4 Common Mistakes to Avoid When Contemplating a Bankruptcy Filing
It is inevitable that when faced with financial hardship, most individuals will take steps to improve their financial situation. These steps however, generally do not improve the financial situation and more often than not, a bankruptcy still becomes necessary. If your faced with a mountain of debt that doesn’t seem to be going away, bankruptcy is often your best bet to achieving the financial fresh start you are looking for. Below are some tips on mistakes to avoid before bankruptcy which can complicate your ability to file and become debt free.
- When faced with financial disaster borrowers will often look towards their own assets to liquidate before considering bankruptcy. Don’t fall into this trap! Liquidating your retirement, your belongings and savings will only affect your ability to get back on your feet. Most retirement accounts, household belongings, and savings are entirely protectable in bankruptcy and do not have to be liquidated. Do not sacrifice your future to your present financial situation! Before you clean out your 401K to pay off your debt seek the advice of a bankruptcy attorney, and learn the alternative options available to you that don’t require you to be penniless first!
- Avoid taking your name off of assets such as: real estate, bank accounts, and vehicles. Under the Bankruptcy Code transfer of property for less than fair value prior to a bankruptcy are considered fraudulent and can complicate your ability to file. Before you transfer your house to a family member or friend consult with legal counsel to ensure that you are not going to hinder your ability to obtain a fresh start.
- With soaring credit card rates, late charges and fees, borrowers find themselves in a vicious circle of making high minimum payments only to be forced to re-incur debt each month to pay for basic living expenses. If you’re in this vicious circle of payments, stop using your credit and seek professional legal assistance immediately. Get the education you need to break the cycle that will never end well for you and your family.
- Be aware that if you stop paying your creditors and are contemplating a bankruptcy filing please do not pay back your family and friends. In the eyes of the law, grandma is an equal creditor with visa, repayment on debt owed to family and friends is consider preferential and can create serious issues if you need to file bankruptcy. There are numerous other options that will work far better. Until you get specialized legal guidance, treat all your creditors the same and prevent issues arising from paying back grandma. Notify your legal counsel immediately if you have debt to family and friends and they will be able to advise you on the proper course to take in handling that debt.
By keeping these four simple tips in mind, you will avoid common mistakes made by people in financial trouble. There are professionals out there with the answers and education to assist you in getting out of your debt, and back on the road to financial success! Call us today to get answers to all of your Bankruptcy questions. At the Law Offices of Neil Crane, we want to quick get you back on track quickly and into financial recovery. Call us today at 203-230-2233, or complete our online contact form to get a free consultation.
The best indicator is your debt-to-income ratio. You can calculate this by taking the total amount of money that you spend each month paying off your debt (this includes all recurring debt, such as mortgages, car loans, child support payments and credit card payments) and dividing by your gross monthly income. The lower the number, the better. If you do not have extra money coming in, then NO debt consolidation plan can resolve it.
Read more about Debt-to-Income Ratio
Connecticut Consumer Protection Lawyers
There are a variety of laws that control the enforcement of debt obligations, collection methods, and the state court judicial process.
The Fair Debt Collection Practices Act (“FDCPA”) is intended to protect consumers from illegal acts by collection agencies seeking to collect on behalf of creditors. The rules are somewhat complicated, but they are enforceable through the State Court located in the county in which you reside. These laws provide for financial awards to consumers who can prove violations of the FDCPA. Collectors often violate these laws but are not often held accountable by consumers who don’t know the laws or how to enforce them. If you feel that your rights may have been violated, seek the opinion of an experienced attorney who knows how to stop abusive practices and win awards for you through the state court system.
Don’t be afraid to assert your legal rights.
Collection Actions start with the filing of a Complaint in the State of Connecticut Court system in the county in which the borrower resides. These suits can be very scary to the average person, and many people don’t respond or answer the Complaint. Failure to respond can have very bad results. The Court collection process is quick and even suits that are entirely incorrect can lead to judgments against you if you don’t respond. Very often, collection attorneys win default judgments even if the allegations and amounts are incorrect, simply because borrowers “freeze” and don’t respond. These default judgments can result in permanent orders against you within the additional amounts owed for legal fees, costs and continuing interest, even after the Court judgment.
Once a collection matter has gone to judgment, the creditors can levy your bank accounts, attach your pay, or lien your home. This can cause financial problems to become quickly uncontrollable. Don’t fail to respond! Lawsuits can be resolved and successfully defended if you take the time to give the matter proper attention and seek immediate legal advice. Judges rule to protect consumer borrowers who properly appear in Court and don’t allow creditors to win by default. Even if the debt and the amount are valid, properly represented borrowers are granted liberal payment plans by often sympathetic State Court judges.
A lawsuit is a final warning sign that you need to seek professional help. Don’t let a suit against you go unaddressed or ignored. Get experienced help to avoid the dangers that can result from losing Court judgments.
The Federal Court system can also provide answers for families in debt through the bankruptcy protection. These laws favor debtors seeking a financial fresh start. The bankruptcy system can protect your assets and your future source of income, even if creditors have already won State Court judgments against you.
Creditors and collectors seem to have become emboldened when trying to collect on debts. They are willing to collect through harassment and illegal practices. Numerous state and federal laws protect you from illegal creditor harassment, but it takes an aggressive and knowledgeable lawyer to enforce them on your behalf. We work hard to protect Connecticut residents under federal and state law.
We can protect you from creditors and other debt collectors today. Our law firm can put a stop to the harassing actions of collectors and even file lawsuits against those who violate the Fair Debt Collection Practices Act (FDCPA) and various other laws that entitle you to protection from illegal phone calls and creditor harassment. If your rights have been violated, you might have a case for strong legal action.
Creditor harassment often entitles you to bring suit and make a claim for monetary damages to you and other related parties.
Creditors routinely violate laws in place for your protection, but there is a way to prevent this illegal activity and fight back. If your rights have been violated, we can prevent the violations from recurring and take strong legal action to make creditors pay you for their illegal activities.
Take Legal Action Against Abusive Debt Collection Agency
Phone calls and demanding letters are one thing. Continual harassment at work, home and on your cellphone, calls to neighbors or family members, intimidation, threats, misrepresentation of information and many other common harassment actions are illegal. Through suit brought by experienced counsel, you may be entitled to payment for damages and abuse.
Federal Laws and State Laws for Your Protection:
- FDCPA: Fair Debt Collection Practices Act
- Telecommunications Act
- FCRA: Fair Credit Reporting Act
- RESPA: Real Estate Settlement Procedure Act
- CUTPA: Connecticut Unfair Trade Practices Act
At The Law Offices of Neil Crane, we know how to make these legal protections work for you, and we are immediately available by telephone or for a free consultation. Take action against illegal harassment and call us today at 203-230-2233.
Taking action against debt collectors who have violated the FDCPA and abused your rights requires an understanding of the applicable laws. Our experience and knowledge of the proper laws can guide your case with ease, end harassment and abuse, and even seek compensation for losses and hardship brought on by illegal debt collection practices.
A list of other actions debt collectors cannot take against you includes:
- Contacting your neighbors about your debt
- Contacting your family members about your debt
- Contacting your employer about your debt
- Calling you every day until debts are paid
- Leaving unlimited voicemail on your phone
- Contacting you at unreasonable hours of the day or night
- Threatening to garnish more wages than allowable under federal law or state law
- Threatening to garnish wages or levy a bank account without using proper legal channels
- Threatening lawsuits, where no suit is intended
- Selling your debt to another company to continue collection on a time-barred debt
- Failing to provide prompt written evidence of a valid debt
- Contacting the Department of Homeland Security (DHS) about your alien status
- Filing or threatening to file a criminal bad check charge on a post-dated check
State and Federal Laws Enacted for Your Consumer Protection
FDCPA: Fair Debt Collections Practice Act
This federal law protects the consumer from third-party collection agencies that employ harassing or abusive practices. Under this act, collectors are limited to what they can say, when and to whom they can say it. Collection agencies are not allowed to discuss your debt with anyone else and are not allowed to harass your family, friends or your employer. Collection agencies can be held liable for damages and attorney fees if they violate this law.
The Federal Trade Commission is a government agency responsible for “protecting America’s consumers.” This government agency is charged with overseeing enforcement of the Fair Debt Collection Practices Act (FDCPA), designed to “prohibit abusive practices by debt collectors.” Under this law, third-party collection agencies are very specifically disallowed from harassing consumers. This continuing improper behavior is often illegal and can entitle you to a lawsuit and award for damages.
What does this mean to you if you were illegally targeted by debt collectors in any of the following ways?
- They sought communication with you at “any unusual time or place or a time or place known or which should be known to be inconvenient to the consumer.” In particular, the law specifies that debt collectors should not contact you before 8 a.m. or after 9 p.m.
- They have sought to communicate with you about a debt despite the fact that “the debt collector knows the consumer is represented by an attorney with respect to such debt.”
- They used threatening, obscene or profane language with you.
- They used illegal threats such as warrants, arrest, prison, liens against your house, pay, or bank account, embarrassment or other coercion.
- They discussed your debt with others.
- They harassed your family, friends or employer or discussed your debt with them.
- Their communications with you included false representations — for example, falsely claiming to be affiliated with the U.S. government.
- They engaged in unfair debt collection practices such as asking you for a postdated check and then depositing that check before the date in question.
- They failed to confirm with you, within five days of contacting you, all key details of a debt.
- They entrapped you with deceptive collection forms.
For one thing, collection agencies can be held liable for damages and attorney fees if they violate this law. The Law Offices of Neil Crane, LLC, fights creditor harassment. We recommend that you take advantage of our offer of a free initial consultation if you suspect that a debt collector has broken the law in dealings with you.
This federal law protects consumers from automated collection calls or “auto-dialers” and limits your creditors’ ability to contact you on your cellphone without permission. If you are receiving calls on your cellphone and have not provided your cellphone number to the creditor, it is likely that your creditor is violating the Telecommunication Act. Under this law, you may be awarded up to $500 per call as damages for violation of the Telecommunications Act.
FCRA: Fair Credit Reporting Act
This federal law protects consumers from unfair credit reporting. Under this law, the three major credit bureaus (Experian, Transunion and Equifax) are required to take affirmative steps to correct all disputes or allegations of misinformation on your credit report. FCRA mandates that the credit bureaus must ensure the accuracy of your account. The bureaus can be held liable for damages and attorney fees if they misrepresent information on your credit report.
The Fair Credit Reporting Act (FCRA) was enacted in 1970 “to promote accuracy, fairness, and the privacy of personal information assembled by Credit Reporting Agencies (CRAs)” (Source: Epic.org). This law provides consumers and their lawyers with a wealth of significant legal precedents that experienced attorneys can use to enforce your rights. In addition, numerous court cases involving enforcement of this law have provided consumers and their attorneys with a significant amount of legal precedents that can be very useful in new court cases.
Specifically, consumer-protecting provisions of the FCRA include the following:
- The three major credit bureaus (Experian, TransUnion and Equifax) are required to take affirmative steps to correct all disputes or allegations of misinformation on your credit report.
- They must ensure the accuracy of your account.
Were You Harmed By Violations Of The Fair Credit Reporting Act (FCRA)?
The lawyers at The Law Offices of Neil Crane have the experience necessary to protect your rights under the FCRA. If you have been mistreated — and harmed — by violations of the FCRA by a credit bureau, you should know that your rights include the right to sue. The credit bureaus may be held liable for damages and attorney fees if they misrepresent information on your credit report. If you think your rights have been violated, email us or call us and speak directly with an experienced attorney today.
RESPA: Real Estate Settlement Procedure Act
This federal law protects homebuyers from unscrupulous brokers and mortgage companies. Banks must follow the guidelines set out under this federal law with respect to all mortgages and accountings of the debt. It makes for full disclosure of all fees and costs. If improper disclosure and mishandling of the homeowner’s debt occur, the homeowner may be awarded damages and attorney fees. Banks may also be held responsible for punitive damages.
CUTPA: Connecticut Unfair Trade Practices Act
This statute provides state remedies for individuals who have been the victim of unfair and/or deceptive practices by any company conducting business in the state of Connecticut. Under this state statute, the courts have the authority to hand down both punitive and injunctive relief, along with all reasonable attorneys fees.
The Connecticut Unfair Trade Practices Act (CUTPA) “allows the Commissioner of Consumer Protection to legally pursue persons or businesses who have used unfair or deceptive trade practices with consumers,” in the words of the Department of Consumer Protection of the State of Connecticut.
A core tenet of this law is found in Section 42-110b: “No person shall engage in unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce.” Examples of unfair methods, acts and practices that have emerged through past cases have included:
- Sale of consumer goods at an unconscionable purchase price to a consumer having unequal bargaining power
- Refusal to sell and install goods at price originally quoted, causing “ascertainable loss” to the consumer
- Representing that work will be performed by an expert subcontractor while knowing that the work will be performed by a different subcontractor not of the same quality
- Failing to disclose to a customer that the customer will be required to pay undisclosed or additional fees
This state law awards for actual damages, monetary penalties and attorney’s fees.
These laws were enacted for your protection and you should seek our knowledge in using them for your protection from creditor harassment and telephone calls, and improper credit reporting.
Our founding attorney, Neil Crane, is a renowned Connecticut bankruptcy lawyer. He often takes clients on referrals from advocacy groups and attorneys who recommend him as a Hartford bankruptcy attorney with the in-depth knowledge and experience necessary to help people get the best possible results in difficult financial situations.
Call for a Free Consultation With a Connecticut Debt Relief Professional
At The Law Offices of Neil Crane, LLC, we protect the rights of individuals, families and businesses throughout the state of Connecticut. Debt collectors do not have the freedom to take any action they want to get you to pay debts. Through our knowledge of consumer protection laws and the Chapter 7, 11 or 13 bankruptcy filing process, we can stop creditor harassment and stop levies, attachments, wage garnishments and lawsuits. But we will take your case even further if we find evidence that a debt collector broke the law trying to collect debt from you.
We have helped thousands of Connecticut families put an end to aggressive bill collection actions. We are ready to help you find a plan to suit your needs. Contact our Connecticut creditor harassment professionals online or call at 203-230-2233 to schedule a free initial consultation at any of our five Connecticut locations.
Bankruptcy Helps Thousands of Connecticut Residents
The American economy and current job market has made bankruptcy the best option for a lot of people.
Individuals tend to have several questions that must be addressed before deciding bankruptcy is appropriate. These questions include what might happen to the family home, which debt is eligible to be discharged, as well as how bankruptcy might affect their life down the road.
Restoring Your Credit Score
One of the most common questions people have following the bankruptcy process is how they can restore their credit score. Obtaining new credit after bankruptcy can be difficult, but there are steps people can take to begin rebuilding credit for the future. These steps include:
- Take on as little new debt as possible – debt to income ratio is an important credit score determinant.
- Obtain a secured credit card if your previous cards have been cancelled (this will establish a positive payment history).
- Pay off credit cards at the end of every billing cycle and avoid charging more than 30 percent of their limits.
- Pay with cash whenever possible.
- Avoid submitting multiple credit applications (credit scores take a hit with each inquiry).
- Develop a budget and abide by a strict budget.
This list is not exhaustive, but following these recommendations can jump start even a recent bankruptcy filer on the road to a sound financial future. Bankruptcy is designed to give debtors a fresh start, so it is important to realize anyone can emerge from bankruptcy with a positive outlook for the future.
Anyone who is considering bankruptcy or wondering how they can rebuild their credit should speak with a qualified attorney immediately. The experience bankruptcy attorneys provide is invaluable before, during and after the bankruptcy process.
If the minimum monthly payments for your car loan, home mortgage, credit card or any personal loan are becoming too difficult to manage, if you find yourself “robbing Peter to pay Paul,” it is important to seek professional counsel quickly. At The Law Offices of Neil Crane, LLC, this is what we do. We have over 30 years of history dedicated to helping a wide range of Connecticut clients with different issues and needs find personally crafted debt relief and budgeting help. We create a plan and an approach to resolve debt with practical solutions. With our dedication, knowledge and experience, we can help you restructure or discharge debt completely with all available options including bankruptcy.
Contact us today to schedule a free initial consultation. We will promptly meet with you to discuss your concerns, your full financial situation and the proper options and alternatives for your problems during our first meeting. Our insightful, dedicated Connecticut attorneys serve clients at offices across the state, including Hamden, Bridgeport, Waterbury, Rocky Hill and Ridgefield.
Any Type of Loan Can Be Stopped From Direct Deduction
Stopping automatic payments will not affect your standing with your lender. It is important to review automatic deductions and your overall financial issues with a highly qualified attorney before deciding which payments to cut back on. Making these decisions and significantly altering your payment schedule without the counsel of an experienced attorney could have negative consequences if it’s not done as part of a customized, overall plan for financial recovery.
Our law firm can help you negotiate more favorable loan terms or restructure debt with or without a bankruptcy filing. It is critical to consider all your options with a professional before proceeding. We can work aggressively on your behalf to protect your assets and ensure that your rights are not violated by overly aggressive lenders or unscrupulous debt collectors. With over 15,000 satisfied clients, we know all your options. Call us.
Contact Our Connecticut Bankruptcy Lawyers
We offer a free initial consultation, and we can provide solutions to help you regain control of your finances. Call us today at 203-230-2233, or complete our online contact form. When you call us, you will always speak to a live person, not our voicemail. We are committed to providing excellent service and legal protection in a comfortable, non-threatening environment
Chapter 13 bankruptcy is a federal court procedure for the deceleration and repayment of mortgage obligations along with the reduction or elimination of all other forms of debt. The filing of a Chapter 13 bankruptcy creates an immediate stop – known as an “automatic stay” – of the foreclosure process, halting a pending foreclosure and allowing for repayment of the past-due mortgage installments, and other debt obligations, over a three- to five-year time period. Chapter 13 bankruptcy will allow you to begin regularly scheduled monthly mortgage payments as if no previous default had ever occurred.
Read more about Chapter 13 Bankruptcy