, and gain an understanding of what bankruptcy actually means. Here are some things to consider when deciding whether bankruptcy is the right decision for you.

Types of Bankruptcy

The two types of bankruptcy that are of concern to individuals are Chapter 7 and Chapter 13, although there are several other chapters, such as Chapter 11 (used by businesses) and Chapter 12 (available to family farmers and fisherman).

Chapter 13 bankruptcy does not wipe out debt, but puts the debtor on a court-approved payment plan, allowing them to rehabilitate their financial situation under terms that the court believes are within their means.

Chapter 7 bankruptcy does wipe out most unsecured debt. However, there are certain types of debt not discharge-able through Chapter 7. These types of debt include:

Child Support

Spousal Support

Most Student Loans

Property Taxes

Income taxes less than 3 years old

Effect On Credit Score

The main disadvantage cited when cautioning individuals against bankruptcy of any chapter is that it stays on your credit report for up to ten years. Although this may deter some people, it is important to remember that if you are considering bankruptcy, your credit score is probably in pretty terrible shape as it is. If you think you can pay off your debts individually, or if they are close to falling off of your credit report, then the effect of bankruptcy on your credit score is something to take into serious consideration. However, if you are in a position where your credit score has no chance of improving in the next 10 years anyway, then this is not of much concern.

Bankruptcy Abuse Prevention and Consumer Protection Act

Put into effect in October 2005, this piece of legislation changed the terms surrounding bankruptcy. It implemented a means test, which determines whether a potential filer’s income is low enough, compared with their debt and based on the calculation of a state-specific median income, to qualify for bankruptcy. It also mandates that anyone filing for bankruptcy must undergo a one-hour counseling session with a non-profit credit counseling agency, in which they discuss all options for dealing with the debt. They must provide written proof of this counseling session when filing.

Other Methods of Filing

Contacting bankruptcy lawyers is not the only option you have for filing. You may download the federal bankruptcy forms and fill them out yourself, although this option is not advisable unless you have an in-depth knowledge of bankruptcy laws. There is also bankruptcy software available, which works much like tax-prep software in that it guides you through the filing process. You can also use a full-service online preparer, although this person is not an attorney and cannot offer legal advice. They simply prepare the forms for you.

Bankruptcy attorneys generally charge between $1,000 and $2,000 for their services, and there is a filing fee of about $300. If you truly have no other option, bankruptcy can be a way for you to make a new start, and may be worth the fees to have an attorney who will advise and guide you through the process. Whatever you decide, make sure you have considered all possible options.

Can I Improve My Credit Score Fast?

You’ve got one of the many financial situations coming up where you need a good report and are wondering how can I improve my credit score fast? While the truth is that a major jump will take some time with timely payments on a number of accounts, there are still some quick things you can do that will make a difference.

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The first thing to do is get a copy of your report, which can can do online for free. Take note that your report and score are two different things, but they are linked. Your score is calculated based on the info in your report.

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The first thing to take notice of is are there any errors? While it’s not worth your time to fix misspellings of your name, it is important to make sure paid accounts are not marked open or overdue and other things of that nature. If there are errors call the company and keep calling until the problem is fixed. Also make sure that the right credit limit is marked on all your cards. The amount of credit available to you versus how much you are using is an important factor.

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While this is all well and good, I know you’re wondering what else can I do; how can I improve my credit score fast?

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Probably the best thing you an do is pay down your balances. It is a good idea to get in the habit of paying your balance every month, and trying not to use over 30% of your limit.

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The older an account the better it looks on your report. If you have any older cards you haven’t used in a while pull them out and use them, while remembering the rule about using them lightly.

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While this isn’t an incredibly fast option, there are two important kinds of payments-revolving and installment. Revolving would be your cards, installment are loans. Taking out a small loan and repaying it- always making your payments on time- can greatly improve your situation if this is missing in your history.

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As we’ve seen, there are a lot of factors that determine how companies view your finances. How can I improve my credit score fast? Make small adjustments, and try to keep things as simple and clean as you can.

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