Debtor Education Course

In the state of Mississippi, everyone who files for bankruptcy – whether it’s Chapter 7 or Chapter 13 – is required to take Pre-Discharge Debtor Education Course in order to have their debts discharged. You may not relish the idea of attending this course, but it is to your benefit. It teaches your how to properly budget and manage finances. Pay attention in this class and take it seriously if you wish to have a healthier financial future.

Budgeting

Before you reach financial independence, you need to lay some groundwork. Calculate your monthly income and then subtract necessary expenses.  This term refers to rent/mortgage payments, utility bills, insurance, food, and gas (basically anything which is essential to living).

If you find some of your expenses exceed your monthly income, see what can be reduced or canceled. Things such as premium cable packages and gym memberships aren’t a necessity. You can exercise at home or a park for free, and you can find cheaper alternatives for entertainment.

Re-establish Credit

After you’ve been able to stick to your budget for a while, the next step is to start building your credit. You can either get a secured or unsecured credit card. Don’t go overboard though. Limit yourself to only one or two cards, and only use them on things you can afford to pay back quickly. If you can’t afford vacation on your own, then don’t use a credit card for it.

Now for some final words of advice. Be sure to pay all of your bills on time every month, and don’t make major investments if they’re not necessary (A new car or home isn’t necessary if there’s really nothing wrong with what you already have). For all your bankruptcy concerns, contact us at Bosserman Law.

The post Post-Bankruptcy: 3 Essential Money Management Tips appeared first on Kelly Bosserman Law.

Only Financially Irresponsible People File for Bankruptcy

This belief may be true in some cases, but not all. People experiencing some form of hardship are more likely to file. The factory worker who always paid their bills early may file because he was laid off six months ago and hasn’t found employment since. Likewise,the recently divorced may file to pay for the divorce and relieve joint debts.

Another common hardship is being crippled by unexpected medical bills due to surgery or an accident. Common hardships such as these can happen to anyone and bring them to this path.

All Debts are Discharged after Filing

Some debts will be discharged depending on which Chapter you file for but not all. People who file bankruptcy in Mississippi will still be required to pay child support, alimony, and certain taxes. Any debt not listed on the bankruptcy petition won’t qualify for discharge and neither will student loans. Discharging student loans is a separate matter from bankruptcy and requires documented proof of undue hardship.

Bankruptcy Ruins Your Credit for Life

It is true that for ten years after filing bankruptcy, it may be documented on your credit record. However, it will not necessarily ruin your credit forever. With the fresh start bankruptcy gives you, your credit may be in better shape than before.

You’ll likely receive credit card applications in the mail shortly afterwards. Secured credit cards with low limits are a great option to start rebuilding your credit. Just be sure to pay them on time, and preferably pay more than the minimum payment.

With all the negative perceptions surrounding bankruptcy and those who file, it’s normal to be hesitant. However, if consolidating debts or receiving debt counseling doesn’t help, then bankruptcy is your best option. To learn more about how Bosserman Law can help you reach a favorable outcome, give us a call today.

The post 3 Common Myths about Filing for Bankruptcy appeared first on Kelly Bosserman Law.

Here I’ll examine a few of these common misconceptions and debunk the myths of a bankruptcy filling.

1. Folks who file for bankruptcy are irresponsible.

Certainly some people who file for bankruptcy have a history of some kind of abuse or fraud. However, it is far more likely that a sudden and catastrophic life change has necessitated the filing.

More often than not, the people who come to me for assistance in a bankruptcy filing are enduring a job loss or transition, experiencing long-term unemployment, undergoing a divorce or suffering a serious illness.

2. Bankruptcy discharges all past debts. 

“Starting fresh” is often used as a way to put bankruptcy in as positive light as possible. And it’s not a bad way to think of it.

However, it’s a bit misleading.

There are, in fact, a number of types of debt you may have incurred that cannot be removed under any circumstance. If you have domestic support obligations including but not limited to alimony and child support, those payments may not be discharged.

Likewise, if you are paying restitution for a crime, those payments cannot be discharged under normal bankruptcy proceedings.

3. If you blindly spend money with wild abandon immediately prior to bankruptcy, you will be forgiven those debts.

Courts have ruled in the recent past that that spending constitutes fraud and debt that is incurred as a result of fraud cannot be discharged.

4. Bankruptcy will permanently ruin your credit.

Rebuilding your financial reputation after bankruptcy is never easy, but the business model of today’s credit card companies actually can be helpful.

Let me explain.

Credit card companies NEED new customers. That’s why they send out volumes of junk mail every day to entice us to sign up for their cards in the first place.

After your debt discharge, let me consult with you on obtaining a secured credit card with a low limit. Making on-time payments to this card will go a long way toward rebuilding your credit score.

Lita Epstein, author of The Complete Idiot’s Guide to Personal Bankruptcy, was quoted in the U.S. News Money blog as saying that “usually about six to 12 months [after obtaining the secured card] you can get a regular credit card and drop the secured credit card, since the secured card can be expensive.”

5. It’s a solution to all financial woes.

Bankruptcy cannot solve the underlying issues that led you to file for the bankruptcy.

It isn’t a solution. It’s a tool.

Depending upon your situation and how you file, there exists a chance that you could lose property and you’ll certainly be forced to significantly alter your lifestyle. Post-bankruptcy life is not easy, but if you look at it as a tool you can use to fix past mistakes or to clear a few hurdles, then you’ll come out of the process a stronger person.

If you have questions about bankruptcy and how filing may help you begin to repair your financial reputation, give me a call and let’s discuss it.

The post Five Bankruptcy Myths DEBUNKED! appeared first on Kelly Bosserman Law.