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Bankruptcy Lawyer Springfield IL

Bankruptcy Lawyer Springfield IL

Bankruptcy Lawyer Springfield IL

How to Repair Your Credit After Bankruptcy

After you file bankruptcy with the assistance of a bankruptcy lawyer Springfield IL residents trust, your credit rating will take a hit. However, understand that this effect is only temporary. You can take steps to repair your credit.

Continue Paying Your Non-Bankruptcy Accounts

While bankruptcy discharges most of your debt, it might not get rid of all of it. Find out which accounts weren’t closed, such as your student loans, and continue paying them. Try to make more than the minimum payment on these accounts so that you can lower your debt-to-income ratio faster.

Apply for a Credit Card

When you’ve just filed for bankruptcy, the idea of applying for a new credit card might sound crazy. It’s true that you will have difficulty getting approved for new credit right away. You may even have to pay more in interest and fees. The best way to get approved right now is to apply for a secured credit card. These credit cards require a cash deposit. If you make timely payments on this card, you can improve your credit over time and will have a higher chance of getting approved for unsecured credit cards.

Keep Up Payments With New Credit Cards

Once you get approved for a new credit card, make timely payments. If the credit bureaus see that you’ve been keeping up with your payments for months, your credit score could go up. If you have trouble remembering to make your payments, a bankruptcy lawyer in Springfield, IL may recommend enrolling autopay or setting reminders on your smartphone to make your payments.

Don’t Job Hop

Although changing jobs frequently won’t impact your score directly, it can make lenders think twice about giving you a loan. They might not think you have reliable income to repay the loan. That’s why you should avoid job hopping as much as possible. 

Keep our Balances Low

Ideally, you should keep the balances on your credit cards as low as possible. It convinces lenders that you aren’t in over your head and that you will repay what you borrow. Try to keep your credit utilization ratio less than 30 percent.

Look at Your Credit Report to Make Sure Your Bankruptcy is Correctly Reported

Bankruptcy in itself damages your credit rating. However, if there are errors, it can do even more damage. For instance, if a debt shows up as active instead of discharged, it could hurt your credit. That’s why a bankruptcy lawyer in Springfield, IL suggests obtaining a free credit report and checking it for inaccuracies. If you catch mistakes, you should dispute it as soon as possible. Call Pioletti Pioletti & Nichols today.

 

bankruptcy infographic

 

3 Major Consequences of Filing for Bankruptcy

Filing for bankruptcy is not something to be taken lightly. At some point, serious debt may become unmanageable, and with the help of a bankruptcy lawyer in Springfield IL, you can file to remove certain types of debt. However, this is a serious financial decision, so make sure you consider all the potential aftereffects and even seek counsel from a firm like Pioletti Pioletti & Nichols.

Loss of Property

You can file for Chapter 7 or Chapter 13 bankruptcy. Both have different levels of debts that you can eliminate and varying degrees of consequences, but regardless of the type of bankruptcy you file for, filing can result in the loss of some of your assets. For example, you may be forced to give up your car or house, which could be liquidated to pay off your lenders. This also extends to personal property, like jewelry or antiques. If you have personal belongings that are important to you, or if you don’t have somewhere to go should your house be taken from you, make sure you consider the risks.

Difficulty Getting Financing

Your credit report is how lenders determine what level of risk you are, and seeing that you have previously filed for bankruptcy labels you as “high risk.” This means that creditors will either offer you high interest rates or may even flat out deny you. A bankruptcy can stay on your report for up to 10 years in some cases. Whether you need a credit card or a mortgage, securing financing can be made extremely difficult for a decade. You can, however, try to get approved for secured credit cards with a cash deposit. A bankruptcy lawyer in Springfield IL from Pioletti Pioletti & Nichols will tell you that having this credit source is an essential step to repairing your credit over time. So long as you use it frequently, pay it off regularly and early, and keep your credit utilization under 30%, you’ll be in good shape.

Lingering Debt

Bankruptcy doesn’t necessarily get rid of all debt. Some debt, such as student loans, government fines, and court-ordered payments such as alimony or child support cannot be forgiven. Additionally, anyone who has co-signed on debts with you will still be held responsible for their share. Ultimately, this could hurt your personal relationships, so make sure they are aware of your decisions prior to filing. There could also be errors on your credit report if the debt is still considered active. Your best bet is to obtain a credit report and consult a bankruptcy lawyer in Springfield IL to figure out what debts can be forgiven and what to do moving forward.

Bankruptcy Lawyer Springfield IL

If you or a loved one are going through bankruptcy then finding a bankruptcy lawyer in Springfield, IL is an important step. Bankruptcy is a drastic action but is a visible solution for certain types of financial peril. There are many reasons why people might need to file for bankruptcy. For many people bankruptcy is a tough decision and it can be a complicated one which is why a lawyer is there to help you through every step.

However, filing a bankruptcy does not always mean that you cannot resist the temptation of credit cards. There are many other reasons why bankruptcy may be the most favorable option out there for you. Many people want to avoid bankruptcy because of the myths that surround it. 

Here’s a look at the 4 myths surrounding bankruptcy:

People Who File for Bankruptcy Are Financially Irresponsible

This actually is not the case. There are many factors that can lead to someone filing for bankruptcy. Things such as job loss, divorce, or even the high cost of medical care can drive just about anyone into bankruptcy. The recent pandemic has even started to trigger a wave of businesses and households to file for bankruptcy. Even the most well-intentioned people can fall into bankruptcy. This doesn’t mean that they are financially responsible or unable to stay away from credit cards. Overwhelming debt can happen to just about anyone.

Bankruptcy Discharges All Past Debts

Many people file for bankruptcy hoping for a fresh start. However, there are several types of debts that are not discharged in bankruptcy. If you have domestic support obligations such as alimony or child support those can’t be removed under any circumstance. Student loans are also typically not discharged in bankruptcy unless you can prove a hardship. Tax debts are sometimes reduced or discharged but it truly depends on the circumstances. This is when talking to a lawyer is the best way to know what can and cannot be discharged because of bankruptcy.

If You Spend Money Recklessly Before Bankruptcy You Won’t Have to Pay Back That Money

You could actually cost yourself your bankruptcy case if you do this. Maxing out your credit cards in hopes the balances will be forgiven through bankruptcy is called presumptive fraud. In order to avoid this, you should not spend $725 or more on luxury goods or services within 90 days of filing for bankruptcy. Is often your best bet to stop using credit cards altogether if possible. There are circumstances that can be overlooked such as paying for essentials like food, shelter, and gas. 

Bankruptcy Ruins Your Credit Forever

While the bankruptcy can be on your credit report for up to 10 years it does diminish over time. This means that you can start rebuilding your credit pretty much right after you file for bankruptcy. In order to keep improving your credit score, you need to make your payments on time and make sure not to spend more than you have. The idea behind bankruptcy is to help you get back on your feet financially and not to doom you forever.

If you or a loved one are thinking about filing for bankruptcy then reach out to a bankruptcy lawyer in Springfield, IL like the team at Pioletti Pioletti & Nichols for more information.

Common Mistakes to Avoid Before Filing for Bankruptcy

Declaring bankruptcy can give you a financial fresh start and take a huge weight off your shoulders. However, if you make the wrong moves before filing, you could jeopardize your bankruptcy case. Here are some common mistakes to avoid before filing for bankruptcy.

  • Repaying family members. If you have borrowed money from family members during tough financial times, you may feel obligated to pay them back right away. However, if you do this before filing for bankruptcy, it can do more harm than good. The bankruptcy trustee may decide to sue your family members for the money and distribute the money to your creditors.
  • Taking money out of your retirement account. Sometimes people who are deep in debt withdraw money from their retirement account to stay afloat. This is a big mistake. Retirement accounts are typically protected from creditors’ claims.However, if you withdraw money from the account, creditors can go after it then.
  • Not telling your lawyer the truth. Your bankruptcy lawyer in Springfield, IL is there to help you. However your lawyer can’t help you to the fullest if he or she does not know the whole truth. You should never hide anything from your lawyer, no matter how embarrassed you may feel.
  • Accumulating more debt. One of the last things you want to do before filing for bankruptcy is getting deeper into debt. If you use your credit card to charge frivolous items within the 90 days before you file for bankruptcy, the charges won’t be discharged.
  • Transferring assets. In Chapter 7 bankruptcy, you have the opportunity to discharge unsecured debt, like medical bills and credit card bills. The bankruptcy trustee may then be allowed to sell some of your property. Some people who declare bankruptcy want to keep their assets, so they may transfer them into a family member’s name. This is another mistake you should avoid making. If the court finds out, your case may get thrown out.
  • Leaving assets out of your bankruptcy paperwork. When you fill out bankruptcy paperwork, you’re required to list all of your assets. However, some people may leave certain assets out to keep them from getting sold. This tactic will rarely work. The court will likely find out and dismiss your bankruptcy petition because you were dishonest.

At Pioletti Pioletti & Nichols, a bankruptcy lawyer Springfield IL residents depend on can give you advice as to whether filing for bankruptcy is in your best interest. When people hit a severe financial hardship, they may wonder whether filing for bankruptcy is their last and only option. The year 2020 has been particularly tough for most, and has led people to thinking about bankruptcy as a potential solution for their financial struggles. If you are considering filing for bankruptcy, we strongly urge you to speak with a reputable lawyer, such as one from our law firm, as soon as possible. The entire process can be complicated and confusing, so having a lawyer to work alongside you can esure that everything goes smoothly. When clients meet with us, they often have the same common questions, which have been briefly answered below. For more information, contact Pioletti Pioletti and Nichols today.

Will declaring bankruptcy make my credit worse?

Yes, bankruptcy does affect a person’s credit score, however, these impacts won’t last forever. Depending on your circumstances, it may be strategic to take a hit to your credit score in order to get on the path to more secure financial footing in the future. Chapter 7 and Chapter 13 bankruptcies remain on a person’s credit report for 7-10 years. But, there is no reason to think that you cannot have strong credit after bankruptcy is over. While interest rates may be higher, it is possible to end up with better credit than when you first filed for bankruptcy.

Will I be debt-free if I file for bankruptcy?

Many people have the misconception that filing for bankruptcy means all of your debts will immediately be erased and you will start fresh with a clean slate. For most people, this just isn’t the case as bankruptcy filings are more complex than that. Only certain kinds of unsecured debts are to be discharged under bankruptcy, such as credit card debt, unsecured loans, and medical bills. Debts that won’t be eliminated through bankruptcy include child support, many student loans, alimony, and taxes. If you want to know whether bankruptcy is right for you, an Illinois bankruptcy lawyer in Springfield can provide you with a consultation.

Will I need to appear in court for bankruptcy?

Those who are filing for bankruptcy will probably have to attend a meeting with their creditors around a month after filing the initial petition paperwork. A trustee appointed by the court will interview the debtor to ensure that information on the bankruptcy petition and schedules are correct. But rest assured that your lawyer can guide you every step of the way, even when things feel overwhelming. It is our job to support you and provide legal information as your bankruptcy filing proceeds.

Call Pioletti Pioletti & Nichols today to schedule a consultation with a bankruptcy lawyer in Springfield, Illinois at your next earliest convenience. 

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