Getting rid of parking tickets in bankruptcy

Unpaid parking tickets can cause a lot of trouble--it can get your car impounded, your license suspended, and your state tax refunds withheld. One type of personal bankruptcy can help solve these problems--Chapter 13.  A Chapter 13 bankruptcy can discharge some types of debt that a Chapter 7 can't discharge. One of those is parking tickets.  If you file a Chapter 13, you set up a monthly payment plan toward your debts based on what you can afford. Typically you don't have to pay back all of your debts. When you file the Chapter 13, you should be entitled to get your car back and reinstate your license. When you finish the Chapter 13, any parking tickets you had when you filed are discharged--you no longer have to pay them.

Will My Bad Credit Affect My Spouse?

Bad credit shouldn't be the reason stopping you from tying the knot. If you have bad credit and your fiance has excellent credit, you'll each have that same credit after you get married.  Marriage doesn't combine credit scores, either for good or for bad. The only way your bad credit could hurt your spouse is if you co-sign a loan together that doesn't get paid.  

The difference in credit scores could make it harder to take out joint debt, like a mortgage or auto loan.  Your bad credit might cause the lender to decline you, making your spouse be the sole applicant or requiring a co-signer. 

Iowa Foreclosure Survival Guide, Part 2

You've been served with foreclosure papers and you want to keep your house. What to do?

Answer the foreclosure lawsuit and demand a delay of sale! This is a job best done with help from a lawyer. Iowa's court filings are now done electronically, so between navigating the online filing system and understanding exactly what an answer is supposed to say, there are lots of chances for error.  Call a lawyer as soon as you get the papers.  They will want to review with you your situation, how far you're behind, and whether your lender has made any mistakes.

Once you've filed an answer, you've bought yourself some extra time. The lender will now have to try and get a foreclosure judgment against you. They could do that either at a trial, or, much more commonly, by filing a motion for summary judgment. That motion asks the court to decide in their favor without a trial. Every lender is different in how fast they work. Some may move to this right away, others may take many months.  Ultimately, when the lender gets a judgment, your delay of sale kicks in. If the property is your house and you've asked for a delay, Iowa gives you six months, no questions asked, before the lender can schedule a sheriff sale to sell your house.

During this process, you can still keep working with your lender on options like modification or a short sale. It can be a very long and frustrating process, but you are free to keep trying.  Sometimes, though, a Chapter 13 bankruptcy will be a better option to catch up and stay in the home.

 

 

Iowa Foreclosure Survival Guide, Part 1

If you fall behind on payments on your Iowa home, odds are you'll end up in foreclosure. How do you get through it?

The first thing to know is that a foreclosure doesn't start until you're at least several months behind on your mortgage. One missed payment won't do it.  You lender also has to send you two notices before foreclosing: a "Notice of Right to Cure" putting you on notice of how far behind you are and giving you 30 days to catch up. If you don't get caught up, then they send a "Notice of Acceleration" calling your entire loan due.  If you've received these notices, that's a good sign foreclosure is coming soon.

Your lender's attorney then files a foreclosure action in court.  They have to send a process server or sheriff's deputy to personally hand you the foreclosure petition.  The petition will be a thick stack of papers and it will warn you on the front cover that you have 20 days to respond.  You should write on the petition what day you got the papers so you don't forget.

If you do nothing, the bank can go to the court in 21 days and ask for a default judgment.  A default judgment says the bank wins because you did nothing.  Sometimes this can be a good thing if you've already decided you want the house to go back to the bank.  Speeding foreclosure along can be good if you just want to end your responsibility on the house quickly.

If you don't want to lose your home quickly, then there's work to be done. 

 

 

 

What to do if you get a bankruptcy notice: protecting yourself as a creditor

If someone owes you money, and you get a notice that they've filed bankruptcy, are out just out of luck?  Honestly, yes, most of the time.  If you got a notice that someone filed bankruptcy, that likely means they listed you as a creditor. Most of the time, your debt will end up getting discharged by the court, and you won't see any further payment.  Beyond that, you're also stopped from taking any action on your own to collect that debt.

In rare cases, you might see a small repayment.  If it is a Chapter 7 case and the trustee assigned to your debtor's case finds assets for creditors, you'll have a chance to submit a claim to the court to be in line for payment.  No claim filed means no payment.  Generally everyone who files a claim shares in any proceeds, so don't expect a huge check.  If it's a Chapter 13 case, you'll be invited to file a claim to collect whatever you're entitled to under the debtor's monthly payment plan.

In other, rare cases, you might have grounds to object to a debtor's discharge.  If you think the debtor lied to you or tricked you or was otherwise deceptive in getting you to lend them money, you might be able to object to the discharge of their debt.  This depends heavily on the facts of your scenario, and is an option you should talk over with an experienced bankruptcy attorney.  

Finally, some types of debt just aren't automatically discharged. For example, if you're owed child support or alimony and your ex files bankruptcy, you don't need to do anything. Those debts won't go away. If in doubt, though, ask a lawyer if you need to take any action to protect yourself.



Four Things To Do if You've Been Sued

If you've been sued in Iowa, Wisconsin, or Illinois, chances are the sheriff or a private process server came to your house or your job and handed you some papers.  What to do next? Look at the papers for the following information:

1. Who is suing you? Is it a company you know you owe money to? Did they buy a debt you owed to another company? The information about who is suing you (called "the plaintiff") should be in the caption, one of the first things you see.  If you don't recognize the plaintiff's name, read on.  Sometimes debt buyers will attach paperwork explaining who they have bought this debt from.

2.  How much are they suing you for? Does the amount sound correct to you?

3.  Is there information about the debt attached? Sometimes creditors will attach credit card statements or affidavits explaining how much you owe. Do these seem correct?

4. Look for your "due date." In Iowa, this is usually 20 days from the day you were served papers.  The first page will usually tell you clearly when you need to take action by filing a response.  Take this date seriously and write it on your calendar!  If you do nothing, the court may assume you owe the money and issue a judgment, even if you had a good defense.  

After you've read the papers, you have to make the choice of whether to get help or handle this on your own.  A lawyer can give you advice about whether you have any good defenses to this lawsuit, such as if too much time has passed.  In Iowa, for example, a creditor has only 5 years to sue you on a credit card debt unless they have a written contract you signed.  A lawyer can also tell you what might happen if the creditor gets a judgment.

If you ask for help from a lawyer, ask early! Your lawyer is also bound by that time limit, and you want to give him or her as much time as possible to respond.  

If you go it alone, you'll have to file an answer for yourself.  In Iowa, that is usually done online; Wisconsin and Illinois still use paper.  Remember that if you represent yourself, the court system offers some guides, but can't give you legal advice.


Newer, But Not "Simpler" Bankruptcy Forms on the Way

As of December 1, 2015, most of the forms used to file bankruptcy will be getting a brand new look.  The idea is supposedly to make them simpler and easier to read.  When has a government agency ever really made something simpler?  Not yet.  

Instead, sneak previews of the new forms show that one-page forms have turned into four-page forms.  The one, standard cover sheet has now turned into four different choices for a filing sheet--you figure out which fits your case!  A typical filing is currently about 50 pages long. With new forms, that total is bound to increase significantly.

What does it mean when a debt is "charged off"?

You know you've missed some payments on a credit card bill. You pull your credit to check, then see it says it is "charged off."  Does that mean you're off the hook?  Unfortunately, it doesn't.  "Charged off" just means that the creditor has adjusted their books to show that your debt is no longer an asset to them; it's a loss. In other words, there's not a good chance you'll actually pay them back.  For credit card companies, this often happens when you've missed 6 months worth of payments. 

But don't be fooled by "charged off"--you absolutely still owe the money to the creditor.  They can still sue you or try other means to collect.  

When to Hang Up the Phone

"Aggressive, convincing, and threatening"--that's how Iowa's Attorney General's Office describes a rash of phone calls being made by debt collection scam companies.  

The caller starts by saying they are collecting some debt you owe to another company. Sometimes they can give you info about the debt, sometimes not.  Then they start to get rude and pushy.  They claim you'll be getting legal papers.  They say you're committing fraud if you don't pay them.  Some even threaten that the sheriff is coming to your work or your house with a warrant if you don't pay right now.

It's a scam, plain and simple.  No legitimate debt collector will threaten you with jail or arrest. Very few would even call to tell you that a lawsuit was underway.  The more outrageous the caller, the better the odds they're a scam.  

Do yourself a favor--hang up. Screen your calls. Don't return voicemails that sound like one of these scams.  The more you show you're interested/worried/concerned, the more they see you as an easy target.

Can bankruptcy actually help your credit score?

In the short run, no, your score will go down. But in the long run, it should help your score, otherwise there's probably no reason to file a bankruptcy.  If you have a great credit score, you'll notice a very large decline if you file a bankruptcy.  If your credit is already low because of missed payments or collection accounts, you'll notice just a small decrease.  

But you have to think about what would happen if you didn't file.  If you're going to go bankrupt, it's because bad things have already happened to your credit or will soon happen if you don't file. You might be making minimum payments right now to stay current, but you know you just can't hold on much longer.  Instead of letting the black marks on your credit start rolling in, you're deciding to file, knowing it will hurt in the short run, but help you in the long run.

Fast forward several years and your credit score should have climbed significantly.  Although a bankruptcy can stay on your credit report for anywhere from 7 to 10 years,  it carries less weight the older it gets.   Making payments on some loans, like mortgages, student loans, or very low-limit credit cards is the best way to build yourself back up.