Bankruptcy Will I Lose My Job?

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Bankruptcy Will I Lose My Job?

The government can’t discriminate against you for having filed for bankruptcy. If you work for a local, state, or government agency, you cannot be fired. Nor can your public employer take other punitive action against you, such as demote you, reduce your salary, or take away responsibilities. Private employers can’t fie you or punish you solely because you filed for bankruptcy.

In fact, it’s rare that an employer ever finds out about a Chapter 7 bankruptcy filing. About the only time this might happen is if a creditor has sued you, obtained a judgment against you, and started garnishing your wages. The bankruptcy will stop the wage garnishment, and your employer will be notified about it. In such a situation, your employer (or at least the payroll department) already knew you were having financial problems and will probably welcome the bankruptcy as a way for you to take affirmative steps to put your problems behind you.

On the other hand, if you file for Chapter 13 bankruptcy, your employer is likely to learn of your bankruptcy case. This is because, if you have a regular job with regular income, the bankruptcy judge may order your Chapter 13 payments to be automatically deducted from your wages and sent to the bankruptcy court. This is called an “income deduction order”.

You may not like the idea of the income deduction order, but the bankruptcy court is likely to deny your Chapter 13 plan if you refuse to comply with it. And realize that the order will probably make it easier for you to complete your plan. The success rate of Chapter 13 cases is higher for debtors with income deduction orders than for debtors who pay the trustee themselves.

Many jobs require you to get a security clearance. If you are a member of the armed forces or an employee of the CIA, FBI, another government agency, or private company that contracts with the government, you may have a security clearance. Do you risk losing your security clearance of you file for bankruptcy? Probably not, in fact, the opposite may be true. Accordingly to credit counselors for the military and the CIA, a person with financial problems, particularly someone with a lot of debts, is a high risk for being blackmailed. By filing for bankruptcy and getting rid of the debts, you substantially lower that risk. Bankruptcy usually works more in your favor than to your detriment.

Bankruptcy Is it the right solution to your debt problems? Attorney Robin Leonard

Bankruptcy Will I Lose My Job?

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Bankruptcy Will I Lose Child Custody? Lost My Freedom? Change Job? Get Divorced?

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Bankruptcy Will I Lose Child Custody? Lost My Freedom? Change Job? Get Divorced?

Will I Lose Custody of My Children?
There are no reported cases from any state of a parent losing custody because he or she filed for bankruptcy. Bankruptcy and divorce (or separation) are so often related these days that one frequently follows the other. Bankruptcy judges are becoming experts on family law matters, and family law judges are becoming experts in bankruptcy. Don’t worry about your bankruptcy affecting your custody status. Keep in mind, however, that bankruptcy does not relieve you of your child support and alimony obligation, past or present.

Will I Lost My Freedom?
We Americans are used to some basic freedoms, and many people fear loss of those freedoms if they file for bankruptcy. Relax. Except in some unusual cases, this just not going to happen.
Can I move? You are free to change your residence after you file. Just be sure to send the trustee a change of address form if your case is still open. If your move involves selling your house and you’ve filed a Chapter 13 bankruptcy, the trustee may want to use proceeds of the sale to pay off your creditors.

Can I change my jobs?
You can certainly change jobs while your bankruptcy case is pending, and after its ends. If you’ve filled a Chapter 13 case, be sure to tell the trustee so he or she can transfer the income deduction order.

Can I get divorced?
No one can force you to stay married, not even a bankruptcy judge. If you’ve filed for Chapter 7 bankruptcy and want to end your marriage, go ahead. Your bankruptcy case will probably end long before your divorce case does.


Bankruptcy Is it the right solution to your debt problems? Attorney Robin Leonard

Bankruptcy Will I Lose Child Custody? Lost My Freedom? Change Job? Get Divorced?

Avoid Bankruptcy and Free Your Debt . Get Refinance Loans , Secured Debt Consolidation or Debt Settlement Advices.

Chapter 7 Bankruptcy vs Chapter 13 Bankruptcy

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Chapter 7 Bankruptcy vs Chapter 13 Bankruptcy

The best feature of Chapter 13 bankruptcy for many people is that they can arrange their affairs to replay their debts without giving up any property. Other than selling property voluntarily, to augment the income you denote to your Chapter 13 plan, you only risk losing property if you’ve missed payments on a secured debt, and the bankruptcy court then lets the creditors repossess or foreclosure on the “collateral” (the property securing the debt).

Chapter 7 bankruptcy is different. If you won property that is considered “no exempt”, you may lose it, unless you arrange to give its cash equivalent or other (exempt) property of the same value to the bankruptcy trustee. The cash could come from earnings or loads received after your filing date.
In addition, if you aren’t current on a secured debt or can’t afford to make payments on it in the future, you may, in a Chapter 7 case, lose the property that secures the debt.


Bankruptcy Is it the right solution to your debt problems? Attorney Robin Leonard

Chapter 7 Bankruptcy vs Chapter 13 Bankruptcy

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Types of Bankruptcies: Chapter 13 and Chapter 7

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Types of Bankruptcies: Chapter 13 and Chapter 7

There are 2 kinds of bankruptcy: “liquidation” and “reorganization”. In a liquidation bankruptcy, your nonessential property items may be sold to pay down your debt, and most or all of your debts may be wiped out. The liquidation bankruptcy is called Chapter 7 bankruptcy, and it can be filed by individual (a “consumer” Chapter 7 bankruptcy) or business (a “business” Chapter 7 bankruptcy). A Chapter 7 bankruptcy typically last 3 to 6 months.

Chapter 7 Bankruptcy
In a Chapter 7 bankruptcy, you got to cancel, or “discharge”, certain types of debts. In return, however, you must be willing to give up certain types of property, to be sold for the benefit of your creditors. In fact, most Chapter 7 filers get to keep most or all of the property they need to get on with their lives, because the law considers it necessary for a fresh start.
The typical Chapter 7 bankruptcy case takes between 3 and 6 months from filing to discharge. It costs $209 in filing and administrative fees, and it commonly requires one physical appearance at what’s called a “creditors’ meeting”.

Chapter 13 Bankruptcy
Chapter 13 bankruptcy, sometimes called the wage earner’s plan is quite different from Chapter 7 bankruptcy. In a Chapter 13 bankruptcy, you use your income to pay some or all of what you owe to your creditors over time. Most Chapter 13 bankruptcies last 3 years. Some last longer, a court can approve a case as long as 5 years. A few are shorter, if you pay off 100% of your debts in less than 3 years, your case will be over sooner.
Chapter 13 bankruptcy isn’t for everyone. If your income is too low or irregular, you may not be eligible. To file for Chapter 13 bankruptcy, you must have a steady income.
If your total debt burden is too high, you are also ineligible. Your secured debts cannot exceed $922,975 and your unsecured debts cannot be more than $307,675. A “secured debt” is one that gives a creditor the right to take a specific item of property (such as your house or car) if you don’t pay the debt. An “unsecured debt” doesn’t give the creditor this right. Common examples of unsecured debts are credit card and medical bills.

Bankruptcy Is it the right solution to your debt problems? Attorney Robin Leonard

Types of Bankruptcies: Chapter 13 and Chapter 7

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Credit Score: Coping With A Credit Crisis

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Credit Score: Coping With A Credit Crisis

A credit crisis, being unable to manage your debts, can come on slowly as the result of overspending for many years. The balances on your accounts grow and grow; pretty soon you’ve able to make only the minimum payments, and then not even that.

Other times a credit crisis comes at you in a rush as a result of another financial setback, a job loss, a divorce, a major illness. Suddenly, you have more “outgo” than “income”, and you’re not sure where to turn.

A friend I’ll call Charlie experienced a crisis that resulted from a combination of both forces. For years, he’d make a successful living as an animator, earning as much as a quarter million dollars a year. He and his family didn’t have to worry much about money, because so much was flowing their way.

Like hundreds of others in his field, though, he was caught in the industry’s downturn at the beginning of the millennium. By the time he contacted me, he had been unemployed for more than a year.

His primary concern was how he could get his home refinanced so that he could lower his interest rate and reduce his monthly expenses. Among the problems, though, was that he and his wife had pretty mediocre credit scores, and, of course, very little income, just what he could scrape together from occasional freelance gigs.

The steps you need to take are fairly straightforward:
1. Figure out how to free up some cash: You might not need to tap every source of income you identify, but it’s good to know what’s available before you go any further.
2. Evaluate your options: If you find enough cash, you might be able to set up a repayment plan and put the crisis behind you. If you don’t, you have an array of tough but important choices you’ll need to consider.
3. Choose a path and take action: You might not like all the consequences you’ll have to face, but further delay will simply make matters worse. The quicker you pick a plan and get started, the sooner your credit can start to recover.

Your Credit Score Liz Pulliam Weston

Credit Score: Coping With A Credit Crisis

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FICO Score: How Your Score Is Calculated

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FICO Score: How Your Score Is Calculated

When most of us think of scores, we think of the relatively straightforward systems used in sports or in school tests. You get points (and possibly demerits) for certain actions, behavior, or answers, and those are totaled to determine your scores.

Credit scoring isn’t nearly so easy. Credit scoring models uses “multivariate” formulas. That basically means that the value of any given bit of information in your report might demand on other bits of information.

To understand how this works, let’s use a non credit example. Say that your sister calls you to report that her husband is more than an hour late in coming home from work, and she asks if you think he’s having an affair. To answer the question, you would need to review what you know about this man, including his attitude about his family, his general moral standards, and whether he’s had dalliances in the past. Using all these variables, you could try to predict whether your brother-in-law is likely to be stepping out, or might just have stopped off to buy his wife an anniversary present.

Let’s supposed that your brother-in-law is a stand-up guy. But you’ve personally observed your neighbor in a clinch with a woman who was not his wife. If your neighbor was an hour late in coming home and his wife asked you your opinion of his likely faithfulness, you might reach quite a different conclusion. So the same behavior, coming home late, could evoke two very different predictions based on the information at your disposal.

The number of factors that the FICO formulate evaluate is infinitely greater, so you can see how difficult it can be sometimes to predict the outcomes of certain behaviors.

There’s one thing that’s always true, though: The FICO model is set up to place more value on current behavior. That means that the effect of your old credit troubles lessens over time if you start handling credit more responsibly.

However, the score are also designed to react strongly to any signs that a once good risk might be turning bad. That’s why someone with a good score might suffer more heavily from a late payment.

It’s generally a lot easier to lose points on your score than it is gain them back, which is why it’s so important to know how to improve and protect your score.

Your Credit Score Liz Pulliam Weston

FICO Score: How Your Score Is Calculated

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FICO Score: What Is a Good Score?

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FICO Score: What Is a Good Score?

One of the first questions many people have about credit scoring is what score lenders consider “good”. There is, however, no single answer to that question.

Generally, of course, the higher the scores, the better. Each lender makes its own decision about where to draw the line, base on how much risk it wants to take and how much profit it thinks it can make with a given blend of customers. Many lenders don’t have a single cut off but may have many, with each segment qualifying for different rates and terms. Finally, as noted earlier, a credit score is usually only one factor in the lending decision. Although scores typically have a big influence, a lender might decide that other factors are more important.

You can see from this national distribution chart of FICO credit scores that most of the U.S. population has a FICO score of 700 or higher. Many lenders use 700 or 720 as the cutoff for giving borrowers their best rates and terms. Many also use 620 as a cut off point. Companies that deal with borrowers below that level RE OFTEN CALLED “subprime” lenders, because their riskier borrowers are considered less than “prime”.

FICO Credit Score Percent with Score
300-499 -------------------------- 1%
500-549 -------------------------- 5%
550-599 -------------------------- 7%
600-649 -------------------------- 11%
650-699 -------------------------- 16%
700-749 -------------------------- 20%
750-799 -------------------------- 29%

The company that creates the FICO is now marketing an updated version called the NextGen. The NextGen has a wider possible score range: instead of 300 to 850, the lowest possible score is 150 and the highest is 950. Your actual score, though, predicts about the same amount of risk in both systems. So, a 750 is considered a low risk score under both the FICO and NextGen formulas.

Your Credit Score Liz Pulliam Weston

FICO Score: What Is a Good Score?

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Credit Score: How Your Credit Score affects You

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Credit Score: How Your Credit Score affects You

In recent years, a simple three digit number has become critical to your financial life.
This number, known as a credit score, is designed to predict the possibility that you won’t pay your bills. Credit scores are handy for lenders, but they can have enormous repercussions for your wallet, your future, and your peace of mind.

If you credit score is high enough, you’ll qualify for a lender’s best rates and terms. Your mailbox will be stuffed with low rate offers from credit card issuers, and mortgage lenders will fight for your business. You’ll get great deals on auto financing if you need a car, home loans if you want to buy or improve a house, and small business loans if you decide to start a new venture. If your score is low or nonexistent, however, you’ll enter a no man’s land where mainstream credit is all but impossible to come by. If you find someone to lend you money, you’ll pay high rates and fat fees for the privilege. A bad or even mediocre credit score easily can cost you tens of thousands and even hundreds of thousands of dollars in your lifetime.

You don’t even have to have tons of credit problems to pay a price. Sometimes all it takes is a single missed payment to knock more than 100 points off your credit score and put you in a lender’s high risk category.

That would be scary enough if we were just talking about loans. But landlords and insurance companies also use credit scores to evaluate applicants. A good score can win you cheaper premiums and better apartments; a bad score can make insurance more expensive and a place to live hard to find.

What credit experts know, is that ignorance about your credit score can cost you. Sometimes people with great scores get offered lousy loan deals but don’t realize they can qualify for better terms. More often, people with bad or mediocre credit get all the loans they want, but they don’t realize the high price they’re paying.

Your Credit Score Liz Pulliam Weston

Credit Score: How Your Credit Score affects You

Avoid Bankruptcy and Free Your Debt . Get Refinance Loans , Secured Debt Consolidation or Debt Settlement Advices.