Do you have too much debt? Chapter 7 Bankruptcy might be an option.
Many Americans simply have more debt than they can afford to repay.
Despite what you hear, it is rarely due to irresponsibility. No one sets out to accumulate $7,000 in credit card debt, but a temporary job loss, sudden illness or other financial emergency can quickly drain savings and force people[…]
If you are considering filing a Chapter 7 or Chapter 13 case, it is essential to understand that there are a few actions you should avoid in order to ensure that your case goes smoothly. Below are a few of the most common mistakes made by debtors that you will want to avoid:
Continuing to make charges on credit cards
In the months leading up to your bankruptcy filing, you should stop making charges on your credit cards. Any charges that are deemed to be for “luxury goods or services” on your credit card that totals in excess of $600 within the ninety (90) days prior to your case being filed, will be assumed to be non-dischargeable. A luxury good or service may be anything that is not reasonably required for the maintenance of your household. It is important to also understand that the $600 amount is not for a single charge to your credit card that exceeds $600, but the total amount of your charges incurred within the 90 day time limit. As a result, it is very important for you to cease all use of your credit cards as you prepare for your bankruptcy filing.
Repaying family members
If you have borrowed money from a relative, you may want to pay them back before you file for debt relief. However, this can cause trouble in your case. All debtors are required to disclose any payments in excess of $600 that have been paid to any creditors (including friends and family) within the six (6) months prior to the filing. The court will look back at payments made within the one (1) year prior to the filing for payments made to “insiders” such as your relatives. If you have repaid a debt to an insider, it will be deemed a “preferential payment.” In other words, you preferred one of your creditors over your other creditors, which is prohibited by bankruptcy law. If there is a preferential payment, the trustee will demand that your relative refund the money back to the trustee for the benefit of your bankruptcy estate. Failure by your loved one to refund the money could result in the trustee filing a lawsuit against him or her to recoup the funds.
It is common for people to think they can protect their assets from being included in the bankruptcy filing by transferring them into another person’s name. However, the trustee will conduct an investigation for all transfers of property (which includes sales and gifts) that the debtor made within the two (2) years prior to the bankruptcy filing. Thus, it is essential that you discuss with your lawyer all assets that you want to keep in order to determine if they are protected by an exemption under the law.
Contact Faro & Crowder for a free initial Bankruptcy Consultation
One of the primary concerns people have when they file a Chapter 7 or Chapter 13 is how their filing will affect their credit score. The truth, however, is that in most cases your credit score is already damaged by past due payments and defaulted loans. Thus, when you file for bankruptcy, the negative impact is minimal. This is especially true in comparison to the benefit of eliminating the majority of your debt and obtaining a fresh financial start. Also, when your bankruptcy case is completed, you can start improving your credit score. Below are a few tips:
Credit report. After you receive your discharge order, you should request a free copy of your credit report to verify that the debts are properly noted as being discharged. If you discover errors on your credit report, you should immediately dispute them with the report agency. You cannot improve your credit score until you ensure that your report is accurate.
Credit cards. It may seem counter-intuitive to obtain a credit card after emerging from bankruptcy, but you have to have credit in order to rebuild your credit score. It is important that you are responsible with your new credit accounts and only open a select few. You must pay your bills on time and, if you are unable to do so, do not use your cards. Your credit score can be improved by having open accounts, even if you are not using them. Lastly, not all credit cards are treated the same when it comes to credit reporting. The major cards (such as Visa or MasterCard) provide more benefits than department store cards.
Secured credit cards. It may be difficult to qualify for traditional credit cards when you first emerge from bankruptcy. If this is the case for you, consider obtaining a secured credit card. This type of card requires you to make a deposit with the cardholder, which is typically 100% to 200% of the total amount of the line of credit extended to you. As long as you timely make your credit card payments, the deposited money will not be touched by your lender.
There are several other ways you can rebuild your credit post-bankruptcy, but the most important thing is to learn from your past mistakes and be financially responsible. With patience and hard work, you will see your efforts payoff with your credit score.
Contact Faro & Crowder, PA for your free initial Bankruptcy consultation
Very few people are excited to meet with a lawyer to discuss their financial struggles. Attorneys are often viewed as being intimidating and difficult to talk to, but we are really people just trying to help you find solutions to your problems. We want to be on your side, so give us a chance!
Below are a few pointers to assist you with understanding your attorney and why they ask the questions they do:
We have a “procedure.” An experienced debt relief lawyer has developed a procedure that he/she relies upon to ensure that all of the crucial information needed to successfully represent you is gathered from you as quickly as possible. This typically includes having you fill out a detailed questionnaire that asks financial questions to cover every circumstance. We know it can seem unnecessarily comprehensive, but a good attorney covers all the bases. We have developed a system that we trust, so answer the questions as completely as possible.
Disclose everything. We know there are certain things you don’t want to talk about, but it is important that we know them. We can only develop a strategy for dealing with the issues in your case if we know everything. A seasoned lawyer has dealt with a wide variety of problems, so we can handle yours too. We aren’t asking questions to be nosey; we really just want to be prepared to handle whatever comes your way.
Get answers. Remember that this is your bankruptcy case. Don’t get too caught-up in answering questions that you forget to ask your own. Your lawyer should be able to answer your questions in a way that you understand. You should understand all of your available debt relief options, including what type of bankruptcy would benefit you the most. And while the staff members in a law firm are not allowed to give you legal advice, they can be very helpful, so use them as a resource too.
Take action. If you are overwhelmed with debt, don’t procrastinate in getting help. Scheduling an appointment with us to learn your options does not mean that you have to file a bankruptcy case.
If you are considering filing for bankruptcy protection, contact the skilled lawyers at Faro & Crowder to schedule a free consultation. We are located in Melbourne and proudly serve all of Central Florida.
Is space tourism just around the corner? According to Bloomberg, it is. Elon Musk’s SpaceX and Boeing Co. are busy at work trying to make it a reality. They have been competing to obtain a $3 billion contract, formally known as the Commercial Crew Transportation Capability contract, to provide the first commercial spaceflights manned by humans. The contract to provide taxi services to the International Space Station by 2017 would bring the end of U.S. reliance on Russian rockets, which has been in effect since the space shuttle retired in 2011.
Winning the contract would a major step for Musk who has dreamed of creating a city on Mars. For Boeing, the contract would ensure its long-term relationship with the U.S. space program. Sierra Nevada Corp., a third competitor, is seeking to broaden its services beyond supplying rockets for sub-orbital tourist trips.
Recent reports from the National Aeronautics and Space Administration have revealed that the contract to transport astronauts to the International Space Station will pay a maximum of $4.2 billion to Boeing and $2.6 billion to SpaceX. Both companies have proposed reusable rockets capable of seating up to seven individuals. Sierra Nevada Corp, will not receive anything.
SpaceX sets elevated goals such as progressing from designing rockets to becoming the first private cargo-hauler to the space station. SpaceX has long-term goals to colonize Mars, and this contract is a stepping stone for accomplishing that goal. The Dragon V2 spacecraft does not rely on parachutes and ocean landings. Rather, it is created to return to Earth and land vertically on a launch pad.
Boeing’s spacecraft looks similar on the outside to the 1960’s Apollo lunar capsules. However, its interior uses lighting the company designed for its airplanes and seating developed for the cockpit of the 787 Dreamliner. It would still use the parachute landing.
A joint contract award would foster competition, while also providing NASA with an alternative if one spacecraft encounters technical difficulties.
SpaceX is facing a lawsuit by two former employees alleging it violated labor laws when the company terminated them and others. The rocket manufacturer is accused of “mass layoffs” that included 200 to 400 employees without providing the 60-day notice as required by state law. The plaintiffs are seeking damages that include back-pay plus interest, in addition to seeking to have the lawsuit certified as a class action.
A California employer with at least 75 employees that intends to lay-off 50 or more workers must provide 60 days’ notice. Failure to provide the notice results in the company’s liability to pay up to 60 days’ compensation and benefits. The law also provides for civil penalties up to $500 a day if the company also fails to notify the government officials of the layoff.
In the SpaceX lawsuit the primary issue will be whether the terminations meet the criteria of a lay-off. California law defines it as “a separation from a position for lack of funds or lack of work.”
SpaceX is claiming the employees were fired because they were “low performers.” The company has stated the terminations were not related to a lack of work funds, but were the result of an annual review of the individuals’ performance. Plaintiffs allege that the lay-off was a tactic used by the company to avoid paying 60 days’ worth of pay and benefits to the terminated employees.
SpaceX is reportedly expecting to hire more employees than it terminates this year. In fact, some reports show that the company’s website has nearly 400 job openings posted on it.
The plaintiffs allege that they were never given warnings or consultations regarding their performance prior to their termination. Their lawsuit also contains allegations that SpaceX’s failure to provide the required notice and 60 days’ of compensation constitutes unfair competition.
SpaceX filed a complaint with the Court of Federal Claims earlier this year challenging the Air Force’s Evolved Expendable Launch Vehicle contract on the basis that it violates fair competition and federal sanction laws due to the sole-source multi-rocket provisions of the contract. The Air Force is seeking to have the court dismiss the lawsuit, claiming that SpaceX was not an actual or prospective bidder on the contract, so SpaceX does not have standing to challenge it. Also, the Air Force has pointed out that SpaceX failed to object to a public request for a proposal issued in March of 2012 for that purchase. The contract was awarded by the Air Force to United Launch Alliance (ULA), which is a joint venture between The Boeing Co. and Lockheed Martin Corp.
United Launch Services, a subsidiary of ULA, was awarded the $11 billion contract the end of last year. The contract provides for the acquisition of nearly 36 rocket bodies required to build boosters for a range of military devices, including navigation beacons, spy satellites and communications relay stations.
SpaceX believes its Falcon 9 v1.1 rocket should be considered by the military for the same purposes, but the sole-source contract unfairly restricts competition. SpaceX alleges national security launches should be awarded under a competitive basis. The Falcon 9 v1.1 was not certified to carry military payloads at the time the contract was awarded to ULA. To be certified, the rocket must complete three successful flights in a row and pass a detailed engineering and business review. The Falcon 9 v1.1 was still in the certification process at the time contract bidding was taking place.
The Air Force is seeking to have the SpaceX lawsuit dismissed because it knew about the sole-source contract and failed to object or to indicate that it intended to compete for the contract. In other words, by failing to act when the government requested prospective bidders to describe their space-launch capabilities, the Air Force claims SpaceX waived its ability to object to the award of the contract now.