What can credit counseling do for you?

If you recently looked into filing for bankruptcy, you may have heard the term credit counseling.

Before you will be able to file for bankruptcy, you are required to take an approved credit counseling course as a way to determine if bankruptcy is your best option. Credit counseling is mandatory when applying for both Chapter 7 and Chapter 13 bankruptcy even if a payment plan will not be feasible for your situation. Once you complete the course you will be given a certificate stating you completed the course. In some instances a repayment plan is proposed; if so, you must submit this to the court as well. After your bankruptcy begins, you will be required to take another course teaching you financial management skills.

The new skills you learn during credit counseling will put you on your way to financial freedom.

Call the law office of Attorney Erwin F. Meiers, III to discuss your bankruptcy and credit counseling options.

Beware of Zombie Debt

Zombie debts can come back years later to haunt you.

With all this talk of zombies in the news, here's another type of zombie you may not have known about.

No, it's not flesh eating zombies, but zombie debt.
Zombie debt is a term that has been applied to debts that were (or so you thought) settled and done. Because debts can be sold from one collection agency to another there is a great opportunity for making money in the reanimation (this is where the Zombie moniker comes in) of a debt you thought was resolved. Knowing about Zombie debt is important because even debt that has been resolved through bankruptcy or resulted from identity theft can come back to haunt you. Some consumers have even been threatened or sued over zombie debt, both practices that could be considered illegal if the debt is fraudulent.

If its illegal why is it happening?
Each state has its own statute of limitations on how long a debt can go unpaid before you are no longer responsible for paying it. However, collection agencies can purchase these debts from the original creditor for just pennies on the dollar allowing them to make a huge profit if you pay on it. Paying on the debt or even admitting that it is yours can reopen the statute of limitations.

So do you really owe on this debt and if not, how do you kill something you thought was dead?
First, find out if the debt is yours and was not paid. Many zombie debts are the result of identity theft, are fraudulent debts or are past the statute of limitations and you are not responsible for paying them. If you are unsure of the debt, do not discuss it with the collector over the phone. Ask for the mailing address of the company and dispute it in writing. If the debt is legitimate and you do not respond to the collection agency, they can take you to court. If you receive notice that you are being taken to court, contact a lawyer and dispute the debt in court with legal representation.

Don't let zombie debt get your credit score, contact Attorney Erwin F. Meiers, III today to discuss your debt.

http://www.investopedia.com/terms/z/zombie-debt.asp#axzz1yuKcpBqV
http://money.howstuffworks.com/personal-finance/debt-management/zombie-debt.htm
http://www.forbes.com/2008/10/31/debt-creditors-default-pf-education-in_af_1031investopedia_inl.html

Automatic Stays and your bankruptcy

What is an automatic stay? An 'Automatic Stay' is put in place once a bankruptcy claim is made. An automatic stay puts a hold on pesky phone calls from collection and repossession agencies.

According to the senate report relating to Automatic Stays: "The automatic stay is one of the fundamental debtor protections provided by the bankruptcy laws. It gives the debtor a breathing spell from his creditors, stopping all collection efforts, all harassment, and all foreclosure actions. It permits the debtor to attempt a repayment or reorganization plan, or simply to be relieved of the financial pressures that drove him into bankruptcy. Notes of Committee on the Judiciary, Senate Report No. 95-989"

While the automatic stay is temporary it may give you the relief you need to get through the bankruptcy process. As with any legal matter you should discuss all of your options with your attorney and make a fully informed decision.

If you are struggling with bankruptcy or harassing collection calls, contact the offices of Attorney Erwin F. Meiers today.

Determining Chapter 7 eligibility with a means test

Are you considering filing for bankruptcy and keep seeing the term "means test?" The means test was developed to determine if you are eligible for Chapter 7 bankruptcy and to aid in separating Chapter 7 eligible persons from those who are not eligible.

The means test is a series of questions involving income and expenses. Qualifying begins with determining your income and whether it is higher or lower than the median of the state you reside. If it is lower, you pass and are ready to file for Chapter 7. If its higher, there are a few more steps to determine whether you pass. Determining your excess income and your debts is crucial at this point as you need to have more debt than income in order to pass. Keep in mind that the medians change from state to state and include differed levels of allowed expenses. In the event that you fail the Chapter 7 means test you could still qualify for Chapter 13.

So, you passed the means test, should you file?
As with many legal matters circumstances can vary and its important to consult an attorney before deciding to file. However, determining your filing eligibility using the means test is an important step in the process. The means test uses information needed to fill out bankruptcy forms and will help you regardless of if you pass or fail.

As with any legal matter you should discuss all of your options with your attorney and make a fully informed decision. Contact the law office of Erwin F. Meiers today.